Unit I Management

Copyright © 2013 by McGraw Hill Education (India) Private Limited. All rights reserved.
MBA 134
Understanding Business
Unit I (6 Hrs)
•A) Nature and purpose of Management (3 Hrs)
Meaning; Scope; Managerial levels and skills; Managerial Roles;
Management: Science, Art or Profession; Universality of Management.

•B) Evolution of Management Thought (3 Hrs)
Ancient roots of management theory; Classical schools of management
thought; Behavioural School, Quantitative School; Systems Approach,
Contingency Approach; Contemporary Management thinkers & their
contribution. Ancient Indian Management systems & practices.
Comparative study of global management systems & practices.
Evolution of Management: Teaching management through Indian
Mythology (Videos of Devdutt Pattnaik, Self-learning mode)
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Illustration 1
14E
MANAGEMENT
A GLOBAL, INNOVATIVE, AND
ENTREPRENEURIAL PERSPECTIVE
Heinz Weihrich | Mark V. Cannice | Harold Koontz

LEARNING OBJECTIVES
 Explain the nature and purpose of management
 Understand that management applies to all kinds of
organization and to managers at all organizational
levels
 Recognize that the aim of all managers is to create a
"surplus“
 Identify the trends in information technology and
globalization
 Explain the concepts of productivity, effectiveness,
and efficiency
 Describe the evolution of management and some
recent contributions to management thought
LEARNING OBJECTIVES
 Describe the various approaches to management

 Show how the management process approach
draws from other approaches
 Realize the managing requires a systems approach
 Define the managerial functions of planning,
organizing, staffing, leading, and controlling
DEFINITION OF MANAGEMENT
NATURE AND PURPOSE
Koontz definition
Art of getting things done through others
Management is the process of:
• designing
• and maintaining an environment in which
• individuals,
• working together in groups,
• efficiently accomplish selected aims.
Few other definition
• Peter F Drucker – Work productive and

worker achieving
• F W Taylor – Art of knowing what you
want to do and doing it in cheapest way.
• Lawrence – Accomplishment of results
through people.
• Henry Fayol- forecast and plan, organize,
control.
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THE FUNCTIONS OF MANAGEMENT
 Planning
 Organizing
 Staffing
 Leading
 Controlling
EXTERNAL ELEMENTS THAT
AFFECT OPERATIONS
• Social factors
• Technological factors
• Economic factors
• Political/legal factors
• Ecological factors
• Ethical factors
Copyright © 2010 , by Weihrich & Cannice

Management 13th ed.
ENTERPRISE
A business, government agency, hospital, university, or any
other type of organization.
MANAGERIAL FUNCTIONS AT
DIFFERENT ORGANIZATIONAL
LEVELS
All managers carry out managerial functions, but the time
spent for each function may differ.

Time spent in carrying out Managerial Functions
Level & Types of Management or Management Hierarchy
Owner or Shareholders
Board of Directors
Chairman
Managing Director
Chief Executive
General Manager
Senior Middle Management

Functional Heads
Production Manager
Marketing Manager
Finance Manager
Junior Middle Management
Divisional & Sectional Officers
Deputy Managers
Branch Managers
Superintendents
Supervisors
Foremen
Section officers Copyright © 2010 , by Weihrich & Cannice
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Management 13th
 Human
 Technical
 Design
ADMINISTRATORS
 Conceptual
FOUR SKILLS REQUIRED FOR
THE MANAGERIAL ROLES APPROACH
INTERPERSONAL ROLES
• 1. The figurehead role

• 2. The leader role
• 3. The liaison role
INFORMATIONAL ROLES
• 4. The recipient role
• 5. The disseminator role
• 6. The spokesperson role
DECISION ROLES
• 7. The entrepreneurial role
• 8. The disturbance-handler role
• 9. The resource-allocator role
• 10. The negotiator role
THE GOALS OF ALL MANAGERS AND
ORGANIZATIONS
 The aim of all managers should be to create

a surplus.
 Thus, managers must establish an

environment in which people can
accomplish group goals with the least
amount of time, money, materials, and
personal dissatisfaction.
CHARACTERISTICS OF EXCELLENT
COMPANIES (PETERS & WATERMAN)
• Oriented towards action

• Learned about the needs of their customers
• Promoted managerial autonomy and
entrepreneurship
• Achieved productivity by paying close
attention to the needs of their people
CHARACTERISTICS OF EXCELLENT
COMPANIES (PETERS & WATERMAN) CONT…
• Driven by a company philosophy often based on

the values of their leaders
• Focused on the business they knew best
• Had a simple organization structure with a lean
staff
• Were centralized as well as decentralized,
depending on appropriateness
ENTREPRENEURSHIP
• Entrepreneurship is the act of

creating an organization that would
not exist without you.
• It is seizing upon an opportunity to

solve a problem or provide a desired
service which results in a sustainable
surplus cash flow.
INNOVATION
Innovation is:
• the enhancement,
• adaptation,
• or commercialization
• of new products, services, or
processes.
PRODUCTIVITY
The output-input ratio within a time
period with due consideration for
quality.
Chapter
Chapter11
DEFINITIONS OF EFFECTIVENESS
AND EFFICIENCY
• Effectiveness is the achievement of objectives.
• Efficiency is the achievement of the ends with the

least amount of resources (time, money, etc.).
MANAGING: SCIENCE OR ART?
Managing as practice is an art;

• the organized knowledge underlying the
practice may be referred to as a science.
THE EVOLUTION OF MANAGEMENT THOUGHT
& PATTERNS OF MANAGEMENT ANALYSIS
• Frederick Taylor and Scientific Management

• Fayol, the Father of Modern Operational
Management Theory
• Elton Mayo and F. Roethlisberger and the
Hawthorne Studies
• Recent Contributors to Management Thought
TAYLOR'S PRINCIPLES OF
SCIENTIFIC MANAGEMENT
• Replacing rules of thumb with
science (organized knowledge).

• Obtaining harmony, rather than
discord, in group action.
• Achieving cooperation of human
beings, rather than chaotic
individualism.
• Working for maximum output,
rather than restricted output.
Chapter
Chapter11
FAYOL, FATHER OF
MODERN MANAGEMENT THEORY
Father of Administrative Management

Identified six groups-
Technical
Commercial
Security
Financial
Accounting
Managerial
Chapter
Chapter11
Chapter
Chapter11
B E
C F
G
D
D
GANG PLANK
In the figure given, if D has to communicate with G he will first send the
communication upwards with the help of C, B to A and then downwards with the help
of E and F to G which will take quite some time and by that time, it may not be worth
therefore a gang plank has been developed between the two.
Gang Plank clarifies that management principles are not rigid rather they are very
flexible. They can be moulded and modified as per the requirements of situations.
school
Management 13th
Behavioural Sciences
45
Chapter
Chapter11
Other notable contributions
• Robert Owen – Scotting Businessman,
miserable working conditionsl
• Munsterberg: Human psychology.

Efficiency
• Marry Parker Follet – Harmonize and
coordinate group efforts. Rely on
expertise and knowledge.
• Chestar Barnard: Social system
50
ELTON MAYO AND F. ROETHLISBERGER
AND THE HAWTHORNE STUDIES
In general, the improvement in
productivity was due to such social

factors as morale, satisfactory
interrelationships between members
of a work group (a "sense of
belonging"), and effective management
—a kind of managing that would
understand human behavior, especially
group behavior, and serve it through
such interpersonal skills as motivating,
counseling, leading, and
communicating.
51
Chapter
Chapter11
CONTRIBUTORS TO
MODERN MANAGEMENT THOUGHT
Management thinkers & their
contribution
• Peter F. Drucker – General Management topics
• W. Edwards Deming – Quality Control in Japan
• Laurence Peter – People get promoted to a level where they
are incompetent
• Keith Davis – Human relations
• Joseph M. Juran - Trilogy
• William Ouchi – Japanese practices adapted in the US
environment
• Thomas Peters and Robert Waterman – Identified the
excellent characteristics of the company
• C. K Prahalad and Gary Hamel (1990) – Core competency of
the corporation
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58
DEMING’S PDCA CYCLE
59
60
Management 13th
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64
65
Management 13th
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Management 13th
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Management 13th
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C. K Prahalad and Gary Hamel (1990) –
Core competency of the corporation

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Management 13th
PATTERNS OF MANAGEMENT
ANALYSIS
A MANAGEMENT THEORY JUNGLE?
1. The empirical, or case, approach
2. The managerial roles approach
3. The contingency, or situational, approach
4. The mathematical, or "management science,"
approach
5. The decision theory approach
6. The reengineering approach
7. The systems approach
PATTERNS OF MANAGEMENT
ANALYSIS CONT…
8. The sociotechnical systems approach

9. The cooperative social systems approach
10. The group behavior approach
11. The interpersonal behavior approach
12. McKinsey's 7‑S framework
13. The total quality management approach
14. The management process, or operational,
approach
THE MANAGEMENT PROCESS, OR
OPERATIONAL APPROACH
THE MANAGEMENT PROCESS, OR
OPERATIONAL, APPROACH
• This approach draws together the pertinent knowledge of

management by relating it to the managerial job—what managers
do.
• It tries to integrate the concepts, principles, and techniques that

underlie the task of managing.
INPUT-OUTPUT MODEL
Quantitative School of
Management
• During World War II, mathematicians, physicists, and other
scientists joined together to solve military problems.

• The quantitative school of management is results of the
research conducted during world war II.
• This involves Management Science, Operation Research, MIS,
LPP, CPM, PERT, ROI
• The quantitative approach to management involves the use of
quantitative techniques, such as
• Statistics
• Information models,
• Simulations
• Decision making tools
• Big data analytics
75
Ancient Indian Management
systems & practices.
• The term Veda itself is derived from the root ‘vid’. It means both to know and
to obtain or to attain.
• Upa-nishada’ means ‘to sit by the side’. What was taught by making the
disciple sit by the side of the teacher is the Upanishads. The main theme in the
Upanishads is a philosophical inquiry and dealing with that state of mind with
all shackles destroyed.
• Bhagwad Gita is a poem which depicts lessons on spirituality and ethics
through a dialogue between Lord Krishna and the warrior Arjuna who was in a
great crisis of his life.
• Gita has got all the management tools to provide the mental equilibrium and
to overcome any crisis situations through an inspirational message gleaned
from it.
• Ramayana depicts the duties of relationships, portraying ideal characters like
the ideal father, ideal servant, the ideal brother, the ideal wife and the ideal
king.
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• Ramayana: Teamwork is an important principle in management, and Rama
applied the same in search of Sita and was successful in the mission.
• The founder of Buddhism school was Gautama Siddhartha who later became
Lord Gautama Buddha. Buddha taught the eightfold path to liberation from all
suffering.
• According to Patanjali, ‘Yoga is the control of the modifications of the mind. It is
mind that leads to or to liberation; that most human problems are mental and
that the only remedy to solve them is a mental discipline.
• There are four Vedas viz. Rig-Veda, Yajur-Veda, Sama-Veda, and Atharva-Veda.
• Vedic: wisdom describes four ashramas. The brahmacharya – student phase, the
grihastha – householder phase, the vanaprastha – preparation for renunciation
phase and sanyasa – renunciation phase.
• Aham Brahmasmi: I have immense potential. I can make the impossible possible.
• the Pancatantra gives us parables for crisis management,”
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• The Arthasasthra, the classic Sanskrit manual for state administration,
“The state had seven components of management: King, Ministry,
Territory, Fortified City, Treasury, Army and Ally.”

• Kautilya believed in the management motto that one wheel was not
enough to move a cart.
• Akbar’s Administration: Concentration of all power in the King: Akbar
was the centre of all powers—civil, judicial, military and religious. He
was the Supreme Commander of the army. He established a centralized
administration. All appointments, promotions or dismissals depended
on his decision and orders.
• Swami Vivekananda and Mahatma Gandhi, referred to all of them as
India’s management gurus.
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Comparative study of global
management systems & practices.
 International management focuses
on the operation of international firms

in host countries.
 International businesses engage in
transactions across national
boundaries.
79
MANAGING DOMESTIC AND
INTERNATIONAL ENTERPRISES
FORMS OF INTERNATIONAL BUSINESS
MULTINATIONAL
CORPORATIONS
• Multinational corporations: Have their headquarters
in one country but operate in many countries.
• Ethnocentric orientation: Style of the foreign

operations is based on that of the parent company.
• Polycentric orientation: Foreign subsidiaries are
given a great deal of managerial freedom.
• Regiocentric orientation: Favors the staffing of
foreign operations on a regional basis.
• Geocentric orientation: Entire organization is viewed
as an interdependent system operating in many
countries.
Characteristics of 21st Century
Executives
• Ability to manage differences
• Ability to manage change-- diversity
• Being a strategic/visionary manager

• Ability to motivate
• Decisive-- quickness of action
• Having a global perspective
• Ethical and/or spiritual orientation-- that is,
to act with integrity
Characteristics of 21st Century
Executives
• Knowledge of computer technology
• Analytic and problem solving skills

• Resiliency-- being able to balance job, family and
outside demands
• Ability to facilitate/manage teams
• Communication and interpersonal skills-- people
skills
• Having a self-development mindset
• Being able to recognize current trends/market
conditions
KEY IDEAS AND CONCEPTS FOR
REVIEW
• Management • Contributors to scientific
• Managerial functions management
• Managerial skills in the • Fayol’s operational

organizational hierarchy management theory
• The goal of all managers • Mayo and Roethlisberger
• Characteristics of excellent and • Recent contributors to
most admired companies management thought
• Three major trends: Advances in • Management theory jungle
technology, globalization, and • Managerial roles approach
entrepreneurship • Management process, or
• Productivity, effectiveness, and operational, approach
efficiency • Systems approach to the
• Managing: science or art? management process
• Major contributors to • Five managerial functions
management thought

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Copyright © 2013 by McGraw Hill Education (India) Private Limited. All rights reserved.

Management: Science, Art or Profession; Universality of Management.

Heinz Weihrich | Mark V. Cannice | Harold Koontz

 Describe the various approaches to management

• Peter F Drucker – Work productive and

Copyright © 2010 , by Weihrich & Cannice

spent for each function may differ.

Senior Middle Management

• 1. The figurehead role

 The aim of all managers should be to create

 Thus, managers must establish an

• Oriented towards action

• Driven by a company philosophy often based on

• Entrepreneurship is the act of

• It is seizing upon an opportunity to

• Effectiveness is the achievement of objectives.

• Efficiency is the achievement of the ends with the

Managing as practice is an art;

• Frederick Taylor and Scientific Management

science (organized knowledge).

Father of Administrative Management

Copyright © 2010 , by Weihrich & Cannice

• Munsterberg: Human psychology.

productivity was due to such social

DEMING’S PDCA CYCLE

Copyright © 2010 , by Weihrich & Cannice

Copyright © 2010 , by Weihrich & Cannice

Copyright © 2010 , by Weihrich & Cannice

Copyright © 2010 , by Weihrich & Cannice

Copyright © 2010 , by Weihrich & Cannice

8. The sociotechnical systems approach

• This approach draws together the pertinent knowledge of

• It tries to integrate the concepts, principles, and techniques that

scientists joined together to solve military problems.

Territory, Fortified City, Treasury, Army and Ally.”

on the operation of international firms

• Ethnocentric orientation: Style of the foreign

• Being a strategic/visionary manager

• Analytic and problem solving skills

• Managerial skills in the • Fayol’s operational

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