MBM 103 (Foundations of Management)

UNIT-1
Lesson- 1: Concept of Management and Organisation,
Nature and Principles of Management
Lesson- 2:Skills, Functions and Theories of Management
Lesson- 3:Approaches of Management and Schools of
Management Thoughts

Lesson- 1: Concept of Management and Organisation,

Nature and Principles of Management
STRUCTURE

1.1 Objectives
1.2 Concept of Management
1.3 Characteristics of Management
1.4 Concept of Organisation
1.5 Key Features of Organisation
1.6 Principles of Management
1.7 Summing Up
1.8 Assignment
1.9 Possible Answers to Self-Check Questions
1.10Terminal Questions
1.11Suggested Further Reading

Lesson- 1 Concept of Management and Organisation,

Nature and Principles of Management
1.1 Objectives : This lesson comprises the following objectives:

 Understand the concept of management.

  Know the approaches to understand the meaning of organisation.
 Study the nature of management
 Identify the main principles of management
1.2 Concept of Management
Management is planning, organizing, leading, and controlling of human and other resources
to achieve organizational goals both effectively and efficiently. It is managing human and
non-human resources in the best possible way in order to accomplish predetermined
goals.Management is the process of designing and maintaining an environment in which
individuals working together in groups, efficiently accomplish selected aims.

1.3 The features of the management can be summarised as follows:

 Management is Universal:

It is required by all types of organisations. Fundamental principles and concepts are

applicable all over. Approach and style may differ.

 Management is Purposeful:

It is means to achieve predetermined goals. It is a process of achieving results and making

things happen. Managers have “SMART” Goals:

S Specific

M Measurable

A Achievable

R Real

T Time-bound

 Management is Unifying Force:

The essence of management lies in the coordination of individual efforts into a team.
Reconciliation of individual and organisational goals creating a whole which is more than the
total of individual parts.

 Management is a Social Process:

It is by the people, through the people and for the people. The focus is on interpersonal
relationships as operations are integrated and interrelated.

 Management is Multidisciplinary:

Knowledge is derived from several disciplines such as Mathematics, Sociology, Psychology,

Economics and Anthropology.
  Management is a Continuous Process:

It is an on-going process involving continuous handling and integrating of human and non-
human resources.

 Management is an Intangible Force:

It is unseen or invisible force which can be felt in the form of results or performance.

 Management is a Dynamic Process:

It considers situational differences advocating that there is no best way of doing things.

 Management is Science as well as Art:

It is organised and systematic body of knowledge as well as practical application of that

knowledge. There are certain similarities between management and science such as:

. Systematic proceedings.

. Cause and effect relationship.

. Fundamental principles.

. Experiments.

. Observations.

Art is a specific way of doing things which requires practice, experience and skills,so managers
also practice managerial skills in order to perform consistently.

 Management is Aided not Replaced by Technology:

Technology can widen a manager’s vision and sharpen insight by supplying more and fast
information for making key decisions.

Self check question:

Q.1. Why dealing with people is important?

1.4 Concept of Organisation:

Organisation can be understood from the point of view of structure as well as process.
Organization structure refers to the network of relationship among individuals and positions in
an organization. Organization is a group of persons working together for common objectives.

Organization as a process refers to:

 Identification of task

 Assigning jobs to personnel

  Establishing systematic authority relationship among them.

1.5 Key features of an organization:-

 Interdependence of people.

 Common objective.

 Authority structure.

 Rules and regulations.

1.6 Principles of Management:

Principles are fundamental truths and long term guiding forces for managers as well as the
organisation. These principles are universal, flexible, have cause and effect relationship and
may be descriptive or prescriptive. Henry Fayol, who is also known as the father of
management has given fourteen principles which can be listed as below:

1. Division of Work:

Allocating different tasks to different persons to create specialisation, enhancing the efficiency of
both, technical as well as managerial work.

2. Authority and Responsibility:

There must be parity between rights of a superior and his obligations to perform a duty.

3. Discipline:

Respect of authority and complying with the rules and regulations of the oranisation.

4. Unity of Command:

A subordinate should receive orders from and be accountable to one and only one superior to
avoid confusion, conflict and divided loyalty.

5. Unity of Direction:

One head and one plan for a group of activities having the same objectives.

6. Subordination of Individual Interest to General Interest:

Efforts to bring about convergence of general and individual interest but in case of
conflict, individuals must sacrifice in the larger interest.

7. Remuneration of Personnel:

Fair, reasonable and effort oriented remuneration must be paid to workers.

8. Centralisation:
Concentration of decision making powers at top level management.

9. Scalar Chain:

Chain of command or communication depicting clear line of authority from top to bottom
linking all managers at all levels.

10. Order:

Proper arrangement of things and right placement of people.

11. Equity:

Fair and impartial dealing with subordinates ensuring no undue favor or neglection.

12. Stability of Tenure of Personnel:

No frequent movement of employees from their positions.

13. Initiative:

Motivating people to initiate action without being asked to do so.

14. Esprit-de-Corps :

Development of team spirit, unity and coordination among people.

Self check question:

Q.2. Why principles can not be negotiated?

1.7 Summing Up:

Management is getting things done through and with people. Management is effective utilisation
of human and non human resources..Managers are knowledgeable as well as
performers..Organisation can be viewed as a structure and as a process comprising
interdependence of people, common objective, authority structure with rules and regulations.

The concept of management is applied everywhere in a dynamic way with basic similarities. It is
an intangible and never ending social process with predetermined objectives.It comprises of
core attributes of science as well as art.It is associated with various disciplines which are helpful
in its development. It is a unifying force supported by technology.

Management principles are statements of fundamental truth and long term guiding force for
managers. They are universal, flexible, equally important and may be descriptive or prescriptive.
Management functions are primarily based on fourteen principles given by Henry Fayol.

1.8 Assignment:

Talk to your friends and relatives and see to what extent the principles of management are
followed in social or formal organisations.
1.9 Possible answers to self check questions:

Q1. Why dealing with people is important?

Ans: Organizations are nothing but people. People are complex as they have
feelings/emotions and intelligence. If in organizations we want to get work done we should
know how to manage people. So dealing with people is a science and an art which is very
important for managers.

Q2. Why principles cannot be negotiated?

Ans2 Principles are fundamental truths, long term guiding force and torch bearers, moreover
they are like lighthouses which do not change their position, hence they can not be negotiated.

1.10 Terminal Questions:

Q1 Why the concept of management and organisation must be understood clearly by practicing
managers?

Q2 Are managerial principles useful for individuals and organisations? Justify with reasons.

1.11 Suggested Readings:.

1.Jones, G.R. and George J.M. 2006. Contemporary Management, 4 Ed. McGraw-Hill,
Irwin.

2. Koontz, H and Weihrich, H. 1998. Essentials of Management.5 Ed, Tatal McGraw –Hill
Edition, New Delhi.

3. Dr.Vasishth, N. 2008. Principle of Management, 3 Ed. Taxmann Allied Services (P) Ltd.,
New Delhi.

4. Tripathi, P.C. and Reddy, P.N. 2008. Principle of Management, 4 Ed. McGraw –Hill
Edition, New Delhi.