Principles of Management

Introduction Human Body & Business

Knowledge about the Structure Functions of different departments [organs] Process by which they [dept/organs] perform their functions in co-ordination with others [dept/organs] Inter-relations among different dept/organs for Symptoms & Indications External conditions in which the business/body is to survive & grow [seasons4body, recession4business] Responses which are made by them [dept/organs] to adopt itself to its environment

Human Occupations

Introduction

Human life is built around work. Numerous & varied are the activities that a human undertakes during their lifetime and long indeed is the list of the roles that they have to play in the theatre of life.
Human Activities

By Inspiration Love, Patriotism, Sympathy, Humanity, Sentimental

By Economic Working to earn a livelihood [Occupational]

By Inspiration: House wifes cooking for her family, A mans sacrifice for his country

By Economic : A lawyer goes to Court, A teacher to school, An employee to his work place [all because to earn a living by producing wealth in different forms ]

OCCUPATION
Profession the occupations which involve the rendering of personal services of a special and expert nature. Eg: A lawyer who practices the legal profession takes up cases & offers his legal advice & specialized services for suitable payment Employment A person has to work under an agreement or rules of service and perform such work as may be assigned to him by the employer. Remuneration for such work takes the form of wages or salaries and allowances. Employment is divided into 2 major parts Government & Private.

Introduction

Business : The Organised production or sale of goods undertaken with the object of earning profits through the satisfaction of human wants. All occupations require a person to be busy but what really matters for the purpose of understanding is What keeps him busy.

Introduction

[1] Sale Transfer or Exchange for the Satisfaction of Human Needs

[2] Dealings in Goods & Services

[3] Recurrence of Transactions

BUSINESS
[4] Profit Motive

[5] Element of Risk

 Management is an art of getting things done through and with the people in formally organized groups in order to achieve the desired set of goals.

Introduction

MANAGEMENT
The process of planning, organizing, leading and controlling the work of organization members and of using all available organizational resources to reach stated organizational goals What is an Organisation? Two or group of people who commonly agree to work together in structured way in order to achieve the established goal or set of goals What is a Goal? The fundamental purpose than an organization strive to achieve. The basic element of every organization is a Goal / Purpose

MANAGEMENT

 Management is an art like other practices medicine, music, engineering. Its the know-how of doing things in the light of the realities of a situation

Introduction

MANAGEMENT
Management is Science ? An Organised theoretical knowledge, empirically [experimentally] derived, critically tested & generalized into theories, laws & principles Management is both Art & Science. The Science of mgmt provides certain general principles which can guide managers in their professional efforts during practice of mgmt. The Art of mgmt consists in tackling every situation in an effective manner.

Introduction

Man

Money

4ms of MANAGEMENT

Methods

Materials

Physical equipment, materials, labour & capital lead to NOTHING if there is no management to manage them towards Organisations objectives Present : It contribute and take part in our daily life. We somehow depend on a type of organization for our well being. Eg: I work for my family, Your parents are part of an Organisation. Past:- It helps people to connect with the past. Everyday that we work with others adds to the history of the Organisation & to our own history. Eg: Your Career profile. Future: Organisation builds towards a desirable future and helps the individual do the same. New Products & Practices are developed as a result of Creative power which emerge when people work together as a Team

Introduction

WHY MANAGEMENT ?

It is the function of the Mgmt to use resources for the realization of results in such a way that the business firm is not only able to pay its way but also able to earn some surplus to meet the needs of growth & expansion. A commercial business enterprise aims at maximizing its profit through an increase in its output and sales.

Introduction

the direction that the business firm will follow the activities it will take It is the Managers function to check out the objectives it will strive for the manner in which work & responsibility will be divided among the members the manner in which the plans are to be implemented by the people constituting the organization

Management is a group of Individuals. A group exists for realization of some definite purpose. Why Groups? Why not individuals? Utter confusion arises as some may work for a while & leave a part of work started but may not be properly cocoordinated with the work done by others

Introduction

will place before the members the objectives for which theyve been brought together will direct the efforts towards the objectives Advantages of Management the people will come for work at proper time & leave only at appointed time Theyll work in cooperation with one another and will try to do their best for the attainment of organisations objectives.

Management is not only for business but wherever human efforts used for achieving the definite common goals. Ex: sports, cultural, social activities

Introduction

Those Work :who have to work to perform the given tasks [ workers, operatives, non-mgrs]

Management Those Supervise:whove to take steps to see that the other [ those work] category works effectively and fulfills the objectives set for them [ managers, directors, coordinators

Introduction

It gives misleading impression that the sole purpose of the mgmt is the accomplishment of tasks
It interprets that forcing people to perform the tasks by hook or by crook, by threat/persuasion Disadvantages of Management Mgmt is not slave-driving nor set of clever tricks whereby you can get people to do your job

These techniques of getting things done through people may work for sometime but you cant oppress or befool people all the time. [ they may switch over to other companies!]

Introduction

it needs their abilities, skills & efforts

Why Business firms Hire People?

a business enterprise does not exist only for a day nor does it exist only for a specific work

it is a continuing entity which calls for the performance of work repeatedly over its lifetime.

Therefore what really matter for its effective functioning is sustained & continuous application of people to their work.

Introduction

Koontz O Donnel consider Mgmt principles necessary & useful for:

to Increase Efficiency

to give a definite & concrete shape to mgmt Why Principles of Management? to improve research in mgmt

to attain social goals by increasing efficiency in the use of resources

Introduction

Herbert Simon No more than Proverbs. Some of the common criticisms on PoMgmt

They are too obvious & represent common sense

Against Principles of Management

they are based on unsound premises

Many of them are contradictory eg: Principle of Unity of Command against dual bossing

Introduction

There are 3 different views prevail about these terms as follows

Mgmt & administration are different functions

Difference Between Management & Administration

Mgmt is a generic term including Admn which is considered to be a narrow function

No distinction between the 2 terms and use them interchangeably.

Introduction

First view by Oliver Sheldon: Mgmt Goal setting & Policy making // Admn Execution & Implementation

Management is the function in industry concerned with the execution of policy within the limits set up by administration & and the employment of the organization for the particular objectives before it. Oliver Sheldon

Administration is the function concerned with the determination of corporate policy, Co-ordination of finance, production & distribution, the settlement of the compass structure of the organization under the ultimate control of the execution

Introduction

Second view by Brech:-He uses mgmt in the sense of an all-inclusive function Mgmt involves responsibility for the effective [or efficient] planning & regulation [or guidance], of the operation of an enterprise such responsibility involving: The installation & maintenance of proper procedure to ensure adherence to plans The guidance, integration & supervision of the personal comprising the enterprise carrying out operations. In simple words, management is a generic term for the total process of executive control Administration is a part of mgmt, which is connected with the installation & carrying out the procedures by which the progress of activities is regulated & checked against plan.

Brech

Introduction

No distinction between the 2 terms

Its supported by everyday usage in factories & offices

Fayol

Admn term used higher executive functions in Govt. circles Mgmt used for same functions in the business world

Third view by Fayol:- for this reason, no distinction is made between mgmt & admn and the two term are used interchangeably.

Development of Management Thought

Introduction

The Orgn of Industry & Commerce on a large scale created new problems for entrepreneurs
With the onset of Industrial revolution, the mgmt position underwent a radical change.

The need for expansion further added to the worries of business leaders.

Development of Management Thought

Introduction

Taylors Scientific Management Approach

Modern Management Thought

Fayols Functional Management Approach

The Behavioural [Modern Human Relations] Approach

Taylors Scientific Management Approach

Introduction

Founder : Fredrick Winslow Taylor [1856 1915] An apprentice machinist in Philadelphia, USA, he rose to be the Chief Engineer at Midvale, England & later at Bethlehem works where he experimented with his ideas & made his contributions to mgmt theory.

So much of waste & efficiency is due to the lack of order & system in the methods of mgmt

Mgmt usually ignorant of the amount of work that could be done by a worker in a day as also the best method of doing the job

The work efficiency largely remained at the mercy of workers, who deliberately delayed work

Taylors Scientific Management Approach

Introduction

Observation Taylors Suggestions Those responsible for mgmt should adapt a scientific approach, which consists of Measurement Experimentation Inference The existence knowledge What Scientific implies? It implies of a specific body [mgmt] of

Possession of certain necessary skills An Orderly, Disciplined approach

when these combined with 20th century management style , it described Taylors approach is much better than Trial & Error, Hit & Run methods

Taylors View

Introduction

Classify, Tabulate & Reduce their knowledge to Rule, Law & Formulae [bcoz, workers do their jobs by watching how others do it and learn from it then do it as they liked]. In simple, instead of permitting each worker to choose his own method of doing work, Managers should train workers to use these standard methods.
He insisted a thorough planning of the job by mgmt & emphasized that necessity of perfect understanding & co-operation between Mgmt & workers for increased profits, use of investigation methods, knowledge in industrial work. Work study involving work measurement & work improvement through scientifically conducted Time & Motion studies, Methods Studies & Fatigue studies

Major Elements of Scientific Management

Standardization of tools & equipment for workmen, machine speeds & working conditions Scientific selection, placement & training of workers by a centralized Per.Dept

Introduction of functional orgn.[separating planning & implmn btn 2 sets of foremen] Mental revolution on the part of employees & workers towards mutual cooperation for better results through increased productivity

Taylors Scientific Management Approach

Introduction

Mgmt Theorists Taylors Scientific Mgmt focuses only on Production excluding other mgrl functions such as Finance, Marketing & Sales etc., Separating the functions of Planning & Implementation is very bad to orgn. Bcoz, Planning without doing will be Unrealistic & Doing without Planning is Mechanical.

Criticism on Taylors :-

McGregor Taylor basically thinks that workers are shirkers & remain indifferent to work unless theyre closely watched & directed through a system of rewards & penalties. People can derive satisfaction even from work and will not need external direction provided that the work is challenging & helps them in meeting their personal needs also

Psychologists Taylor misunderstood the basic principles of Industrial psychology. There is no one best method of Job performance and individual difference between workers must be taken into account while selecting workers & assigning works to them. If all initiative is taken away from the workers, it will lead to overspecialisation & will make the worker mechanical, disinterested in his job.

Workers The workers refuse to accept, as it treat them like machines [bcoz of doing the same work for repeated time] makes industrial work too monotonous & uninteresting, increases their workloads, divides them into efficient and inefficient classes & make them unable to gain from the increased productivity.

Henri Fayol Modern Management Theory.

Introduction

Fayol identified six activities to be accomplished in Industrial Organisations

A French industrialist & manager. Father of Modern Management Theory. First to suggest the Functions of Management the essential part of a managers work.

1. Technical those connected with production

2.Commercial buying, selling, exchange functions 3. Financial concerned with optimum use of Capital

4. Security Protection of Property

5. Accounting functions leading to determination of financial position 6. Managerial functions of planning, organizing, controlling, directing, coordinating

FUNCTIONS OF MANAGEMENT will not have a reason to exist

Goal/Purpose/Objective

Introduction

Plan
Organizations without Resources

not likely to be very effective cannot achieve their goals

Effective Mgmt

are likely to founder [break down]

Functions or Process is a systematic way of doing things

FUNCTIONS OF MANAGEMENT

Planning

Organising

Directing

Controlling

is deciding in advance what is to be done. It is the determination of a course of action to achieve a desired result. Planning
-Plan is nothing. Planning is everything. - Failure to plan is planning to failure - Planning requires use of Intellectual faculties, imagination, insight, sound judgement
Problem Solving [finding the alternatives]

Planning
Decision Making [Choosing the alternatives] The function of planning includes Forecasting because only through anticipation of future that a manager can decide upon the future course of action.

Features of Planning

1. Plans are the guides for the organization to gather its resources required to achieve its goals 2. Members of the organization to carry on consistent activities towards the goals 3. Monitoring & measuring the progress towards the goals & if necessary, can take corrective actions
is determining what activities are necessary to any purpose and arranging them in groups, which may be assigned to individuals Urwick Organizing
Grouping the activities necessary to carry out the plans into administrative units, and defining the relationships among the executives & workers in each unite
Organizing is the process of arranging & allocating work, authority & resources to the members in order to achieve the Organizational Goals

Features of Organizing
1. 2. 3. 4. 5. Organization deals with the Human & Material resources An organizer should try to fit men to ideas, rather than ideas to men Relationships & time are central to organizing It produces a structure for relationship Seeking new people to join the structure of relationships [means, staffing]

Function of a Manager

Management Functions and Process most useful conceptualization of the managers job Planning - defining goals, establishing strategies for achieving those goals, and developing plans to integrate and coordinate activities Organizing - determining what tasks are to be done, who is to do them, how the tasks are to be grouped, who reports to whom, and where decisions are made Leading - directing and motivating all involved parties and dealing with employee behavior issues Controlling - monitoring activities to ensure that they are going as planned

Roles of a Manager
Based on specific categories of managerial behavior
Interpersonal

- involve people and duties that are ceremonial and symbolic in nature Informational - receiving, collecting, and disseminating information Decisional - revolve around making choices

emphasis that managers give to the various roles seems to change with their organizational level

Types of Business Organizations

Private Organizations Govt. Organizations

Sole Traders Joint Hindu Family Partnership Joint Stock Company Co-operative Multinational Companies

Department Undertaking Public Corporation Government Company Board Organization

Prentice Hall, 2002

Planning

Unit 2

Plan to plan is took ahead & chart out the future course of operation towards the accomplishment of goals. Planning involves identification of alternatives & selection from alternatives.
fixes the objectives of the orgn., as a whole Managers Role In the light of this, the goals of various departments are fixed

Billy E. Goetz Managerial planning attempts to achieve a consistent, co-ordinated structure of operations focused on desired ends. Why Consistent / Co-ordinated? Bcoz, in the absence of Planning, there may be inconsistencies, contradictions & duplication of work in the operations of an Organization.

Definition : A process involved in defining organisations goals, establishing an overall strategy for achieving those goals & developing a comprehensive hierarchy of plans to integrate & coordinate

Ends what is to be done

Planning is concerned with

Means how it is to be done Planning is an Intellectual Process

Nature of Planning

Planning is Goal Oriented Planning is Primary Function of Management Planning pervades all Managerial Activity Planning is directed toward Efficiency

A good plan should not only attain optimal result between Input & Output, but should also bring the greatest deal of satisfaction to those implementing it

Why do Managers Plan? bcoz, Planning gives direction, reduces the impact of change, minimizes waste, redundancy and set the standards used in Controlling Planning establishes Coordinated Effort Purposes of Planning Make Managers anticipate Change It reduces overlapping & wasteful activities

Planning establishes objectives / standards used in controlling. If we are unsure of what we are trying to achieve, how can we determine whether or not weve achieved it?

To Manage by Objectives Importance of Planning To take care of future uncertainty To secure Economy in operations To make Control Effective Planning is directed toward Efficiency

Planning without control is a fruitless exercise and control without planning is an impossibility.

Recognition of the Need for Action STEPS INVOLVED IN PLANNING

Establishment of clear cut objectives Building the Premises for Planning Identifying Alternative Courses of Action
Evaluation of Alternative Courses

Choice of Course of Action

Non-Controllable Premises Planning Premises Semi-Controllable Premises Controllable Premises

Economical

Forecasting
Political Social General Business Forecast Kinds of Forecasts Sales Forecast Capital Forecast

DECISION MAKING

Whatever the manager does, he does through Decision Making Peter F. Drucker.
Identification of Decision Criteria Steps in Decision Making

Identification of a Problem
Allocation of Weights to Criteria

Development of Alternatives
Analysis of Alternatives Selection of Alternative Implementation of the Alternative

Evoluation of Decision Effectiveness

ORGANISING & HRM

Unit 3

An organization is not merely a chart or a lifeless structure. It comprises people & it is the agency through which management performs the important functions of Direction, Coordination & Control. It is the foundation of management as well as its chief tool.

It facilitates administration

Organisation is important

It makes growth & diversification possible It provides for the optimum use of technological improvements To make Control Effective It simulates independent, creative thinking & initiative through well defined areas of work

Dimensions of Organization Unity of Command Dimensions of Organization Authority & Responsibility Span of Control Centralization & Decentralization

Division of Labour
Departmentalization Mechanistic[bureaucracy] -A structure that is high in complexity, formalization & centralization, rigid & stable. Organic [adhocracy] A structure that is low in complexity, formalization & centralization.

Kinds of Organizations