Pom Unit 1 Introduction

Principles of Management
Unit 1 - Introduction
Management by Different Authors
 F.W. Taylor - “Art of knowing what you want to do and then
seeing that it is done the best and cheapest way”.
 Henry Fayol – “To Manage is to forecast, to plan, to organize,

to command, to co-ordinate and to control”.
 Peter F.Drucker – ”Management is work and as such it has its

own skills, its own tools and its own techniques”.
 Mary Parker Follet - “Management is the art of getting things

done through and with people”.
 George R.Terry – “Consisting of planning, organizing, actuating

and controlling”.
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Management Contd….
 Management – Process of designing and maintaining an
environment in which individuals, working together in
groups, effectively accomplish selected aims.
 Business organizations
 Non – Business organizations
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Characteristics of Management
 Is a Process /a function.
 Is a Social Process.
 Involves Group Effort.
 Aims at achieving predetermined objectives.
 Required at all levels of management.
 Is a profession.
 Is an art and science.
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Management functions/The process of
Management
 Newman and Summer – organizing, planning, leading and
controlling.
 Henri Fayol and Koontz and O’Donnell – Planning,
organising, commanding, coordinating and controlling.
 Gulick – POSDCORB
 Warren Haynes and Joseph Massie – Decision making and
communicating.
“External element affect the operation”
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Functions Of Management
 Planning
 Look ahead and chart out future course of operation
 Formulation of Objectives, Policies, Procedure, Rules, Programmes and
Budgets
 Organizing
 Bringing people together and tying them together in the pursuit of
common objectives.
 Enumeration of activities, classification of activities, fitting individuals
into functions, assignment of authority for action.
 Human organisation and Material Organisation.
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Functions Of Management
 Directing
 Act of guiding, overseeing and leading people.
 Motivation, leadership, decision making.
 Financial and Non-financial.
 Controlling
 Laying standards, comparing actuals and correcting deviation-achieve
objectives according to plans.
 Co-ordination
 Synchronizing and unifying the actions of a group of people.
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Functions of Management
 Innovation
 Finding new uses for old ones.
 Representation
 Various outside groups.
“Blend into each other”
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Functions@different Organisational
levels
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Skills and Management levels
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Roles of a Manager
 Achieve objectives through and with people.
 Identify and Utilize resources – optimum.
Types
 Interpersonal Roles
 Figurehead, leader and Liaison
 Informational Roles
 Monitor, Disseminator, Spokesman
 Decisional Roles
 Entrepreneur, Disturbance Handler, Resource allocator and
Negotiator
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Management – A Science or an ART?
 Art
 Practical know how
 Technical skills
 Concrete results
 Creativity
 Personalized nature
 Science
 Empirically Derived
 Critically tested
 General principles
 Cause and effect relationship
 Universal applicability
“MANAGEMENT AS A SCIENCE PROVIDES PRINCIPLES AND AS AN ART HELPS IN

TACKLING SITUATIONS”.
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Development of Management Thought
Early Management Approaches
 Scientific Management
 Administrative Management Theory
 Human Relations Movement
Modern Management Approaches
 Behavioral Approach
 Quantitative/Management Science Approach
 Systems Approach
 Contingency Approach
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Early Management Approaches
 Scientific Management
“F.W.Taylor(1856-1915) – Father of scientific Management”
 His Contributions are

1. Time and Motion study
2. Differential Payment
3. Drastic Reorganization of Supervision
4. Scientific recruitment and training
5. Intimate friendly cooperation between management and workers
“Gantt introduced new features in Taylor’s scheme”
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Early Management Approaches contd…
 Administrative Management
“Henri Fayol(1841-1925) – Father of scientific Management”
 He laid down 14 Principles

 Division of work
 Authority and Responsibility
 Discipline
 Unity of Command
 Unity of Direction
 Subordination of Individuals Interest to general Interest
 Remuneration
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Early Management Approaches contd….
 Principles Contd….
 Centralization
 Scalar Chain
 Order
 Equity
 Stability
 Initiative
 Esprit de corps
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Early Management Approaches contd…
 Human Relations Movement
“Prof, Elton Mayo(1927-1932) – Father of Human Relations”
 His Contributions are

1. Social System
2. No Correlation
3. Not by Time and Motion study
4. Employee Centered
5. Non-financial rewards
6. Informal group
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Modern Management Approaches
1. Empirical or Case Approach
2. Managerial Roles Approach
3. Contingency or Situational Approach
4. Mathematical or Management Science Approach
5. Decision theory Approach
6. Re-Engineering Approach
7. Systems Approach
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Modern Management Approaches contd…
8. Socio-technical Systems
9. Co-operative social Systems
10. Group Behavior Approach
11. Interpersonal Behavior Approach
12. McKinsey’s 7-S Frame work
13. TQM Approach
14. Management Process or Operational Approach
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Empirical Managerial Roles
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Contingency Mathematical
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Decision Theory Re-Engineering
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Systems Operational
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Socio-Technical Systems Co-Operative Social Systems
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Group Behavior Interpersonal behavior
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McKinsey’s 7-S Framework TQM Approach
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Management and Administration
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Business Organization
 Definition
 Process of identifying and grouping the work to be performed,
defining and delegating responsibility and authority and establishing
relationship for the purpose of enabling people to work most
effectively together in accomplishing objectives
 Types of Business organizations

 Individualistic Institutions – Sole traders, Joint stock company,
Co – operative and Multinational companies
 Government Institutions – Departmental undertaking, Public

corporation, Government company and Board organization
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Individualistic Institutions
 Sole Trading
 Sole proprietorship is that form of business organization which is
owned and controlled by a single individual. He receives all the profits
and risks all of his property in the success or failure of the enterprise
 Characteristics
 One man ownership and control, Unlimited liability, Enjoyment of
entire profit, No separate legal entity, Simplicity, Self employment and
Secrecy
 Advantages
 Easy to form the business, Take decision making, full control and so on
 Disadvantages
 Short life, Risks and Uncertainity
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Individualistic Institutions Contd…
 Partnership
 Group of men who have joined capital or serves for the prosecution
of some enterprise
 Features of Partnership
 Agreement, Multiplicity of person, Lawful business, sharing of profits,
Contractual relations, Mutual agency, Unlimited liability, Registration,
Common management, Utmost good faith
 Kinds of partners
 Active partner, Sleeping partner, Normal partner, Partner in profit only,
Sub partner, Secret partner and Minor as a partner
 Rights of a partner
 Rights to express his option, participation, Share profits, Get interest
on the capital etc.,
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 Partnership Contd…
 Advantages
 Easy to form
 Registration is not compulsory
 Larger financial resources
 Promptness in decision making
 Growth and expansion of business
 Disadvantages
 Unlimited liability increases
 Lack of harmony
 Limited resources
 Difficulties in expansion
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 Joint Stock Company
 Association of many persons who contribute money to a common
stock and employ it in some trade or business and also share the
profit and loss as the case may be arising there from. Two types are
 Private Limited Company
 Has a minimum paid up capital as may be prescribed
 It restricts the rights to transfer the shares
 Can work with only two directors
 Public Limited Company
 Capital is collected from the public by issuing shares
 No restriction on the transfer of shares
 Maximum number of members is unlimited
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 Joint Stock Company Contd….
 Advantages
 More stable
 Limited liability
 Shares are freely transferable
 Company can easily expand
 Large financial resources
 Disadvantages
 Time consuming
 Lack of motivation
 Difficult to maintain secrets
 Delayed decision and actions
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 Co – operative Organization
 Voluntary association of persons for mutual benefit and its aims are
accomplished through self help and collective effort
 Mutual help i.e., one for all and all for one
 Characteristics of Co – operatives
 Voluntary association, Equal voting rights, service motive, separate
legal activity, open membership, state control, liability, No share
transfer, Statuary audit and cash trading
 Merits
 Easy formation, Low operation cost, exempts from income tax
 Demerits
 Lack of motivation, Lack of secrecy and non – transferability of shares
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Government Institutions
 Public Enterprises or State Enterprises
 Autonomous or semi autonomous corporations controlled by the
state and engaged in industrial and commercial activities
 Characteristics
 Financed by government, Government management, Public services,
Legislative control and monopoly enterprises
 Merits
 Complete government control
 Proper use of funds
 Demerits
 Inefficiency
 Tax burden to public
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Government Institutions Contd…
 Public Corporation
 Autonomous body corporate created by a special statue of a state or
central government
 It has separate legal entities created for specific purpose
 Merits
 Finance from government
 Internal autonomy
 Protect public welfare
 Flexibility
 Demerits
 Limited autonomy
 Inefficient operation
 Misuse of power
40

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Principles of Management

 Henry Fayol – “To Manage is to forecast, to plan, to organize,

 Peter F.Drucker – ”Management is work and as such it has its

 Mary Parker Follet - “Management is the art of getting things

 George R.Terry – “Consisting of planning, organizing, actuating

“MANAGEMENT AS A SCIENCE PROVIDES PRINCIPLES AND AS AN ART HELPS IN

Modern Management Approaches

 His Contributions are

“Gantt introduced new features in Taylor’s scheme”

 He laid down 14 Principles

 His Contributions are

2. Managerial Roles Approach

3. Contingency or Situational Approach

4. Mathematical or Management Science Approach

5. Decision theory Approach

9. Co-operative social Systems

10. Group Behavior Approach

11. Interpersonal Behavior Approach

12. McKinsey’s 7-S Frame work

13. TQM Approach

14. Management Process or Operational Approach

Empirical Managerial Roles

Decision Theory Re-Engineering

Socio-Technical Systems Co-Operative Social Systems

Group Behavior Interpersonal behavior

McKinsey’s 7-S Framework TQM Approach

 Types of Business organizations

 Government Institutions – Departmental undertaking, Public

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