Principles of Managements; Chapter one

Copyright © Amity University
PAN African e-Network Project
DBM
“PRINCIPLES & PRACTICES OF
MANAGEMENT”
Semester - I
By- DR. MEENAKSHI KAUSHIK

What is management
Management involves managing
efficiently and effectively the
activities of men , machines material
and money.

“ Efficiency refers to getting the maximum
output from the available scarce resources
i.e. ‘doing things right’
Effectiveness-
“Doing the right things” to achieve
desired organizational goals”
Every organization works towards achieving
some common goals and formulates
methods to achieve these goals.
Efficiency

 Managers are the people within the
organizations who play a vital role towards
achieving the organization’s goals by
monitoring and controlling organizational
activities.
With increasing global competition ,changes
in the world of technology ,changing business
practices and increasing social responsibility
of organizations , the role of managers has
become all the more significant.
Continued…

“ Management is the process of planning ,
organizing ,leading ,staffing , and controlling
the activities of various resources within the
organization through systematic , coordinated
and co-operative human efforts to achieve
organizational objectives.
Harold Koontz and Heinz Weihrich defined
management as the process of designing and
maintaining an environment in which
individuals ,working together in groups
,efficiently accomplish selected aims”
Definitions of Management

“ The use of people and other resources to
accomplish objectives”
Louis E. Boone and David L. Kurtz

Defined management as
“a process by which managers create ,
direct ,maintain ,and operate purposive
organizations through systematic
,coordinated , co-operative human efforts.”
Marry Parker Follet defined management as
“ the act of getting things done through
people”
Dalton E. McFarland

Managers carry out the functions of planning,
organizing ,staffing ,leading and controlling.
Henry Fayol was the first management
thinker to outline the five basic functions
carried out by managers.
Management is essential to any kind of
organization. Where ever there are group of
people working together to achieve some
common objectives, it becomes essential to
manage their people and resources
effectively.
Nature of Management

Management is essential at all hierarchical
levels. However the type of skills and the
degree to which various skills are required at
different levels of hierarchy may vary. In
order to perform their duties satisfactorily
,managers need technical , human ,
conceptual , and design skills.
The goals of all managers is to generate
surplus
The aim of all managers is to improve
productivity, efficiency , and effectiveness.
Nature continued…

• Productivity is defined as “the output input
ratio within a time period with due
consideration for quality. It can be
expressed as :
• Productivity =Output/Input (within a time
period ,quality considered)
Continued….

In the following ways:-
 By producing more output with the same inputs.
 By reducing inputs, but maintaining the same
levels of outputs.
 By increasing the outputs and reducing inputs ,
thereby , making the ratio more favorable.
Thus productivity can be improved by ensuring
efficiency and effectiveness in the operations of
the firm.
Productivity can be improved

1. Planning-Planning is the process of selecting
goals for an organization and designing
necessary programs to achieve desired goals.
Planning helps managers to decide on the
activities to be performed with available
resources.
2. Organizing-This is the process of assigning
and allocating tasks ,authority and resources
to enable a firm to achieve its organizational
objectives.
Functions of Management

3. Staffing- Staffing involves manning the
various positions created by the organizing
process .It involves activities such as
identifying work-force requirements
,recruitment , selection and orientation of
new employees.
4. Leading –It involves directing ,
influencing , and motivating employees
towards achieving organizational
objectives
Continued…

Communicating with others
Leadership approaches and styles
Motivating people to put forth the efforts
required to achieve organizational goals.
In simple words , it is the act of making
things happen through others
Leading involves

5. Controlling-
The main elements of the control process
include establishing the standards of
performance , measuring ,the actual
performance ,comparing the actual
performance with the standards and taking
corrective actions in case of deviation
Continued…….

I. Comparing performance with standards
II. Determining where negative deviations ,
III. Developing remedial measures to
correct deviations
Thus Control process involves

Top Level managers-:
 The top level management is responsible for
the overall activities of an organization.
 It establishes plans and goals that influence the
entire organization.
 Top level managers are few in number and
occupy the posts of ‘Chief executive officer’,
‘Chairman’, ‘President’ ‘Vice president’, ‘Director’
etc.
Levels of Management

These level managers are directly
responsible for managing the performance
of first level managers.
They are responsible for the operational
efficiency of various departments in an
organization.
They hold designation such as
‘Department Heads’ , ‘Project Head’, ‘Plant
Manager’ and Divisional Head’.
Middle level managers

Managers at the first level have the
responsibility to manage the performance
of the non managerial personnel in an
organization and ensure implementation of
operational plans.
They are also called supervisors
They are given different titles in different
companies like ‘Foreman’, ‘Clerical
supervisor’, ‘Technical supervisors’, etc.
First Level Managers

TOP MANAGEMENT
Develops and reviews long range plans
and strategies.
Evaluates overall performance of various
departments and ensures cooperation.
Involved in selection of key personnel.
Consults subordinate managers on subject
or problems of general scope
Functions at various levels of
Management

• Makes plans of intermediate range and
prepares long range plans for review by
top management.
• Analyzes managerial performance to
determine capability and readiness for
promotion.
• Reviews daily and weekly reports on
production or sales.
• Counsels subordinates on production,
personnel or other problems
Middle Management

• Makes detailed ,short range operational
plans.
• Reviews performance of subordinates.
• Supervises day to day operations.
• Makes specific task assignment
• Maintains close contact with employees
involved in operations
Supervisory Management

Robert L. Katz identified three essential
skills that are needed by a manager
1.Technical Skills
2.Human Skills
3.Conceptual Skills
4.Design skills
Management Skills

o Technical Skills refer to the ability of a person to
carry out a specific activity. In order to do so
,one needs to have knowledge of methods
,processes and procedures. Engineers ,
computer specialists , accountants , and
employees in manufacturing departments all
have the necessary technical skills for their
specialized fields.
o Example-Technical skills are essential for first
level managers.
Technical Skills

• Human skills refer to the ability to work
with other people as individuals and in
groups. They help employees to
communicate ,motivate, lead and inspire
others in an organization. These skills are
equally important for all managerial levels.
• These human skills or interpersonal skills
refer to the ability of a person to work well
with other people in a group.
Human Skills

These are the skills that are required by
the managers to conceptualize abstract
and complex situations.
These skills are essential for top level
managers, since they need to possess a
clear understanding of the overall
functioning of the organization and relate it
to the external environment.
Conceptual skills

• These skills are required by top level
managers to find solutions to problems in
a manner that would benefit the
organization. Top managers should
suggest a rational and feasible solution to
a problem apart from recognizing the
problem.
Design Skills

First level managers require more
technical skills in order to supervise
operational employees .They need to have
good human skills for they need to interact
with their subordinates on a regular basis.
However conceptual skills are usually not
very essential for the managers at the
supervisory level.
Relative need for the Main
categories of skills

The need for technical skills is lesser at
the middle level management. Here ,
human skills and conceptual skills are
more significant.
At the top management level, conceptual ,
design and interpersonal skills are of
greatest importance. There is little need
for technical skills.
Continued…

 Interpersonal roles
 Informational roles
 Decision Roles
Managerial Roles: Henry Mintzberg

Figurehead role-Performs ceremonial and
symbolic duties such as greeting visitors
,signing legal documents.
Leader role-Direct and motivate
subordinates, training ,counseling and
communicating with subordinates.
Liaison role-Maintain information links both
inside and outside organization; use mail,
phone calls ,meetings
Interpersonal roles

Recipient –Seeks and receives information,
scan periodicals and reports ,maintain
personal contacts
Disseminator-Forward information to other
organization members ;send memos and
reports, make phone calls.
Spokesperson-Transmit information to
outsiders through speeches ,reports ,
memos.
Informational roles

Entrepreneur- Initiate improvement
projects ,identify new ideas ,delegate idea
responsibility to others.
Disturbance Handler-Take corrective
actions during disputes or crises ;resolves
conflicts among subordinates, adapt to
environmental crises.
Decisional roles

Resource allocator-Decides who gets
resource, scheduling , budgeting ,setting
priorities.
Negotiator- Represent department during
negotiation of union contracts ,sales ,
purchases , budgets ;represent
departmental interests
Decisional Roles continued…

The McKinsey 7-S Framework-This is a value
based management model. It describes how
to effectively organize a company. According
to this model , there are seven factors that
determine a companies operations. These
are as follows-;
1) Shared Values
2) Strategies
3) Structure
Approaches to Management

4) System
5) Staff
6) Style
7) Skill
Continued…

1. Shared values –
It is the interconnecting centre of the model. It
states the purpose of the organizations
existence.
2. Strategy-
Refers to the planning for allocation of firms
scarce resources.
3.Structure-
The way the organizations units relate to one
another.
McKinsey 7-S framework

4. System-
It gives an understanding of how
procedures , processes and routines are
performed.
5. Staff-
Number of people working in an
organization.
6. Style-
Cultural styles in an organization and
what managers do to achieve goals .
Continued…

7. Skills-
Refers to the capabilities of different
personnel in the organization.
Other Approaches to Management
Empirical Approach
Studies experience through cases, to
explain management principles.
Continued…

Interpersonal behavior approach:
Focuses on interpersonal behavior , human
relations , leadership , and motivation. Based on
individual psychology .
Group Behavior Approach
Stresses behavior of the people in groups. Based
on sociology and social psychology. Primarily
study of group behavior patterns. The study of
large groups is often called “Organization
Behavior”
Management approaches

Decision Theory Approach
Focuses on making of decisions ,persons or
groups making decisions ,and the decision
making process. Some theorists use
decision making as a springboard to study
all enterprise activities. The boundaries of
the studies are no longer clearly defined.
Continued….

It believes that managerial practices
depends upon circumstances or situations
i.e. (a contingency or a
situation).Contingency theory recognizes
the influence of the given solutions on
organizational behavior patterns.
Managerial roles approaches
Categorizes managerial roles into three
basic roles-interpersonal , informational ,
and decisional.
Contingency or Situational
Approaches

Topics to be covered
Introduction
Classical Approach
Behavioral approaches
Quantitative approach
Modern Approach to Management
Summary
Evolution of Management thoughts

• The evolution of management began with
the industrial revolution which occurred in
the 1800’s.The earliest contribution to the
concept of management can be traced to
Robert Owen, a British factory owner who
was concerned about the work
environment of his workers and executed
reforms in the operational process.
• In the nineteenth century , Charles
Babbage advocated the principles of
division of labor .
Introduction

The classical approach to management
focused on the development of efficient
methods of managing work and
operations. This approach can be
classified into three schools of
management.
They are-
1.1 Scientific management-F.W. Taylor
1.2 Administrative management-Max Weber
1.3 Bureaucratic management-Henri fayol
Classical Approach

Scientific management is defined as that
kind of management which conducts a
business or affairs by facts or truths
gained through systematic observations ,
experiments or reasoning”
Main features of Scientific management
1-Standardization
2-Time and motion study
3-Financial incentives
Scientific Management

 Standardization-it is a process in which
fixed methods are applied to work
activities practiced by the workers.
 Time and Motion studies-It is a process in
which the work is divided into several
motions and unnecessary motions are
eliminated.
 Financial Incentives-In this method , the
incentives are provided to the workers on
the basis of their performance.;
Explanation of main features

Is based on four principles-
Replacement of conventional methods by
scientific methods.
Scientific selection , training , and
development of workers
Equal distribution of work and
responsibility between the managers and
the workers.
Improvement of productivity through work
and motion studies ,tools and incentive.
Scientific management theory

The administrative management theory
focuses on the principles that managers
use to coordinate the organizations
internal activities.
Henry Fayol viewed management as a
process of five functions-planning
,organizing , commanding ,coordinating ,
and controlling. He emphasized the
importance of managerial activities in the
overall functioning of the organization.
Administrative management

According to German scientist ,Max Weber “
A bureaucracy is a highly structured
,formalized ,and impersonal organization.”
He propagated the belief that an
organization should have a defined
hierarchical structure managed by
regulations and lines of authority.
Specialization of labor
Formal rules and regulations
Impersonality in application of rules
Bureaucratic Management

Well defined hierarchy
Career advancement based on merit
Limitations:
 The principles of scientific management failed to
focus on management from a managerial point of
view.
 Taylor and his followers overlooked the social
needs of the workers and emphasized only the
economic and physical needs.
Continued…

Weber’s bureaucracy was not flexible
enough to suit the complex changes in the
environment.
The classical theorists failed to consider
other aspects of management and
stressed only on productivity.
Continued…..

• Specialization of work increases output.
• Managers should be given authority to
effectively carry out their responsibilities.
• Employees should respect the rules of the
organization.
• Activities should be guided by a single
plan and be led by a single superior.
• Individual interest should not be in conflict
with organizational interests.
Fayol’s principles of Management

• Employees should be paid fair wages.
• An organization should adopt a centralized
or decentralized approach depending on
the situation.
• A proper selection procedure should be
implemented to ensure that the right
people and material are at the right place.
• There should not be any discrimination
between employees.
Continued….

Employees should be provided with job
security.
Subordinates should be motivated by their
superiors to take the initiative.
Managers should build up a team spirit
among their subordinates.
Continued….

• The behavior approach focused on the
individuals attitude and behavior in an
organization.
• It emphasizes the significance of
understanding the various factors that
influence human behavior.
• The early advocates of the behavioral
approach were Elton Mayo, Mary Parker
Follet ,Abraham Maslow and Douglas
McGregor.
Behavior Approach

Mary Parker Follet: She made important
contributions in the area of group’s influence
on individuals and conflict resolution through
integration.
Abraham Maslow: He postulated the theory
of motivation which states that people are
motivated by a hierarchy of needs.
Douglas McGregor developed two theories
,theory X and Theory Y to describe two types
of personalities who have different sets of
beliefs towards their subordinates.
Early Advocates of Behavioral
Approach

• Was known as “the father of human
relations approach. 'He conducted certain
experiments at Western Electric’s
Hawthorne Plant between 1927 and 1933
to evaluate the attitudes and perceptions
of workers in an organization.
• Mayo concluded that work satisfaction
depends to a larger extent on informal
social relations
Elton Mayo,

1-Illumination experiments were conducted to
find out the productivity of the workers by
exposing them to different lighting
intensities .Researchers concluded that
productivity was not related to the intensity
of illumination.
2-In relay assembly test room experiments
,researchers focused on the working
conditions of the workers. its was
concluded that better working conditions
enhanced productivity.
Hawthorne Experiments

3-In the interview phase the employees of
Hawthorne plant were interviewed in order
to determine individual attitudes towards
work.
4-There were no changes in the work
behavior irrespective of the changes made
in the pay structure.
Continued…

The quantitative approach emphasizes the
use of mathematics ,statistics ,optimization
models ,and computer simulations in
managerial decision making.
It consist of three main branches :
management science ,operations
management , and management
information systems.
Quantitative Approach

 Systems Approach
A system is a group of parts that operate as a whole
to achieve a common objective. It has four major
components:
 Inputs
 Transformation processes
 Output
 Feedback
Modern Approaches to
Management

There are two types of systems-
A closed system no interaction with the
external environment .
An open system depends on external
environment to carry out its activities. Most
organizations are open systems as they
depend upon the external environment to
achieve their goals.
Continued…

It has been developed to adapt to the
changing situations of the organizations. It
states that there is no single principle to
manage all the situations in an
organizations.
The essence of this approach is that
managers should identify the situations
,interpret them , and apply the approach
which suits the situation best.
The contingency approach

What planning is
Planning objectives
Definition and Nature of planning
The importance of planning and its
classification
The steps involved in planning process
Limitations of planning
Concept and techniques of forecasting
Objectives of this module

• Organizations operate in a dynamic
environment and so require proper
planning to adapt to the changing
marketing conditions.
• Planning is an ongoing process of
deciding in advance the activities to be
performed. It bridges the gap between
organizations present existence and its
future prospects.
Fundamentals of plnning

• Proper planning minimizes risk and help in
effective and efficient utilization of
resources.
• Control is an inseparable part of planning.
It involves establishing standards of
performance and comparing the results
with the established standards.
Continues….

Peter Drucker defined planning as “a
continuous process of making present
entrepreneurial decisions ( risk taking )
systematically and with best possible
knowledge of their futurity ,organizing
systematically the efforts needed to carry
out these decisions and measuring the
results of those decisions against the
expectations through an organized
systematic feedback.”
Definition and Nature of planning

• Thus planning is the process of coping
with uncertainty by formulating a future
course of action to achieve specified
results.
Continued….

Planning is the primary function of the
management process.
Planning is goal oriented.
Planning extends throughout the
organization.
Planning is a continuous and integrated
process.
It is concerned about anticipating the future.
Planning involves choosing a course of
action-basically it involves decision making
Nature of Planning

Establishing the right climate for planning
like setting goals, proper information flow ,
and effective implementation.
Having clear and specific objectives.
Planning premises i.e. clear identification
of external and internal environment.
The top level taking the initiative.
Managers at all levels participating in
planning process.
Pre-requisites of effective

Communicating the planning process to all
employees in a firm.
Integrating short term and long term plans.
Having an effective management
information system which includes
communication of essential information.
Continued…

Planning helps in devising means to
achieve organizational objectives.
It aids in accumulating information that can
be used to develop detailed guidelines for
achieving organizational goals.
Planning provides managers with a sense
of direction.
It helps in developing objectives.
It provides guidelines for decision-making.
Significance of planning

It provides a basis of control.
Planning facilitates delegation of authority
and coordination of various activities within
the organization.
Continued…..

Lack of accurate information.
Time consuming process.
Expensive
Inflexibility
Resistance to change
Environmental constraints
Lack of ability and commitment.
False sense of security.
Reluctance to establish goals
Limitations of planning

Thank You
Please forward your query
To: kaushikmeenakshi36@gmail.com
CC: manoj.amity@panafnet.com
Copyright @ Amity University

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