Management Concepts and Practices

(MBMI 11)

Dr. Shobitha Poulose

Assistant Professor
Department of Management Studies
National Institute of Technology Tiruchirappalli
 Course objectives

1. To enable the students to study the evolution of Management

2. To study the functions and principles of management

3. To learn the application of the management principles in an organization.

 UNIT I INTRODUCTION TO MANAGEMENT AND ORGANIZATION
• Definition of Management – Science or Art – Manager Vs Entrepreneur - types of
managers’ managerial roles and skills – Evolution of Management – Scientific,
human relations, system and contingency approaches – Organization culture and
Environment – Current trends and issues in Management.
UNIT II PLANNING
• Nature and purpose of planning – planning process – types of planning –
objectives – setting objectives – policies – Planning premises – Strategic
Management – Planning Tools and Techniques – Decision making steps and

Syllabus – HRM
process.
UNIT III ORGANISING
• Nature and purpose – Formal and informal organization – organization chart –
(MBMI 11 ) organization structure – types – Line and staff authority – departmentalization –
delegation of authority – centralization and decentralization
UNIT IV DIRECTING
• Foundations of individual and group behaviour – motivation – motivation theories
– motivational techniques – leadership – types and theories of leadership –
communication – process of communication – barrier in communication –
effective communication.
UNIT V CONTROLLING
• System and process of controlling – budgetary and non-budgetary control
techniques – use of computers and IT in Management control - Recent Trends and
Challenges - Role of Managers in Changing environment. Challenges in today’s
global environment and competitiveness.
 A systematic arrangement of people
Organizations brought together to accomplish
some specific purpose; applies to all
organizations—for-profit as well as
not-for-profit organizations.

Where managers work (manage)

Common Characteristics of Organizations
People Differences

• Non-managerial employees
• People who work directly on a job or task and
have no responsibility for overseeing the work of
others
• Managers
• Individuals in an organization who direct the
activities of others
Organizational
Levels
 Supervisors
First-line responsible for
directing the day-to-
managers day activities of
operative employees

Identifying Individuals at levels

of management
Managers Middle
managers
between the first-
line manager and
top management

Responsible
Top for making
decisions and
managers establishing
policies
 • “Management as a process consisting of planning,
organizing, actuating and controlling, performed to
determine and accomplish the objective by the use of
people and resources.”
What is George R. Terry
• “Management is a multi-purpose organ that manages a
Management? business and manages managers and manages worker and
work”.
Peter F Drucker

• The process of getting things done, effectively and

efficiently, with and through other people.
 Efficiency
Vs
Effectiveness
 Efficiency is concerned with the means
of getting things done by:

Efficiency Vs • Doing a task correctly

Effectiveness • Minimizing both resource use and cost, and
• Getting the greatest output from the smallest
amount of inputs.

Effectiveness is concerned with the

ends , that is, doing the right tasks that
result in attaining organizational goals.
 Science :“A systematic body of
knowledge pertaining to an area
of study and contains some
Is Management general truths explaining past
events or phenomena”
a Science or an
Art?
‘Art’ refers to “the way of doing
specific things; it indicates how an
objective is to be achieved.”
 What do
Managers do?
Management
Functions?
 It is a process of deciding the business
objectives and charting out the plan/
Planning method for achieving the same.

This includes determination of:

– What is to be done?
– How to do?
– Where it is to be done?
– Who will do it? and
– How result are to be evaluated?
 Organizing is the process of identifying and
grouping the work to be performed, defining
and delegating responsibility and authority
and establishing relationships for the purpose
of enabling people to work most effectively
Organizing together in accomplishing objectives.”

To organize a business is to provide it with

everything useful to its functioning i.e.
personnel, raw materials, machineries etc.
 • Includes motivating employees, directing the
Directing activities of others, selecting the most effective
communication channel, and resolving conflicts
 • The process of monitoring performance,
comparing it with goals, and correcting any
Controlling significant deviations
 • “Management as a process consisting of
planning, organizing, actuating and controlling,
performed to determine and accomplish the
objective by the use of people and resources.”

George R. Terry
What is • “Management is a multi-purpose organ that
manages a business and manages managers and
Management? manages worker and work”.

Peter F Drucker

• The process of getting things done, effectively

and efficiently, with and through other people.
 Improving the way
Why Study organizations are
Management? managed.

You will eventually

either manage or
be managed
History of
Management
History of •

Management
 • Industrial revolution
• Machine power began to substitute for
The Industrial human power
• Lead to mass production of
Revolution’s economical goods
• Improved and less costly transportation
Influence on systems became available
Management • Created larger markets for goods.
• Larger organizations developed to serve
Practices larger markets
• Created the need for formalized
management practices.
History of Management
History of
Management
 • Classical approach
• The term used to describe the
hypotheses of the scientific management
theorists and the general administrative
Classical theorists.
Contributions • Scientific management theorists
• Fredrick W. Taylor
• General administrative theorists
• Henri Fayol and Max Weber
 • Frederick W. Taylor
• The Principles of Scientific Management
(1911)
• Advocated the use of the scientific
method to define the “one best way”
for a job to be done
Scientific • Believed that increased efficiency could
Management be achieved by selecting the right people
for the job and training them to do it
precisely in the one best way.
• To motivate workers, he favored
incentive wage plans.
• Separated managerial work from
operative work.
 • Develop a science for each element of an
individual’s work, which replaces the old
rule-of-thumb method.
• Scientifically select and then train, teach, and
develop the worker.
Taylor’s Four
• Heartily cooperate with the workers so as to
Principles of ensure that all work is done in accordance
with the principles of the science that has
Management been developed.
• Divide work and responsibility almost equally
between management and workers.
Management takes over all work for which it
is better fitted than the workers.
 • General administrative theorists
• Writers who developed general theories
of what managers do and what
constitutes good management practice
• Henri Fayol (France)
• Fourteen Principles of Management:
Administrative Fundamental or universal principles
Management of management practice
• Max Weber (Germany)
• Bureaucracy: Ideal type of
organization characterized by division
of labor, a clearly defined hierarchy,
detailed rules and regulations, and
impersonal relationships
 • Division of work • Centralization
Fayol’s
• Authority & Responsibility • Scalar chain
Fourteen • Discipline • Order
Principles of • Unity of command • Equity
Management • Unity of direction • Stability of tenure of
personnel
• Subordination of the
individual • Initiative
• Remuneration • Esprit de corps
 Division of Labor

• Allows for job specialization.

• dividing the tasks within any organization
into different teams specialized in those
tasks.
Fayol’s
Principles of Authority and Responsibility

Management • Fayol included both formal and informal

authority resulting from special expertise.

Unity of Command

• Employees should have only one boss.

 Line of Authority

• A clear chain of command from top to

bottom of the firm.

Fayol’s Centralization
Principles of • The degree to which authority rests at the
Management top of the organization.

(cont’d) Unity of Direction

• There should be one head and one plan

for a group of organized activities that
share a common objective.
 Equity

• The provision of justice and the fair and

impartial treatment of all employees.

Fayol’s Order
Principles of • The arrangement of employees where they
Management will be of the most value to the organization
and to provide career opportunities.
(cont’d)
Initiative

• The fostering of creativity and innovation by

encouraging employees to act on their own.
 Discipline

• Obedient, applied, respectful employees are

necessary for the organization to function.

Fayol’s Remuneration of Personnel

Principles of • An equitable uniform payment system that
motivates contributes to organizational
Management success.
(cont’d)
Stability of Tenure of Personnel

• Long-term employment is important for the

development of skills that improve the
organization’s performance.
 Subordination • The interest of the
of Individual
organization takes
Interest to the
Common precedence over that of
Fayol’s Interest the individual employee.
Principles of
Management
(cont’d) Esprit de
• Comradeship, shared
enthusiasm foster
corps devotion to the common
cause (organization).
 Weber’s Ideal
Bureaucracy
Division of Labor
Authority Hierarchy
Formal Selection
Formal Rules and Regulations
Impersonality
Career Orientation
 Hawthorne effect
A series of studies done during • Social norms or
the 1920s and 1930s that standards of the group
are the key
provided new insights into determinants of
group norms and behaviors individual work

Hawthorne behavior.

Studies
Changed the prevalent view of the time that
people were no different than machines.
 Illumination Experiment

Relay Assembly Test Experiments

Hawthorne
Experiments Mass Interview Group

Bank Wiring Observation Group

 1924-1927

Measured Light Intensity vs. Worker Output

Result :

Illumination • Higher worker productivity and satisfaction at all

light levels

Studies • Worker productivity was stopped with the light

levels reached moonlight intensity.

Conclusions:
• Light intensity has no conclusive effect on output
• Productivity has a psychological component
Concept of “Hawthorne Effect” was created
 1927-1929

Manipulated factors of production to measure effect on

output:
• Pay Incentives

Relay •
•
Length of Work Day & Work Week (5pm, 4:30 pm, 4pm)
Use of Rest Periods (Two 5 minutes break)
• Company Sponsored Meals (Morning Coffee & soup along with sandwich)
Assembly Test Results:
Experiments • Higher output and greater employee satisfaction

Conclusions:

• Positive effects even with negative influences – workers’ output

increased as a response to attention
• Strong social bonds were created within the test group. Workers are
influenced by need for recognition, security and sense of belonging
 Conducted 20,000 interviews.

Objective was to explore information, which

Mass could be used to improve supervisory training.

Interview Results
Program • - Giving an opportunity to talk and express grievances
would increase the morale.
• - Complaints were symptoms of deep-rooted
disturbances.
• -Workers are governed by experience obtained from
both inside and outside the company.
 The workers were satisfied or dissatisfied
depending upon how they regarded their
social status in the company.
Mass
Interview Social groups created big impact on work.
Program
(Contd) Production was restricted by workers
regardless all financial incentives offered as
group pressure are on individual workers.
 1931-1932

Limited changes to work conditions

• Segregated work area
• No Management Visits
Bank Wiring •
•
Supervision would remain the same
Observer would record data only – no interaction with
Observation workers

Result:
Group • No appreciable changes in output

Conclusions:
• Preexisting performance norms
• Group dictated production standards –
• Work Group protection from management changes.
 Social Unit

Group Influence

Group Behaviour

Motivation

CONCLUSION Supervision

Working Conditions

Employee Morale

Communication
 • Operations research (management science)
• Evolved out of the development of
mathematical and statistical solutions to
The military problems during World War II.
• Involves the use of statistics, optimization
Quantitative models, information models, and
Approach computer simulations to improve
management decision making for
planning and control.
 • Ludwig von Bertalanffy
• Defines a system as a set of interrelated and
interdependent parts arranged in a manner
that produces a unified whole
The Systems • Closed system : a system that is not
influenced by and does not interact with
Approach its environment
• Open system: a system that dynamically
interacts with its environment
• Stakeholders: any group that is affected
by organizational decisions and policies
The Systems Approach
 • The situational approach to management that
replaces more simplistic systems and integrates much
of management theory
• Holds that there are no universal management
theories

The • Effective management theory depends on the kinds of

problems that managers are facing at a particular
Contingency time and place
• Managers must lookout for key contingencies that
Approach differentiate today’s situation from yesterday’s
• Four popular contingency variables
• Organization size
• Routineness of task technology
• Environmental uncertainty
• Individual differences
What Skills Robert L. Katz
and
Competencies •Conceptual Skills
Do •Interpersonal Skills
Managers •Technical Skills
Need? •Political Skills
 Conceptual skills
• A manager’s mental ability to coordinate all of the
organization’s interests and activities
Interpersonal skills
• A manager’s ability to work with, understand,
General Skills mentor, and motivate others, both individually and
in groups
for Managers Technical skills
• A manager’s ability to use the tools, procedures,
and techniques of a specialized field
Political skills
• A manager’s ability to build a power base and
establish the right connections
 Level in the organization
• Do managers manage differently based on where they
are in the organization?
Profit versus not-for-profit
Is The • Is managing in a commercial enterprise different than
managing in a non-commercial organization?
Manager’s Job Size of organization
Universal? • Does the size of an organization affect how managers
function in the organization?
Management concepts and national borders
• Is management the same in all economic, cultural,
social and political systems?
Distribution of Time • Source: Adapted from T. A. Mahoney, T. H.
Jerdee, and S. J. Carroll, “The Job(s) of
per Activity by Management,” Industrial Relations 4, No.2
(1965), p.103.
Organizational Level
Management Environment
and Culture
what the external environment
is and why it’s important
External
Environment
• Factors, forces, situations, and events outside the
organization that affect its performance.
Components of
the External
Environment
Organizational
Stakeholders
Organizational
Culture
• Shared values, principles, traditions, and ways of
doing things that influence the way an organization’s
members act
Where culture comes from
How do employees learn the
culture?
How Does Organizational
Culture Affect Managers
The Organization and
its Environment