Essentials Of Management

Batch: PGDFTM
Semester: I
 Learning Outcomes
• Explain why managers are important to organizations.

• Tell who managers are and where they work.

• Describe the functions, roles, and skills of managers.

• Describe the factors that are reshaping and redefining

the
manager’s job.

• Explain the value of studying management.

 Nature of Management
Management is the attainment of organisational goals
in an effective and efficient manner through planning,
organizing, staffing, directing and controlling
organisational resources.
Inputs Outputs

Planning-Organizing-Leading-Controlling
Oragnisational
Resources(5M’s)
Men Products
Money &
Machine Services
Material
Method

The Process of Management

 The Four Management Functions
1. Planning 2. Organising
The management function The management function
concerned with defining goals concerned with assigning
for future organisational tasks, grouping tasks into
performance and deciding on departments, and allocating
the tasks and resource use resources to the departments.
needed to attain them.

4. Controlling
3. Leading
The management function
The management function
concerned with monitoring
that involves the use of
employees activities, keeping
influence to motivate
the organisation on track
employees to achieve the
towards its goals, and making
organistional goals.
corrections as needed.
 Characteristics of Management
•Management is Intangible.
•Management is goal oriented.
•Management is universal.
•Management is a social process.
•Management is group activity.
•Management is system of authority.
•Management is an activity.
•Management is dynamic.
•Management is a science as well as an art.
•Management is multidisciplinary.
 Importance of Management
i. Optimum use of resources.
ii. Effective leadership and motivation.
iii. Establishes sound industrial relations.
iv. Achievement of goals.
v. Change and growth.
vi. Improves standard of living by: (a) using scarce
resources efficiently and turning out profits, (b)
ensuring the survival of the firm in the face of
continued changes, (c) exploiting new ideas for the
benefit of the society as whole, and (d) developing
employee talents and capabilities while at work and
promoting them to show peak performance.
Levels of Management: A line of demarcation
between various managerial positions.
Top Management Middle Management Lower Management

•Determines objectives and •Interprets and explains • Plans day to day

policies.
•Designs the basic operating
and financial structure of an
organisation.
•Provides guidance and
direction.
•Lays down standards of
performance.
•Maintains good public
relations.
e.g. Chief Executive
Officer(CEO), President,
Chairman, managing
Director, etc.
the policies framed by the
top management.
•Issues detailed
instructions.
•Participating in operating
decisions.
•Trains other managers.
e.g. Functional
Heads(Marketing manager,
Finance manager, Human
Resource Manager, etc.)
operations.
•Assign jobs to workers.
•Provides supervision
and control over work.
•Arranges material,
tools and equipment.
•Maintains discipline.
e.g. Supervisor,
Foreman, Section
officer, etc.
 Management Skills
Technical Skill: Human Skills: Conceptual Skills:
The Specific The ability to Key Management skills
knowledge and ability understand, motivate related to the ability to
to use the tools, and get along with visualise the organisation as a
procedures or other people. whole , discern
techniques in interrelationships among the
performing work. organisation parts, and
understand how the
organisation fits into the
industry, community and
world.
 Managerial Skills at Various Levels
Top Conceptual
Skills
Management
Human
Middle Skills

Management

Technical
Lower Level Skills
Management
 Management Roles
Category Role

Interpersonal Figurehead
Leader
Liaison

Informational Monitor
Disseminator
Spokesperson

Decisional Entrepreneur
Disturbance Handler
Resource Allocator
Negotiator
 Theories and Approaches to
Management
• Scientific Management Theory: F W Taylor
• Administrative Management Theory: Henry Fayol
• Bureaucracy: Max Weber
• Human Relations Theory(Hawthorne Experiment):
Elton Mayo
• Human Resources Approach
• Systems Approach
• Contingency (Situational) Approach
• Modern Management Thought (MMT)
 Scientific Management(1890-1930):F W Taylor did his most
work at the Midvale and Bethlehem Steel Companies in
Pennsylvania,USA.
Basics of Scientific Management: The concept of scientific management
implies the application of science to management. It is based on four
basic principles:

• Each task must be scientifically designed so that it can replace the old,
rule of thumb methods.

• Workers must be scientifically selected and trained so that they can be

more productive on their jobs.

• Bring the scientifically designed jobs and workers together so that there
will be a match between them.

• There must be division of labour and coordination between

management and workers.
Taylor has summed up his approach in these words(Principles):
i. Science, not rule of thumb.
ii. Harmony not discord.
iii. Cooperation, not individualism.
iv. Maximum output in place of restricted output.
v. Development of each individual to his greatest efficiency and
prosperity.
vi. Equitable division of work and responsibility between
management and labour.

Key concepts of scientific management:

• Scientific task planning
• Time and motion studies
• Standardisation
• Differential piece rate system
• Functional foremanship
 Techniques of Scientific Management
Time Study

It is a technique which enables the manager to ascertain standard time taken for performing
a specified job.
• Every job or every part of it is studied in detail.
• This technique is based on the study of an average worker having reasonable skill and ability.
• Average worker is selected and assigned the job and then with the help of a stop watch, time
is ascertained for performing that particular job.
• Taylor maintained that Fair day’s work should be determined through observations,
experiment and analysis by keeping in view an average worker.

Standard Time × Working Hours = Fair Day’s Work

Motion Study
In this study, movement of body and limbs required to perform a job are closely observed.
• In other words, it refers to the study of movement of an operator on machine involved in a
particular task.
• The purpose of motion study is to eliminate useless motions and determine the best way of
doing the job.
• By undertaking motion study an attempt is made to know whether some elements of a job
can be eliminated combined or their sequence can be changed to achieve necessary rhythm.
• Motion study increases the efficiency and productivity of workers by cutting down all
wasteful motions.
 Functional Foremanship
• Taylor advocated functional foremanship for achieving ultimate specification.
• This technique was developed to improve the quality of work as single supervisor may not be an
expert in all the aspects of the work.
• Therefore workers are to be supervised by specialist foreman.
• The scheme of functional foremanship is an extension of principle pf specialization at the
supervisory level.
• Taylor advocated appointment of 8 foremen, 4 at the planning level & other 4 at implementation
level.
• The names & function of these specialist foremen are: -
• Instruction card clerk concerned with tagging down of instructions according to which workers are
required to perform their job
Time & cost clerk is concerned with setting a time table for doing a job & specifying the material
and labor cost involved in it.
• Route clerk determines the route through which raw materials has to be passed.
• Shop Disciplinarians are concerned with making rules and regulations to ensure discipline in the
organization.
• Gang boss makes the arrangement of workers, machines, tools, workers etc.
• Speed boss concerned with maintaining the speed and to remove delays in the production process.
• Repair boss concerned with maintenance of machine, tools and equipments.
• Inspector is concerned with maintaining the quality of product.
 Functional Foremanship
• In order to apply specialization at the supervisory level , Taylor developed the system of functional
foremanship.
Under this system planning and execution are repeated from each other and the job of planning is
entrusted to a specialized planning department.

A single supervisor cannot be expected to be an expert in all aspects of work and , therefore,
Taylor suggested that every worker should be supervised by different experts in different phases of
his job.

He advocated appointment of eight foreman, four of them being responsible for planning the work
(in the office) and other four concerned with the function of work (in the shop).

Office (planning the work)

1.Instruction card clerk- He issues daily instructions to the workers and gives the schedule for the
work.

2.Route clerk- He gives instruction about the way in which the work is to be done i.e. fixes the
route of production.

3.Time and cost clerk - He frames the time table for doing various jobs and maintains records of
the work.
• 4.Disciplinarian - the main function of disciplinarian is to enforce rules and regulations and
maintain discipline among workers.
Shop (execution of work)
1.Gang boss - He is the provider i.e. ensures that all materials and things are available for
workers to start the work.

2.Repair boss - He is the mechanic i.e. responsible for maintenance, renewal and repair of
machines.

3.Speed boss - He maintains the speed of the workers and keeps a check if workers are
wasting time.

4.Inspector - It is the responsibility of the inspector to see that work done conforms to the
standards of quality laid down by the planning department.
• Standardization
It implies the physical attitude of products should be such that it meets the requirements & needs of customers.
• Taylor advocated that tools & equipments as well as working conditions should be standardized to achieve
standard output from workers.
• Standardization is a means of achieving economics of production.
•
It seems to ensure -
The line of product is restricted to predetermined type, form, design, size, weight, quality. Etc
• There is manufacture of identical parts and components.
• Quality & standards have been maintained.
• Standard of performance are established for workers at all levels.
• Differential Piece Wage Plan
• This tech of wage payment is based on efficiency of worker.
• The efficient workers are paid more wages than inefficient one.
• On the other hand, those workers who produce less than standard no. of pieces are paid wages at lower rate
than prevailing rate i.e. worker is penalized for his inefficiency.
• This system is a source of incentive to workers who improving their efficiency in order to get more wages.
• It also encourages inefficient workers to improve their performance and achieve their standards.
• It leads to mass production which minimizes cost and maximizes profits.
•

• Other Techniques
Various other techniques have been developed to create ordeal relationship between management and workers
and also to create better understanding on part of works.
• Those includes use of instruction cards, strict rules & regulations, graphs, slides, charts etc, so as to increase
efficiency of workers.
Administrative theory of management: Henry Fayol
An approach that focuses on principles that can be used by managers to coordinate
the internal activities of organisations.

Fayol had classified business operations into six major activities;

Technical(production); commercial (buying and selling); Financial (use of capital);
Security (protection of property); Accounting( keeping financial records); and
Managerial(planning, organising, commanding, coordination, controlling)

Principles of management: At the operational level, Fayol has asserted that

managers should apply fourteen principles. According to him, these principles can be
applied in all types, functions, levels and sizes of organisations.
1. Division of work: This is principle of specialisation which applies to all kinds of work.
2. Authority and Responsibility:
3. Discipline
4. Unity of command
This principle states that there must be only one superior to a subordinate. That is, an
employee or a worker must not have many bosses or superiors. If an employee or
subordinate has to work under the influence of many bosses or superiors, then it creates a
confusing situation, dilemma and disorder. This also affects overall efficiency, productivity
and profit of the organization.
5. Unity of direction
The rationale behind the principle of unity of direction is the idea of structuring an efficient organization and management
structures as well as avoiding unnecessary duplication of effort and minimizing the waste of organizational resources. The
idea is that each department of an organization is responsible for specific objectives and uses one plan to complete each
objective. One person is in charge of implementing and managing the execution of the plan.

6.Subordination of individual interest to common good.

7. Remuneration of personnel
8. Order
9. Centralisation
10. Scalar chain

11. Equity
12. Stability of tenure
13. Initiative
14. Esprit de corps
 Goal vs Objective

The words Goal and Objective are often confused with each other. They both describe
things that a person may want to achieve or attain but in relative terms may mean
different things. Both are desired outcomes of work done by a person but what sets
them apart is the time frame, attributes they're set for and the effect they inflict.
Comparison chart

Goal Objective

Meaning: The purpose toward which an Something that one's efforts or actions
endeavor is directed. are intended to attain or accomplish;
purpose; target.

Example: I want to achieve success in the I want to complete this thesis

field of genetic research and do what ongenetic research by the end of this
no one has ever done. month.

Action: Generic action, or better still, an Specific action - the objective supports
outcome toward which we strive attainment of the associated goal.

Measure: Goals may not be strictly measurable Must be measurable and tangible.
or tangible.

Time frame: Longer term Mid to short term

 Management Planning
• Management planning is the process of
assessing an organization's goals and creating
a realistic, detailed plan of action for meeting
those goals. Much like writing a business plan,
a management plan takes into consideration
short- and long-term corporate strategies. The
basic steps in the management planning
process involve creating a road map that
outlines each task the company must
accomplish to meet its overall objectives.
 Management Planning Process
• Establish Goals
• The first step of the management planning process is to identify specific company
goals. This portion of the planning process should include a detailed overview of
each goal, including the reason for its selection and the anticipated outcomes of
goal-related projects. Where possible, objectives should be described in
quantitative or qualitative terms. An example of a goal is to raise profits by 25
percent over a 12-month period.
• Identify Resources
• Each goal should have financial and human resources projections associated with
its completion. For example, a management plan may identify how many sales
people it will require and how much it will cost to meet the goal of increasing sales
by 25 percent.
• Establish Goal-Related Tasks
• Each goal should have tasks or projects associated with its achievement. For
example, if a goal is to raise profits by 25 percent, a manager will need to outline
the tasks required to meet that objective. Examples of tasks might include
increasing the sales staff or developing advanced sales training techniques.
• Prioritize Goals and Tasks
• Prioritizing goals and tasks is about ordering objectives in terms of their
importance. The tasks deemed most important will theoretically be approached
and completed first. The prioritizing process may also reflect steps necessary in
completing a task or achieving a goal. For example, if a goal is to increase sales by
25 percent and an associated task is to increase sales staff, the company will need
to complete the steps toward achieving that objective in chronological order.
• Create Assignments and Timelines
• As the company prioritizes projects, it must establish timelines for completing
associated tasks and assign individuals to complete them. This portion of the
management planning process should consider the abilities of staff members and
the time necessary to realistically complete assignments. For example, the sales
manager in this scenario may be given monthly earning quotas to stay on track for
the goal of increasing sales by 25 percent.
• Establish Evaluation Methods
• A management planning process should include a strategy for evaluating the
progress toward goal completion throughout an established time period. One way
to do this is through requesting a monthly progress report from department
heads.
• Identify Alternative Courses of Action
• Even the best-laid plans can sometimes be thrown off track by unanticipated
events. A management plan should include a contingency plan if certain aspects of
the master plan prove to be unattainable. Alternative courses of action can be
incorporated into each segment of the planning process, or for the plan in its
entirety.
 Planning and Performance
Is planning worthwhile? Numerous studies have looked at the relationship between planning
and performance. Although most showed generally positive relationships,
we can’t say that organizations that formally plan always outperform those that don’t plan.

What can we conclude?

First, generally speaking, formal planning is associated with positive financial
results—higher profits, higher return on assets, and so forth.

Second, it seems that doing a good job planning and implementing those plans play a bigger
part in high performance than how much planning is done.

Next, in those studies where formal planning didn’t lead to higher performance, the external
environment often was the culprit. When external forces—think governmental regulations or
powerful labor unions—constrain managers’ options, it reduces the impact planning has on an
organization’s performance.

Finally, the planning-performance relationship seems to be influenced by the planning time

frame. It seems that at least four years of formal planning is required before it begins to affect
performance.
 Basics Of Organizing
We defined organizing as arranging and structuring work to accomplish
organizational goals.

It’s an important process during which managers design an organization’s

structure.

Organizational structure is the formal arrangement of jobs within an

organization.

This structure, which can be shown visually in an organizational chart,

also serves many purposes.

When managers create or change the structure, they’re engaged in

organizational design, a process that involves decisions about six key
elements:
work specialization, departmentalization, chain of command,
span of control, centralization and decentralization, and formalization.
 Purposes of Organizing
• Divides work to be done into specific jobs and
departments.
• Assigns tasks and responsibilities associated with
individual jobs.
• Coordinates diverse organizational tasks.
• Clusters jobs into units.
• Establishes relationships among individuals,
groups, and departments.
• Establishes formal lines of authority.
• Allocates and deploys organizational resources.
 Work Specialization
At the Wilson Sporting Goods factory in Ada, Ohio, 150
workers (with an average tenure exceeding 05 years)
make every football used in the National Football League
and most of those used in college and high school
football games.
To meet daily output goals, the workers specialize in job
tasks such as molding, stitching and sewing, lacing, and so
forth.
This is an example of work specialization, which is
dividing work activities into separate job tasks.
Individual employees “specialize” in doing part of an
activity rather than the entire activity in order to increase
work output. It’s also known as division of labor.