Entrepreneurship & BM CHAPTER: FIVE Page # 52

Fundamentals oF management
Topics:
Management
◘ Meaning of Management
◘ Principles of Management
◘ Functions of Management
◘ Levels of Management
◘ Roles of Management
Scientific Management
◘ Characteristics of Scientific Management
◘ Objectives to Scientific Management
◘ Principles of Scientific Management

MEANING OF MANAGEMENT
Management (or managing) is the administration of an organization, whether it is
a business, a not-for-profit organization, or government body. Management includes the
activities of setting the strategy of an organization and coordinating the efforts of
its employees to accomplish its objectives through the application of
available resources, such as financial, natural, technological, and human resources.

“Management is a set of activities (including planning and decision making, organizing,

leading, and controlling) directed at an organization’s resources (human, financial,
physical, and information), with the aim of achieving organizational goals in an efficient
and effective manner”- Ricky W.Griffin

A manager then, is someone whose primary responsibility is to carry out the

management process. By efficient, we mean using resources wisely in a cost effective
way. By effective, we mean making the right decisions and successfully implementing
them.

Today’s managers face various interesting and challenging situations. The average
executive works 60 hours a week; has enormous demands placed on his or her time; and
faces increased complexities posed by globalization, domestic competition,
government regulation, shareholder pressure, emerging technologies, the rise of social
media, and other Internet-related uncertainties. Their job is complicated even more by
rapid changes, unexpected disruptions, and both minor and major crises.

PRINCIPLES OF MANAGEMENT
Henry Fayol, also known as the ‘father of modern management theory’ gave a new
perception of the concept of management. He introduced a general theory that can
be applied to all levels of management and every department. The Fayol theory is
practised by the managers to organize and regulate the internal activities of an
organization.

The fourteen principles of management created by Henri Fayol are explained below.

1. Division of Work: Henri believed that segregating work in the workforce amongst the
worker will enhance the quality of the product. Similarly, he also concluded that the
division of work improves the productivity, efficiency, accuracy and speed of the
workers. This principle is appropriate for both the managerial as well as a technical work
level.

Prof. Dr. Shaikh Shamsul Arafin, skarafin@gmail.com

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Fundamentals oF management
2. Authority and Responsibility: These are the two key aspects of management. Authority
facilitates the management to work efficiently, and responsibility makes them
responsible for the work done under their guidance or leadership.

3. Discipline: Without discipline, nothing can be accomplished. It is the core value for
any project or any management. Good performance and sensible interrelation make
the management job easy and comprehensive. Employees good behaviour also helps
them smoothly build and progress in their professional careers.

4. Unity of Command: This means an employee should have only one boss and follow his
command. If an employee has to follow more than one boss, there begins a conflict of
interest and can create confusion.

5. Unity of Direction: Whoever is engaged in the same activity should have a unified
goal. This means all the person working in a company should have one goal and motive
which will make the work easier and achieve the set goal easily.

6. Subordination of Individual Interest: This indicates a company should work unitedly

towards the interest of a company rather than personal interest. Be subordinate to the
purposes of an organization. This refers to the whole chain of command in a company.

7. Remuneration: This plays an important role in motivating the workers of a company.

Remuneration can be monetary or non-monetary. However, it should be according to
an individual’s efforts they have made.

8. Centralization: In any company, the management or any authority responsible for the
decision-making process should be neutral. However, this depends on the size of an
organization. Henri Fayol stressed on the point that there should be a balance between
the hierarchy and division of power.

9. Scalar Chain: Fayol on this principle highlights that the hierarchy steps should be from
the top to the lowest. This is necessary so that every employee knows their immediate
senior also they should be able to contact any, if needed.

10. Order: A company should maintain a well-defined work order to have a favourable
work culture. The positive atmosphere in the workplace will boost more positive
productivity.

11. Equity: All employees should be treated equally and respectfully. It’s the responsibility
of a manager that no employees face discrimination.

12. Stability: An employee delivers the best if they feel secure in their job. It is the duty of
the management to offer job security to their employees.

13. Initiative: The management should support and encourage the employees to take
initiatives in an organization. It will help them to increase their interest and make then
worth.

14. Esprit de Corps: It is the responsibility of the management to motivate their

employees and be supportive of each other regularly. Developing trust and mutual
understanding will lead to a positive outcome and work environment.

Prof. Dr. Shaikh Shamsul Arafin, skarafin@gmail.com

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Fundamentals oF management
This 14 principles of management are used to manage an organization and are
beneficial for prediction, planning, decision-making, organization and process
management, control and coordination.

FUNCTIONS OF MANAGEMENT
Management is essential for an organized life and necessary to run all types of
organizations. Managing life means getting things done to achieve life’s objectives and
managing an organization means getting things done with and through other people to
achieve its objectives.

There are basically five primary functions of management. These are:

1. Planning
2. Organizing
3. Staffing
4. Directing
5. Controlling

(1) Planning
Planning is future-oriented and determines an organization’s direction. It is a rational and
systematic way of making decisions today that will affect the future of the company. It
involves predicting of the future as well as attempting to control the events. It involves
the ability to foresee the effects of current actions in the long run in the future.

An effective planning program incorporates the effect of both external as well as

internal factors. The external factors are shortages of resources; both capital and
material, general economic trend as far as interest rates and inflation are concerned,
dynamic technological advancements, increased governmental regulation regarding
community interests, unstable international political environments, etc.

The internal factors that affect planning are limited growth opportunities due to
saturation requiring diversification, changing patterns of the workforce, more complex
organizational structures, decentralization, etc

2) Organizing
Organizing requires a formal structure of authority and the direction and flow of such
authority through which work subdivisions are defined, arranged and coordinated so
that each part relates to the other part in a united and coherent manner so as to attain
the prescribed objectives.

The function of organizing involves the determination of activities that need to be done
in order to reach the company goals, assigning these activities to the proper personnel,
and delegating the necessary authority to carry out these activities in a coordinated
and cohesive manner.

(3) Staffing
Staffing is the function of hiring and retaining a suitable work-force for the enterprise
both at managerial as well as non-managerial levels. It involves the process of recruiting,
training, developing, compensating and evaluating employees and maintaining this
workforce with proper incentives and motivations. Since the human element is the most
vital factor in the process of management, it is important to recruit the right personnel.

This function is even more critically important since people differ in their intelligence,
knowledge, skills, experience, physical condition, age and attitudes, and this

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Fundamentals oF management
complicates the function. Hence, management must understand, in addition to the
technical and operational competence, the sociological and psychological structure of
the workforce.

(4) Directing
The directing function is concerned with leadership, communication, motivation, and
supervision so that the employees perform their activities in the most efficient manner
possible, in order to achieve the desired goals.

(5) Controlling
The function of control consists of those activities that are undertaken to ensure that the
events do not deviate from the pre-arranged plans. The activities consist of establishing
standards for work performance, measuring performance and comparing it to these set
standards and taking corrective actions as and when needed, to correct any
deviations.

The controlling function involves:

a) Establishment of standard performance.
b) Measurement of actual performance.
c) Measuring actual performance with the pre-determined standard and finding
out the deviations.
d) Taking corrective action.

LEVELS OF MANAGEMENT
There are three levels of management that an organization can have. You can include
different portfolios and designations in each of these management levels depending
upon the specific needs of your business. So, here are the three levels:

Lower Level Management:

The level of management, which deals with the non-managerial staff, oversees their
work and interacts with them, is included in the low level management. The employees
at this management level are at the lowest level of the managerial hierarchy. Moreover,
they take instructions from the upper level of management. In addition, there is a direct
involvement of these individuals in producing the products or rendering the services in
an organization.

Examples:
The examples of the skills that are part of the low level management include:
o Technical expertise for operating machines
o Specific ways and techniques to do a job efficiently and effectively
o Additionally, hands on experience of producing goods and rendering services

Designation:
Some of the designations that can be a part of the low level management of any
organization are:
o Supervisor
o Shift manager
o Department manager
o District Manager
o Office manager

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Fundamentals oF management
Middle Level Management:
This is the second tier in the managerial hierarchy. The purpose of this level of
management is to coordinate between the top management and the lower level of
management. They oversee the work of the tier below them and ensure that the work
being done is according to the goals and objectives of the organization. So, this is how
we can define the work of the middle level management.

Example:
The specific skills that are important for this tier of management include:
o Good communication
o Empathetic personality
o Moreover, effective decision-making ability

Designation:
Some of the examples for this level of management include:
o Store manager
o Division manager

Top Level Management:

The level of management that can be considered as part of the executive board of an
organization is known as the top level management. The main purpose of their existence
is to formulate the strategies for the organization. Moreover, they tend to evaluate the
current position of a company and review the objectives and goals that you need to
achieve. Based on these considerations and the external factors or the environmental
factors, this level of management makes strategies.

These strategies are passed on to the middle level of management, which ensures its
effective execution. Apart from formulating strategies the evaluation and monitoring of
the performance of the middle level management is also their responsibility.

Usually, the top level management contains a number of middle level managers under
them. The exact number is dependent on the span of control and the design that a
company follows. So, you’ll have to analyze the business structure of a specific company
if you are looking for further details on the number of managers under the top level of
management. Only then you can expect to get the best answer.
Examples:
The specific skills that you can consider as the part of the top level management
include:
o Leadership qualities
o Effective decision-making skills
o Vision
o Ability to delegate tasks
o Monitoring work of others
o Moreover, Dedication towards the achievement of the goals and strategies set
Designation:
You might have heard a few designations to be part of every big business. These are
often the part of the top level management. In order to clarify it further, we have listed
some of the designations that you can see in the top level management as:
o Finance Manager
o Marketing Manager
o HR Manager
o Operations Manager
o CEO

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Fundamentals oF management
ROLES OF MANAGEMENT
For better understanding, Mintzberg categorized all activities into ten managerial roles
performed over the course of a day. These are as follows:

Interpersonal Roles
o Figurehead – includes symbolic duties which are legal or social in nature.
o Leader – includes all aspects of being a good leader. This involves building a
team, coaching the members, motivating them, and developing
strong relationships.
o Liaison – includes developing and maintaining a network outside the office for
information and assistance.
Informational Roles
o Monitor – includes seeking information regarding the issues that are affecting the
organization. Also, this includes internal as well as external information.
o Disseminator – On receiving any important information from internal or external
sources, the same needs to be disseminated or transmitted within the
organization.
o Spokesperson – includes representing the organization and providing information
about the organization to outsiders.
Decisional Roles
o Entrepreneur – involves all aspects associated with acting as an initiator, designer,
and also an encourager of innovation and change.
o Disturbance handler – taking corrective action when the organization faces
unexpected difficulties which are important in nature.
o Resource Allocator – being responsible for the optimum allocation
of resources like time, equipment, funds, and also human resources, etc.
o Negotiator – includes representing the organization in negotiations which affect
the manager’s scope of responsibility.

SCIENTIFIC MANAGEMENT
“Scientific management is the substitution of exact scientific investigations and
knowledge for the old individual judgment or opinion in all matters relating to the work
done in the shop”. —F.W. Taylor

“The core of scientific management is the organized study of work, the analysis of work
into its simplest elements and the systematic improvement of the worker’s performance
of each element.” —Peter F. Drucker

Scientific management implies the application of science to the job management of an

industrial concern. It aims at replacement of traditional techniques by scientific
techniques. Scientific management is a thoughtful, organized human approach to the
job of management as contrasted with hit or miss, rule of thumb. “It is the art of knowing
exactly what you want men to do and then seeing that they do it in the best and
cheapest way.”

Scientific management includes finding the most efficient methods of production,

scientific selection and training of worker, proper allotment of duties and work and
achieving cooperation between workers and management.

Prof. Dr. Shaikh Shamsul Arafin, skarafin@gmail.com

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Fundamentals oF management
CHARACTERISTICS OF SCIENTIFIC MANAGEMENT:
The features of scientific management are as follows:
i. It is a systematic approach to handle management problems.
ii. It implies scientific techniques in method of work, recruitment, selection and
training of workers.
iii. It rejects the age old method of rule of thumb’ or ‘hit or miss’ approach.
iv. It attempts to discover the best method of doing the work at the lowest cost.
v. It attempts to develop each worker to his greatest efficiency.
vi. It involves a complete change in the mental attitude of the workers as well as of
the management.

OBJECTIVES TO SCIENTIFIC MANAGEMENT:

The objectives or aims of scientific management may be summarised as under:
a) Higher Productivity: Increase in the rate of production by use of standardized
tools, equipment’s, methods and training of the workers.
b) Cost Reduction: Reduction in the cost of production by rational planning and
regulation, and cost control techniques.
c) Elimination of Wastes: Elimination of wastes in the use of resources and methods
of manufacturing.
d) Quality Control: Improvement in the quality of output by research, quality control
inspection devices.
e) Right Men for Right Work: Placement of right persons on the right jobs through
scientific selection and training of workers.
f) Incentive Wages: Relating wage payments to the efficiency of the workers, i.e.,
giving wages at the higher rates to the efficient workers.

PRINCIPLES OF SCIENTIFIC MANAGEMENT:

The fundamental principles that Taylor saw underlying the scientific approach to
management may be summarized as follows:

1. Replace rule-of-thumb work methods with methods based on a scientific study of

the tasks.
2. Scientifically select, train, and develop each worker rather than passively leaving
them to train themselves.
3. Cooperate with the workers to ensure that the scientifically developed methods
are being followed.
4. Divide work nearly equally between managers and workers, so that the
managers apply scientific management principles to planning the work, and the
workers actually perform the tasks.

Prof. Dr. Shaikh Shamsul Arafin, skarafin@gmail.com