MANAGEMENT CONCEPTS &

ORGANISATIONAL BEHAVIOUR

UNIT-1
 What is management ?
 The process of using various resources (inputs) to produce some results

(outputs) is known as management, and the degree of success varies

according to the efficiency with which the resources are managed.

 Management is a Set of activities

planning and decision making, organizing, leading and controlling
directed at an organizational resources- human, financial, physical
and information
with the aim of achieving organizational goal in an efficient
and effective manner.
 Definitions of Management

Management Definition by H. Koontz “Management is an

art of getting things done through and with the people in
formally organized group”

According to Harold Koontz and Heinz Weihrich
“Management is the process of designing and
maintaining an environment in which individuals,
working together in groups, efficiently accomplish
selected aims”.

According to F.W. Taylor, ‘ Management is an art of
knowing what to do when to do and see that it is done in
the best and cheapest way ‘.
Management by objectives (MBO), also known as
management by planning (MBP), was first popularized by
Peter Drucker in his 1954 book The Practice of
Management. ... This process allows managers to take
work that needs to be done one step at a time to allow
for a calm, yet productive work environment.

According to Theo Heimann, management has three different
meanings, viz.,

Management as a Noun : refers to a Group of Managers.

Management as a Process : refers to the Functions of Management
i.e. Planning, Organising, Directing, Controlling, etc.

Management as a Discipline : refers to the Subject of
Management.

Management is an individual or a group of individuals that accept
responsibilities to run an organisation. They Plan, Organise, Direct
and Control all the essential activities of the organisation.
Management does not do the work themselves. They motivate
others to do the work and co-ordinate (i.e. bring together) all the
work for achieving the objectives of the organisation.

Management brings together all Six Ms i.e. Men and Women,
Money, Machines, Materials, Methods and Markets. They use these
resources for achieving the objectives of the organisation such as
high sales, maximum profits, business expansion, etc.
 Basic purpose of management

EFFICIENTLY
Using resources wisely and in cost effective way

EFFECTIVELY
Making the right decision and successfully
implementing them
 Efficiency:
operating in a
manner where
resources are not
wasted

Successful
management

Effectiveness:
doing the right
thing in a right
way at a right
time
 Characteristics of management

Multi-dimensional - Most management oversees and supervises a
company or organisation's service or production cycle. Managers
work closely with and provide guidance to the members of their
team. A manager considers a staff member both as an individual
with diverse needs and as a component of the larger group. To be
effective, managers influence their team members to apply their
unique strengths toward achieving the organisation's goals.


Dynamic - Management is a dynamic function and evolves and
adapts to changes in its environment, whether they are economic,
socio-political or technological. For instance, a paper company
could see a decline in sales because of the rapid adoption of screens
and digital devices. Whether the company can still survive depends
on how effectively its management can adapt to new market
requirements.
Cont..

Intangible - Management is not a tangible product, but its presence
can change the way an organisation functions. Management consists
of ideologies, policies and human interaction. Good management
helps improve a company's target achievement ratios, employee
gratification levels and overall ease in the company's operation.

Goal Oriented: Management is a purposeful activity. It coordinates
the efforts of workers to achieve the goals of the organization. The
success of management is measured by the extent to which the
organizational goals are achieved. It is imperative that the
organizational goals must be well-defined and properly understood
by the management at various levels.

Distinct Process: Management is a distinct process consisting of
such functions as planning, organizing, staffing, directing and
controlling. These functions are so interwoven that it is not possible
to lay down exactly the sequence of various functions or their
relative significance.

Universal Application: Management is universal in character. The
principles and techniques of management are equally applicable in
the fields of business, education, military, government and hospital.
Henri Fayol suggested that principles of management would apply
more or less in every situation. The principles are working
guidelines which are flexible and capable of adaptation to every
organization where the efforts of human beings are to be
coordinated.
Nature of Management
• as a process
• as a discipline
• as a group of individuals
• as a profession,
• as a science as well as an art.
a) Management as a Process:
Management consists of a series of inter-related activities of
planning, organizing and controlling. All activities are undertaken
in a proper sequence with a systematic approach so as to ensure
that all actions are directed towards achievement of common goals.
Thus, it is regarded as a process of organizing and employing
resources to accomplish the predetermined objectives
b) Management as a Discipline:
Management is a systematized body of knowledge that has
developed, grown and evolved over the years through practice and
research. The knowledge so cumulated is disseminated to
successive generations of managers and used by them in
performing their jobs. Thus, it has become a separate field of study
with its own principles and practices and thus, evolved as an
independent discipline with its own techniques and approaches.
c) Management as a Group:
Management normally refers to a group of managers working in an
organization. It includes the top executive as well as the first line supervisors.
These managers perform their functions jointly as a group. The success of
business does not depend on the efficiency of one, but of all manages taken
together. Managers work as a team so that objectives of the business are fully
achieved. However, in every organization there are certain levels of
management with varying degree of the nature of authority and
responsibilities. You will learn about these later in this lesson.
d) Management as Profession: To be precise, any occupation that satisfies the
following requirements is called a profession. (i) It must be an organized and
systematized body of knowledge. Take for example professions like
engineering or chartered accountancy. These require a specialized knowledge.
(ii) There is always a formal method of acquisition of such knowledge. In
other words, individuals, to pursue a specific profession, must acquire the
specialized knowledge through some formal institutions. (iii) There exists an
association to devise certain code of conduct for the professionals. This code
of conduct lays down norms to be observed by the professionals while doing
their job. (iv) A profession is no doubt an occupation to earn one’s livelihood
but the financial reward is not the main measure of their success.
Though management may not meet all the requirements of a
profession in strict sense of the term, but it meets most of
the above requirements and is, now a days, regarded a
fullfledged profession
 Management as Art or Science
Management as Science
1.Universal Acceptance - Scientific principles are universally
accepted principles and can be applied across all situations,
locations, and times. For example, Newton’s law of motion applies
to every object in motion irrespective of their location and state.
Similarly, management as well comprises specific fundamental
principles that are accepted worldwide. For instance, the principle
of unity of command applies to all organisations, large and small.

2. Cause and Effect Relationship - In science, every cause results in

an effect. This phenomenon is known as causality. To put simply,
every event occurs due to reason. For instance every action has
consequences, like if employees aren’t treated well, then the
productivity will degrade. Conversely, an organisation can attain
increased productivity if the workers are given a bonus and
satisfactory remuneration.
3. Experimentation and Observation - Science is all about facts and
logic and deduces results through experimentation and
observation. The principles of management have been formed
along the same lines. For instance, equal work opportunities and
fair remuneration for the work are known to improve one’s
productivity at work. This idea was derived through scientific
observation.

4. Test of Validity and Predictability - Every scientific principle

and law is tested for validity and can be verified at any given
point in time, and it shall provide similar result each time.
Likewise, one can test the principles of management and expect
the same results every time. Consider two companies A and B.
Let’s say, company A has one boss who administers that
company’s operations, whereas, company B has two bosses and
they both try to manage the organisation as per their judgement.
An experiment will show that company A performs better with
Management as Art

1. Skilful application - Art is personalised, and the style of every artist is different. Each
artist has a different perspective, style, and a different approach to a job. Likewise, one
can successfully manage their organisation only with their individual skills. Here, one’s
approach to the tasks at hand will be different from another, and hence management can
be considered an art.

2. Creativity - Every artist is creative, and similarly, managers need to show creativity and
innovation in the decisions they make for their business to stand out and gain a
competitive edge. Hence, creativity and innovation in management help managers take
unique yet effective decisions.

3. Practical & Theoretical Knowledge - Art supports and believes the importance of
theoretical knowledge and hence most of the art classes, whether it is music, painting, or
dance also carry theoretical papers for students to study. And evidently, the practical
knowledge forms the basis of art. In management, the significance of theoretical and
practical knowledge is not new. With a theoretical understanding of management
principles and their subsequent practice, managers can perform better in managing their
organisational goals.
4. Practise - An artist becomes seasoned with years of
practice and dedication towards their work. Management as
art speaks the same terms. Managers have to go through this
trial and error method before they can become seasoned
managers who can make appropriate decisions.
5. Target-oriented - An artist never works on their piece of
art without any goals in mind; goals make them more
focused and act accordingly for its fulfilment. The same
holds for management. A manager must set objectives and
work towards achieving it to become proficient in their
endeavour.
 Importance of Management
1.It helps in Achieving Group Goals - It arranges the factors of production,
assembles and organizes the resources, integrates the resources in effective
manner to achieve goals. It directs group efforts towards achievement of
pre-determined goals. By defining objective of organization clearly there
would be no wastage of time, money and effort. Management converts
disorganized resources of men, machines, money etc. into useful enterprise.
These resources are coordinated, directed and controlled in such a manner
that enterprise work towards attainment of goals.
2. Optimum Utilization of Resources - Management utilizes all the physical
& human resources productively. This leads to efficacy in management.
Management provides maximum utilization of scarce resources by selecting
its best possible alternate use in industry from out of various uses. It makes
use of experts, professional and these services leads to use of their skills,
knowledge, and proper utilization and avoids wastage. If employees and
machines are producing its maximum there is no under employment of any
resources.
3. Reduces Costs - It gets maximum results through minimum input by
proper planning and by using minimum input & getting maximum
output. Management uses physical, human and financial resources in
such a manner which results in best combination. This helps in cost
reduction.
4. Establishes Sound Organization - No overlapping of efforts (smooth
and coordinated functions). To establish sound organizational structure is
one of the objective of management which is in tune with objective of
organization and for fulfilment of this, it establishes effective authority &
responsibility relationship i.e. who is accountable to whom, who can
give instructions to whom, who are superiors & who are subordinates.
Management fills up various positions with right persons, having right
skills, training and qualification. All jobs should be cleared to everyone.
5. Establishes Equilibrium - It enables the organization to survive in
changing environment. It keeps in touch with the changing environment.
With the change is external environment, the initial co-ordination of
organization must be changed. So it adapts organization to changing
demand of market / changing needs of societies. It is responsible for
growth and survival of organization.
6. Essentials for Prosperity of Society - Efficient management leads
to better economical production which helps in turn to increase the
welfare of people. Good management makes a difficult task easier by
avoiding wastage of scarce resource. It improves standard of living.
It increases the profit which is beneficial to business and society will
get maximum output at minimum cost by creating employment
opportunities which generate income in hands. Organization comes
with new products and researches beneficial for society.
The main functions of top management are as follows:

1. Determining the objectives of the enterprise as a whole.

2. Setting up an organisational framework.
3. Framing policies and making plans to achieve the objectives laid.
4. Work as a link between internal organisational environment and
external environment by representing organisation.
5. Assembling the resources of men, machine, material & money.
6. Providing overall leadership to organisation.
7. Exercising effective overall control.
The important functions of Middle management are as follows:

1. Interpreting the policies framed by top management.

2. Selecting suitable operative and supervisory personnel.
3. Assigning duties and responsibilities for timely execution of the
plans.
4. Motivating personnel to achieve higher productivity.
5. Preparing the organisational set up in their respective departments.
6. Compiling and issuing instructions to the supervisors under their
control.
7. Coordinating with other departments so as to ensure a smooth
running of the entire organisation.
8. Reporting & feedback to top management.
9. Collecting information & reports on performance.
10. Making recommendations to top management for the better
implementation of plans & policies.
The various functions of lower management are as follows:

1. To issue orders & instructions to the workers and supervise & control
their functioning.
2. To plan the activities of his section, classifying and assigning jobs to
the workers.
3. To direct and guide the workers about work procedures.
4. To provide on the job training.
5. To solve the problem of the subordinates.
6. To communicate the problems upward in the hierarchy which cannot
be solved at this level.
7. To maintain discipline among the subordinates and develop in them
the right approach for work.
8. To build up a high group morale among the subordinates.
9. To maintain good human relations.
10. To act as a liaison officer between the middle management and rank
and file employees.
 What is a Manager?

A manager is an expert in his or her field and is a support

system for employees. Managers work within a business
and work together as a team to achieve company goals.
According to Ricky W. Griffin: A manager is someone
whose primary responsibility is to carry out the
management process within an organization. ... The
basic activities that comprise the management process are
planning and decision, organizing, leading, and
controlling.
 Roles of manager by Mintzberg

Interpersonal Informational Decisional

• Figurehead • Monitor • Entrepreneu
• Leader • Disseminato r
• Liaison r • Disturbance
• Spokespers handler
on • Resource
allocator
• Negotiator
 Skills of a Manager

Technical Skill.
Conceptual Skill.
Interpersonal and Communication Skills.
Decision-Making Skill.
Diagnostic and Analytical Skills.
Technical skills

Technical skill is knowledge of and proficiency in activities

involving methods, processes, and procedures.
Thus it involves working with tools and specific techniques.
Technical skill is the ability to use the specialized knowledge,
procedures, and techniques of a field of activities.
Accountants, engineers, surgeons all have their technical
skills necessary for their respective professions. Most
managers, especially at the lower and middle levels, need
technical skills for effective task performance.
For example, mechanics work with tools, and their
supervisors should have the ability to teach them how to use
these tools.
Conceptual Skill
 Conceptual skill is the ability to see the “big picture,” to recognize
significant elements in a situation and to understand the
relationships among the elements.
 Conceptual skill is the ability to coordinate and integrates all of an
organization’s interests and activities.
 It requires having the ability to visualize the enterprise as a whole,
to envision all the functions involved in a given situation or
circumstance, to understand how its parts depend on one another
and anticipate how a change in any of its parts will affect the whole.
 A manager’s ability to think in the abstract and to view the
organization holistically is important.
 Suggesting a new product line for a company, introducing computer
technology to the organization’s operations, or entering the
international market; for deciding this magnitude, a manager
requires conceptual skill is his personality.
Interpersonal and Communication Skills

Communication skill for a manager is a must. The

manager must be able to convey ideas and information to
others and receive information and ideas from others
effectively.
A manager’s job is to control the subordinates and gives
high-level managers or administrators information about
what’s going on.
Communication skill enables a manager to perform them
properly. Most of his time, a manager’s job is to interact
with people inside and outside of the organization.
Manager’s ability to communication with individuals and
groups, controlling and motivation they are what
Interpersonal and Communication skill are.
Decision-Making Skill

Decision making skill is the skill that makes a manager

able to recognize opportunities and threat and then select
an appropriate course of action to tackle them efficiently
so that the organization can benefit them.
Managers are not always going to make the best decision.
But a good manager most often makes a good decision
and learns from the bad ones. Decision making is a skill
that improves as managers gain more experience.
Training or educating is also a good method to develop
the Decision making the skill of a manager.
Diagnostic and Analytical Skills
A good manager has Diagnostic and Analytical skills in
his bags. Diagnostic skill refers to the ability to visualize
the best response to a situation.
Analytical skill means, the ability to identify the key
variables in a situation. Manager diagnostic skill and
Analytical skill helps him to identify possible approaches
to a situation.
After that is also helps a manager to visualize the result or
outcomes of these approaches. This skill sounds similar to
the decision making skill, but it is the skill required to
make the decision.
 Planning
 According to KOONTZ, “Planning is deciding in advance - what to do,
when to do & how to do. It bridges the gap from where we are & where we
want to be”. A plan is a future course of actions. It is an exercise in problem
solving & decision making.

 Planning is determination of courses of action to achieve desired goals.

Thus, planning is a systematic thinking about ways & means for
accomplishment of pre-determined goals.

 Planning is necessary to ensure proper utilization of human & non-human

resources. It is all pervasive, it is an intellectual activity and it also helps in
avoiding confusion, uncertainties, risks, wastages etc.

 Planning increases efficiency, reduces business related risks, provides

directions, encourages creativity and innovation, helps in motivation.
Planning also smoothens decision making , helps to achieve objectives and
basis of control.
Steps in Planning Process

Establishing verifiable goals

Establishing Planning Premises
Deciding the Planning Period
Finding alternative course of action
Evaluating and selecting a course of action
Implementing the Plan
Measuring and Controlling the Programme
Types of planning
 Types of Plans
 Objectives - Objectives may be defined as the goals which an
organization tries to achieve. Objectives are the ends towards which
the activities of the enterprise are aimed. Objectives provide direction
to various activities and serve as benchmark of measuring the
efficiency and effectiveness of the organization.
 Strategies - A strategy is a special kind of plan formulated to meet the
challenge of the policies of the competitors. Strategy can be shaped by
the general forces operating in an industry and the economy. The
strategy must be consistent with external environment
 Policies - Policies may be described as plans which are meant to serve
as broad guidelines to decision making in a firm. Policies exist at
various levels of the enterprise. A policy should be definite, positive
and clear. A policy is a standing plan which assist decision making and
should be referred as a general statement of the established rule. For
example –A firm has a policy of promotion from within the
organization. If a vacancy arises; the first preference is given to
existing employees.
 Procedure – Procedure lays down the manner or method by
which work is to be performed in a standard and uniform way.
Procedure is a standing plan acting as a means of implementing a
policy. For Example –Sales department lays down a policy to
execute all orders within 48 hours. So a procedure has to be
followed in a chronological and systematic order to fulfill the
orders.
 Programs – Programs are precise plans which need to be made
to discharge a non –repetitive task. The essential ingredient of
every program are time phasing and budgeting. Specific dates
should be laid down for the completion of each successive stage
of a program. For Example –An enterprise has a program of
opening 5 branches in different parts of a country so they have to
allocate funds and time period for - a) Securing the necessary
accommodation b) Recruiting personnel to manage business c)
Arrange the supply of goods that are to be sold through the
branches Often a single step in a program is set up as a project.
Rules – Rules are an explicit statement that tells the
members of the organization what they can or cannot do.
Rules do not allow any room for interpretation because it
clearly specifies the action needed to be done in a particular
situation. Rules enforce discipline. For e.g. - Use of Mobile
Phone at workplace during office hours is restricted.
Budgets: Budgets are plans for future period of time
containing statements of expected results in numerical
terms. Budgets are very useful for an enterprise. Being
expressed in numerical terms, they facilitate comparison of
actual results with planned ones and serve as a control
devise. The important budgets are sales budget, production
budget, cash budget, Revenue –Expense Budget.
 Organizing
According to Chester Barnard, “Organizing is a function by
which the concern is able to define the role positions, the jobs
related and the co-ordination between authority and responsibility.
Hence, a manager always has to organize in order to get results.

Organizing is important becoz:

It facilitates efficient management
It facilitates coordination and communication
It facilitates growth and diversification-
It ensures optimum use of resources
It provides for optimum use of technological innovations
It facilitates specialization
 Steps in organizing:

1.Determination of objectives - The purpose of the organization must be identified.

Objectives determine resources and various activities which should be done to achieve
the organizational goals.

2. Identification and grouping of activities- If group members are to pool their efforts
successfully, there must be proper division of the major activities. Each job should be
accurately classified and grouped. This will avoid duplication of work.

3. Assignment of duties- After grouping the activities into various jobs, as per the nature
of work, Similar activities should be placed under one department . Each individual
should be given a particular task according to his ability and skills.

4. Establishing relationship among individuals and group- The activities which are
performed by person holding different positions must be related. Every person in the
organization should know about his responsibility, authority and accountability so that
there is coordination, among individuals and departments.

The organizing process results in organization structure with precisely defined authority
and responsibilities.
Staffing
According to Kootz & O’Donell, “Managerial function of
staffing involves managing the organization structure
through proper and effective selection, appraisal &
development of personnel to fill the roles designed un the
structure”.

Importance of Staffing
Helps in finding efficient worker
Helps in increased Productivity
Maintains Harmony
Helps in morale boosting
Helps in Optimum utilization of human resources
Staffing involves:
Manpower Planning (estimating man power in terms of
searching, choose the person and giving the right place).
 Recruitment, Selection & Placement.
 Induction and orientation
 Training & Development.
 Remuneration or compensation.
 Performance Appraisal.
 Promotions & Transfer
 Directing
According to Koontz and O'Donnell “Direction is the
interpersonal aspect of managing by which subordinates
are led to understand and contribute effectively and
efficiently to the attainment of enterprise objectives.”
The manager must stimulate action by giving direction to
his subordinates through orders and also supervise their
work to ensure that the plans and policies achieve the
desired actions and results
Importance of Directing
 Initiates action
 Creates a Sound work environment
 Develops managers
 Behavioral satisfaction
 Increase in productivity
 Achieves coordination
 Facilitates control
 Facilitates change
 Facilitates growth
Elements of directing
Directing deals with inter-personal relations. It is the doing or
implementing phase of management. Hence it is also called
management-in-action.

a) Supervision – It implies overseeing the work of subordinates in

order to guide and regulate their efforts. Supervision is very
important at the operating level of management. The Supervision is
in direct contact with the workers and acts as the link between
workers and management. The purpose of supervision is to ensure
that subordinates perform their tasks according to prescribed
procedures and as efficiently as possible.
b) Communication- It is the process of passing information view
point, facts, ideas , opinion and understanding from one person to
another. It is a two way process and is complete when there is some
response from the receiver of information. Communication may
take several forms like order, instructions, report, suggestion etc.
 Leadership- Leadership may be defined as the process by which
a manager guides and influences the work of his subordinates.
The success of every enterprise is dependent upon the quality of
its leadership. For example Reliance would not have attained
their present success but for the able leadership of Dhiru Bhai
Ambani. A leader exercises his influence over the followers
through the use of informal authority or power.

 Motivation- Motivation means inspiring the subordinates with a

zeal to do work for accomplishment of organizational objectives.
A manager should make appropriate use of motivational tools to
actuate the subordinates to work harmoniously towards
achievement of organizational goals. Different people are
motivated by different type of rewards, which can be financial
incentives or non-financial incentives.
 Controlling
It implies measurement of accomplishment against the
standards and correction of deviation if any to ensure
achievement of organizational goals.
According to Theo Haimann "Controlling is the process of
checking whether or not proper progress is being made
towards the objectives and goals and acting if necessary, to
correct any deviation.” Controlling ensures that there is
effective and efficient utilization of organizational resources
so as to achieve the organizational goals. Controlling has
two basic purposes a) If facilitates coordination b) It helps
in planning
 Significance of good control system are as follows

1) Basis of future action- Control provides the basis for future actions. It
will reduce the chances of mistakes being repeated in future by
suggesting preventive steps.
2) Facilitates decision making- The process of control is complete only
when corrective measures have been taken. This requires taking a right
decision as to what type of follow up action is to be taken.
3) Facilitates discipline and order – The existence of control system has a
positive impact on the behavior of the employees. They are cautious
while performing their duties as they know they are being observed by
their superiors.
4) Facilitates Coordination- Control helps in Coordination of the activities
of various departments of the enterprise. It provides them unity of
direction.
5) Facilitates motivation – A control system is most effective when it
motivates people to high performance. Since most people respond to a
challenge, successfully meeting a tough standard may provide a greater
sense of accomplishment. 6) Effective plan Implementation-
Therefore controlling has following steps:


Establishment of standard performance.

Measurement of actual performance.

Comparison of actual performance with the standards
and finding out deviation if any.

Corrective action
 Relation between Planning and Controlling
 Control is always based on Planning- Every manager uses certain
Standards for measuring the performance which are laid down by
planning. So planning is a pre-requisite for controlling
 Planning without Controlling is meaningless and control without Planning is
blind- A good plan will not bring any concrete result if the
management is lacking in controlling Planning identifies the goals
and determines the ways to achieve them whereas control ensures
attainment of goals by evaluating performance and taking corrective
action.
 Planning and controlling are both forward looking and backward looking -

Planning is looking ahead because plans are prepared for future

Controlling is looking forward because it aims to improve future
performance and helps in better planning in future. Planning is
looking backwards because new planning is guided by past
experiences. Controlling is looking backwards as it compare actual
performance with standards fixed in the past
 The management process
Planning and decision
making: setting the
organizational goals &
deciding how best to
achieve them

INPUTS from
Environments GOAL attained
Controlling &
Organizing
Monitoring and
•Human resource determining how best to
correcting ongoing
•Financial resources group activities &
activities to facilitate
resources •Effectively
•Physical resources goal attainment. •Efficiently
•Information
resources

Leading motivating
members to work in
best interest of the
organization