Introduction, meaning, nature and characteristics of management, scope and functional area of management, management as a science or arts or profession, management & administration, role of management, levels of management, development of management thought, early and modern management approaches.
1. Dr. H.R.L PESCE
MANAGEMENT & ENTREPRENEURSHIP
Dr. Lakshmi Narasimha Murthy H.R
P E S College of Engineering
Mandya-571401
2. UNIT-I
MANAGEMENT
Introduction, meaning, nature and
characteristics of management, scope and
functional area of management, management
as a science or arts or profession, management
& administration, role of management, levels of
management, development of management
thought, early and modern management
approaches.
Dr. H.R.L PESCE
3. Introduction
Dr. H.R.L PESCE
The term management has enjoyed great prominence during the twentieth
century and continues its dominance in the twenty-first century. During
this time, various corporations were created worldwide and managed
successfully by professionally trained managers.
Management was formally introduced as an academic discipline in the
USA with the establishment of Harvard Business School in 1908.
In India, the advent of management education can be traced back to 1962,
when the Indian Institute of Management (IIM) at Calcutta was
established by the Government of India in collaboration with the Sloan
School of Management, Massachusetts Institute of Technology (MIT).
Later in the same year, the Indian Institute of Management at Ahmedabad
was established in association with the Harvard Business School.
4. Introduction
Dr. H.R.L PESCE
• What is organization?
Group of people working together in a systematic manner to
achieve a set of goals
• Understanding “Management“ from resource based
perspective:
Human Resource: managerial talent and labor
Financial Resource: capital used to finance both ongoing
and long term operations.
Physical Resource: raw materials, office, production facilities
equipment
Information Resource: Usable data needed to make effective
decisions
5. Importance of Management
Dr. H.R.L PESCE
• Management is a critical element in the economic
growth of a country
• Management is essential in all organised efforts,
be it a business activity or any other activity
•Management is the dynamic , life giving element in
every organisation
7. • Management is the art of getting things done
through and with the people in formally
organized groups”…..Koontz H.
• Management is the process of planning,
organizing, actuating and controlling to
determine and accomplish the objectives by the
use of people and resources”…..Terry G.
• “Management is the accomplishment of results
through the efforts of other people”
Lawrence A Appley
Dr. H.R.L PESCE
Meaning
8. The manager is not expected to do things on
his own, but to take work out of other people.
These people may be subordinates, superiors,
vendors, contractors, shareholders, and other
stakeholders.
Dr. H.R.L PESCE
Meaning
9. Dr. H.R.L PESCE
There are four views of management:
1. Management is a process: A process is defined as systematic method
of handling activities.
2. Management is a discipline: Discipline refers to the field of study
having well defined concepts and principles.
3. Management is a human activity: The word ‘management’
used here refers to the people who engage in the process of management.
Managers are responsible for seeing that work gets done in organization.
4. Management is a career: Today management is developed as a
career focused on specialization. Marketing management, finance
management, personal management, Industrial management, production
management, quality management are some of the
specializations in management.
11. Dr. H.R.L PESCE
The nature of management can be described as
follows:
Multidisciplinary: Because it includes knowledge, information from
various disciplines like economics, statistics, psychology, sociology,
operations research etc. Management integrates ideas and concepts taken
from these disciplines and presents newer concepts which can be put in to
practice for
managing organizations.
Dynamic nature of principles: It tries to visualize problems before
they turn in to emergencies & takes suitable steps. It tries to adapt itself to
environmental changes quickly.
Relative not absolute principles: Management principles should
be applied according to the need of the organization. A particular
management principle has different strengths in different conditions
12. Dr. H.R.L PESCE
Universality of management: Basic principles of management can
be applied in all managerial situations regardless of size, nature and location
of the organization. Universality of managerial tasks and principles also
implies that managerial skills can be transferrable and managers can be
trained and developed.
Management – science or art : Management is both science as well
as art. It’s a behavioural science.
Management is a system of authority: A manager is supposed to
get things done by using authority, rather than doing things himself.
Authority means right to give orders and power to obtain objective from
subordinates. It’s a rule making and rule entering body in an organization.
13. Dr. H.R.L PESCE
Following are the characteristics of management : 1
• Management is a continuous process
• Management aims at achieving predetermined objectives
• Management is a factor of production
• Management is decision-making
• Universal application
• Management is needed at all levels
• Management aims at maximum profit
• Dynamic
• Management as a career
• Management is a profession
14. Dr. H.R.L PESCE
Scope and functional area of management
• Development Management
• Distribution Management
• Financial Management
• Marketing Management
• Personnel Management
• Production Management
• Office Management
• Transport Management
• Purchasing management
• Sales Management
• Supply chain Management
• Business Management
Scope
16. Dr. H.R.L PESCE
Functional areas of management
Production Management: It deals with planning, organizing, directing, coordinating
and controlling the function of production. This helps in managing cost, time and
quantity of the goods and services which a business wants to achieve.
Human Resource Management: It mostly deals with the workforce hence is also
called manpower management. It aims at obtaining the desired level of performance
from the employees. It involves recruiting, placing, training, promoting, motivating,
managing welfare etc. of the employees.
Office Management: It is restricted to the office premise but is one of the most
important functional areas of management. It deals with layout, environment,
accommodation, effective communication, correspondence and mailing, record
maintenance, filing, handling stationary and equipment etc.
Marketing Management: Marketing management deals with the identification of
needs and wants of customers for the concerned product and then applying effective
techniques to create demand and supply of that product.
Financial Management: It deals with the creation and distribution of funds. It
involves the cost of capital, capital budgeting, short and long-term sources of finance,
dividend policy etc. Securing of funds in investments giving profits is the main aim of
this management.
17. Dr. H.R.L PESCE
Management as a science or arts or profession
Management is an art: because it requires the creativity and
subjective skills of a manager like the communication skills,
negotiation skills, motivational skills, etc. Every individual
manager has his own personal traits—attitude, ethics, values
and style, which constitute an art form.
Management is also a science: as it requires a systematic
study based upon scientific methods to analyse business
problems and to find optimal solutions. Later in this chapter,
while covering the development of management thought, we
would come across the contributions of various scientists,
engineers, and mathematicians who used scientific tools and
techniques in laying the foundations of management as a
discipline.
18. Dr. H.R.L PESCE
Management is Profession:
Management is undoubtedly one of the most sought after
professions, which is evident from the immense
achievements of successful managers in creating new
enterprises, growing existing enterprises, and the lucrative
pay packages offered by organizations worldwide to its
managers.
19. Dr. H.R.L PESCE
Management & Administration
• The term administration and management are used
synonymously.
• Some writers urge that running of a business requires skills,
which is known as management
• Functioning of government departments and non-profit
institutions requiring skill is known as administration
20. Dr. H.R.L PESCE
Is administration and management one and the same?
• No universally accepted view on this point.
• American school of thought says
- Administrators think- Top level function
- Managers do- Lower level function
• British School of Thought
- Management is wider concept than administration
- Administration is a lower level function of day to day
activities
- Management is rule making and rule enforcing activity
• There is really no clear cut distinction between management
and administration-Govt. agencies have administration,
Companies have Management
23. Dr. H.R.L PESCE
Role of management
Henry Mintzberg a contemporary management thinker has done
research on various roles performed by manager. A role according
to him is an organized set of behavior belonging to an identifiable
office or position. He has classified 10 managerial roles in three
broad categories :
Interpersonal roles : managers have to work with many people
in organization. Because of their formal authority and superior
status, managers have to establish good interpersonal contact
with subordinates peers and superiors.
Informational roles : information is life blood of any
organization and every manager is a clearing house of
information related to various task on hand.
Decisional roles : involve around making choices among
available alternatives. Through decisional roles, strategies are
formulated and put into action.
26. Dr. H.R.L PESCE
INTERPERSONAL ROLES
a) Figure head role :
Symbolic head. Need to perform number of routine duties. Greeting
visitors, represent company or community events, welcome new staff
etc.
b) Leader :
Role to motivate, influence and direct subordinates, staffing, training. All
activities of managers involve handling subordinates.
c) Liaison :
Connect people outside and maintaining network of contacts like
buyers, suppliers, strategic partners. It involves
mail coordinating external board work.
27. Dr. H.R.L PESCE
INFORMATIONAL ROLES
a) Monitor :
Scan environment and receive wide variety of information
from internal and external sources to understand
organizational environment. Handling mails, contacts,
reading periodicals and reviewing.
b) Disseminator :
Transmitting subordinates information to inform staff about
company related matters. The manager passes some of his
privileged information directly to his key subordinates who
would otherwise have no access to it.
c) Spokesperson :
Deliver information to specific person to individual and groups
outside. It comprises of holding board meeting, press
conference etc.
28. Dr. H.R.L PESCE
DECISIONAL ROLES
a) Entrepreneur:
In this role, the manager proactively looks out for innovation to improve his
organization. searches of new opportunity projects, methods, products.
Strategy making, new product launch entry into new markets.
b) Disturbance handler:
in this role addressing unanticipated problems. Handling issues like excess
inventory, production breakdown etc.
c) Resource allocator:
allocating organizational resources like money, materials. Which includes
budget allocation, decision like who should get what.
d) Negotiation:
representing organization for various negotiations like union management
negotiation, sales negotiation, purchase negotiation etc.
31. Dr. H.R.L PESCE
Top line managers
• Responsible for the production of goods and services.
• First line managers: foremen, white collar supervisors, Section heads.
• Second line managers: Functional heads and immediate subordinates.
• Top line managers: CEO, President, Chairman, MD, COO, CIO.
Middle managers
• Translate the broad strategies into specific goals for implementation
First line managers
• Responsible for the overall direction and operations of an organization
34. Dr. H.R.L PESCE
Early Classical Approaches
Classical Approach Scientific Management
• Frederick Winslow Taylor
(1856- 1915)
• Graduated in science and engineering
through evening study
• 1878- joined as worker at Midvale
steel works.
• 1898- joined Bethlehem steel
company as Engineer
•Acknowledged as Father of scientific
Management
35. Dr. H.R.L PESCE
Frederick Winslow Taylor is considered to be father of scientific
management. During his career span of 26 years, he conducted series of
experiment in three companies at this time Taylor made several important
contributions which are classified under scientific management :
1. Time and motion study : Taylor focused in time duration required
by employees to accomplish given task, in which he timed motion of
job with help of a stop watch. Thus through this best way of doing job
was found.
2. Differential payment : Taylor introduced payment plan in which
employee remuneration is linked to performance of employee in
company.
36. Dr. H.R.L PESCE
3. Drastic reorganization of supervision : Taylor suggested two
new concepts in which he was of opinion that work should be planned
by foreman and not by worker, secondly as there are special functions
involved in doing a job and each of these foreman should give orders to
workers based on their specialization.
4. Scientific recruitment and training : Taylor suggested that
management should develop and train every worker to get best quality
of output, desired behavior from employees in company.
5. Intimate friendly cooperation between management and
workers : Taylor was of opinion that organization success depends upon
effective cooperation and coordination between management and
employee in company.
37. Dr. H.R.L PESCE
Limitations of scientific management
• It ignored human touch in an organization and viewed
workers as machines
• Monotonous and boring job
• Exploitation device
• Harsh and difficult to perform
38. Dr. H.R.L PESCE
Administration Management
• Scientific management deals with improving efficiency
and productivity of individual employees
• Administrative management focuses on managing whole
organization.
• Henry Fayol [1841-1925] is the main contributor to this
approach
39. Dr. H.R.L PESCE
• Henry Fayol [1841-1925]
• A French Industrialist
• Regarded as “ Father of
Modern Management Theory”
40. Dr. H.R.L PESCE
Suggested conceptual framework for studying
management by dividing industrial activities into 6
groups
• Technical
• Financial
• Security
• Accounting
• Managerial
• Commercial
41. Dr. H.R.L PESCE
Identified 5 managerial functions to carry out these activities;
planning, organizing, commanding, coordinating and
controlling.
• Fayol was the 1st management thinker to recognize need for
management teaching
• Believed that management was an activity common for all
organizations including government agencies
• Published a famous book named “General And Industrial
Management”
• In his book, he presented 14 principles of management for
running an organization efficiently.
42. Dr. H.R.L PESCE
Fayol’s 14 principles of management
1. Division of Work:
division of total task lightens the work, specialization[one person does only
one thing] increases the efficiency and output.
2. Parity between Authority and responsibility:
managers should balance between both. They should have right to give
orders and should own accountability for the task
3. Discipline:
Respect of authority and following rules. Clarity of rules, built in rewards,
punishments help to maintain discipline
4. Unity of Command:
One should receive orders from only one superior
5. Unity of Direction:
there should be single plan and head for each group of activity with same
objective/ direction
6. Subordination of Individual interests to general interests
Individuals interests should be harmonious with organization’s interests.
Integrate the both
43. Dr. H.R.L PESCE
7. Fair remuneration to workers:
Remuneration should be based on cost of living, business condition.
Additional works should get incentives. This increases morale and efficiency
8. Centralization:
Major decisions should be taken by Top Management, operations level
decision making power can be given to lower level.
9. Scalar Chain:
Chain of superiors from highest to lowest ranks. Authority should run from
top to bottom in proper channel
10. Order:
there should be a place for everything and every thing should be in its place
11. Equity:
managers should be kind and fair to their workers
12. Stability of tenure of personnel:
Try to minimize employees turnover, build long term commitment, a sense of
belongingness among their subordinates. Provide job security
13. Initiative:
Managers should encourage their subordinates to take initiatives.
14. Esprit de corps:[ team spirit]
Management should create team spirit among employees for harmony and
unity
44. Dr. H.R.L PESCE
Bureaucratic Management
•Max Weber (1864-1920)
• German sociologist
• Known as Father of
Modern Sociology
45. Dr. H.R.L PESCE
Important Features of Bureaucratic Management
• Insistence on following standard rules
• Systematic division of work
• Principle of hierarchy is followed
• Necessary for the individual to have knowledge of and
training in the application of rules
• Administrative acts , Decision and Rules are recorded
in writing
• Rational personnel Administration
46. Dr. H.R.L PESCE
Contributions and limitations
Can be viewed as the logical extension of management when it
becomes impossible for one person to fulfill all management
functions
Limitations:
• Overconformity of rules
• Buck passing
• Trained incapacity
• Displacement of goals
• Neglect of informal groups
• Rigid structure
• Inability to satisfy the needs of mature individuals
47. Dr. H.R.L PESCE
Behavioural Science Approach
• Decision-making is done in a sub-optimal manner, because of practical
and situational constraints on human rationality of decision-making. The
behaviorists attach great weight age on participative and group decision-
making.
• Behavioral Scientists encourage self direction and control instead of
imposed control.
• Behavioral Scientists consider the organization as a group of individuals
with certain goals.
• In view of behavioural scientists the democratic-participative styles of
leadership are desirable, the autocratic, task oriented styles may also be
appropriate in certain situation.
NEO CLASSICAL APPROACHES
48. Dr. H.R.L PESCE
• They suggest that different people react differently to the same
situation. No two people are exactly alike and manager should
tailor his attempts to influence his people according to their
needs.
• They recognize that organizational conflict and change are
inevitable.
49. Dr. H.R.L PESCE
MODERN MANAGEMENT APPROACHES
• Quantitative Approach
• Systems Approach
• Contingency Approach
50. Dr. H.R.L PESCE
Quantitative Approach
• Quantitative approach also known as management approach
• The interdisciplinary teams who were engaged for this
purpose were known as operation research teams.
• The focus of quantitative approach is on decision making,
and to provide tools and techniques for making objectively
rational decisions.
• Objective rationality means an ability and willingness to
follow reasonable, unemotional and scientific approach in
relating means with ends and in visualizing the totality of the
decision environment.
51. Dr. H.R.L PESCE
Systems Approach
A system is a set of interdependent parts which form a unit as a
whole that performs some function.
• Developed during early 1960s
• Contributors: Kenneth Boulding, Johnson and Bernard etc
• System: An interrelated set of elements functioning as a whole
• Organizations are viewed as a system
Basic types of system:
• Open System: organization that interacts with its environment
• Closed System: that doesn’t interact with its environment
52. Dr. H.R.L PESCE
A system is a set of interdependent parts which form a unit as a
whole that performs some function.
Environment reacts to these outputs and
provides feedback to the system
53. Dr. H.R.L PESCE
Contingency Approach/ Situational Approach
Contingency Approach suggests there is no one best way of doing things
under all conditions
Stresses that there is no best way of doing a thing. Conditions of
contingency/situation will determine which technique would be most
suitable
Managers should prepare objectives, policies, procedures, rules and
regulations according to situation of business
Success in management depends upon the ability to cope with environmental
demands
Managers should sharpen their diagnostic skills to anticipate and
comprehend environment changes
54. Dr. H.R.L PESCE
Three situational components determine the
favorableness or situational control:
1. Leader-member relations, referring to the degree of mutual
trust, respect and confidence between the leader and the
subordinates.
2. Task structure, referring to the extent to which group tasks are
clear and structured.
3. Leader position power, referring to the power inherent in the
leader’s position itself.
Limitations:
• This approach lacks theoretical base
• Manager is required to think through all possible alternatives,
as there is no clear cut principles to act upon.
