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Principles of Management
Principles of Management
MANAGEMENT
UNIT 1
Management
Management
Organization
Two or more people who work together in a structured
way to achieve a specific goal or set of goals.
Goals
Purpose that an organization strives to achieve;
organizations often have more than one goals, goals are
fundamental elements of organization.
The Role of Management
To guide the organizations towards goal
accomplishment
Top
Top
Managers
Managers
MiddleManagers
Managers
Middle
First-LineManagers
Managers
First-Line
Nonmanagers
Nonmanagers
Levels of Management
Middle Managers:
Coordinate employee activities
Determine which goods or services to provide
Decide how to market goods or services to customers
Assistant Manager, Manager (Section Head)
Top Managers: provide the overall direction of an
organization Chief Executive Officer, President, Vice
President
Top Managers
Responsible for providing the overall direction of an
organization
Develop goals and strategies for entire organization
Spend most of their time planning and leading
Communicate with key stakeholdersstockholders,
unions, governmental agencies, etc., company
policies
Use of multicultural and strategic action
competencies to lead firm is crucial
Middle Managers
Responsible for setting objectives that are consistent with
top managements goals and translating them into specific
goals and plans for first-line managers to implement
Responsible for coordinating activities of first-line
managers
Establish target dates for products/services to be delivered
Need to coordinate with others for resources
Ability to develop others is important
Rely on communication, teamwork, and planning and
administration competencies to achieve goals
First-line Managers
Directly responsible for production of goods or services
Employees who report to first-line managers do the
organizations work
Spend little time with top managers in large organizations
Technical expertise is important
Rely on planning and administration, self-management,
teamwork, and communication competencies to get work
done
A Model of Managerial
Competencies
(adapted from Figure 1.1)
Communication
Competency
Teamwork
Competency
Planning and
Administration
Competency
Global
Awareness
Competency
Strategic
Action
Competency
Self-Management
Competency
(contd)
Organizing
Leading
Planning
Controlling
Management and
Organizational Resources
Planning
Determining organizational goals and
means to reach them
Managers plan for three reasons
1. Establish an overall direction for the
organizations future
2. Identify and commit resources to achieving
goals
3. Decide which tasks must be done to reach
those goals
Organizing
Leading
Controlling
Process by which a person,
group, or organization
consciously monitors
performance and takes
corrective action
Communication Competency
Ability to effectively transfer and exchange information
that leads to understanding between yourself and others
Informal Communication
Used to build social networks and good
interpersonal relations
Formal Communication
Used to announce major events/decisions/
activities and keep individuals up to date
Negotiation
Used to settle disputes, obtain resources,
and exercise influence
Recent developments in
Management Theory
1. The system approach
2. The contingency approach
Key concept
Subsystem
While an organisation as a whole
is a system, the various
components or parts within it are
called the system
Closed System
A system that does not interact
with its environment. A closed
system has fixed boundaries, its
operation is relatively independent
Open System
Synergy
Outputs
Transformatio
n
Goods
services
Informatio
n
Feedback
SCIENCE
ART
F.W.Taylors scientific
management
Fredrick Winslow Taylors is called ` FATHER
OF SCIENTIFIC MANAGEMENT`
FOUR BASIC PRINCIPLES
1. Observation & measurement used in the
Organisations
2. Employees should be scientifically selected
& trained
3. Selection & training of employee has the
opportunity of earning a high rate of pay
4. A mental revolution in employer &
employee
PRINCIPLES OF SCIENTIFIC
MANAGEMENT
1. Separation of planning & doing
1. Separation of planning & doing
2. Functional foremanship
3. Job analysis
a) Time study
b) Motion study
c) Fatigue study
4. Standardization
5. Scientific selection & training
6. Financial incentives
7. Economy
8. Mental Revolution
II Part
Concerned with the 14
Principles of management
1. Division of work
2. Authority & Responsibility
3. Discipline
4. Unity of command
5. Unity of Direction
6. Subordination of individual interest to
general interest
7. Remuneration of personnel
8. Centralisation
9. Scalar chain
10. Order
11. Equity
12. Stability of tenure of personnel
13. Initiative
14. Esprit de corps
Managerial Roles
Interpersonal roles
2. Informational roles
3. Decisional roles
1.
1.
Interpersonal roles
a) Figure head role
In this role a manager persons symbolic
duties required by the status of this
office
b) Leader
Responsible for the motivation and
activation of subordinates
c) Liaison
It describes a manager`s relationship
with
the outsiders
2. Informational roles
a)monitor.
Amanager scans the environment and
collects internal and external information.
B) disseminator:
Manager distributes the information to his
subordinated in order to achieve
organizational objectives.
C) spokes person.
Transmits the informations to the outside
of the organisation
3) decision roll:
a) Entrepreneur
Initiates and supervises design of
organizational improvement projects.
b) Disturbance handler:
Responsible for corrective action when
organisation faces on expected problems.
c)Resource allocator:
Manager responsible to allocation of human
monetary and material resources.
d)negotiator: As a manager bargains with
suppliers dealers. Trade union agents etc.
BUSINESS ORGANISATION
Business means `State of being
busy`throughout.Those human
activities which involve production of
wealth.
Organisation is used to mean
bringing together various elements
of business with the object
establishing harmonious relationship
& adjustment in their functioning.
Government institutions
1. Sole trades
2. Joint Hindu family
partnership
3. Joint stock company
4.Co-operative
5. Multinational companies
1.Departmental Undertaking
2. Public Corporation
3. Government Company
4. Board Organization
Sole Trading
PARTNERSHIP
Is an association of two or more persons to
carry
on business and to share its profits and
losses.
FEATURES OF PATNERSHIP
1. Agreement
2. Multiplicity of person
3. Lawful business
4. Sharing of profits
5. Contractual relations
6. Mutual agency
7. Unlimited liability
8. Registration
9. Common management
10. Utmost good faith
Kind of partners
1.
2.
3.
4.
5.
6.
7.
8.
Active partner
Sleeping partner
Normal partner
Partner in profit only
Partner by estoppel
Sub partner
Secret partner
Minor as a partner
RIGHTS OF PARRNER
1.
2.
3.
4.
5.
6.
Advantages of
partnership
1.
2.
3.
4.
5.
6.
It is easy to formation
Registration is not compulsory
Larger financial resources
Greater managerial talent
Promptness in decision
making
The risk of business is shared
by more persons
Disadvantages of
partnership
1.
2.
3.
4.
5.
6.
Advantages of joint
stock company
1.
2.
3.
4.
5.
6.
7.
Limited liability.
It is more stable.
The shares of a joint stock company are
freely transferable.
Company can easily expand.
Democratic setup in this company.
Democratic setup in this company.
Possible for large financial resources.
Disadvantages of joint
stock company
1.
2.
3.
4.
5.
COOPERATIVEORGANISATION
1.
Characteristics of cooperatives
Voluntary association.
PUBLIC ENTERPRISES
or STATE ENTERPRISES
PUBLIC CORPORATION
DEMERITS
1.
2.
3.
4.
5.
Limited autonomy
Misuse of power
Inefficient operation
Lack of interest
Government control
Government company
1.
2.
3.
4.
5.
Easy to form
Flexibility in management
Freedom of action
Run on commercial lines
Helpful in developing
neglected sectors
1.
Demerits of Government
company
lack of interest
2.PUBLIC
CORPORATION
LIC
IDBI
RBI
Industrial Finance corporation
3. GOVERNMENT CAMPANIES
Coal mines
Steel authority of India Ltd
Tamilnadu state transport corporation
Difference between
partnership & sole
traders
Basis of
Partnership
Sole trader
SI
no differences
1.
Specific act
2.
Number of
members
Minimum 2 maximum
10 for banking
business
Only one
person
3.
Registration
Optional
Need not be
registered
4.
It is managed by
the person
5.
Liability
Unlimited
6.
Division of
profit or
loss
The profit or
losses borne by
the sole trader
7.
Secrecy
Secrecy cannot
maintain
Secrecy
maintained
8.
Economic
strength
More strong
Economically
weak
9.
Decision
Delay
making
10 Agreemen Agreement essential
.
t
Very quick
No agreement is
necessary
UNIT- II
PLANNING
Planning is the process of selecting the objectives
and determining the course of action required to
achieve these objectives
NATURE OF PLANNING
1. Planning a primary function
2. Planning a dynamic process
3. Planning based on objectives and policies
4. Planning a selective process
5. Pervasiveness of planning
6. Planning an intellectual process
STEPS INVOLVED IN
PLANNING
Identification of opportunities
Establishment of objectives
Developing planning premises
Identification of alternatives
Evaluation of alternatives
Selecting an alternative
Formulating derivative plans
Establishing sequence of activities