Principles

of
Management
Hotel Management
Semester: V
 Contents
Unit 1: Concept of Management and Management thought Journey from Inception till
today: Meaning of Management, Nature of Management, Management Vs
Administration, Objectives of Management, Levels of Management, Characteristics of
Management, Importance of Management, Functions of Management, Coordination-
Meaning & nature, 14 Principles of Management by Henri Fayol
Unit 2: Planning: Meaning, Characteristics of Planning, Types of Plans-standing plan &
single used plan, Planning-Importance, Advantages, Disadvantages, Planning Process,
Planning Premises, Goals, objectives, Methods, Procedures. Policies, Rules, Programmes
and Budgets
Organising:
Meaning of Organising, Importance of Organising, Organising process, Span of
Management, Organization Charts-formal and informal organization, Types of
Organization-Functional & divisional, Delegation, Centralization and Decentralization
 Contents
Unit 3: Staffing: Meaning & importance of Staffing, Job Analysis-Job Specification & Job
description, Recruitment-Meaning, sources of recruitment, Selection, Induction &
orientation, Training & Development, Transfer, Promotion, Performance Appraisal

Directing:
Meaning, Nature of Directing, Principles of Directing, Importance of Directing, Elements
of Directing, Supervision- Meaning, functions of a supervisor
 Contents
Unit 4: Leadership:
Meaning & Importance, Qualities of a good leader, Different styles of Leadership and
their relevance with reference to context and conditions/situations,
Motivation: Meaning of Motivation, Importance of Motivation, Maslow's Theory of
need Hierarchy, Herzberg's Hygiene-Motivation Theory, Vroom's expectancy theory, Mc
Gregory's theory 'X' and theory ‘Y’, Financial & non-financial Incentives
 Contents
Unit 5: Communication: Meaning of Communication, Nature of Communication, Types
of Communication: Upward/Downward. Formal/Informal, Medium of Communication-
Verbal & non-verbal, Barriers to Communication, Communication Process,
Communication networks, Ways to effective communication
Controlling: Meaning & importance of Controlling, Control Process, Control Techniques-
PERT, CPM
 Meaning of Management

Management refers to a process or science of organizing resources and directing

human efforts for the successful accomplishment of organizational goals and
objectives.

It is also defined as a universal phenomenon that involves making optimum utilization of

available resources to achieve predetermined goals and objectives.

According to F.W Taylor , “ Management is Art of knowing what you want to do and
seeing it is done in the best and the cheapest way.’’

According to Peter F Drucker, “Management is doing things right”.

 Meaning of Management

Management is the Art of getting things done through other people.

Management is concerned with ideas, things and people.

Management is the effective utilization of human and material resources to

achieve the enterprise objectives.
 Nature of Management
Management as Science- Science is a systematic body of knowledge
pertaining to a specific field of study that contains general facts which
explains a phenomenon. Since the principles of management are not as exact
as the principles of science their application and use is not universal. They
have to be modified according to on given situation.
Management as an Art- Art implies application of knowledge & skill to
trying about desired results. An art may be defined as personalized
application of general theoretical principles for achieving best possible
results. Art has the following characters –
1. Practical Knowledge
2. Personal Skill
3. Creativity
4. Perfection through practice
5. Goal-Oriented
 Nature of Management
Management as a Profession: A profession may be defined as an occupation
that requires specialized knowledge and intensive academic preparations to
which entry is regulated by a representative body. The practice of
management is an art.
However, managers can work better if their practice is based on the
principles of management. These principles constitute the science of
management. Management as an art and a science are therefore not
mutually exclusive, but complement each other.
The essentials of a profession are:
1. Specialized Knowledge
2. Formal Education & Training
3. Social Obligations
4. Code of Conduct
5. Representative Association
 Significance of Management

Optimum
Achievement of
utilization of
goals
resources

Cost
Survival & growth Minimization/
Sustainability Efficiency &
Effectiveness
 Characteristics of Management

Management is a universal process

Management is Goal-Oriented

Management is Continuous.

Management is a Group Activity

Management is the art of getting things

done through and with people.
 Management vs. Administration

There has been a controversy on the use of the two terms-management and
administration.

Different authorities on the subject have expressed conflicting opinions.

Many experts make no distinction between management and administration while

others consider them as two separate functions.

A few authors treat administration as a part of management. These three points of

view are explained below:
 Management vs. Administration
On the basis of FUNCTIONS:
Basis Management Administration
Meaning Management is an art of getting It is concerned with
things done through others by formulation of broad
directing their efforts towards objectives, plans & policies.
achievement of pre-determined
goals.
Nature Management is an executing Administration involves
function. decision-making.
Process Management decides who should Administration decides what is
& how should it be done. to be done & when it is to be
done.
 Management vs. Administration

On the basis of FUNCTIONS:

Basis Management Administration

Function Management is a doing function Administration is a thinking
because managers get work done function because plans and policies
under their supervision. are determined under it.
Skills Technical and Human skills Conceptual and Human skills
Level Middle & lower level function Top level function
Managing director, General Minister, Commissioner, Registrar,
Manager, Sales Manager, Branch Vice Chancellor, Governor.
Manager.
Management vs. Administration

Top Management

Middle Management

Lower Management
 Levels of Management
➢ In an organisation there exists a chain of command or scaler chain from the
ultimate authority to the lowest rank.
➢ This chain is made up of superior-subordinate relationships.
➢ Various managers are linked with one another through the vertical chain.
➢ This chain or hierarchy or management consists of series of managerial positions
called 'levels of management’.
➢ The level of management determines the authority and status of managers. Thus,
the term 'level of management' refers to a line of demarcation between various
managementForemen
positionsSupervisors
in an organisation.
 Levels of Management

Top Management
Board Chief
Executive
Upper Middle/Intermediate
Departmental Divisional
Management
Heads

Superintendent Branch Middle Management

Managers

Foremen Supervisors Operating Management

 Top 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 is also responsible for maintaining a contact with the outside world.
g. It provides guidance and direction.
 Intermediate or Upper Middle Management

❖ It consists of departmental or divisional heads like works manager, marketing

manager, personnel manager, and finance manager.
❖ They make sure their departments run efficiently based on top management's
objectives and policies.
❖ They handle the daily operation of their departments and implement plans.
❖ They create operational plans and set targets for their departments.
❖ They select supervisory personnel, motivate employees, and gather information.
❖ They are responsible for efficiently using the resources available to their
departments.
❖ They translate the organization's objectives and strategies into specific decisions
and actions.
 Middle Management

❖ It consists of Deputy heads of departments, sectional officers (like plant manager,

area sales manager, branch manager, office manager, chief accountant, purchase
officer).
❖ They act as a bridge between top management and operating management.
❖ Share in decision-making challenges with top management.
❖ Help their subordinates implement policies.
❖ Relay orders, decisions, and guidance from top management to lower levels.
❖ Forward problems, difficulties, and suggestions upward.
❖ While top management thinks big-picture (conceptual), middle management deals
with day-to-day operations.
 Operating Management

o Supervisory/operative level is also known as lower level of management.

It consists of supervisors, foreman, section officers, superintendent etc.
o 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 the
organization.
e. They communicate worker’s problems, suggestions, and recommendatory appeals
to the higher level and higher level goals and objectives to the workers.
PLANNING
Functions of Management

ORGANISING

STAFFING

DIRECTING

CONTROLLING
According to Henry Fayol, “To manage is to forecast and
plan, to organize, to command, & to control”.

Whereas Luther Gullick has given a keyword ‘POSDCORB’

where,
P stands for Planning,
O for Organizing,
S for Staffing,
D for Directing,
Co for Co-ordination,
Luther Gullick
R for Reporting and
B for Budgeting.
But the most widely accepted are functions of
management given by KOONTZ and O’DONNEL i.e.
Planning, Organizing, Staffing, Directing and Controlling. ,
KOONTZ O’DONNEL
 Coordination
o The process by which a manager synchronizes the activities of different
departments is known as coordination.
o Coordination is the force that binds all the other functions of management.
o Coordination brings unity of action and integrates different activities of the
organization.

According to E.F.L. Brech, “ Coordination is balancing and keeping together the

team by ensuring a suitable allocation of tasks to the various members, and
seeing that the tasks are performed with due harmony among the members
themselves.”
 Coordination: Nature/Features
1. Coordination integrates group efforts: The efforts of individuals in a common direction.
2. Ensure unity of efforts: To ensure all departments work hand in hand and create
balance in all the departments. It acts as a binding force in all departments.
Eg: HR Dept. + Purchase Dept. + Sales Dept. + Finance Dept. = Company
3. Continuous process: Coordination is a non-ending function. It is a continuous function
although its degree may vary. The managers work continuously to achieve coordination and
maintain coordination because without coordination companies cannot function efficiently.
4. Coordination is a pervasive function: Coordination is a universal function, it is required at
all levels, in all departments and to perform all the functions due to interdependence of
various activities on each other. Business as well as non-business organisation requires
coordination.
 Coordination: Nature/Features
5. Coordination is the responsibility of all managers: Coordination is the task of not only
top-level managers but also managers working at different levels to coordinate the
activities of the organization. The top level tries to coordinate the overall plans and policies
of the organization, the middle level tries to coordinate departmental activities and the
lower level coordinates the activities of workers.
6. Coordination is a deliberate function: Every manager tries to coordinate the activities of
the organization to avoid confusion and chaos. Without coordination efforts of individuals
cannot be united and integrated; that is why while performing various activities in the
organization managers deliberately perform coordination functions.
 Principles of Management by Henri Fayol
Background and History of Fayol.
Henry Fayol was born in Turkey in 1841. He got a degree in mining engineering
in 1860 and started working as an engineer in a coal mining company. In 1888,
he was promoted to the managing director of the company. At that time the
company was in a situation of insolvency. He accepted the challenge and
applied his managerial techniques to bring the company from this situation
and he succeeded. When he retired after 30 years, the company was a leading
coal-steel company with a strong financial background.
Major Contributions of Fayol:
(a) made a clear distinction between technical and managerial skills.
(b) He identified the major functions of management-planning, organizing,
staffing, directing, and controlling.
(c) He developed 14 principles of management that act as guidelines for
managers to perform managerial activities.
 14 Principles of Management
Division of Work Centralisation & Decentralisation

Authority & Responsibility Scalar Chain

Discipline Principle of Order

Unity of Command Principle of Equity

Unity of Direction Stability of Tenure of Personnel

Subordination of individual interest

Initiative
to general interest

Remuneration of Persons Esprit De Corps

 Division of Work

Henri believed that segregating work in the workforce

amongst the workers would 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
levels.
For example: In a car manufacturing plant, workers are
assigned specific tasks like assembling doors or installing
engines.
 Authority & Responsibility

Authority- Power to make decisions

Responsibility- Obligation to complete the job assigned on time
Fayol defines authority as “the right to give orders and obedience,” where the worker
must be responsible for complying with the order. Both authority and responsibility must
be balanced. The managers should be able to ensure their tasks are being done without
fail.
If, Authority > Responsibility = Misuse of authority

Authority < Responsibility = Non-completion of job

(overburdened with excess responsibility)

Authority = Responsibility = Positive effects

 Discipline

Respect for authority and adherence to the rules and regulations of

an enterprise are all aspects of discipline. Under this principle,
employees respect their superiors and follow their directions.
Managers maintain discipline in their employees by ensuring they
follow rules and regulations. To do this, effective managers also
lead by example.

For example: A company enforces strict attendance policies to

ensure punctuality and discipline among employees.
 Unity of Command

A chain of command is typically present within an

organization to help ensure a clear direction of work. By
following this principle, each employee has a single direct
manager. Employees who receive directions from multiple
managers may encounter a conflict of interest or
miscommunication.

Fayol wrote that "an employee should receive orders from

one supervisor only." Otherwise, authority, discipline,
order, and stability are threatened.

For example: An employee reports to a single department

manager and not to multiple supervisors.
Unity of Direction

Whoever is engaged in the same activity should have a

unified goal. This means all the people working in a
company should have one goal and motive which will
make the work easier and achieve the set goal easily.

Teams with the same objective should be working under

the direction of one manager, using one plan. That, Fayol
wrote, "is the condition essential to unity of action,
coordination of strength and focusing of effort.“
Subordination of individual interest
to general interest

In any organization, the company’s interests must

always be privileged over the particular interests of the
owners and employees. This is called subordination of
individual interest against the company’s interest.
Meaning it will always be necessary to give more
importance to what happens in the company than
personal issues.

This indicates a company should work unitedly towards

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

Employee satisfaction depends on fair remuneration for

everyone – financial and non-financial. Fayol said pay should be
fair and reward "well-directed effort."

Ideally, it should be according to an individual’s efforts they

have put forth.
Example: A company’s salespeople are paid a 3% commission
as a sales award, but a newly hired employee is paid only 2%. In
other words, this principle would not be fulfilled in this case.
It is also good to emphasize that there are still salary inequities
due to gender issues, where women often earn less than men
for the same positions and responsibilities.
Centralisation & Decentralisation

The centralization of authority involves the

concentration of decision-making power at the top level
STATE GOVT.
of management. Centralization improves capabilities and
facilitates efficient operations. This also helps facilitate
quick decision-making in emergencies. Centralization of
authority is essential for small-scale organizations.
PANCHAYATS
Whereas, the dispersal of decision-making authority
Power to decide and make
decisions for the welfare of
among more than one person is called decentralization.
villages.
Henri Fayol stressed the point that there should be a
balance between the hierarchy and division of power.
 Scalar Chain

A scalar chain expresses the hierarchy of authority

and communication within an organization. It
identifies which positions hold more authority within
a professional relationship. A scalar chain also refers
to the principle of clear communication between
upper management and employees.
Using the scalar chain, managers can identify the right
person to contact in certain situations and improve
communication within the organization.
 Principle of Order

Fayol wrote that "The right man in the right place"

forms an effective social order.
It says that ‘A place for everything (everyone) and
everything (everyone) in its (his/her) place.

This will lead to increased productivity and efficiency.

 Principle of Equity

In any company, consistently to achieve the

employees’ loyalty, it will be necessary to treat the
employees in a friendly manner, without any
preferences, and fairly. Equity is a combination of
kindness and justice.
Equity also makes it essential to talk about the
importance of gender equality. This means men and
women can access a position and receive the same
salary.
 Stability of Tenure of Personnel

Fayol argues that it is essential to ensure that employees

last a long time in their positions and avoid staff
turnover as much as possible. The idea of the stability of
tenure of personnel is to inculcate a sense of job security
and loyalty in the teams so they don’t think of leaving
the organization. The sense of job insecurity is directly
proportional to low labor efficiency and the high cost of
training a new person to carry out their tasks.

Example: Info Edge India Limited awards its employees

for their contribution after they achieve a benchmark
period (five years, ten years, and so on). This fosters
loyalty toward the organization and encourages the
employees to contribute their best.
 Initiative

The management should support and encourage the employees to take

initiative in an organization. It will help them to increase their motivation and
morale.
 Esprit De Corps

Esprit de Corps is a French term that means “Team

Spirit.” Therefore, the management should create
unity, cooperation, and team spirit among
employees.
Managers are responsible for fostering an
environment of mutual trust, understanding, and
empathy. Working as a team will achieve more
meaningful results than independently. He/she
should replace ‘I’ with ‘We’ in all his conversations
with his/her subordinates to foster team spirit.
Therefore, this will be essential to achieve unity and
harmony among employees.
THANK YOU