Principles of management MG 75 Cycle test I Answer key 1.

2. Functions of Management: i) Planning ii) Organizing iii) Staffing iv) Directing v) Controlling 3. Management as both Science and Art Management combines features of both science as well as art. It is considered as a science because it has an organized body of knowledge which contains certain universal truth. It is called an art because managing requires certain skills which are personal possessions of managers. Science provides the knowledge & art deals with the application of knowledge and skills.

4. Characteristics of management

Management is Management is Management is Management is Management is Management is

Universal dynamic a continuous process Purposeful goal oriented integrative Function+

5. Scientific Management: According to Taylor, Scientific Management is an art of knowing exactly what you want your men to do and seeing that they do it in the best and cheapest way. It implies application of scientific principles for studying & identifying management problems. Hence scientific management is a thoughtful, organized, dual approach towards the job of management against hit or miss or Rule of Thumb. 6. The Social Audit The Social audit has been defined as a commitment to systematic assessment of and reporting on some meaningful;, definable domain of companys activities that have social impact. 7. Planning: It is the basic function of management. It deals with chalking out a future course of action & deciding in advance the most appropriate course of actions for achievement of pre-determined goals. 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. 8. Types of Planning: i) ii) iii) iv) Operational planning Tactical Planning Strategic Planning Contingency Planning

9. Managerial Skills Conceptual skills Human Skills Technical Skills Design Skills Decision making

Part B 10.a) The principal contribution of F.W.Taylor to the Development of Management 1. Development of Science for each part of mens job (replacement of rule of thumb) This principle suggests that work assigned to any employee should be observed, analyzed with respect to each and every element and part and time involved in it. This means replacement of odd rule of thumb by the use of method of enquiry, investigation, data collection, analysis and framing of rules. Under scientific management, decisions are made on the basis of facts and by the application of scientific decisions. 2. Scientific Selection, Training & Development of Workers There should be scientifically designed procedure for the selection of workers. Physical, mental & other requirement should be specified for each and every job. Workers should be selected & trained to make them fit for the job. 3. Co-operation between Management & workers or Harmony not discord Taylor believed in co-operation and not individualism. It is only through co-operation that the goals of the enterprise can be achieved efficiently. There should be no conflict between managers & workers. 4. Division of Responsibility

 This principle determines the concrete nature of roles to be played by different level of managers & workers. The management should assume the responsibility of planning the work whereas workers should be concerned with execution of task. Thus planning is to be separated from execution. 5. Mental Revolution The workers and managers should have a complete change of outlook towards their mutual relation and work effort. It requires that management should create suitable working condition and solve all problems scientifically. Similarly workers should attend their jobs with utmost attention, devotion and carefulness. They should not waste the resources of enterprise. 6. Maximum Prosperity for Employer & Employees The aim of scientific management is to see maximum prosperity for employer and employees. It is important only when there is opportunity for each worker to attain his highest efficiency. Maximum output & optimum utilization of resources will bring higher profits for the employer & better wages for the workers. 10.b) Major functions of Management: 1. Planning It is the basic function of management. It deals with chalking out a future course of action & deciding in advance the most appropriate course of actions for achievement of pre-determined goals. 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.

2. Organizing It is the process of bringing together physical, financial and human resources and developing productive relationship amongst them for achievement of organizational goals. Identification of activities. Classification of grouping of activities. Assignment of duties. Delegation of authority and creation of responsibility.

3. Staffing It is the function of manning the organization structure and keeping it manned. Staffing has assumed greater importance in the recent years due to advancement of technology, increase in size of business, complexity of human behavior etc. Recruitment, selection & placement. Training & development. Remuneration. Performance appraisal. 4. Directing It is that part of managerial function which actuates the organizational methods to work efficiently for achievement of organizational purposes. Supervision Motivation Leadership

 Communication 5. Controlling It implies measurement of accomplishment against the standards and correction of deviation if any to ensure achievement of organizational goals. Establishment of standard performance. Measurement of actual performance. Comparison of actual performance with the standards and finding out deviation if any. Corrective action. 11.a) Henri Fayol management theory Henry Fayol contributed 14 principles to Management which is widely applied in all the Orgn 1. Division of Work 2. Authority and Responsibility 3. Discipline 4. Unity of Command 5. Unity of Direction 6. Subordination of individual interest to general interest 7. Remuneration of personnel 8. Centralisation 9. Scalar Chain 10. Order 11. Equity 12. Stability of Tenure of Personnel 13. Initiative 14. Esprit-de-corps 11.b) Nature of management: Management is Management is Management is Management is Management is Management is Management is Universal dynamic a group of managers Purposeful goal oriented integrative Function a Social process

Management is Management is Management is Management is Management is Management is

a Multi-faceted discipline a continuous process a system of authority a resource intangible profession, an art as well as a science

Purpose of management: Achievement of group goals Optimum utilization of resources Fulfillment of social obligations Economic growth Stability Human Development Meets the challenge of change Merits of Management: 1. Performance Based Conversations 2. Targeted Staff Development 3. Encouragement To Staff 4. Rewards Staff For A Job Well Done 5. Under-Performers Identified And Eliminated 6. Documented History Of Employee Performance Demerits of Management: 1. Time Consuming 2. Discouragement 3. Inconsistent Message 4. Biases 12.a)Steps in Planning: 1. Being aware of opportunities.

- SWOT analysis 2. Establishing objectives. 3. Developing premises - Planning premises are forecasts, applicable basic policies, and existing company plans. - They are assumptions about the environment in which plan is to be carried out. - Forecasting is important for premising. - Premises should be make practical what volume of sales? What price? 4. Determining alternative courses of action 5. Evaluating alternative course of action - Operation Research Decision tree 6. Selecting a course of action - Decision making 7. Formulating Derivative plans - Supporting plans for basic plan 8. Numerating plans by budgeting - Income and expenses

Advantages of Planning: 1. Focuses attention on objectives & results 2. Reduces uncertainity and risk 3. Provides sense of direction 4. Encourages innovation & creativity 5. Helps in coordination 6. Guides decision making 7. Provides a basis for decentralization 8. Provides efficiency in operation Limitations of Planning: Policy is formulated under particular preset conditions which do not remain the same for all problems. Requires constant review and revision. No formula for all problems Serve as guides for thinking and action and do not provide solutions to problems. They are not substitute for human judgment. They only point out the limits within which the judgment is to be taken.

They may stifle individual initiative and creativity.

13.a) Arguments for social involvement of business 1. Public needs have changed, leading to changed expectations. Business, it is suggested, received its charter from society and consequently had to respond to the needs of society. 2. Improvement of the social environment benefits both society and business. Society gains through better neighborhoods and employment opportunities; business benefits from a better community, since the community is the source of its work force and the consumer of it products and services. 3. Social involvement discourages additional government regulation and intervention. The result is greater freedom and more flexibility in decision making for business. 4. Business has a great deal of power which, it is reasoned, should be accompanied by an equal amount of responsibility. 5. Modern society is an interdependent system and the internal activities of the enterprise have an impact on the external environment. 6. Social involvement may be in the interest of stockholders. 7. Problems can become profits. Items that may once have been considered waste (for example, empty soft drink cans) can be profitably used again. 8. Social involvement creates a favorable public image. Thus, a firm may attract customers, employees and investors. 9. Business should try to solve the problems which other institutions have not been able to solve. After all business has a history of coming up with novel ideas. 10. Business has the resources. Specifically, business should use its talented managers and specialists, as well as its capital resources to solve some of societys problems. Arguments against social involvement of business 1. The primary task of business is to maximize profit buy focusing strictly on economic activities. Social involvement could reduce economic efficiency. 2. In the final analysis, society must pay for the social involvement of business through higher prices. Social involvement would create excessive costs for business, which cannot commit its resources to social action. 3. Social involvement can weaken the international balance of payments. The cost of social programs, the reasoning goes, would have to be added to the price of the product. Thus American companies selling in international markets would be at a disadvantage when competing with companies in other countries which do not have these social costs to bear.

4. Business has enough power and additional social involvement would further increase its power and influence. 5. Business people lack the social skill to deal with the problems of society. Their training and experience is with economic matters and their skills may not be pertinent to social problems. 6. There is a lack of accountability of business to society. Unless accountability can be established, business should not get involved. 7. There is not complete support for involvement in social actions. Consequently, disagreements among groups with different viewpoints will cause friction. 13.b) Nature of Planning 1. Its contribution to purpose and objectives. 2. Primacy of functions Planning & control are inseparable 3. Pervasiveness of planning it is a function of all managers. Varies from level to level 4. Efficiency of plans Pans are efficient if they achieve their purpose at a reasonable cost 5. Planning is a Process 6. Intellectual Process 7. Pragmatic, action-orientation 8. Decision making 9. Dynamism 10. Rationality Purpose of Planning: 1. Reducing Risk 2. Reducing Uncertainty 3. Supporting Better Decision Making 4. Establishing Trust 5. Conveying Information