Notes Unit -1 PRINCIPLES OF MANAGEMENT

Management is required in all kinds of organisations whether they are manufacturing computers or
handlooms, trading in consumer goods or providing saloon services and even in non-business
organisations. No matter what the organisation is or what its goals might be, they all have something
in common – management and managers. Successful organisations achieve their goals by following a
deliberate process called „management. Management consists of a series of interrelated functions that
are performed by all managers. In simple words Management is the art of getting things done through
people. Let‟s understand the concept of management.

Concept of Management

Some of the common definition of management given by famous writers and thinkers are:

 According to Harold Koontz and Heinz Weihrich, Management is the process of designing and
maintaining an environment in which individuals, working together in groups, efficiently accomplish
selected aims.
 According to Robert L. Trewelly and M. Gene Newport, Management is defined as the process of
planning, organising, actuating and controlling an organisation‟s operations in order to achieve
coordination of the human and material resources essential in the effective and efficient attainment
of objectives.
 According to Kreitner, “Management is the process of working with and through othersto effectively
achieve organisational objectives by efficiently using limited resources in the changing environment.
 According to George R Terry, Management consists of planning, organising, actuating and
controlling, performed to determine and accomplish the objectives by the use of people and
resources.

So Management can be defined as a process of getting things done with the aim of achieving goals
effectively and efficiently.

Nature of Management

1. Process: Process means the primary functions or activities that management performs to get things
done. These functions are planning, organising, staffing, directing and controlling.
2. Effectiveness: Effectiveness is concerned with the end result. It basically means finishing the given
task. Thus Effectiveness in management is concerned with doing the right task, completing activities
and achieving goals
3. Efficient: Efficiency means doing the task correctly and with minimum cost. Management is
concerned with the efficient use of input resources which ultimately reduce costs and lead to higher
profits.

Process of Management

1. Management is a goal-oriented process: An organisation has a set of basic goals which are the
basic reason for its existence. Management unites the efforts of different individuals in the
organisation towards achieving these goals.
2. Management is all pervasive: The activities involved in managing an enterprise are common to all
 organisations whether economic, social or political.
3. Management of people: The task of management is to make people work towards achieving the
organisation‟s goals, by making their strengths effective and their weaknesses irrelevant.

4. Management of operations: It requires a production process which entails the flow of input material
and the technology for transforming this input into the desired output for consumption
Management is a continuous process: The process of management is a series of continuous,
composite, but separate functions (planning, organising, directing, staffing and controlling). These
functions are simultaneously performed by all managers all the time.

Management as an Art, Science and Profession

To decide whether management is science, art or profession, one has to comprehend the
characteristics and definitions of science, art and profession and associate them with management
definition and traits.

Management as an Art:
Art is the experienced and personal utilisation of subsisting information to accomplish solicited
outcomes. It can be procured via education, research and practice. As art is involved with the
personal utilisation of data some kind of inventiveness and creativity is needed to follow the
fundamental systems acquired. The essential characteristics of art are as follows:

 The presence of theoretical knowledge: Art assumes the presence of specific academic knowledge.
Specialists in their particular fields have obtained specific elementary postulates which are
appropriate to a specific sort of art. For instance, the literature on public speaking, acting or music,
dancing is publicly acknowledged.
 Personalised application: The application of this primary information differs from person to person.
Art, hence, is a highly personalised notion.
 Based on custom and creativity: Art is practical. Art includes the creative practice of subsisting
intellectual knowledge.
Management as a Science:
Science is an organised collection of knowledge that emphasises definite universal truths or the
action of comprehensive laws. The central characteristics of science are as follows:

 The organised body of knowledge: Science is a precise entity of knowledge. Its systems are based
on a purpose and consequence association.
Universal validity: Scientific conventions have global genuineness and application.
 Systems based on experimentation: Scientific conventions are originally formed via research and
then tested via repeated trial and error under the regulated situations.

Levels of Management
The level of management determines a chain of command, the amount of authority & status enjoyed
by any managerial position. The levels of management can be classified in three broad categories:

1. Top level / Administrative level

2. Middle level / Executory
3. Low level / Supervisory / Operative / First-line managers
 Managers at all these levels perform different functions. The role of managers at all the three levels
is discussed below:

LEVELS OF MANAGEMENT SKILLS FUNCTIONS AND ROLES

1. Top Level of Management

It consists of board of directors, chief executive or managing director. The top management is the
ultimate source of authority and it manages goals and policies for an enterprise. It devotes more time
on planning and coordinating functions.
The role of the top management can be summarized as follows -

a. Top management lays down the objectives and broad policies of the enterprise.
b. It issues necessary instructions for preparation of department budgets, procedures,schedules etc.
c. It prepares strategic plans & policies for the enterprise.
d. It appoints the executive for middle level i.e. departmental managers.
e. It controls & coordinates the activities of all the departments.
f. It provides guidance and direction.

2. Middle Level of Management

The branch managers and departmental managers constitute middle level. They are responsible to the
top management for the functioning of their department. They devote more time to organizational
and directional functions. In small organization, there is only one layer of middle level of
management but in big enterprises, there may be senior and junior middle level management. Their
role can be emphasized as -

a. They execute the plans of the organization in accordance with the policies and directives of the
top management.
b. They participate in employment & training of lower level management.
c. They interpret and explain policies from top level management to lower level.
d. They are responsible for coordinating the activities within the division ordepartment.
 e. It also sends important reports and other important data to top level management.
f. They evaluate performance of junior managers.
g. They are also responsible for inspiring lower level managers towards betterperformance.

3. Lower Level of Management

Lower level is also known as supervisory / operative level of management. It consists of supervisors,
foreman, section officers, superintendent etc. According to R.C. Davis, “Supervisory management
refers to those executives whose work has to be largely with personal oversight and direction of
operative employees”. In other words, they are concerned with direction and controlling function of
management. Their activities include -

a. Assigning of jobs and tasks to various workers.

b. They guide and instruct workers for day to day activities.
c. They are responsible for the quality as well as quantity of production.
d. They are also entrusted with the responsibility of maintaining good relation in theorganization.
e. They communicate workers problems, suggestions, and recommendatory appeals etc to the higher
level and higher level goals and objectives to the workers.
f. They help to solve the grievances of the workers.
g. They supervise & guide the sub-ordinates.
h. They are responsible for providing training to the workers.
i. They arrange necessary materials, machines, tools etc for getting the things done.
j. They prepare periodical reports about the performance of the workers.
k. They ensure discipline in the enterprise.
l. They motivate workers.
m. They are the image builders of the enterprise because they are in direct contactwith the workers.

COORDINATION AS ESSENCE OF MANAGEMENT

1. Professional Competence
Professional competence refers to having thorough knowledge of the field concerned. In the case of
management, professional competence involves being well-versed in management principles and
how these principles can be applied in the given situations.

2. Belief in High Achievement

Managers have belief in high achievement. They have internal locus of control implying that they
feel that they can control situations and the situations cannot control them. They have a feeling that if
others can do something exceptional, they can also do the same way. This belief instills confidence
in them for doing better and better.

3. Creativity
Creativity involves conceiving of original and unique alternatives to the solution of a problem.
Creativity is required because nature of problems goes on changing requiring innovative solutions.

4. Analytical Skills
Managers have to work in complex situations which contain both significant and insignificant
 factors. With analytical skills, quality managers may be able to identify those factors which are more
relevant for their work.

5. Excellent Communication Skills

Communication involves sharing of ideas and understanding with others. In order to understand
others and making himself understood by others, excellent communication skills are required.
Further, persuasive communication may influence others favorably.

6. Leading from the Front

Managers lead from the front. They do not speak about themselves but their work speaks on their
behalf. This feature leads the followers to follow the leaders enthusiastically.
7. Team-based Approach
Quality managers adopt team-based approach. For work performance, they adopt „give and take„
approach. They believe in developing themselves as well as others.

Development of Management Thought

The evolution of management thought is a process that started in the early days of man. It began
since the period man saw the need to live in groups. Mighty men were able to organize the masses,
share them into various groups. The sharing was done accord to the masses' strength, mental
capacities, and intelligence.

Classical Thought of Management by Taylor:

F.W. Taylor or Fredrick Winslow Taylor is also known as the „father of scientific management‟
proved with his practical theories that a scientific method can be implemented to management.
Taylor gave much concentration on the supervisory level of management and performance of
managers and workers at an operational level. Let‟s discuss in detail the five(5) principles of
management by F.W Taylor.

1. Science, not the Rule of Thumb-

This rule focuses on increasing the efficiency of an organisation through scientific analysis of work
and not with the „Rule of Thumb‟ method. Taylor believed that even a small activity like loading
paper sheets into boxcars can be planned scientifically. This will save time and also human energy.

2. Harmony, Not Discord-

Taylor indicated and believed that the relationship between the workers and management should be
cordial and complete harmony.

3. Mental Revolution-
This technique involves a shift of attitude of management and workers towards each other. Both
should understand the value of each other and work with full participation and cooperation.

4. Cooperation, not Individualism-

It is similar to „Harmony, not discord‟ and believes in mutual collaboration between workers and the
management. Managers and workers should have mutual cooperation & confidence and a sense of
goodwill.
5. Development of Every Person to his Greatest Efficiency-
The effectiveness of a company also relies on the abilities and skills of its employees. Thus,
implementing training, learning best practices and technology, is the scientific approach to brush up
the employee skill.

Neo Classical or Henry Fayol’s Administrative Management

Division Of Work: Work should be divided among individuals and groups to ensure that effort and
attention are focused on special portions of the task. Fayol presented work specialization as the best way to
use the human resources of the
organization.
Authority: The concepts of Authority and responsibility are closely related. Authority was defined by
Fayol as the right to give orders and the power to exact obedience. Responsibility involves being
accountable, and is therefore naturally associated with authority. Whoever assumes authority also assumes
responsibility.
Discipline: A successful organization requires the common effort of workers. Penalties should be applied
judiciously to encourage this common
effort.
Unity Of Command: Workers should receive orders from only onemanager.
Unity Of Direction: The entire organization should be moving towards a common objective
in a common
direction.
Remuneration: Many variables, such as cost of living, supply of qualified personnel, general
business conditions, and success of the business, should be considered in determining aworker‟s rate
of pay.
Equity: All employees should be treated as equally aspossible.
Stability of Tenure Of Personnel: Retaining productive employees should always be a high priority
of management.

Behavioral Thought or Hawthorne studies

The Hawthorne studies were conducted from 1927 until 1932 by Professor Elton Mayo at the
Western Electric Hawthorne Works in Chicago. Professor Mayo examined work conditions and
productivity. The conclusion of the research led to the discovery that relationships largely influenced
productivity. Being part of a group or team affected the performance of each employee. The
researchers dubbed the increased motivation and productivity The Hawthorne Effect.
Human relations movement
The human relations movement originated from Dr. Elton Mayo's Hawthorne studies. The movement
stated that personal development and growth as well as employee goal setting are essential to
effective businesses. The movement also emphasized the fact that affirmative motivation derived
from team goals and greater production resulted from encouragement and positive reinforcement
from employers.
 System Thought or A PESTLE analysis of Management
Political: Tax policy; environmental regulations; trade restrictions and reform; tariffs; political
stability
Economic: Economic growth/decline; interest, exchange, inflation and wage rates; minimum
wage; working hours; unemployment (local and national); credit availability; cost of living
Sociological: Cultural norms and expectations; health consciousness; population growth rates;
age distribution; career attitudes; health and safety
Technological: New technologies are continually emerging (for example, in the fields of robotics
and artificial intelligence), and the rate of change itself is increasing. How will this affect the
organisation‟s products or services?
Legal: Changes to legislation impacting employment, access to materials, quotas, resources,
imports/exports, and taxation
Environmental: Global warming and the increased need to switch to sustainable resources;
ethical sourcing (both locally and nationally), including supply chain intelligence. Pandemics
and other emergencies.

Contingency Management Thought Management By Objectives (MBO)

Definition: Management By Objectives (MBO) is the process of setting achievable goals for the
managers and employees at all the levels to be accomplished within a stipulated period. It
streamlines the plan of action of the workforce and establishes their roles and responsibilities.
The concept of MBO was introduced by Peter Drucker in his book „Practice of Management‟ in
the year 1954. In general terms, it is also called as MBR (Management By Results) or PRIDE
(Performance, Result and Individual Development Evolution).
1. Defining Organizational Goals: The initial step is to establish the short-term and long- term
organizational goals and objectives which evolves from the mission and vision of thecompany.
2. Determining Employees’ or Subordinates’ Objectives: The next step is to define the individual goals
and objectives. For this, opinion is taken from the employees on their ability of goal accomplishment and
targets which they will set for themselves.
3. Constant Monitoring Employee Progress and Performance: The managers need to continuously
monitor the performance of each employee to identify any loopholes or hurdles in business operations.
4. Performance Evaluation: After monitoring the work, the managers need to evaluate and review the
performance of every individual to spot any scope for improvement.
5. Providing Feedback: With the help of the above evaluation, the managers now need to give valuable
feedback to every individual to motivate them. And, at the same time making them aware of their
weaknesses and potential for improvement.
6. Performance Appraisal: The last step is reviewing the performance of the employees regularly to bring
in efficiency in their workstream.