Principles and Practices of Management: Mba 1 Semester Subject Code: HRES 7005 (General)

Principles and Practices of
Management
MBA 1ST Semester

Subject Code: HRES 7005 (General)
HRES 7003(Aviation/
Post & Shipping)
Chapter 1
Introduction and Concepts
Of
management
2 Dr. Ragini Chauhan 11/29/2020

Management (Definitions)
“The art of getting things done through people” -Mary Parker Follett
“Management is the process of planning, organizing, leading and controlling the

efforts of organization members and of using all other organizational resources to
achieve stated organizational goals”. -James A.F. Stoner
Management is a multipurpose organ that manage a business and manages

Managers and manages Workers and work.
-Peter Drucker
"Management is a process of working with and through others to achieve

organizational objectives in a changing environment, central to this purpose is the
effective and efficient use of limited resources."
-Rovert Kreitner

Management
Art of getting things done through people.
Process of planning, organizing, staffing, directing and
controlling activities.
Mobilizing and utilizing physical and human resources to
achieve organizational goals efficiently and effectively.
Prime mover of organization making it functional and
productive
Process of creating conductive and proper internal
environment in the organization.
Process of coping with changing external environment by
identifying strengths and weakness of organization

Process of Management

Functions of Management
Planning
Organizing
Staffing
 Directing
Controlling

Planning
• Planning is determining the objectives and

formulating the methods to achieve them.
• During planning one needs to ask oneself the
following:
o What am I trying to accomplish i.e. what is my
objective?
o What resources do I have and do I need to accomplish
the same?
o What are the methods and means to achieve the
objectives?
o Is this the optimal path?

Organizing
 Division of Work
 Departmentalization
 Hierarchy Development
 Decide how much Authority to Designate/ Authority,
Responsibility and Delegation
 Decide the Levels at which Decisions are to be made /
Centralization vs. Decentralization

Staffing
 Manpower planning
 Recruitment and Selection
 Training and Development

Directing
Motivating the employees
Providing best communication channel
Ability to command people
Resolving conflicts

Controlling
 Establishing Standards of Performance
 Measuring Actual Performance
 Comparing Performance to Standards
 Taking Corrective Action

Top
Level
mana
Levels of Management geme
nt
( CEO
,
Direct
Middleor,Level
management
Gener (production
manager, HR
al manager,
marketing
Mana manager,
Financeger)
manager)
Lower Level Management
(Supervisor, Foreman, Management trainee)

Managerial Skills
Technical Skills
Interpersonal Skills
Conceptual Skills

Technical Skills
A persons’ knowledge and ability to make effective use of
any process or technique constitutes his technical skills.
For eg: Engineer, accountant, data entry operator, lawyer,
doctor etc.

Human Skills/Interpersonal skills
An individuals’ ability to cooperate with other members of
the organization and work effectively in teams.
For eg: Interpersonal relationships, solving people’s problem
and acceptance of other employees.

Conceptual Skills
Ability of an individual to analyze complex situations and to
rationally process and interpret available information.
For eg: Idea generation and analytical process of information.

Manager’s Roles (Henry
Mintzberg)
Interpersonal role
Informational role
Decisional role

Interpersonal Role
 Figurehead- performs symbolic or ceremonial functions
 Leader- maintains relationships, motivate and communicate
subordinates
 Liaison-Maintain network of contact with outside word
who provide information and help.

Informational Role
 Monitor- monitors source of information about issues that
can affect organization
 Disseminator-passes certain information to peers and
subordinates
 Spokesperson- provides information about organization to
outside world.

Decisional Role
 Entrepreneur- an initiator, designer and encourager of
change and innovation
 Disturbance handler- to take corrective action to deal with
unexpected problems facing the organization from the
external as well as internal environment
 Resource allocator- allocate existing resources among
different functions and departments
 Negotiator- negotiate with suppliers, distributors and labor
unions

Management as Science
Systematized body of knowledge
Universal Application
Experimentation and observation
Results can be replicated

Management as Art
Practical Knowledge
Personalized application
Creativity
Perfection through practice
Conclusion: Management is both Art and Science

Management as Profession
Five characteristics of a Profession
Existence of an organized and systemized body of
knowledge
Formal method of acquisition of knowledge
Existence of an Association with professionalism as its
goals
Formulation of ethical codes
Conclusion
Management is an evolving profession

Management & Administration
There are three Schools of thought-
Administration is above Management
Administration is about policy formulation and management is
about policy execution.
Administration is a top level function and Management is a
middle or lower level function.
Management is above Administration
Management is broader and a more comprehensive function,
which includes administration.
Administration is concerned with day to day functions
 Administration and Management are same
Both are used interchangeably

Evolution of Management Thoughts
Management Theories Beginning Dates Emphasis
Classical Management Theory
• Scientific
1900-1930
Management Theory Managing workers and
•Administrative organizations more efficiently.
1916-1940
Management Theory
•Bureaucratic
1920s
Management Theory
Neo-Classical Management Theory

Understanding human behavior in
• Human Relations 1930s-1950 the organization.
• Human Behaviour
1950-1970
27 Approach
Dr. Ragini Chauhan 11/29/2020
Management Theories Beginning Dates Emphasis
Modern Management Theory
• Quantitative Increasing quality of managerial

Management Theory 1950s decision-making through the
 Management Science application of mathematical and
Theory (operation research) 1940s statistical methods.
 Operations Management
Theory
Understanding the organization as

• Systems Management
a system that transforms inputs
Theory 1960s
into outputs while in constant
interaction with its' environment.
Applying management principles
• Contingency and processes as dictated by the
1970s
Management Theory unique characteristics of each
situation.

Classical or Traditional Approach
(a) Scientific Management Approach;

(b) Administrative Theory of Management
(c) Bureaucratic Organization Approach

Scientific Management
F.W. Taylor - father of scientific management
• Concerned with improving operational efficiency at shop floor level

• Emphasis on solving managerial problems in a scientific way
Elements and Tools of Scientific Management

1. Separation of planning and doing
2. Functional foremanship
3. Job Analysis
4. Standardization
5. Scientific Selection and Training of workers
6. Financial Incentives
Principles by F.W. Taylor
1. Replacing rule of thumb with Science

2. Harmony in Group Action
3. Cooperation
4. Maximum output
5. Development of workers

Work of Frank & Lillian Gillbreth and Henry
L.Gantt
• Most famous for developing the Gantt chart in the 1910s (Task – and -
bonus system).
• Implemented a wage incentive programme
HENRY • If the worker completed the work fast, i.e., in less than the standard
GANTT time, he received a bonus
• Specialized in time and motion studies to determine the most efficient way to
perform tasks.
• Breaking up each job action into its components.
FRANK • Finding better ways to perform the action.
GILBERT • Reorganizing each job action to be more efficient by eliminating unnecessary
H motions and reducing work fatigue
• A strong proponent of better working conditions as a means of

improving efficiency and productivity.
LILLIAN • Studied fatigue caused by lighting, heating, and the design of tools
GILBERT and machines
H
Administrative Management
Henri Fayol - Father of Administrative management
• Looked at the problem of managing an organization from top management point of

view
five functions of managers
1. Planning
2. Organizing
3. Commanding
4. Co-ordinating
5. Controlling

Cont.
classified industrial and business operations into 6 distinct activities-
Technical Relating to production
Commercial Buying, selling and exchange
Financial Search for capital and its optimum use
Security Protection of property and person

Accounting Including statistics
Administrative and Managerial Planning, organization, command,

coordination and control

Cont.
Principles of Management
1. Division of work
2. Authority and responsibility
3. Discipline
4. Unity of command
5. Unity of Direction
6. Centralization
7. Equity
8. Order
9. Scaler Chain

Cont.
10. Initiative
11. Remuneration of Personnel
12. Stability of Tenure of Personnel
13. Subordination of Individual Interests to the Common
Interest
14. Esprit de Corps

Bureaucratic Management
Propounded by Max Weber
Weber is known as the “Father of Organization

Theory.” Weber’s goal was not perfection, but
systematization
Replaces traditional leadership and charismatic

leadership with legal leadership

Weber’s Principles of Bureaucracy
Specialization of labor
Formal rules and procedures
Impersonality
Well-defined hierarchy
Career advancement based on merit

Limitations of Bureaucratic
Management
Not universally applicable to today’s complex organizations
Does not consider informal organization and does not prescribe

personal relationship
Rigid rules and red-tapism
delay in decision making

Behavioral or Neo- classical approach
The business organization is a social system.
Human factor is the most important element in the social
system.
It revealed the importance of social and psychological
factors in determining worker productivity and
satisfaction.
The behavior of an individual is dominated by the
informed group of which he is a member.
The aim of the management is to develop social and
leadership skills in addition to technical skills. It must be
done for the welfare of the workers.
Ideas Introduced by Behavioural Approach
 Behavioral management (or human resource) approaches

include:
Hawthorne studies
Maslow’s theory of human needs
McGregor’s Theory X and Theory Y

Hawthorne Study
The Hawthorne Experiments carried out between 1924-1933 at

Western Electric company’s Hawthorne plant in Chicago.
Major contributors:
Elton Mayo, Fritz Roethlisberger and William Dickson.
Experiments were conducted:
Illumination studies
Relay assembly room study
Mass interviewing
Bank wiring room study
Conclusion:
When employees are given special attention, productivity is likely
to change regardless of whether working conditions change.
Illumination Studies (1928-1930)
Worker productivity was measured at
various levels of light illumination.
Researchers found that regardless of whether

the light levels were raised or lowered,
worker productivity increased

Relay assembly room study (1927-1929)
Harvard research team set up experiment with 5 females
from Relay Assembly area to test impact of incentives and
work conditions on worker fatigue
There is no conclusive evidence that these affected fatigue

or productivity.
Productivity and worker satisfaction increase when

conditions are improved and made worse.

Bank wiring room study (1931-1932)
Bank Wiring Observation group, 1931-1932
The final test studying 14 male workers in the Bank Wiring
factory to study the dynamics of the group when incentive pay
was introduced.
There was no effect… Why?

Work group established a work “norm” – a shared expectation
about how much work should be performed in a day and stuck
to it, regardless of pay.
The conclusion: informal groups operate in the work

environment to manage behavior.
Maslow’s theory of human needs/ Maslow’s
Need Hierarchy
Sel Theory
f
Act
uali
zati
on
NeNeeds
Esteem
ed
Social Needs
Security Needs
Physiological Needs Needs

Maslow’s Need Hierarchy Theory
Maslow’s theory of human needs
Deficit principle
 A satisfied need is not a motivator of behavior.
Progression principle
 A need becomes a motivator once the preceding lower-level need
is satisfied.

McGregor’s Theory X and Theory Y
• McGregor’s Theory X assumes that workers:
• The average human inherently dislikes to work
• Lack ambition
• Are irresponsible
• Resist change
• So, people must be coerced, controlled, directed.
• McGregor’s Theory Y assumes that workers are:

• Work is as natural as play or rest- not disliked..
• Workers will exercise self-direction and
• self-control
• Meeting goals is satisfying and motivating. .
• Workers seek responsibility. ...
• Workers will be creative and are willing to do more
• Capable of self-direction
McGregor’s Theory X and Theory Y
 Managers create self-fulfilling prophesies.
 Leaders and managers who hold Theory X assumptions believe that

employees are inherently lazy and lack ambition and create situations
where workers become dependent and reluctant.
A negative perspective on human behavior.
 Leaders and managers who hold Theory Y assumptions believe that

most employees do not dislike work and want to make useful
contributions to the organization and create situations where workers
respond with initiative and high performance.
A positive perspective on human behavior.
Dr. Ragini Chauhan

 Central
50 to notions of empowerment and self-management. 11/29/2020
Management Science Approach/
Quantitative Approach
 The management science approach (ca1940) is a management approach
that emphasizes the use of the scientific method and quantitative techniques
to increase organizational success.
 Scientific application of mathematical techniques to management problems
 Post World War II – British use of mathematics, Operations Research, in

military operations find applications in US post war industrial development
 So, quantitative approach includes the application of statistics, optimization

models, information models and computer simulations.
 More specifically, this approach focuses on achieving organizational

effectiveness.
Management Science Approach/ Quantitative Approach
Quantitative management:
Use of mathematic models, linear programming, simulation systems and chaos
theory to solve management problems.
Operations management:
It stresses the use of mathematical and statistical methods for decision-making.
Techniques used to analyze all aspects of the production system.
Total Quality Management (TQM):

Total quality management (TQM) is a approach to management that focuses on
managing the entire organization to deliver quality goods and services to
customers.
Analyzing input, conversion, and output to increase product quality.
Management Information Systems (MIS):

Management information systems focuses on designing and implementing
computer-based information systems for business organizations.
52 Dr. Ragini Chauhan
Provides information vital for effective decision making 11/29/2020
Systems Approach
The system approach (ca 50’s-60’s) to management is a management
approach based on general system theory--the theory that to understand
fully the operation of an entity and the entity must be viewed as a system.
This requires understanding the interdependence of its parts.
Systems thinking
System
 Collection of interrelated parts that function together to achieve a common purpose.
Subsystem
 A smaller component of a larger system.
Open systems
 Organizations that interact with their environments in the continual process of transforming
53 Dr.resource
Ragini Chauhan
inputs into outputs. 11/29/2020
Systems Approach
Environment

Contingency Approach
 The contingency approach (ca 70’s) to management is a
management approach that emphasizes that what managers do
in practice depends on a given set of circumstances and
situations.
 So, a theory based on the premise that managers’ preferred

actions or approaches depend on the variables of the situation
they face
 Also known as ‘Situational Theory’, developed by

managers, consultants, and researchers who tried to
apply the concepts depending on various Internal and
External factors.
Contingency thinking
Tries to match managerial responses with problems and opportunities
unique to different situations.
Especially individual or environmental differences.
No “one best way” to manage.
Approaches depend on the variables of the situations
Draws on all past theories in attempting to analyze and solve problems
Is integrative and summarized as an “it all depends” device
Tells managers to look to their experiences and the past

Encourages managers to stay flexible
Systems Viewpoint
How the parts fits
together
•Individual Contingency Viewpoint
•Group Traditional Managers’ use of other
•Organization viewpoint view points to solve
•environment What managers problems
do
•Plan •External environment
Behavioral Viewpoint •Organize •Technology
How managers influence •Lead
others •Individuals
• Control
• Interpersonal Roles
• Informational Roles
• Decisional Roles


Management and Ethics
Ethics: Greek word ethos, referring to character and
individual behavior
Ethics: The science of morals
Morals: Concerned with character, or right and wrong,

or goodness and badness

Business ethics
“Business ethics in short can be defined as the systematic

study of ethical matters pertaining to the business,
industry or related activities, institutions and beliefs.
Business ethics is the systematic handling of values in
business and industry.”
“Business Ethics is generally coming to know what is

right or wrong in the work place and doing what is right.
This is in regard to effects of products/services and in
relationship with the stake holders.”
Ethical Issues in Various Areas of Management
A. Ethical issues in Finance
1. In accounting – window dressing, misleading financial
analysis.
2. Insider trading, securities fraud leading to manipulation of
the financial markets.
3. Executive compensation.
4. Bribery, over billing of expenses, facilitation payments.
5. Fake reimbursements.
6. Misappropriation of assets - the use of company assets for
any other purpose than company interests in the practice of
the profession.
B. Ethical issues in HRM
1. Employment Issues
2. Issues related to Cash and Incentive Plans
3. Issues related to Discriminations of the employees
4. Issues related to Performance Appraisal
5. Issues related to Privacy
6. Issues related to Safety and Health
7. Issues related to Restructuring and Layoffs
8. Other issues like using forced labour, child labour,
Longer working hours, Increasing work stress, Sexual
harassment.
C. Ethical issues in Marketing
1. Misleading advertisement
2. Surrogate advertising
3. Anticompetitive Practices
4. Black Marketing
D. Ethical issues in Production
1. There are ethical problems arising out of use of new technologies

that are harmful to health, safety and environment. This includes
technological advancements like genetically modified food,
radiations from mobile phones, medical equipment etc.
2. Defective services and products or products those are innately
deleterious like alcohol, tobacco, fast motor vehicles, warfare,
chemical manufacturing etc.
3. Animal testing and their rights or use of economically or socially
deprived people for testing or experimentation is another area of
production ethics.
4. Ethics of transactions between the organization and the
environment that lead to pollution, global warming, increase in
water toxicity and diminishing natural resources.

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Principles and Practices of

MBA 1ST Semester

2 Dr. Ragini Chauhan 11/29/2020

“Management is the process of planning, organizing, leading and controlling the

Management is a multipurpose organ that manage a business and manages

"Management is a process of working with and through others to achieve

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• Planning is determining the objectives and

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Conclusion: Management is both Art and Science

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Classical Management Theory

Neo-Classical Management Theory

• Quantitative Increasing quality of managerial

Understanding the organization as

28 Dr. Ragini Chauhan 11/29/2020

(a) Scientific Management Approach;

29 Dr. Ragini Chauhan 11/29/2020

• Concerned with improving operational efficiency at shop floor level

Elements and Tools of Scientific Management

1. Replacing rule of thumb with Science

31 Dr. Ragini Chauhan 11/29/2020

• A strong proponent of better working conditions as a means of

• Looked at the problem of managing an organization from top management point of

five functions of managers

33 Dr. Ragini Chauhan 11/29/2020

Financial Search for capital and its optimum use

Security Protection of property and person

Administrative and Managerial Planning, organization, command,

34 Dr. Ragini Chauhan 11/29/2020

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Weber is known as the “Father of Organization

Replaces traditional leadership and charismatic

37 Dr. Ragini Chauhan 11/29/2020

Formal rules and procedures

Career advancement based on merit

38 Dr. Ragini Chauhan 11/29/2020

Does not consider informal organization and does not prescribe

Rigid rules and red-tapism

delay in decision making

39 Dr. Ragini Chauhan 11/29/2020

 Behavioral management (or human resource) approaches