Principles and Practices of Management UNIT - 1 EVOLUTION OF MANAGEMEN’ STRUCTURE 1.0 Objectives 1.1 Introduction 1.2. Evolution pf management 1.3 Evolution of management system 1.4 Contingency approach for understanding organisation 1.5. Managerial process 1.6 Functions skills and roles of organisation 1.7 Let Us Sum Up 1.8 Key Words 1.9 Some Useful Books 1.10 Answer to check your progress 1.11 Terminal Questions 1.0 OBJECTIVES Learners will be able to learn: > Features of management v Importance pf management v Evolution pf management v Functions of management 1.1 INTRODUCTION Management is what managers ‘do’, It is the process of coordinating work activities with and through other people so that work activities are completed efficiently and effectively. The Term ‘Management’ is used to refer the process of Managing the activities of Enterprise. In layman's Language Management refers to group of personnel of an enterprise who have supervisory role over others. Example Good quality of Management and Bad Quality of Management. In simple term Management the process of getting things done, effectively and efficiently, through and with other people,Principles and Practices of Management For management, it is important to be both effective and efficient Effectiveness and efficiency are two sides of the same coin. But these two aspects need to be balanced and management at times, manager has to compromise with efficiency. For example, it is easier to be effective and ignore efficiency i.c., complete the given task but at a high cost. Suppose, a company’s target production is 5000 units in a year. To achieve this target the manager has to operate on double shifts due to power failure most of the time. The manager is able to produce 5000 units but at a higher production cost. In this case, the manager was effective but not so efficient, since for the same output, more inputs (labour cost, electricity costs) were used, At times, a business may concentrate more on producing goods with fewer resources i.c., cutting down cost but not achieving the target production. Consequently, the goods do not reach the market and hence the demand for them declines and competitors enter the market. This is a case of being efficient but not effective since the goods did not reach the market. Therefore, it is important for management to achieve goals (effectiveness) with minimum resources ie., as efficiently as possible while maintaining a balance between effectiveness and efficiency. Usually high efficiency is associated with high effectiveness which is the aim of all managers. But undue emphasis on high efficiency without being effective is also not desirable. Poor management is due to both inefficiency and ineffectiven s. In simple efficiency Means doing the things correctly; refers to the relationship between inputs and outputs; Seeks to minimize the resource and cost, Effectiveness Means doing the right things; Goal Attainment In total we can understand that Management takes place within an organisation structure Management positioned at top under which everything falls. Manager is the foundation upon which an organisation is built. Within the organisation structure managers allocate resources (Like ‘men material machinery methods and money) and Manger uses the functions (such as Planning organizing directing coordinating and controlling) most efficiently and effectively to achieve organizational goals (such as increasing the sales and profitability ete)Principles and Practices of Management 1.2 EVOLUTION OF MANAGEMENT Evolution of Management Thought - Introduction There is a long history behind the evolution of management thought Management is considered as the significant feature of economic life of mankind throughout ages. Management thought is regarded as an evolutionary concept. Ithas developed along with it and in line with social, cultural, economic and scientific institutions. Management thought has its origin in ancient times. It is developed along with other socio economic development. The contributors to management theory include management philosophers, management practitioners, and_ scholars. Modern management is based on the strong foundation laid down by the management thinkers from the past event Evolution of Management Thought - Introduction There is a long history behind the evolution of management thought Management is considered as the significant feature of economic life of mankind throughout ages. Management thought is regarded as an evolutionary concept. It has developed along with it and in line with social, cultural, economic and scientific institutions. Management thought has its, origin in ancient times. It is developed along with other socio economic development. The contributors to management theory include management philosophers, management practitioners, and scholars. Modern management is based on the strong foundation laid down by the management thinkers from the past events. What Does Management Thonght Means? Management thought refers to the theory that guides management of people in the organization. Initially management theories were developed out of the practical experience of the managers in the industrial organization, Later on, managers borrowed ideas from several other fields of study like science, sociology, anthropology, ete.The Concept of Evolution of Management Thought To understand the entire concept of evolution of the management thought, the topic is divided into 4 major stages, which are as follows: + Pre-scientific management period + Classical theory + Neo-classical theory ( or behaviour approach) + Bureaucratic Model of Max Weber Pre-Scientific Management Period As the industrial revolution occurred in the 18th century, there was a huge impact on management. The scenario changed the method of raising capitals, organising labor, and goods’ production for the individuals and businesses. Entrepreneurs then had access to production factors like land, labor, and capital. The final step was only to make some effort to combine these factors to achieve the target successfully. But, afler the industrial revolution, the newer dimension taken by management is because of the involvement of certain notable personalities who introduced some effective ideas and approaches for giving management an acceptable and precise direction, Here is a brief on some of the personalities and their theories: Professor Charles Babbage of United Kingdom (1729 to 1871) Prof. Babbage was a renowned Mathematics professor at Cambridge University, He discovered that manufacturers rely on guessing and suggesting and advised them for utilising science and mathematics to be more productive and accurate. Practices of ManagementPrinciples and Practices of Management Robert Owens of United Kingdom (1771 to 1858) Sir Robert is often regarded as personnel management's father as his approach focuses on employee welfare. He also introduc: cooperation and trade unions. He mainly believed that employee welfare might determine the performance to a larger extent. Sir Robert also encouraged the workers’ training, children’s education, ensuring canteens in the workplaces, shorter working durations, and others. The Classical Theory Robert Owens, Charles Babbage, and other prominent personalities are regarded as managements pioneers. However, their contribution to the evolution of management is lower. Further, by the last decade of the 19th century, the science of management began, and with it, some professionals like H. L. Grant, F, W. Taylor, Emerson, and others entered for the establishment of scientific management. Further, during the classical period, management thought focused on standardisation, job content, labor division, and scientific approaches for the organization. It also related closely to the industrial revolution and the ri of large-scale enterprises, ‘The Neo-Classical Theory This duration of the evolution of management thought is a better version of classical theory. It is a modified version of classical theory with several improvements. The classical theory focused mainly on the areas of job including physical resources and their management, but Neoclassical theory focuses on employee relationships in the work ecosystem. The Bureaucratic Model Max Weber, a German sociologist, proposed the bureaucratic model. This includes a system of labour division, rules, authority hierarchy, and employees” placement based on their technical capabilitiesPrinciples and Practices of Management Evolution of Management Theories Organizations were shaped effectively and the writings of some prominent writers consisted of the management and governance of various kingdoms. These descriptions formed the literature that helped develop the management theories. Several heads of religions, political affairs, and military also gave the management models. For example, the books like Sun Taus “The Art of War” and Chanakya’s Arthashastra used some managerial purposes and the governance of the kingdom conceming the policy formulations respectively. The Evolution of Management Science Management evolution started with civilization, and the evolution of management science is the entire concept involving several theories behind it. Whatever we presently have gets refined and improved as management thoughts and theories. This helps people in improving the knowledge of the process and utilises the management principles for enhancing the overall organization. Management Theories Help You Study An Organization, Its Corporate Designs, Structures And Behaviour Of Individuals Or Groups. By Studying The Impact Of Internal And External Business Environments, These Theories Provide A Lens To Address Critical Questions About How A Business Works Or Operates. Management Theories Can Be Grouped Under Three Categories —Classical Theory, Neoclassical Theory And Modern Management Theory. Let’s Take A Look At The Individual Theories In Detail: 1. Classical Theory Of Management The Theories That Emerged Under The Classical Evolution Of Management Thought Are: © Scientific Management Fredrick Winslow Taylor, An Engineer, Proposed And Developed The the Father Of Scientific Management Theory. He Is Also Known As 1 Scientific Management And His School Of Thought Came To Be Known.Principles and Practices of Management As Taylorism. He Introduced A Scientific Approach To Productivity, Which Meant That An Increase In Efficiency Can Lead To Higher Productivity And Profits. He Believed That Research-Backed And Standardised Procedures Were Necessary For Effective Management. Administrative Management Henry Fayol, A French Mining Engineer, Laid Down Five Functions And 14 Principles Of Management Under The Theory Of Fayolism. This Gave Way To The School Of Administrative Management. He Believed That These Functions And Principles Can Guide Managers To Fulfil Their Responsibilities Effectively And They Should Have The Liberty To Determine How To Use Them. 2. Neoclassical Theory Of Management The Theories That Emerged Under The Neoclassical Evolution Of Management Practices Are: o Human Relations Management Developed By Elton Mayo, An Australian Psychologist, The Human Relations Theory Of Management Was Proposed After A Series Of Experiments, Also Known As Hawthorne Studies Or Hawthome Experiments. This Theory Emerged As A Response To The Criticism. Faced By The Classical Management Theories, Where Social Factors Such As Human Behaviour And Attitudes Weren’t Considered Important. Behavioural Management Behavioural Approaches To Management Set The Pace For How Modern Workplaces Build An Employee-Friendly Culture, Abraham Maslow, An American Psychologist, Proposed The Hierarchy Of Need, Where Employee Need And Expectations Were Prioritised. The Theory ‘Suggests That Human Relations And Behaviour Are Essential In Driving Efficiency In Teams And Managing The Workforce Successfully.Principles and Practices of Management 3. Modern Theory Of Management The Theories That Emerged With The Modern Evolution Of ‘Management Needs Are: o Systems Approach The Systems Theory Of Organization Has Its Roots In Biology And Systems Science. This Concept Broke Away From Classical ‘Management Theory That Viewed Organizations As Machines And Moved Toward A More Holistic View That Sees Them As Networks Of People, Procedures And Activities. Systems Theory Allows For An Understanding Of The Connections Between Various Parts Of The Organization And How They Interact With One Another. o Contingeney Approach The Contingency Management Theory Suggests That There Isn't Any Perfect Way To Organise A Business Or Corporation. The Optimal Solution Lies In The Situation That An Organization Operates In. A. Business Is Contingent (Depends) Upon Internal Or External Environments, It’s Evident That In The Long History Of The Evolution Of Management, The Focus Has Shifled From The Structure And Authority To The People Behind The Scenes. Many Of These Principles Hold Relevance In Modern Workplaces Even If Society Continues To Evolve. Practicing The Principles Of Various Management Theories Will Not Only Bring Success To Your Organization But Also Improve Your Relationship With Your Team, Harappa’s Managing Teamwork Course Is Designed To Equip You With Tools To Imbibe Team Culture And Collaborate With Diverse People. Meet Organisational Goals With Greater Efficiency By Le With Them, Try Harappa And See The Change For Yourself! ning How To Trust Your Team And Progress 1Principles and Practices of Management 1.3 EVOLUTION OF MANAGEMENT SYSTEM A management system is the framework of processes and procedures used to ensure that an organization can fulfil all tasks required to achieve its objectives. After World War Il, the reigning paradigm of product-oriented mass production had reached its peak. Examples of management systems at that time are linear ssembly lines, organisational hierarchies of command, product quality control and mass consumption. Soon afterwards, the Deming-Juran process-quality teachings spearheaded a new quality orientation (later referred to as Total quality management) and propelled Japan directly to the post-war process focus (process quality control, just-in-time, continuous improvement). The US responded by a painful and prolonged product-to-process transformation, ultimately levelling the playing field again by the mid 1980s. At the end of the 1980s, business process reengineering focused on the radical redesign of the production process through the reintegration of task, labor and knowledge. As a result, lean, flexible and streamlined production processes were created, capable of fast response and internet- based integration necessary for the upcoming phase of supply chains business-to- ~ business-to-business (B2B) — as well as demand chains customer(B2C). In the above three stages of evolution of management systems, the competitive advantage was derived almost exclusively from the internal resources of the firm. At the end of the 1980s, a radical fourth shift has occurred: the competitive advantage became increasingly derived from the external resources of the firm — through the extended networks of suppliers and customers.Principles and Practices of Management Fig 1.1 Operation It represents the traditional linear input-process-output management system. This system has been fixed and unchanging for centuries. The only change has been in terms of changing focus on individual components of the system, emphasizing different parts of this basic scheme. Although the scheme itself (inputs —> process — outputs) remains mostly unchallenged, there are some indications that this business model will undergo major restructurings in the future (in the emerging stages of evolution of management systems). It will become disaggregated and distributed, subjected to non-linear modularity and bringing forth new ways of making things and delivering services. Then it will become reintegrated again, tying together globally distributed components into a unified recycling whole. All early stages are characterised by changing focus of attention within the unchanging, invariant scheme of Figure 1. The management system has typically focused on: Final product The final product is a primary focus, the production process is considered secondary. Its operations and their sequences are technologically fixed or ‘given’, Product quality is ‘insp -d in’, mostly at the end of the process. Statistical quality control, inventory control, cost minimisation, mass production, assembly line, work specialization, hierarchies of command, mass consumption, statistical ma markets and forecasting are among the defining characteristics of this stage. 13Principles and Practices of Management Partitioned process It is the high-quality process that assures the high-quality product. The main focus was on improving of process operations. Quality of the process was understood as the quality of its operations. Powerful new concepts of Total Quality Management (TQM), Continuous Improvement Process (Kaizen) and Just-In-Time (JIT) systems have characterised this stage. Although the operations were being improved, the process architecture and structural sequencing were kept intact and remained technologically ‘given’ [6] Integrated process The focus of attention shifted from operations (circles) to linkages (arrows) - thus changing the process architecture itself. The reengineering of the process, re-integrating individual components into effective, more autonomous and even self-manageable wholes, has characterised this stage.[7]The production process became a business process and therefore subject to qualitative redesign and reengineering (BPR). Discontinuous improvement and process innovation replaced the piecemeal continuous improvement, Traditional vertical hierarchies of command have flattened out into more horizontal, process-oriented networks, Mass customisation, disintermediation, knowledge ‘management and autonomous teams have started emerging, Check Your Progress- 1 1. Explain management? 2. State classical theory of management?Principles and Practices of Management 3. What is management as system? 1.4 CONTINGENCY APPROACH FOR UNDERSTANDING ORGANISATION The contingency theory is simply an extension of the systems organisational theory. According to this theory, there is no particular managerial action or organisational design that is appropriate for all situations, In fact, the design, as well as the managerial decision, depends on the situation, In other words, itis contingent on the situation and circumstances. Therefore, the Contingency Theory is also referred to as a situational theory. Moverw Organizationat THEortes Contingency THeory = Fig 1.2 Modern Organizational Theories 15Principles and Practices of Management Like in the systems organisational theory, the contingency theory considers an organization as a system which consists of several sub- systems. Further, both these theories lay a lot of emphasis on maintaining and adapting activities for the growth and survival of the system, They also deal with pattems of relationships and the interdependence among the elements of the system. However, there are some differences between the two. Differences between the Systems and Contingency Organisational Theory + The systems theory focuses on the internal dynamics of an organisation's structure and behaviour. On the other hand, the contingency organisational theory focuses on the external determinants of the organisation's behaviour and structure. ‘+ The systems theory lays down universal principles for application in all situations, On the other hand, the contingency organisational theory works on the prescription which says that ‘it all depends’ In other words, the contingency organisational theory spells out the relationship between an organization and its external environment and endeavours to fill a critical lacuna of the systems theory. Further, it offers a more explicit understanding of the relationship between various variables of the environment. It is also action-oriented and directed towards the application of the system theory’s concepts. Hence, it offers useful and practical insights to managers in turbulent working environments.Principles and Practices of Management Further, the contingency organisational theory seeks to emphasise the multivariate nature of an organization. Further, it tries to understand how an organization operates under varying conditions in specific circumstances. Also, the theory directs its views towards recommending organisational designs and managerial actions which are most appropriate for specific situations. The theory suggests that apt organisational design depends on environmental variables like size, technology, people, ete. Systems Approach: 1 the emphasis is on interdependence and interaction among sub- systems. 2. The focus is on the internal environment and sub-systems of the organisation. 3. It treats all organisations alike and the background of the organisation is not taken into account. 4, The organisation interacts with the environment and adjusts as per the changes, 5. It provides a theoretical model of understanding the organisation and its sub-systems 6. ltis lent on the validity of classical principles of management. Contingency Approach: 1. Itemphasises the impact of environment on organisational design and managerial style, 2. The focus is on external environment of the organisation. 3. Each organisation is taken as unique entity. Different organisations have different nature and face different situations. 7Principles and Practices of Management 4, The impact of the environment on organisation structure and mana- gerial style is the major concem of contingency approach. 5. It suggests practical solutions to organisational problems. 6, It rejects the blind application of classical principles of management. What is System Theory? System theory focuses on the internal environment and the subsystems of the organization, Mainly, it considers the inter-dependence and interaction among sub-systems, Moreover, depending on the expectations of the organization, the interaction between organization and environment constantly change. A systematic approach treats all organizations in the same way. However, it does not take the background of the target organisation into account. Further, this approach provides a theoretical model for the organisation, as well as its various sub-systems. However, it doesn’t downgrade any of the classical management principles in which the target industry commonly function. Lack of universality and abstract approach are considered as limitations of systems theory, What is Contingency Theory? Contingency theory acts as an addition to system theory as it considers the relationship between organization and external environment to fill the lapses of system theory. The theory states that there is no specific managerial action or organisational design that suits all situations. In fact, it is the situation that determines the design, as well as the managerial decision. In other words, itis contingent on the situation. Thus, situational theory is another name for contingeney theory. Contingency organisational theory does not describe the most appropriate way to organise a corporation or lead an organization or make managerial decisions, Hence, the best course of action is dependent or liable on internal and external conditions.Principles and Practices of Management Fig 1.3 Contingency Theory Besides, this theory also highlights the impact of the environment on an organisation’s design, principles and its’ hierarchy. Organizations are considered a unique entity. According to contingency theory, the environmental impact on the organisation’s structure and authoritative structure are described as the major concerns. Moreover, the contingency theory uses to highlight the multivariate nature of an organization, It illustrates how an organization works under varying conditions in specific circumstances. Furthermore, the contingency theory suggests that the most suitable way of solving problems is giving practical solutions within the organization. Finally, this approach rejects the blind application of classical principles of management. What is the Relationship Between S stem Theory and Contingency Theory? «Both theories consider an organization as a system that consists of several sub-systems + Moreover, these two theories emphasise maintaining and adapting activities for the growth and survival of the system. Also, both theories deal with patterns of relationships and the interdependence among the elements of the system 19Principles and Practices of Management 20 What is the Difference System Theory Between and Contingency Theory? The key difference between system theory and contingency theory is that the system theory deals with the internal dynamics of the organization, whereas the contingency theory deals with extemal determinants of the organisation’s structure and behaviour. Besides, the systems theory discusses the universal principles for application in all situations. On the contrary, the contingency organisational theory works on the remedy, which says that ‘it all depends’. So, this is also a vital difference betw en system theory and contingency theory. Moreover, the contingency theory offers a more clear understanding of the relationship between different variables of the environment, Also, this theory is performance-oriented and directed towards the application of the system theory's concepts. Below infographic shows more facts related to the difference between system theory and contingency theory.Principles and Practices of Management Tw mrs ls f Canny that focuses on the internal environment ERT On ueat organization Mure cen ecru ica) SECC ear a tnias cen rer RUE eT ees enon the organization eon ne seit eae Ue feces ve Scan e a Pera Poet Eire ees Fig 1.4 System Theory and Contingency Theory 1.5 MANAGERIAL PROCESSES A process is a systematic way of executing tasks. It is concerned with the transformation of inputs into outputs. An analysis of the management process will help us understand the functions that managers perform. However, before we analyse, we need to understand what is management process-all about. How Do You Define a Management Process? ‘Management is a process that brings scarce human and material resources together and motivates people to achieve common 2Principles and Practices of Management 22 organisational goals, It is not @ one-time act but an ongoing progression of complementary activities, In simple words, a management process is a well-defined system of setting goals, planning and controlling any action’s execution. It constitutes a set of interrelated operations or functions necessary to accomplish desired organisational objectives. These activities include but are not restrained to: + aproject (project management system), or + a process (process management system, sometimes referred to as the process performance measurement and management system). The senior management of an organisation is in charge of carrying out its management process. However, this is not always true for all management processes; for example, sometimes, it is the project manager’s responsibility (o carry out a proj ct management process. Salient Features of a Management Process The following features characterise a management process: 1. Management is Highly Aspirational The achievement of pre-defined objectives is an essential aspect of the ‘management process. It is a medium to accomplish the goals and objectives established well in advance. Without any purpose, there is no rationale for a management process in place. Every activity undertaken by an organisation's management should be goal-oriented. This achievement of pre-defined goals is a measurement of the success of any organisation’s leadership. 2. Management is Omnipresent In today’s world, management is pervasive. Be it clubs, governments, annies, or business organisations; all require an efficient management system. The basic principles of management apply to all spheres within an organisation. Managers at all levels execute the same essential functions day in and day out. It is this persistent need that makes the ‘management process a universal concept. 3. Management is an Ongoing Process Management is not a one-off affair; rather, it is a continuous exercise. The constant desire to achieve varied organisational goals makes management an ongoing process.Principles and Practices of Management 4, Management is Abstract Management is neither visible nor can it be felt in a real sense, One can only observe management’s accomplishments and compare a well- managed organisation with one that has been poorly managed. 5. Management is Social in Nature Management is social because it involves interpersonal relations. The human element is the most crucial factor in the management process as it is dictated by contrasting social values and cultures. It is a function that transforms society, preserves the community, and endorses its future interests 6. Management is Versatile Management deals with human reactions under enterprising conditions. The awareness and the aptitude required for management comes from several disciplines like Sociology, Psychology, Engineering, Economics, Anthropology, Mathematics, etc. It is this aspect that makes managing a multifaceted experience. 7. Management is Conditional There are several ways of doing things. An existing situation determines the most suitable method of performing any task. Sometimes, it may be possible that management is not doing things in the right manner due to should account for these specific the situation, Successful managers situations. 8. Management is a Team Effort An individual’s efforts are harmonised with the team’s efforts. A single individual cannot manage the management function alone. All the managerial activities like the setting of goals, the formation of plans and policies, implementation, and follow-up are the coordinated effort of a group of people who envision an organisation’s future. 9, Management is an Administrative Function The administration and management of the activities of people to accomplish predetermined objectives are concemed with the ‘management. Management is also known as an approach through which a human group’s goals are set, defined and achieved. 23Principles and Practices of Management 24 The Importance of Management Process The product management process is very crucial for an organization. It is a set of activities that must be performed to achieve organisational goals. ‘The following are some facts about the management process: What is the management process defi ition? Management proces refers to a series of activities performed by managers to achieve organisational goals, These management process steps aim to identify, analyse and solve problems related to performance or efficiency within an organization, When these tasks are done successfully, organizations succeed in achieving their goals. This can be accomplished through different tools like SWOT analysis, PESTEL etc, What are the features of the management process? There are several features associated with this tool which include: identifying problems within an organization, analysing them accordingly, and resolving them by implementing solutions through various methods, such as training employees on new technologies while also evaluating time constraints before finalising any decision made by top-level management members. ‘What are the types of the management process? There are two ‘management processes: Management by Objectives (MBO) and ‘Management by Results (MBR). Both these tools have their advantages and disadvantages. Management by Objectives (MBO) is a style that focuses on achieving organisational goals through different methods, such as training employees on new technologies and evaluating time constraints before finalising any decision by top-level management members. This tool allows organizations to identify their strengths, weaknesses and improvement opportunities to succeed in the long runPrinciples and Practices of Management What is the Nature of the Management Process? The management process is a system that combines all of an organisation’s activities to achieve its goals. It involves planning, organising, leading and controlling. The term ‘management’ refers to managing an organization through its functions and act ities using certain principles and methods. The product management process flow can be explained below: 1. Planning This step is where you create a detailed action plan for your business goals with expected results in mind (e.g., increased sales) 2. Organising This step involves arranging people, materials, machines, equipment and money to achieve set objectives (e.g., organise human resources by team structure). 3. Leading This step is about motivating people/workers to perform better at their tasks (¢.g., encouraging workers through incentives such as bonus schemes), 4. Controlling This step deals with measuring performance against corporate standards or targets set at earlier stages. Salient Features of Management Process Management process requirements are planning, organising, directing and controlling an organization to achieve its goals. The management process consists of various steps such as planning, organising, staffing, leading and controlling. These steps are done continuously throughout the life cycle of an organization. 25Principles and Practices of Management 26 This article aims to provide a basic under nding of how these processes work together to help you better understand how they affect your day-to-day job function and the overall success or failure of your organization. You may have heard the term “process” used about your job, but what does it mean? Simply put, a process is any activity with a beginning and an end, It may be a single task or something more complex. A process can be thought of as a series of steps that are repeated over time. The best option to understand the management process in depth is to undertake Product Management Training which helps you lean practically with dummy projects. For example, suppose you work in customer service at an organization. In that case, your job probably includes multiple processes such as answering phone calls from customers and resolving their issues, entering data into computer systems so other employees and so on can process them. If you work in an office environment, you probably have a process for managing your time, meeting with coworkers and other tasks that need to be done. For example, if you’re new to the company, one of your first tasks will be learning about the various processes used by employees and how they fit together Elements of Management Process The management process is a set of activities that are performed to achieve organisational goals. It comprises three major components: Planning © Organising % Controlling Planning is the process of defining the objectives of an organization, determining how those objectives can be achieved, and specifying thePrinciples and Practices of Management resources needed to achieve them. Organising is the process of grouping people and resources together to work effectively toward accomplishing a common goal. Controlling is the process of ensuring that plans are carried out as intended so that an organization achieves its goals, The three components of the management system are interrelated and work together to achieve organisational goals. Planning sets a direction for an organization that can be accomplished through organising and controlling. The planning process is a continuous cycle, not a one-time event. The organization must plan throughout its existence. Planning is a continuous cycle of activities that help organizations identify their goals, develop strategies for achieving them, allocate resources to achieve them, monitor progress toward meeting objectives and change course if ne ssary. Check Your Progress-2 1. Discuss contingency theory ? 2. What management process? 27Principles and Practices of Management 28 1.6 FUNCTIONS SKILLS AND ROLES OF ORGANISATION 7 important functions of an Organisation: 1. To define the role of the individual: An individual employed in an enterprise must know his role, position and relationship with other personnel in his department and with others. Organisation becomes necessary so that the persons involved in the enterprise can identify themselves in the enterprise. It is through the organisation that one can know his position and role in the unit. He can relate his position with other members of the enterprise. It includes the deciding and division of various activities required to achieve the objectives of the organisation, The entire work is divided into various parts and again each part is sub-divided into various sub-parts. For example, the purchase work may be divided into requisition of items, placing of an order, storage and so on. 2, Determination of authori The assignment of a certain role proposes the granting of certain authority so that performance can be possible. Organisation is necessary to define the authority i.e., the rights and powers of men in different positions which would help them to discharge their assigned roles. The next function of organisation is that the identical activities are grouped under one individual or a department. The activities of sales such as canvassing, advertisements and debt collection activities are grouped under one department ic., sales department, 3. ation of responsi ity: Each individual is assigned a certain duty organisational structure defines what performance is expected of a member of the unit of the department of the enterprise, Absence or faulty determination of responsibility will lead to irresponsible functions, behaviour and attitudes. In order to censure effective performance, the grouped activities are allotted to specified persons.Principles and Practices of Management In other words, the purchasing activities are assigned to the Purchase Manager; the production activities are assigned to Production Manager; the sales activities are assigned to Sales Manager and the like. Besides, adequate staff members are appointed under the specified persons. The specified persons are specialized in their respective fields. If there is any need, appropriate training would be provided to such persons 4. Specialisation: ‘Modern production and management techniques are based on the idea of specialization which means the performance of different parts of a job by persons specifically suited for them. Organisation is basically required to promote specialization. Efficient and smooth functioning is possible when different elements of a job are performed by experts and their efforts are pooled to attain the desired and product. Assignment of duties or allotment of duties to specified persons is followed by delegation of authority. It will be very difficult for a person to perform the duties effectively, if there is no authority to do it While delegating a authority, responsibilities are also fixed. Thus, the Production Manager may be delegated with the authority to produce the goods and fixed with the responsibility of producing quality goods. 5. Coordinatio Since the pattern of managerial operations is to be based on die division’ of labour, there arises the need of coordinating the activities of various individuals or that of different departments. They perform diverse, activities and these have to be woven into the main fabric. When a group of persons is working together for a common goal, it becomes necessary ‘to define the relationship among them in clear terms. If it is done, each person will know who is his boss, from whom he has to receive orders and to whom he is answerable, In another sense, each boss should know what authority he has and over which person. 29Principles and Practices of Management 6. Proper utilisation of human resources: ‘The most important thing for enterprises is to make the best possible use of its human resources. There must not be wastage or misapplication of human efforts. This is of great importance for economy as well as for the achievement of objectives, It can be possible only by suitable organisation, which avoid all bottlenecks-chances of work being held up and allow smooth flow of performances. 7. Efficient functioning: Efficiency is to be the watchword of an enterprise, all the factors mentioned above will have a great impact on the efficient functioning of the enterprise, and Organisation avoids all duplication in jobs, overlapping and wastage. It promotes speedy, smooth and efficient functioning of the enterprise. The delegated authority and responsibility should be co-ordinated by the Chief Managerial Staff. The reason is that there must be a separate and responsible person to see whether all the activities are going on to accomplish the objectives of the organisation or not. The work can be completed in time whenever a technique or a principle is adopted. So, the success or failure of an organisation depends upon the principles to be followed in the organisation. The principles of organisation may be termed as a tool used by the organisation. Some experts like Taylor, Fayol and Urwick have given the principles of organisation, They are briefly discussed below: 1. Principle of Definitior It is necessary to define and fix the duties, responsibilities and authority of each worker. In addition to that the organisational relationship of each worker with others should be clearly defined in the organisational set up.Principles and Practices of Management 2. Principle of Objective: The activities at all levels of organisation structure should be geared to achieve the main objectives of the organisation. The activities of the different departments or sections may be different in nature and in approach, but these should be concentrated only for achieving the main objectives. 3. Principle of Specialisation or Division of Work: Division of work means that the entire activities of the organisation are suitably grouped into departments or sections. The departments or sections may be further divided into several such units so as to ensure maximum efficiency. This will help to fix up the right man to the right job and reduce waste of time and resources. The work is assigned to each person according to his educational qualification, experience, skill and interests. He should be mentally and physically fit for performing the work assigned to him. The required training may be provided to the needy persons. It will result in attaining specialisation in a particular work or area. 4. Principle of Co-Ordination: The objectives of the organisation may be achieved quickly whenever co-ordination exists among the workers. At the same time each work can be done effectively by having co-ordination. The final objective of all organisations is to get smooth and effective co-ordination. 5. Principle of Authority: When many persons are working together in one place, there will be a difference of power and authority. Of these persons, some will rule and others will be ruled, Normally, maximum powers are vested with the top executives of the organisation. These senior members should delegate their authorities to their subordinates on the basis of their ability. In certain cases, the subordinates are motivated through the delegation of authority and they perform the work efficiently with responsibility. 6. Principle of Responsibility: Each person is responsible for the work completed by him. Authority is delegated from the top level to the bottom level of the organisation. But the responsibility can be delegated to some extent, 31Principles and Practices of Management While delegating the authority, there is no need of delegation of responsibility. So, the responsibility of the junior staff members should be clearly defined. 7. Principle of Explanation: While allocating duties to the persons, the extent of liabilities of the person would be clearly explained to the concerned person. It will enable the person to accept the authority and discharge his duties. 8. Principle of Efficiency: Each work can be completed efficiently wherever the climate or the organisational structure facilitates the completion of work. The work should be completed with minimum members, in less time, with minimum resources and within the right time. 9. Principle of Uniformity: The organisation should make the work distribution in such a manner that there should be an equal status and equal authority and powers among the same line officers. It will avoid the problems of dual subordination or conflicts in the organisational set up. Besides, it increases co-ordination among the officers. 10. Principle of Correspondence: Authority and responsibility should be in parity with each other. If itis not so, the work cannot be effectively discharged by any officers, whatever his ability may be. At the same time, if authority alone is delegated without responsibility, the authority may be misused. In another sense, if responsibility is delegated without the authority, it is a dangerous one. 11. Principle of Unity of Command: This is also sometimes called the principle of responsibility. The organisational set up should be arranged in such a way that a subordinate should receive the instruction or direction from one authority or boss. If there is no unity of command in any organisational set up, the subordinate may neglect his duties. It will result in the non-completion of any work. In the absence of unity of command, there is no guidance available to the subordinates and there is no controlling power for the top executives of the organisation. Further, some subordinates will have to do more work and some others will not do any work at all.Principles and Practices of Management 12. Principle of Balance: There are several units functioning separately under one organisational set up. The work of one unit might have been commenced after the completion of the work by another unit. So, it is essential that the sequence of work should be arranged scientifically. 13. Principle of Equilibrium Balance: The expansions of business activities require some changes in the organisation. In certain periods, some sections or departments are overloaded and some departments are under loaded. During this period, due weightage should be given on the basis of the new work load. The overloaded sections or departments can be further divided into sub sections or sub-departments. It would entail in the effective control over all the organisational activities. 14. Principle of Continuity: It is essential that there should be a re-operation of objectives, re- adjustment of plants and provision of opportunities for the development of future management. This process is taken over by every organisation periodically. 15. Principle of Span of Control: This is also called span of management or span of supervision or levels of organisation. This principle is based on the principle of relationship. Span of control refers to the maximum number of members effectively supervised by a single individual. The number of members may be increased or decreased according to the nature of work done by the subordinate or the ability of the supervisor. In the administration area, under one executive, nearly four or five subordinates may work. In the lower level or the factory level, under one supervision, the twenty or twenty five number of workers may work. The span of control enables the smooth functioning of the organisation. 16. Principle of Leadership Facilitation: The organisational set up may be arranged in such a way that the persons with leadership qualities are appointed in key positions. The leadership qualities are honesty, devotion, enthusiasm and inspiration. 33Principles and Practices of Management 17. Principle of Exception: The junior officers are disturbed by the seniors only when the work is not done according to the plans laid down. It automatically reduces the work of middle level officers and top level officers. So, the top level officers may use the time gained by reduction in workload for framing the policies and chalking out the plans of organisation. 18. Principle of Flexibility: The organisational set up should be flexible to adjust to the changing environment of business. The organisation should avoid the complicated procedures and permit an expansion or contraction of business activities, 19. The Scalar Principle: This is also called chain of command or Line of authority. Normally, the line of authority flows from the top level to bottom level. It also establishes the line of communication, Each and every person should know who is his superior and to whom he is answerable. 20. Principle of S plicity and Homogeneity: The organisation structure should be simple. It is necessary to understand a person who is working in the same organisation. If the organisation structure becomes a complex one, junior officers do not understand the level and the extent of responsibility for a particular activity. The simplicity of the organisational structure enables the staff members to maintain equality and homogeneity. If equality and homogeneity are maintained in one organisation, it is possible to determine whether the staff members discharge their duties to realise the objective of the organisation, 21. Principle of Unity of Direction: This is also called the principle of co-ordination. The major plan is divided into sub-plans in a good organisational set up. Each sub-plan is taken up by a particular group or department. All the groups or departments are requested to co-operate to attain the main objectives or in implementing major plan of the organisation. 22, Principle of Joint Decisions: In the business organisation, there are number of decisions taken by the officers to run the business. Ifa complicated problem arises more than, one member examines the problems and takes the decisions.Principles and Practices of Management Whenever the decision is taken jointly, the decision gives the benefit for a long period and the decision is based on various aspects of the organisational set up. Skills and Roles in an organis: Management Skills Skills are those mind tools with which a manager performs certain tasks. Different kind of skills are required to perform different tasks. According to Katz there are three essential basic skills which a manager needs to perform a task. These are as follow: 1, Technical Skills: Technical skills are the proficiency and knowledge required in an specific area like IT skills in the field of IT, Finance skills for finance work, Mechanical Engineering, Architecture for buildings ete, Technical skills are more required at the execution level of a project for junior and middle management level. 2. Interpersonal Skills: Interpersonal skills of a manager shows how he interacts with subordinates, peers, seniors, customers and business partners. Interpersonal skills are required at all the levels in an organisation. It helps a manager to understand, to motivate and to resole conflict if any in his team. It helps him to lead the team effectively by knowing every person of his team well, by taking maximum output from the strengths of his team member. It includes motivational skills, understanding other's perception and attitude, communication skills, negotiation skills, ete. These are normally called as soft skills. 3. Conceptual Skills: Conceptual skills are more required at the top management level as they are the people who are basically involved in giving direction to the organisation and big decision making. Conceptual skills are those skills which helps a manager to see the organisation in a big picture like impact of upcoming government policies in the related field, budding competition, expansion plans in a new territory, need of a marketing campaign, etc. It helps a manager to understand the relationship between various sub units and visualise how organisation fit into this broader environment 35Principles and Practices of Management Roles in an organisation According to Mintzberg (1975) managers of all levels of hierarchy behave in the same way, carry into effet similar activities and therefore fulfil similar roles. He divided these activities into 10 roles and defines them as “organised set of behaviours”, Further Stoner and Wankel (1997) grouped these 10 roles into 3 main roles as: 1. Interpersonal Roles: Interpersonal roles are concerned with creating and maintaining interpersonal relationships in work. These are: a) Figurehead role: Manager represents organisation in all matters of formality, legality and socially to inside or outside the organisation, He is like a symbolic of the organisation. b) Leader Role: Manager being a leader of the department sets goal: and leads the team to achieve that goal. ©) Liaison role: Manager interacts with people inside and outside the organisation to gain valuable information, to come into an agreement, to gain orders for the organisation, 2. Informational roles: These are concemed with informational aspect of managerial work like receiving, collecting, and disseminating information. These are: a) Monitor Role: Manager looks out for information regarding the organisation. He collects the information from inside (like information regarding problem areas of the organisation) as well as outside (information regarding competition, new technology, ete) the organisation through reports, magazines, etc. b) Disseminator Role: Manager transmits the important information gathered from inside or outside the organisation to related organisational members. He may do this by holding informational meetings, sending reports or emails, making phone calls ete. ©) Spokesperson: Manager transmits organisation's information to outside like government, departments, public, media ete. This information may include organisation's annual reports, achi ements, plans, policies, etc. They may do it by holding board meetings or advertising in newspapers, ete.Principles and Practices of Management 3, Decisional roles: These are related to making decisions. These are: a) Entrepreneur: Manager analyses organisation's development opportunities and possibilities and bring about organic changes to grow the organisation and make it more profitable. He motivates employees to give their suggestions and achieve organisation's objectives. b) Disturbance Handler: Manager takes corrective actions whenever any disturbance or crisis occurs inside or outside the organisation. Handles disputes among employees, among employees and business partners, and among business partners. Thus he plays the role of a rescuer, ¢) Resources Allocator: Manager allocates the organisation's resources like people, money, infrastructure, ete so that it is optimally utilised and enhance its productivity. He approves plans, budgets and programmes, and set priorities 4d) Negotiator: Manager negotiates with the team, departments and organisations to defend business interests and gain advantage for his team, department and organisation 1.7 LET US SUM UP The key difference between system theory and contingency theory is that the system theory focuses on the intemal dynamics of an organization’s structure and behavior, whereas the contingency theory focuses on the external factors of the organization’s behavior and structure. Moreover, contingency theory looks at the relationship between an organization and its extemal environment and activities to fill critical gaps of the systems theory. In other words, it is an addition to system theory. ‘Management skills are a collection of abilities that include things such as business planning, decision-making, _ problem-solving, communication, delegation, and time management. While different roles and organizations require the use of various skill sets, management skills help a professional stand out and excel no matter what their level 37Principles and Practices of Management In top management, these skills are essential to run an organization well and achieve desired business objectives. Having a strong and fumetional management team is important for the sustained success of a business organisation, A team working under an effective manager provides several advantages to the company, such as better strategy and creativity, good time management and organisation within the team and increased productivity and motivation, A well- managed team also has a lesser frequency of conflicts among members and improved employee relations. An effective manager also helps team members break down differences, foster honest and open communication and contribute more creative ideas and solutions. 1.8 KEY WORDS Organisation: An organization or organisation, is an entity—such as a company, an institution, or an association—comprising one or more people and having a particular purpose. The word is derived from the Greek word organon, which means tool or instrument, musical instrument, and organ. Management: Management is the administration of an organization, whether it is a business, a nonprofit organization, or a government body. Itis the art and science of managing resources of the business. System approach: A systems approach brings together interviews, dialogue, openness to perspectives from public and private sectors, and people at all levels of an institution’s hierarchy Managerial skills: managerial skills are the knowledge and ability of the individuals in a managerial position to fulfill some specific ‘management activities or tasks. This knowledge and ability can be Ieamed and practiced. However, they also can be acquired through practical implementation of required activities and tasks. Managerial roles: In an organization, a managerial role involves responsibility and supervision. They contribute to their companies, in many ways that hinge upon their job titles and the organization'sPrinciples and Practices of Management needs. Managers, from department managers to project managers, play different roles in the scope of their work. 1.9 ANSWER TO CHECK YOUR PROGRESS 1. Refer 1 for Answer to check your progress 1Q1 Management is the administration of an organization, whether it is a business, a nonprofit organization, or a government body. It is the art and science of managing resources of the business 2. Refer 2 for Answer to check your progress- 1Q. 2 ... The classical management theory emphasizes employees’ physical needs over job satisfaction or social needs. This theory holds that these physical needs can be met through income and monetary incentives and uses the opportunity for wage increases to motivate employees. 3. Refer 3 for Answer to check your progress- 1Q.3 ... A management system is the way in which an organization manages the interrelated parts of its business in order to achieve its objectives. 4. Refer 4 for Answer to check your progress- 2 Q. 1 ... A contingency approach to management is based on the theory that management effectiveness is contingent, or dependent, upon the interplay between the application of management behaviors and specific situations. In other words, the way you manage should change depending on the circumstances. One size does not fit all. 5. Refer 5 for Answer to check your progress- 2.Q. 2 ... Management process is a process of setting goals, planning and/or controlling the organizing and leading the execution of any type of activity, such as: a project or a process. An organization's senior ‘management is responsible for carrying out its management process 39Principles and Practices of Management 1.10 SOME USEFUL BOOKS 40 Monga, JR, 2018. “Financial Accounting: Concepts and Applications”, Mayo or Paper Backs, New Delhi Maheshwari, S.N. and S.K. Maheshwari, 2018. “Financial Accounting”, Vikas Publishing House, New Delhi. Sehgal, Ashok, and Deepak Sehgal, 2018. “Advanced Accounting”, Part- 1, Taxman Applied Services, New Delhi. uulsa, P.C., 2018. “Advanced Accounting”, 1 New Delhi. ta Mc Graw Hill, Materiality, Full Disclosure, Conservatism and Consistency. Gupta & Chaturvedi. 2018. ‘Financial Accounting, Shree Mahavir Book Depot (Publishers), 2603, Mai Sarah New Delhi Goel D. K., 2018. Accountancy (Arya Publications), 1569/30 Narwal, Karol Bags, New Delhi 110 005. Maheshwari, S. , 2018, Introduction to Accounting, Vikas Publishing House: New Delhi. Gupta, RIN. & MRadhaswamy, 2018. Advanced Accountancy, Sultan Chand and Sons: New Delhi 1.11 TERMINAL QUESTIONS. 1. Discuss management process steps? 2. What is management and describe its evolution? 3. Explain contingency approach? 4, Explain system approach? 5. Describe functions pf managerial process ?