principlesofmanagement-1-220922060950-5b5beaa5.ppt

PRINCIPLES OF MANAGEMENT

1. Definitions on Management
Various definitions on management can be
broadly classified under the following
categories
As an art of getting things done
As a process
As a group of managers
As a discipline

2. •Management as an art of getting things done
through others (Mary Parker) has the following
salient features
1.Traditional view of management
2.Workers are treated as a factor of production only
& get wages for their labour
3.Their social & psychological needs are ignored-
does not offer human treatment
4.Vague definition as it does not identify the
functions which a manager has to perform
5.Because of the above reasons, the definition is
incomplete & misleading in the present context

3. We can alter the above definition as – “the art of
getting things done through & with people in formally
organized groups”
“It is the art of creating an environment in which
people can perform as individuals & yet cooperate
towards attainment of group goals” - Harold Koontz

4. •As a process
Management is viewed not as one time
activity, but as an ongoing & continuous process
involving the performance of series of functions on a
continuous basis.
“Management is a distinct process
consisting of activities of planning, organizing,
actuating (Giving an incentive for action) &
controlling, performed to determine & accomplish
stated objectives with the use of human beings &
other resources”- George R. Terry

5. The above definition identifies 5 major functions of
management – planning, organizing, staffing, actuating
(directing/leading) & controlling. The whole process of
management can be viewed as under:
Inputs Management Functions Objectives
(6 Ms) (End results)
Men Planning Directing Goods &
Material services
Machines desired by
Methods customers
Money Staffing
Market Organizing Controlling

6. As a process, management has two unique features:
1.It is a continuous process
2.Various functions of management are
interdependent
As a group of managers:
Management is viewed as the body or group of
people which performs certain managerial functions
for the accomplishment of predetermined goals. The
individual members of this group are called
‘managers’

7. •As a discipline:
Today, management is viewed as a separate
discipline or branch of knowledge. It is a multi-
disciplinary area which draws heavily from areas
like psychology, sociology, operations research,
economics, information technology etc.

8. Definition of Management
•It is very difficult to give a precise definition of the term
management.
•Different management authors have viewed
management from their own angles moreover, during
the evolutionary process of management different
thinkers laid emphasis on different expects.
•For example, F.W. Taylor emphasized engineering
aspects, Elton Mayo laid emphasis on human relations
aspects, E.F.L, Brech, George R.Terry emphasis on,
decision making aspect, Ralph Davis stresses leadership
aspect and some other likeBarry Richman etc.
emphasized integration or
 coordination aspect.

9. 1. Harold Koontz, “Management is the art of
 getting
things done through and with people in formally
organized groups.”
2. George R. Terry, “Management is a
 disconnect process
consisting of planning organizing activating
and
 controlling performed to determine and accomplish
the objectives by the use of people and resources.”
3. Donald J. Cough, “Management is the art and
 science
of decision making and leadership.”
4. Mary Cushing NileGood, “Management, or scientific
management, achieves a
 social objective with the best
use of
 human andmaterial energy and time, and with
satisfaction for the participants and the public.”
5. Henry Fayol, “To manage is to forecast, to plan, to
organize, to command, to coordinate, and to control.”

11. NATURE OF MANAGEMENT

12. FEATURES OF MANAGEMENT
1.Goal oriented: The ultimate purpose of management is
to achieve certain
 goals
 over a period of time. The goals
must be realistic and achievable that ensure
 efficient
utilization of the resources and satisfy the enterprise
objectives.
2.Economic resources: Achieving of organizational goals
requires application of various economic resources
including human resource.
3.Integrative force: Team work
 creates synergy and
accomplishment of the firm’s objectives by the unified
and co-ordinated
 efforts of all the individuals working
for that firm.
4.Distinct process: Management is a distinct process
consisting of functions like planning, staffing, directing,
controlling & organising.

13. 5. Result through others: Managers cannot do everything by
themselves. They have to delegate authority to their subordinates.
The success of a manager is measured based on the performance
of his subordinates.
6. System of authority: Managers at different levels in the
hierarchy enjoy different degrees of authority.
7. Multi-disciplinary subject: Management is a multi-disciplinary
subject which draws heavily from areas like psychology, sociology,
economics, operations research, information technology, financial
management, quantitative techniques etc.

14. 8. Management is Continuous Function
Management is a dynamic and ongoing process.
It continues to operate as long as there is organised action
to achieve group goals
As long as organisation exist the management will be there
It’s a never ending process

15. 9. It is science as well as an art
Management is science
 It has definite principles
These principles are universally applicable
It is social science
Management is an Art
It is concerned with application of knowledge and skills
As an artist manger become perfect with experience
As an Artist managers find creative ideas and new
imaginations with tenure

16. 10. Management is a profession
New field of Knowledge which can be acquired through
formal Education (BBA, MBA, PGDBA)
Individuals can be trained and turned to become
Management professional.
Managers apply managerial principles skills techniques to
solve the problem of organisation

17.  11. Universal application/Pervasive
Management is applicable to all type of
organisations managers perform more or less the
same functions irrespective of their position and
nature of organization.
Ex: Educational Institutions, Hospitals,
Government, Urban centers, Team of Players,
Cultural body, NGO’s

18. 12. Management is a Social Process
Management is concerned with dealing with
people and their emotions talents attitude and
culture.
Management is a social process since it involves
people and their inter personal relationship. A good
manager succeeds in motivating , guiding and
extracting work from people working under him

19. 13. Management is a Group Activity
Management plans organises, directs and controls
the group efforts to achieve enterprise objectives.
Its always concerned with group efforts not
individual efforts

20. 14. Management is Intangible
It is an Unseen force
It cannot be touched and felt
It does not have physical presence
 It is an unseen force, Its results can be felt in the
form of orderliness adequate work output
satisfactory work climate, Employee satisfaction,
etc

21. 15. Management is Co-ordinating force
Management co-ordinates the efforts of employees of the
organisation
Orderly arrangement of activities to avoid duplication and
overlapping
It Balances the individual goals and organisational goals
and Integrate the human and physical resources

22. Management as a Science ,
Art And Profession

23. MANAGEMENT: A SCIENCE & AN ART
As a science:
Science is a systematically organized body of knowledge
based on proper findings & exact principles, is capable of
verification & consists of universally accepted principles.
Science ensures predictable results.

24. Management as a Science
•Systematically Organised body of Knowledge based on proper
findings and exact principles and is capable of verification.
Systematised body of Knowledge
Includes concepts, Principles, theories
Have a method of scientific enquiry
Establish Cause and Effect Relationship
Principles should be verifiable
Ensure predictable results
Have Universal Application

25. Management has a systematized body of knowledge pertaining to its
field. Most of the principles in management have been verified by many
researchers & these principles have universal application.
However, management is not a pure or perfect science. Main reason
being, it deals with people & on most occasions, it is very difficult to
predict the behavior of human beings accurately. Therefore, we can say
management is a social science. Ernest Dale has called management a
‘soft science’

26. Management as an art
•Is bringing about desired results through the application of practical
knowledge and skill.
Denotes the Personal skills
Signifies the Practical Knowledge
Achievement of Concrete results
Creative in nature
Personal touch
Constant practice (Experience)
It is A mix of Know- how skills and practice

27. As an art:
Art is an application of knowledge & skill. If science is
learnt; art is practiced.
Features:
•It denotes personal skills
•It signifies practical knowledge
•It is creative in nature
Management is an art because, ultimately, the
success of a manager depends upon his personal skill &
ability to apply various management principles &
concepts.
Thus management is both a science as well as an art.

28. Management As a Profession
•As an Occupation backed by Specialised knowledge
and training and to which entry is regulated by
representative body and which is duly recognised by
the society.
Specialised body of Knowledge
Formal education and training
Professional body
Code of conduct
Social status

29. Administration V/s Management
•Administration is a Higher level function
•Management is a Generic term
•Management and Administration are synonymous

30. Administration
•“Administration means the overall determination
of policies, setting of major objectives, the
identification of general purposes and laying
down of broad programmes and projects.” –
Theo Haimann
•According to Newman, “Administration means
guidance, leadership & control of the efforts of
the groups towards some common goals”.
•It refers to the activities of higher level. It lays
down basic principles of the enterprise.

31. Administration vs Management
There are three main schools of thought regarding the meaning of
these terms
•According to Fayol and other management thinkers, the term
‘administration’ and ‘management’ means one and the same, and
there is no distinction between the two.
•According to Oliver Sheldon and other management thinkers,
‘administration’ and ‘management’ are different terms.
•According to E.F.L. Brech, Kimball and others, ‘Management’ is a
comprehensive generic term which includes ‘Administration’. It
classifying Management into two categories
a. Administrative management
b. Operative manangement

32. Administration vs Management

33. Administration
•It is concerned with the
formulation of objectives,
plans and policies.
•It relates to decision making
•It concerned with planning
and control
•It determines what is to be
done and when it is to be
done
Management
•It means getting things
done from others
•It relates to execution of
decision
•It concerned with
organization and
direction
•It decides who shall
implement the decision

34. Administration
•Leading and motivating
of middle level
executives
•It has direct interaction
with external
environment of business
and makes strategic plans
•This is associated with
government office, public
sector and non-business
organisation
Management
•Leading and
motivation of
operative workforce
•It has link with
internal environment
•The term is widely
used in business
organisation

35. FUNCTIONS OF MANAGERS
Management is seen as a process involving certain
functions. Henry Fayol gave the functional definition of
management as “To manage is to forecast & plan, to
organize, to command, to coordinate & to control”. Thus
the definition mentions 5 main functions of management:
•Forecasting & planning
•Organizing
•Commanding
•Coordination
•Control

37. Luther Gulick proposed PODSCORB to describe the
functions of management. These functions are-
planning, organizing, directing, staffing, coordinating,
reporting & budgeting.
G.R.Terry identified four functions of management which
are – planning, organizing, actuating & controlling.
For the purpose of analysis of management process, we can
list out the mgt. functions as under:
1.Planning
2.Organizing
3.Staffing
4.Directing/Actuating/Leading
5.Controlling

38. •PLANNING
Planning is a mental process requiring the use of
intellectual faculties, foresight & sound judgment. It is
the determination of future course of action to achieve
the desired result.
It involves deciding in advance what to do, when to do it,
where to do it, how to do it, who is to do it & how the
results are to be evaluated. The process of planning
involves the following steps:
1.Determination of goals or objectives of the enterprise
2.Forecasting
3.Search for alternative courses of action
4.Evaluation of various alternatives & formulation of a
plan

39. 5Formulation of polices & procedures
6Preparation of schedules, programmes & budgets
ORGANIZING:
Organizing involves identification & grouping the activities
to be performed & dividing them among the
individuals & creating authority & responsibility
relationships among them for the accomplishment of
organizational objectives. Organizing involves the
following steps:
1Identification of activities required for the achievement
of objectives
2Grouping of activities so as to create well defined jobs

40. 3Assigning of jobs to employees
4Delegation of authority to subordinates
5Establishment of authority-responsibility relationships
throughout the organization.
STAFFING:
Staffing function of management pertains to recruitment,
selection, training, development & appraisal of
personnel. Staffing comprises the following sub-
functions:
1.Manpower planning – determination of number & the
kind of personnel required
2.Recruitment – attracting suitable personnel to seek
jobs in the enterprise.

41. 3Selection of the most suitable persons for the
job under consideration
4Placement & orientation of employees
5Transfer, promotion etc. of employees
6Training & development of employees
DIRECTING/LEADING/ACTUATING:
Directing involves determining the course of action,
giving orders & instructions & providing
dynamic leadership.
It involves issuing instructions or communication to
subordinates, leading, motivating & supervising
them. Thus the sub-functions of directing are-

42. 1.Communication
2.Leadership
3.Motivation
4.Supervision
CONTROLLIG:
It is the process of checking the actual performance against the
set standards with a view to ensuring satisfactory
performance. Thus the process of controlling involves the
following steps:
1.Establishment of standards
2.Measurement of performance
3.Appraisal of performance
4.Taking corrective action

43. FUNCTIONAL AREAS OF MGT.
The imp. functional areas of mgt. are – production, finance,
marketing, personnel/human resource & materials.
The imp. activities performed under these functional
areas of mgt. are –
•Production mgt.- activities :
1.Design of product
2.Design of production system
3.Selection of plant location
4.Plant layout
5.Selection of machineries & equipments
6.Production planning & control

44. •Financial mgt. – activities:
1.Investment decisions
2.Working capital decisions
3.Financing decisions
4.Dividend decisions
•Marketing mgt. – activities:
1.Product decisions
2.Pricing decisions
3.Promotion decisions
4.Place or physical distribution decisions

45. •Personnel / human resource mgt. –activities:
1.Recruitment & selection
2.Training & development
3.Compensation
4.Motivation
5.Working condition
6.Cordial relation between employer & employees
•Materials mgt. – activities:
1.Analysis of requirements
2.Search for sources of supply
3.Inviting tenders & quotations
4.Placing the order

46. 5Checking the invoice
6Inspection of incoming materials
7Maintaining purchase records
8Maintenance of various stock records

47. Evolution Of Management Thoughts

48. Introduction
•The evolution of management thought is a process that
started in the early days of man.
• It began since the period man saw the need to live in
groups. The sharing was done accord to the masses’
strength, mental capacities, and intelligence.
•Although modern operational management theory
dates primarily from the twentieth century there was
serious thinking and theorizing about managing many
years
 before.

49. Evolution of Management in different phases
•Pre-Classical Era
•Management in ancient civilization
•Industrial Revolution
•Classical Management school(1880-1930)
•Neo classical Management School(1920-1950)
•Modern management school(from 1950 onwards)

50. Management in ancient civilization times
•Management existed even during the ancient civilization. People of
the olden days where food gatherers, making their living by hunting,
fishing and collecting nuts and berries.
•Evidence of Management practices in ancient times are as follows:
•Bhagwat Gita
•Kautilya’s Arthashastra
•Sun Tzu’s book on Art of War
•Machiavelli’s Principles in “Discourses” written in 1531
•Egyptian government- Need for planning, organising and
controlling
•Sumerians-used clay tokens to calculate quantities of grain,
livestock and value-added goods

51. DEVELOPMENT OF MGT. THOUGHT
Impact of industrial revolution on mgt. thought: Industrial
revolution of eighteenth & nineteenth century had a
great influence on the development of mgt. thought.
Some of these are
1.Large scale production
2.Change in the ownership form – from sole
proprietorship to partnership; from partnership to
joint stock companies which led to the separation of
ownership from management.
3.Factory system – giving direct & indirect employment
to large number of people.

52. Industrial Revolution Period
•The period of 1700 to 1800 emphasizes the industrial revolution and
the factory system highlights the industrial revolution and the
importance of direction as a managerial purpose.
•Many economic theorists during this period described the notion of
management. Adam Smith and James Watt have been recognized as
two theorists who launched the world toward industrialization.
•Entrepreneurs had access to all the factors of production such as
land, labor, and capital. Theirs was to make an effort to combine
these factors to achieve a targeted goal successfully.

53. The notable contributors of Industrial Revolution times
•Robert Owens-U.K.(1771-1858) known as Father of Personnel
Management
•Professor Charles Babbage-U.K. (1792-1871)- Invented calculating
machine called “Differential Engine”
•Mathew Robinson Boul-ton-U.K.(1770-1842)
•James Watt Junior-U.K.(1796-1848)
•B. Seeboham Rowntree- U.K. (1871-1954)
•Henry Robinson Towne-U.S.A.-(1884-1924)
•Henry Varnum Poor

54. Classical or Traditional schools of Management thought
One of the first schools of management thought, the classical
management theory, developed during the Industrial Revolution
when new problems related to the factory system began to appear.
Managers were unsure of how to train employees (many of them
non‐English speaking immigrants) or deal with increased labour
dissatisfaction, so they began to test solutions.
 As a result, the classical management theory developed from
efforts to find the one of the best ways to perform and manage
tasks.

55. Contributors to Classical Management School
•Scientific Management School
•Fredrick Winslow Taylor(1856-1915)-Father of Scientific
Management
•Henry Gantt(1861-1919)
•Frank Gilberth(1868-1924)
•Lillian Gilberth(1878-1972)
•Administrative/Management Process school
•Henry Fayol(1841-1925)- Father of Process/Administrative
Management
•Bureaucratic Management School
•Max Webber(1864-1920)- Father of Bureaucratic Management

57. •The emergence of scientific mgt. approach can be associated with
the industrial revolution of the eighteenth & nineteenth century.
Frederick W. Taylor was the first person who insisted on the
introduction of scientific methods in management & along with his
associates made the first systematic study of management.

58. According to Taylor, “scientific management is the
substitution of exact scientific investigations &
knowledge for the old individual judgment or opinion
in all matters relating to the work done in the shop”.
It implies the application of science to the management of
an enterprise. It aims at the replacement of traditional
techniques by scientific techniques.

59. Principles of scientific management
•Replacement of old rule of thumb
•Scientific selection & training of workers
•Co-operation between labour & management
•Maximum output
•Equal division of responsibility
•Mental revolution

60. Management process or Administrative
Management
Management process school or administrative management
approach (traditional or universalist school) believes that
mgt. principles are applicable to all kinds of group activities.
Henri Fayol is regarded as the father of administrative
management. He defined mgt. in terms of certain principles
& then laid down fourteen principles of mgt. which,
according to him, have universal applicability.
Fayol served as Managing Director in French Coal Mining
company for 30 years.

62. According to Henry Fayol, all the activities of a business
enterprise could be divided into the following six groups:
•(i) Technical activities (relating to production)
•(ii) Commercial activities (relating to buying, selling or
exchange).
•(iii) Financial activities (relating to search for and optimum
use of capital i.e. finances)
•(iv) Security activities (relating to protection of the
properties and personnel of the enterprise)
•(v) Accounting activities (relating to a systematic recording
of business transactions, including statistics also).
•(vi) Managerial activities

63. Qualities required in managers
•1. Physical
•2. Mental
•3. Moral
•4. Education
•5. Technical
•6. Experience

64. Fayol’s 14 principles of management
1. Division of work – The more people specialise at their workplace,
the more efficiently they can perform their work.
2. Authority & Responsibility – Managers in the organizations must
have the authority so that they can get the things done through their
subordinates. At the same time, a manager is also responsible to his
higher authority for the task assigned to him.

65. 3 Discipline – Members in the organization need to respect
the rules & regulations that govern the organisation.
According to Fayol, discipline results from good leadership,
fair treatment & judiciously enforced penalties.
4 Unity of command – Each employee in the organisation
must receive instructions from only one superior. When an
employee has to report to more than one boss, it would
result in conflicts in instructions & confusion of authority.
5 Unity of direction – Various operations within the
organization having same objective should be directed by
only one manager using single plan of action. For e.g. a
particular dept. in the organisation must have only one
departmental manager with only one plan for his
department.

66. 6. Subordination of individual interest to common good – In any organisation,
the interest of individual employee should not take precedence over the
interest of the organisation as a whole.
7. Remuneration – Compensation for the work done should be fair to both
employees & employers.
8. Centralisation – Decreasing the role of subordinates in decision making is
centralisation; increasing their role is decentralisation. Fayol belied that
managers should retain final responsibility, but at the same time, should give
enough authority to their subordinates.

67. 9Hierarchy/Scalar chain – The line of authority in an
organisation should run in the order of ranks from top
management to the lowest level of the organisation
showing authority & responsibility at various levels.
10Order – Materials & people should be at the right place at
the right time. It should be based on the principle ‘a place
for everything & everything in its place’.
11Equity – Managers in the organisation should be both
friendly & fair to their subordinates.
12Stability of staff – A very high rate of employee turnover
will affect the smooth functioning of the organisation.
Therefore, there has to be reasonable stability in the labour
force of the organisation.

68. 13Initiative – Subordinates should be given fair
amount of freedom to carry out their own plans
even though it might result in some mistakes.
14Esprit de corps ( union is strength) – Promoting
team spirit will give the organisation a sense of
unity. Fayol suggested that even small factors like
use of verbal communication instead of formal
written communication, whenever possible, will
help to develop such team spirit.

69. Neo-Classical schools of Management thought
The Neoclassical approach began with the Hawthorne
studies in the 1920s. It grew out of the limitations of
the classical theory.
Under classical approach, attention was focused on
jobs and machines. After some time workers resisted
this approach as it did not provide the social and
psychological satisfaction. Therefore, attention shifted
towards the human side of management.
George Elton Mayo (1890-1949) is considered to be the
founder to the neoclassical theory. He was the leader
of the team which conducted the famous Hawthorne
Experiments at the Western Electric Company (USA)
during 1927-1932.

70. Contributors to Neo-Classical Management School
•Human Relation school
•Elton Mayo- Hawthorne Experiment
•Roethlis-berger
•Lewin
•Behavioral Science School
•Douglas McGregor- Theory X and Y
•Abraham Maslow- Motivational Need Hierarchy theory
•Herzberg-
•Katz
•Social System school
•Chester Barnard
•Rensis Likert

71. Human Relation Approach:
Mary Parker Fallet and Chester J Barnard
This approach revealed the importance of social & psychological
factors in determining the workers’ productivity & satisfaction
level.
Hawthorne Experiment:
series of studies were conducted to study the human relations at
the work place at the Hawthorne Works of Western Electric
Company, Chicago by a group of researchers led by Elton Mayo
during 1924 - 1932.
Elton Mayo is regarded as Father of Human Relation Approach.

72. Series of Experiments
•Illumination experiments (Phase-I)
•Relay Assembly Test group (Phase-II)
•Interviewing programme (Phase-III)
•Bank Wiring Observation Room experiments. (Phase-IV)

73. Modern schools of Management thought
After, 1960 management thought has been turning
somewhat away from the extreme human relations ideas
particularly regarding the direct relation between morale
and productivity.
The modern business ideologists have recognized the
social responsibilities of business activities and thinking on
similar lines.
This change in ownership pattern inevitably brought in
‘salaried and professional managers’ in place of ‘owner
managers’. But at the same time the professional
management has become socially responsible to various
sections of society such as customers, shareholders,
suppliers, employees, trade unions and other Government
agencies.

74. Contributors to Modern Management School
•Quantitative or Mathematical School- Based on model and simulation
•Joel Dean
•Russel
•Systems School
•Kenneth
•Boulding
•Contingency/ Situational School
•Joan Woodward
•P.R. Lawrence
•Decision Theory School
•Herbert Simon
•Peter Drucker