1. PRINCIPLES OF MANAGEMENT
by
Devipriya.M
Industrial Placement Co-Ordinator
&
Assist Professor

2. UNIT : I
HISTORICAL DEVELOPMENT
 Definition of Management
 Science or Art
 Management and Administration
 Development of Management Thought
 Contribution of Taylor and Fayol
 Functions of Management
 Managerial Roles
 Levels of management
 Types of Business Organisation

3. DEFINITION OF MANAGEMENT
 Management : On expanding
Manage – men – tactfully
Manage – Men – technology
Manage – men – as team
Manage – competencies
Manage – objectives (MBO)
Manage – men and things

4.  According to Harold Koontz,
“Management is an art of getting things
done through and with the people in formally
organized groups. It is an art of creating an
environment in which people can perform
and individuals and can co-operate towards
attainment of group goals”.

5. MANAGING SCIENCE OR ART:
 Science influence in management:
 Organized science and Systematic body of
Knowledge
 Concepts and Universal principles
 Rational justification
 Cause & Effect relationship
 Test of validity and predictability
 Dependent and Independent variables
 Scientific enquiry and experiments
 Conditions and Influences

6. ARTS
 Creativity
 Practice through Experience
 Interpretations from huge Knowledge base
 Cannot experiment accurately
 Decisions differ from Organization to organization
 Decision differ based on situations
 Clear cut cause- Effect could not be established because
of inability to control so any external and subjective issues
 Irrationality & Subjectivity in most of the decisions
 Deals with human beings , the most complex organism.
 Result oriented approach
 Improvement through people

7. Difference Between Management &
Administration
S.No Features Administration Management
Determinative or Thinking
1 Nature function Executive or Doing function
Decision on Objectives &
2 Type of work Policies Implementation of policies
3 Levels of authority Top level Middle and Lower level
Public opinion & Outside Objectives & Policies of
4 Influence sources concern
Direction of human
5 efforts Not directly concerned Actively concerned
6 Main functions Planning & Control Directing & Organizing
7 Skills required Conceptual and human skills Technical and Human skills
8 Usage Used in Govt. & Public sector Business organizations
Administrator, Incharge,
9 Designations Officer Manager, Supervisor
Commissioner

8. Evolution Of Management Thought
 The origin of management as a discipline was developed in the
late 19thcentury.
 a) Classical approach,
 b) Behavioral approach,
 c) Quantitative approach,
 d) Systems approach,
 e) Contingency approach.
 THE CLASSICAL APPROACH:
The classical approach is the oldest formal approach of
management thought.

9. (i) Scientific Management.
Frederick Winslow Taylor is known as the father of scientific
management. Scientificmanagement (also called Taylorism or the
Taylor system) is a theory of management that analyzes and
synthesizes workflows, with the objective of improving labor
productivity.
 Scientific Task and Rate-setting, work improvement, etc.
Method study
Motion study
Time study
Fatigue study
Rate setting

10.  Planning the Task.
Having set the task which an average worker must strive to perform to
get wages
 Vocational Selection and Training
To entrust the task of selection to a central personnel department.
 Standardization (of working conditions, material equipment
etc.)
Tools and equipment
Speed
Condition of work
Materials

11.  Specialization:
The Route Clerk
The Instruction Card Clerk
The Time and Cost Clerk
The Shop Disciplinarian
The Gang Boss
The Speed Boss
The Repair Boss
The Inspector
 Mental Revolution:
Enormous gain that arises from higher productivity
shared both by the management and workers in the form of
increased profits and increased wages.

12. (ii) Administrative Management.
Administrative management focuses on the management
process and principles of management
Henry Fayol's 14 Principles of Management:
1.Division of work
2. Authority and Responsibility
3. Discipline:
4. Unity of Command
5. Unity of Direction

13. 6. Emphasis on Subordination of Personal Interest to General
or Common Interest
7. Remuneration
8. Centralization
9. Scalar Chain
10. Order
11. Equity
12.Stability of Tenure
13. Esprit of Co-operation
14. Initiative

14. (iii) Bureaucratic Management.
Bureaucratic management focuses on the ideal form of
organization. Max Weber was the major contributor to
bureaucratic management
 Behavioral Approach
Human Relations.
Behavioral Science.
 The Quantitative Approach
The quantitative approach focuses on improving decision
making via the application of quantitative techniques.

15.  Management Science (Operations Research)
 Production And Operations Management.
 SYSTEMS APPROACH
FEED BACK
INPUT OUTPUT
PROCESS
EXTERNAL ENVIRONMENT

16.  Contingency Approach
It emphasizes that there is no one best way to manage
and that it depends on various situational factors, such as the
external environment, technology, organizational characteristics,
characteristics of the manager, and characteristics of the
subordinates.

17. THE FUNCTIONS OF MANAGEMENT
Managers
Planning Organizing Staffing Directing
Planning is Bringing The Employees’ Controlling
deciding in together organization activities Measurement
advance what resources and with qualified toward & correction
to do, when activities to people achievement of performance
achieve the (put right man of objectives activities of
to do & how
organization’s on right job)
to do. subordinates
objectives

18. LEVELS OF MANAGEMENT
 The three levels of management are as
follows
Top Level
Middle Level
Lower Level

19. MANAGERIAL ROLES
• Figure head
Interpersonal • Leader
• Liaision
• Monitor
Informational • Disseminator
• Spokesperson
• Entrepreneur
• Negotiator
Decisional • Resource allocator
• Disturbance Handler

20. TYPES OF BUSINESS ORGANIZATION
 Sole Proprietorships
These firms are owned by one person, usually the individual who
has day-to-day responsibility for running the business.
 Partnerships
In a Partnership, two or more people share ownership of a single
business. The Partners should have a legal agreement regarding
profit sharing, disputes will be resolved, how future partners will be
admitted to the partnership, how partners can be bought out, or
what steps will be taken to dissolve the partnership when needed.

21.  Corporations
A corporation, chartered by the state in which it is headquartered, is
considered by law to be a unique "entity", separate and apart from
those who own it. A corporation can be taxed; it can be
sued; it can enter into contractual agreements.
 Joint Stock Company
Limited financial resources & heavy burden of risk involved in
both of the previous forms of organization has led to the
formation of joint stock companies these have limited
dilutives.

22. There are two main types of joint stock
Companies.
(i) Private limited company:
This type company can be formed by two or more persons. Te
maximum number of member ship is limited to 50.
(ii) Public limited company:
Public Limited Company: Its is one whose membership is open to
general public. The minimum number required to form such
company is seven, but there is no upper limit. Such

23.  Public Corporations:
A public corporation is wholly owned by the Government centre to
state. It is established usually by a Special Act of the parliament.
Special statute also prescribes its management pattern
power duties & jurisdictions.
 Government Companies:
A government company is any company in which of the share capital
is held by the central government or partly by central government &
party by one to more state governments. It is managed b the
elected board of directors which may include private individuals.

24. UNIT II PLANNING
 Nature and purpose
 Steps involved in Planning
 Objectives-Setting Objectives
 Types of Plan
 Process of managing by objective
 Strategies
 Policies and Planning Premises
 Forecasting
 Decision Making

25. DEFINITION
According to Koontz O'Donnel :
"Planning is an intellectual process , the conscious
determination of courses of action, the basing of decisions
on purpose, acts and considered estimates".

26. NATURE AND PURPOSE
Nature of Planning:
1. Planning is goal-oriented
2. Primacy of Planning
3. Pervasiveness of Planning
4. Efficiency, Economy and Accuracy
5. Co-ordination
6. Limiting Factors
7. Flexibility
8. Planning is an intellectual process

27. PURPOSE OF PLANNING
 To manage by objectives
 To offset uncertainty and change
 To secure economy in operation
 To help in co-ordination
 To make control effective
 To increase organizational effectiveness

28. PLANNING PROCESS
How does a manager Plan?
Establish objectives
Develop Strategies
Determining
planning premises
Establish policies
Coordinate Develop program
throughout the for
planning accomplishments
Develop preventive Establish schedules
&/or contingent and budgets
action
Identify potential Establish
problems procedures

29. Perception of Establishing
opportunity objectives
Establishing Planning
sequence of premises
activities
Identification of
Formulating
alternative
support plans
Choice of
Evaluation of
alternative
alternative
plans

30. OBJECTIVES
According to Koontz and O'Donnell,
“An objective is a term commonly used to indicate the end point of
a management programme."
Objectives are the ends towards which the activities of the
enterprise are aimed. They are present not only the end-point of
planning but also the end towards which organizing,
directing and controlling are aimed.

31. Features of Objectives:
 Clear definition of objectives encourages unified planning.
 Objectives provide motivation to people in the
organization.
 When the work is goal-oriented, unproductive tasks can
be avoided.
 Objectives provide standards which aid in the control of
human efforts in an organization.
 Objectives serve to identify the organization and to link it
to the groups upon which its existence depends.

32. SETTING OBJECTIVE
 Objectives are required to be set by management in
every area which directly and vitally affects the
survival and prosperity of the business.
 Identifying objectives ( various field)
 Review of past performance
 The objectives to be set should be reasonable and
capable of attainment.
 Objectives must be consistent with one and other.
 Objectives must be set in clear-cut terms.
 For the successful accomplishment of the objectives,
there should be effective communication.

33. TYPES OF PLANS
Specify actions to
Operational achieve tactical plans
Plans (very short-term)
Tactical Plans Designed to
implement
strategic objectives
(usually one year or
less)
Establish long-range
Strategic Plans objectives

34. MANAGEMENT BY OBJECTIVES (MBO)
MBO is a process whereby the superior and the mangers of an
organization jointly identify its common goals, define each
individual’s major area of responsibility in terms of results expected
of him.
1.MBO is concerned with goal setting and planning for individual
managers and their units.
2. Joint goal setting between a supervisor and a subordinate.
3. Superior -subordinates relationship to establish the performance goals
4. MBO focuses attention on appropriate goals and plans.
5. MBO facilitates control through the periodic development and
subsequent evaluation of individual goals and plans.

35. STEPS IN MBO
 Setting goals
Managers need to identify and set objectives both for
themselves, their units, and their organizations.
 Developing action plans
 Reviewing Progress
 Performance appraisal
Performance appraisals communicate to employees how
they are performing their jobs, and they establish a plan for
improvement.

36. STRATEGIES
According to Koontz and O' Donnell, "Strategies must often denote a
general programme of action and deployment of emphasis and resources
to attain comprehensive objective.
• It is the right combination of different factors.
• It relates the business organization to the environment.
• It is an action to meet a particular challenge, to solve particular problems
or to attain desired objectives.
• Strategy is a means to an end and not an end in itself.
• It is formulated at the top management level.
• It involves assumption of certain calculated risks. ensive objectives".

37.  Strategic Planning Process / Strategic Formulation Process
1. Input to the Organization
2. Industry Analysis
3. Enterprise Profile
4. Orientation, Values, and Vision of Executives
5. Mission (Purpose), Major Objectives, and Strategic Intent
6. Present and Future External Environment
7. Internal Environment
8. Development of Alternative Strategies
9. Evaluation and Choice of Strategies
10. Medium/Short Range Planning, Implementation through
Reengineering the Organization Structure, Leadership and
Control
11. Consistency Testing and Contingency Planning

38. TYPES OF STRATEGIES
According to Michel Porter, the strategies can be classified
into three types. They are
a) Cost leadership strategy
b) Differentiation strategy
c) Focus strategy

39. POLICIES
Policies are general statements or understandings that
guide managers’ thinking in decision making.
Principles of departure
Statement of issues
Goals and objectives
Policy analysis
Recommendations
Implementation Plan
Monitoring and evaluation

40. FORECASTING TECHNIQUES
 Qualitative techniques: Expert, judgmental, opinion based and
subjective
 Delphi method : Panel of experts were asked to judge or
estimate and the average of all the estimations are considered
as Final estimate.
 Market research method: Systematic formal investigation
 Panel consensus: Open group discussion and estimation
 Visionary forecast: Personal insights and prophesies
 Historical analogy: History of one or more similar product
investigation is used.

41.  Quantitative techniques:
 Time series analysis ; Adjusted to trend, seasonal variations
 Extrapolation: Future projection based on past & Present
trends
 Regression analysis : Relative movements of one more
interrelated series.
 Input – output analysis : Cause- effect estimation
 Econometric model: Expressing in quantitative terms the
relationship between different variables that could
influence.

42. DECISION MAKING
In the words of George R. Terry, "Decision-making is the
selection based on some criteria from two or more
possible alternatives".
Components of decision making process
 Decision maker
 Decision problem
 Environment around the problem
 Objectives of decision maker
 Alternative course of action
 Outcomes expected from various alternatives
 Final choice

43. Elements of decision making process
 Identification of problem situation
 Definition of problem situation
 Specification of objectives
 Collection of data
 Developing alternative course of actions.
 Evaluation of alternative course of actions
 Selecting appropriate techniques
 Implementation of decision

44.  Types of decisions:
 Routine and strategic decisions
Routine: Regular, Normal, day to day, less significance, No
deviations
Strategic: Critical, high value, responsible for success/failure of
the organization.
 Policy and operating decisions
Policy: Vital importance and taken by top management
Operating decisions: Lower levels of management, activities,
tasks and processes.
 Organizational and Personal decision
Organizational: Official capacity
Personal decisions: Individual

45.  Programmed and non programmed decisions:
Programmed: Routine and Repetitive
Non programmed decisions : Situational, Accidental and
Contingency
 Individual and Group decisions
Individual: Decisions of own by Leaders
Group: Collective decisions

46. Decision Making styles:
 The Directive Style
 The Analytic Style
 The Conceptual Style
 The Behavioral Style