Principles of Management

FOR FINAL

Introduction 1

Decision Making 3

Organizing 5

Motivation 8

Controlling 11

Leading 12
 Introduction
Manager: The person who coordinates and oversees the work of other people so that
organizational goals can be accomplished.

Management: Management is a process to effectively and efficiently achieve goals with

limited resources in a changing environment.

Organization: A deliberate arrangement of people to accomplish some specific purpose.

Types of Manager:
1. First Line Manager: Who manage the work of nonmanagerial employees.
2. Middle Manager: Who manage the work of first line managers.
3. Top Manager: Who are responsible for making organization-wide decisions and
establishing the goals and plan that affect the organization.

Works of Manager
Planning Organizing Leading Controlling

Setting goals Determining- Motivating Monitoring performance

Establishing What to do? Leading Comparing with standard
strategies How to do? Conflict resolving Taking corrective steps
Developing plans to Who will do?
coordinate activities

Mintzberg’s Managerial Roles

Interpersonal/Human Informational Decisional
Figurehead Monitor Entrepreneur
Leader Disseminator Disturbance handler
Liaison Spokesperson Resource allocator
Negotiator

Skills: (Conceptual, Human/Interpersonal, Technical)

1. Managing human capital
2. Inspiring commitment
3. Managing change
4. Structuring work and getting things done
5. Facilitating the psychological and social contexts of work
6. Using purposeful networking
7. Managing decision-making processes
8. Managing strategy and innovation
9. Managing logistics and technology

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Changes Facing Managers:
Change Technology Ethics Competition Security threats

Impacts Shifting org boundaries Redefined Customer Risk mgt,

Virtual workplace values, service, Uncertain future
Mobile workforce Rebuilding Innovation energy source &
Flexible arrangements trust, Globalization economic climate,
Empowered employee More Efficiency Discrimination &
Work-Life balance accountability globalization concern
Employee assistance

Management is universal, because

1. All size of organization
2. All departments/functions of organization
3. All levels of organization
4. All types of organization

Dimensions of Management:
1. Process
2. Environment
3. Resources
4. Effectiveness
5. Efficiency
6. Goal

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 Decision Making
Decision making refers to the term making choice from alternatives.

Steps of DM

1. Identifying the problem 5. Analyzing alternatives

2. Identifying decision criteria 6. Selecting an alternative
3. Allocating weights to criteria 7. Implementing the alternative
4. Developing alternative 8. Evaluating decision effectiveness

Ways of DM
1. Rational: Describe choices that are logical and consistent and maximize value.
2. Bounded Rationality: Decision making that’s rational, but limited (bounded) by an
individual’s ability to process information.
3. Intuitional: Making decisions on the basis of experience, feelings, and accumulated
judgment.
a. Experience Based (based on previous experience)
b. Affect-initiated decisions (based on emotion/feelings)
c. Cognitive-based decisions (based on knowledge, skill)
d. Subconscious mental processing (from subconscious mind)
e. Values or ethics- based decisions (based on ethical values/culture)
4. Evidence Based: The systematic use of the best available evidence to make
decisions.

Types of Decision
1. Structured: The goal is clear, the problem is familiar, and information about the
problem is easily defined and complete.
2. Programed: A repetitive decision that can be handled by a routine approach. Because
the problem is structured, the manager doesn’t have to go to the trouble and expense
of going through an involved decision process.
a. Procedure: is a series of sequential steps a manager uses to respond to a
structured problem. The only difficulty is identifying the problem.
b. Rule: is an explicit statement that tells a manager what can or cannot be
done. Rules are frequently used because they’re simple to follow and ensure
consistency.
c. Policy: is a guideline for making a decision. policy establishes general
parameters for the decision maker rather than specifically stating what
should or should not be done.
3. Unstructured: which are problems that are new or unusual and for which information
is ambiguous or incomplete.
4. Non Programmed: are unique and nonrecurring and involve custom-made solutions.

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Characteristic Programmed Decisions Nonprogrammed Decisions

Type Structured Unstructured

Managerial level Lower levels Upper levels

Frequency Repetitive, routine New, unusual

Information Readily available Ambiguous or incomplete

Goals Clear, specific Vague

Time span Short Relatively long

Dependency Procedures, rules, policies Judgment and creativity

Styles of DM

Linear Thinking Style: Decision style
characterized by a person’s preference for
using external data and facts and
processing this information through
rational, logical thinking
Non Linear Thinking Style: Decision style
characterized by a person’s preference for
internal sources of information and
processing this information with internal
insights, feelings, and hunches.

Conditions of DM Decision Traps

1. Certainty 1. Intuition
2. Risk 2. Escalation of commitment
3. Uncertainty 3. Risk propensity
4. Framing error
5. Overconfidence
6. Framing error
7. Overconfidence

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 Organizing
Organizing is the establishment of effective authority relationships among selected works, persons and work
places in order for the group to work together efficiently, or the process of dividing work into sections and
departments.

Definition: Span of control: Span of control (or span of management) is the number of
subordinates who report directly to a manager or leader. The more employees assigned to a
manager, the wider their span of control.
Types of Span of Control
Tall/ Narrow span: When one manager manages a few subordinates, it shows a narrow span
of control. It is also called the Executive span because it is applicable at the top or middle
managerial level. Organizations opt for a narrow span when the nature of work is complex
and requires more assistance from the superior. A narrow span contains fewer subordinates
at a single level. Consequently, it increases the number of management levels making an
organization taller in structure.

Advantages Disadvantages

I. Ease in management I. High cost as more managers are

II. Improved control of management appointed
III. Effective Supervision II. Increased levels of management
IV. Suitable for work complex in nature in the organization
V. Creativity in planning and decision III. Delay in communicating
making information from top to bottom
IV. Delay in decision-making
Flat/Wide span: When one manager supervises many subordinates, it shows a wide span of
control. It is also called Operative Span as it is generally applicable at the lower or operating
managerial level. The wide span involves simple working and forms a flatter organizational
structure. Besides the organizations large in size go for a wide span of control. It involves
less operating cost and is highly adaptive to the changes. The supervisors have excellent
coordination and communication horizontally & vertically because of the fewer levels.

Advantages Disadvantages

I. Cost-effective in nature I. Confusion among the subordinates

II. Suitable for large organizations II. Difficulty in management if the
III. Effective communication within the number is considerably large
organization III. Requirement of qualified superior
IV. Reduced Planning time IV. Delegation of authority may be
V. Subordinates are well-trained difficult at lower levels

Importance of Span of Control

1. Discipline: By specifying the span of control at every management level, stakeholders

can create discipline within the organizations.
2. Motivation: Motivation is a crucial factor that keeps the team going. One can
motivate its workforce through the span of control by providing guidance and
feedback at regular intervals.

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 3. Timely Decision Making: Many small or big business decisions have to be taken at
every hierarchy. The determination of the span of management helps in timely
decision-making.
4. Effective Control: Control is an essential principle of management. Managers use the
span of control to achieve effective control over the business.
5. Communication: Business communication is how individuals interact within the
business. To attain effective communication, organizations use the span of control.
It eases the communication flow and sends information to the lower levels of
management.
Factors Affecting Span of Management

1. Qualification and Qualities: If the superiors and subordinates are well-qualified,

trained, experienced, and if they are experts in their jobs then the span of control will
be wide and vice-versa.
2. Level of Management: If the superiors are working at the top-level of management,
then they have more responsibilities. Therefore, their span of control will be narrow
and vice-versa.
3. Nature of Work: If the work is difficult then the span of control is narrow and vice-
versa.
4. Superior - Subordinates Relationship: If there are good relations between the
superior and subordinates, then the span of control will be wide and vice-versa.
5. Degree of Centralization: Under decentralization, the superior has to take fewer
decisions. Therefore, he can have a wide span of control. However, under
centralization, the superior has to take many decisions. Therefore, he should have a
narrow span of control.
6. Use of Communication Technology: If face-to-face communication is used, then the
span of control will be narrow. However, if electronic devices are used for
communication then the span of control will be wide.
7. Financial position of the Organization: If the organization has a good financial
position, then it can have a narrow span of control. This is because a narrow span
requires more managers. More managers will increase the compensation or wage
bill of the organization. However, if the organization has a bad financial position, then
it will be forced to have a wide span of control.
8. Clarity of Plans and Responsibilities: If the plans are clear and if the responsibilities
are well-defined, then the span of control will be wide. This is because the
subordinates will not have to go and consult their superior repeatedly for getting
orders and guidance.
9. Time available for Subordinates: If the superior is busy with another work, and if he
has less time for his subordinates then his span of control will be narrow and vice-
versa.
10. Faith and Trust in Subordinates: If the superior has good faith, trust and confidence
in his subordinates then the span of control can be wider.
Delegation of Authority: The division of authority and powers downwards to the subordinate.
Elements of Delegation:
1. Authority
2. Responsibility
3. Accountability means giving explanations for any variance in the actual performance
from the expectations set. Accountability cannot be delegated. For example, if ’A’ is
given a task with sufficient authority, and ’A’ delegates this task to B and asks him to

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 ensure that task is done well, responsibility rests with ’B’, but accountability still rests
with ’A’. The top level management is most accountable. Being accountable means
being innovative as the person will think beyond his scope of job. Accountability, in
short, means being answerable for the end result. Accountability can’t be escaped. It
arises from responsibility.
Authority Responsibility

1. Legal right of a person to command 1. Obligation of subordinate to

his subordinates perform assigned work
2. Attached to the position of a superior 2. Araises out of superior-subordinate
concern relation where subordinate carries
3. Can be delegated by superior to out duties given
subordinate 3. It’s absolute, cannot be shifted
4. Flows from top to bottom 4. Flows from bottom to top

Departmentalization: An organizational structure that separates people into groups, or

departments, based on a particular set of criteria. These departments have their own
leadership and work together to complete tasks. With large or complicated projects, multiple
departments may work together.

Benefits Types

1. To organize a large number of people 1. Function

2. To simplify training, increase the ease of evaluating 2. Process
performance and allow for quick growth or expansion 3. Product
3. To integrate work, allowing people to communicate with 4. Market
and learn from their departments easily 5. Customer
6. Location

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 Motivation
The set of internal and external forces that cause an employee to choose a course of action and engage in
certain behaviors.

Stages:
1. A felt need or drive.
2. A stimulus in which needs have to be aroused.
3. When needs are satisfied, the satisfaction or accomplishment of goals.

Maslow Theory Herzberg Theory Alderfer (ERG) Theory

Self actualization & ● Work M

O
fulfillment needs ● Achievement T
● Growth I
● Responsibility V ● Growth needs
A
T
● Advancement I
Esteem & status ● Recognition O
N
needs A
● Status L
● Relatedness needs
Belongings & social ● Relation w/colleagues M
A
needs ● Quality of supervision I
N
Safety & security ● Company policy T
E
needs ● Job security N
A ● Existence needs
Physiological needs ● Working condition N
C
● Pay E

McClelland’s Three Needs Theory

1) Need for Achievement (nACH): Personal responsibility, Feedback, Moderate risk
a) Typical behaviors:
i) High: Must win at any cost, must be on top, and receive credit.
ii) Low: Fears failure, avoids responsibility.
2) Need for Power (nPOW): Influence, Competitive
a) Typical behaviors:
i) High: Demands blind loyalty and harmony, does not tolerate disagreement.
ii) Low: Remains aloof, maintains social distance.
3) Need for Affiliation (nAFF): Acceptance and friendship, Cooperative
a) Typical behaviors:
i) High: Desires control of everyone and everything, exaggerates own
position and resources.
ii) Low: Dependent/subordinate, minimizes own position and resources.

Skinner’s reinforcement theory

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When individuals experience positive outcomes as a result of a behavior or action,
they are more likely to perform that action in the future. These positive outcomes are
known as “reinforcements”.
Similarly, when individuals experience a bad outcome as a result of an action or
behavior, they are less likely to perform that action or behave in that way in the
future. These negative outcomes are known as “punishments”.

Vroom’s Expectancy Theory of Motivation

Motivation is a function of valence, instrumentality and expectancy.
M=V*/*E
Valence: How much they value the potential rewards associated with the
specific results or behaviors,
Expectancy: How much they believe that their additional effort will help
them achieve the target results of behaviors, and
Instrumentality: How much they believe the rewards will actually appear
should they achieve the desired outcomes or behaviors.

Locke’s goal-setting theory

It has five principles to help you make goals you can stick to. They are:
1. Clarity
2. Challenge
3. Commitment
4. Feedback
5. Task complexity
Goal setting theory has certain eventualities such as:
1. Self-efficiency- Self-efficiency is the individual’s self-confidence and faith
that he has the potential of performing the task. Higher the level of self-efficiency,
greater will be the efforts put in by the individual when they face challenging
tasks. While, lower the level of self-efficiency, less will be the efforts put in by
the individual or he might even quit while meeting challenges.
2. Goal commitment- Goal setting theory assumes that the individual is
committed to the goal and will not leave the goal. The goal commitment is
dependent on the following factors:
i. Goals are made open, known and broadcasted.
ii. Goals should be set-self by an individual rather than designated.
iii. Individual’s set goals should be consistent with the organizational goals and
vision.

Equity Theory of Motivation

Adam’s Equity Theory, also known as the Equity Theory of Motivation, was developed in
1963 by John Stacey Adams.
Inputs Outputs

1. The number of hours worked (effort). 1. Salary

2. The commitment shown. 2. Bonus
3. The enthusiasm shown. 3. Pension

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 4. The experience brought to the role. 4. Annual holiday allowance
5. Any personal sacrifices made. 5. Company car
6. The responsibilities and duties of the 6. Stock options
individual in the role. 7. Recognition
7. The loyalty the individual has 8. Promotion
demonstrated to superiors or the 9. Performance appraisals
organization. 10. Flexibility of work arrangements
8. The flexibility shown by the individual, for 11. Sense of achievement
example, by accepting 12. Learning
assignments at very short notice or with 13. Promotion
very tight deadlines. 14. Performance appraisals
15. Flexibility of work arrangements
16. Sense of achievement
17. Learning

Referent group
1. Self-inside: The individual’s experience within their current org.
2. Self-outside: the individual’s experience with other organizations.
3. Others-inside: others within the individual’s current organization.
4. Others-outside: others outside of the individual organization.

For money as a motivator: Against money as a motivator:

1. Intrinsic motivation is also a stronger
predictor of job performance than extrinsic
motivation
2. Reward System
3. Money is acceptable for all
4. Money is likely to be more important
5. Money is often more than its monetary value
1. Money does not create employee
engagement
2. Money is never enough
3. Pay is hygiene factor, not a motivator
4. Extrinsic motivators alone won’t help
us to love our job
5. Only intrinsic motivation lasts

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 Controlling
Chapter Name- Controlling.pdf
https://drive.google.com/file/d/1rkJUSlW3hYMMS2E8FT0Kp2y0rRVqH7lK/view?
usp=share_link

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 Leading
Leading means the act of motivating and influencing people. The person who has the ability to motivate and
influence people is a leader.

Behavior/ Traits of a good Leader:

1. Drive: shows high effort level, persistent, high desire of achievement
2. Desire to lead: have strong desire to influence & lead
3. Honesty & Integrity: builds trusting relations by being honest & consistent in works &
words
4. Self Confidence
5. Intelligence
6. Job relevant knowledge
7. Extraversion: energetic & lively
8. Proneness to guilt: produces strong sense of responsibility for others

Roles of a Leader Types of Power

1. Leading people 1. Legitimate: status or position

2. Commanding people 2. Coercive: control or punish
3. Influencing people 3. Reward: control on reward
4. Inspiring people 4. Expert: based on expertise/skill
5. Referent: personal charisma

Leader vs Manager

1. Has followers 1. Has people who work for him

2. Creates vision 2. Executes the vision
3. Creates change 3. Reacts & adopts to the change
4. Is people focused 4. Structure focused
5. Seeks feedback 5. Minimizes weakness

Dimensions of leadership

1. Affirming 5. Resolute
a. Being approachable a. Setting expectation
b. Acknowledging contribution b. Improving methods
c. Creating positive env. c. Speaking about problem
2. Deliberate 6. Commanding
a. Communication a. Showing confidence
b. Promoting discipline b. Taking charge
c. Providing sense of stability c. Showing result
3. Pioneering 7. Inclusive
a. Finding opportunities a. Staying open
b. Promoting bold actions b. Showing diplomacy
4. Humble 8. Energizing
a. Managing composure a. Showing enthusiasm
b. Showing modesty b. Building connections
c. Rallying people to success

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 Planning
Planning involves defining the organization’s goals, establishing strategies for achieving those goals, and
developing plans to integrate and coordinate work activities. It’s concerned with both ends and means.

Purpose of Planning
1. Provides direction to managers
2. Reduces uncertainty
3. Minimizes waste
4. Establishes goals/standards

Goals vs Plans
Goals Plans

Desired outcome/target Documents that outline how the goals are going to be met

Stated Goals Real Goals Breadth Timespan Specificity Frequency

of use

Official goals an org Strategic: Long-Term: Specific: Single Use:

statement of actually Plan of full org More than 3 Fixed & One time
org, and pursues. and goal years. Final plan for
what it No change unique
wants its in plan. case
stakeholders
to believe. Operational: Short-Term: Directional: Standing:
Plan of parts Less than 1 Flexible plan Ongoing
or functions of year. plan for
org repeated
activities.

Characteristics of well written Goal Steps of setting Goal

1. Written in terms of outcomes rather 1. Review org mission (mission-

than actions purpose of organization)
2. Measurable and quantifiable 2. Evaluate available resource
3. Clear as to a time frame 3. Determine goals
4. Challenging yet attainable 4. Write down the goals & inform the
5. Written down concerned people
6. Inform the concerned people 5. Review results

Goal setting Approaches

Traditional Goal Setting: Goals set by top Management by Objectives: A process of

managers flow down through the org &
become subgoals for each organizational
area. This perspective assumes that top
managers know what’s best because they
see the big picture. The goals passed down
to each succeeding level guide individual
setting mutually agreed-upon goals and
using those goals to evaluate employee
performance
a. The organization’s overall objectives
and strategies are formulated
b. Major objectives are allocated among

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employees as they work to achieve those divisional and departmental units
assigned goals. c. Unit managers collaboratively set
specific objectives for their units with
their managers
Contingency Factors d. Specific objectives are collaboratively
set with all department members
1. Organizational level e. Action plans, defining how objectives
2. Degree of environmental uncertainty are to be achieved, are specified and
3. Length of future commitment agreed upon by managers and
employees
f. The action plans are implemented
g. Progress toward objectives is
periodically reviewed, and feedback is
provided
h. Successful achievement of objectives
is reinforced by performance-based
rewards.

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