PRINCIPLES OF MANAGEMENT

Prof. M Roy
 Definition – Management:

 Management: Process of achieving organizational

objectives effectively through other people by utilizing
limited resources efficiently in an ever-changing
environment

 “Management is the process of getting things done,

through & with people in organization”
 Management : Related to people, resources, goal,
challenges and changing environment.
 Central to this process : An effective efficient use of
limited resources.
 Effectiveness :Achievement of objectives
 Efficiency :Achievement of ends with least amount of
resources
 Process of planning, organizing, leading, and controlling
people and their efforts for achievement of certain goals.
 Managerial Skills

 Conceptual Skills-Ability to see the ‘big picture’, that is,

to understand how various functions of the organization
complement one another and how the organization
relates to the environment and how changes in one part
of an organization can affect the whole

 Ability to organize and combine the interest and activities

of the organization.

 Most important for employee for top level managers.

 Technical skills- Ability to apply specialised knowledge to
work-related techniques and procedures, crucial for
lower level managers as they are in direct contact with
the employees performing the work concerned.

 Important for middle level management.

 Human Relations Skills- Ability to work with , understand

and motivate other people

 Important for employee in the supervisory level.

 Different Managerial Levels

Top Management
Conceptual
Skills
Middle Management

Human Relations Skills

Supervisory Level

Technical Skills
 Levels of management
 Top management : Focus more on planning ,strategic
decisions and goals that affect the entire organization.

 Middle management :Translates broad and general

strategies , policies into specific goals and organize the
work of first-line managers.

 Lower management: Involved more on training and

developing workers and take short term decisions
Order of Management
Top
Manag
ement

Middle
Managers

First-Line Managers

Operatives
(or)
Executive
Management Functions
 Planning- Defines the goal & establishing strategy.

 Organizing- Determines what task has to be done, who is to do

them.

 Staffing- recruitment of people and training them towards

accomplishment of task.

 Leading- motivating the employees and directing their activities.

 Controlling- monitoring the performance.

Planning
 Planning: involves advance decisions related to what,
why, when, how and who.
 Involves :
 Study of environment around the organization
 Specifications of goals and strategies for achieving these
goals.
 Framework of policies, procedures and anticipated
course of action
 Revision of plans and adjustments in changed situations
Organizing
 Organizing: process of translating the required activities of
plans into a structure of task, authority and responsibility
to carry out plans and meet the organizational goals.

 Focus: on determining what tasks are to be done, who is

to be done, how the tasks are to be grouped, who reports
to whom, and where decisions are to be made.

 Subfunctions: Defining the nature content of each job in

the organization, and delegating authority to assigned
managers
Directing &Motivating
 Directing &Motivating: Stimulate the organizations to
undertake actions along plan and channelize the
organizational behaviour for attainment of goals .
 Basic focus:
 Communicate and explain the objectives to the subordinates
 Assign the performance standards
 Help and guide subordinates to meet the standards of
performance.
 Praise and reward for better performance
 Build confidence among different layers of management
 Coordinate the entire process,
Controlling
 Controlling: monitoring performance against goal,
determine the causes of deviation from goals and take
corrective actions for improvement.
 Basic focus:
 Set standards of performance,
 Measure the gaps in standard and attained performance.
 Corrective actions to bridge the gap.
Management Roles
 Basic roles : Inter-personal, Informational and Decisional
role(Henry Mintzberg (1973) .
 Interpersonal:
 Figurehead: every manager must perform some duties of
traditional nature, as greeting dignitaries, attending the
wedding of employees, taking an important customer to
lunch.
 Leader: motivate and activate the subordinates.
 Liaison: develop contacts outside their vertical chain of
command to collect information and maintain a self-
developed net-work of outside contacts and information.
Informational
 Monitor: collect a wide variety of information and create a
knowledge-base to develop a thorough understanding of
organization and continuously examine environment

 Disseminator: means transmission of information to their

subordinates so that value added knowledge emerges for
organizational use.

 Spokesperson: Means transmitting information to

outsiders on behalf of the organization to clarify
organizational plans, policies, actions and results.
Decisional Role
 Entrepreneur: search the environment for opportunities
and initiate the change process to bring about
transformation.
 Disturbance handler: responsibility related to corrective
actions when organizations face sudden unanticipated
problems.
 Resource allocator: responsibility related to allocation of
resources among different sections and departments.
 Negotiator: represent the organization at major
negotiations and bring advantage to the organization.
knowledge leadership role

 Internet and e-business: Information technology and

the internet has changed the nature of job, transforming
business and transformed management completely
 Additional role : knowledge leader and Change handler

 Knowledge team builder: Create teams to build knowledge-

base through seminar, internet-search, and adoption of
technology

 Sustaining and maintaining knowledge: Related to

knowledge management
Change Handler Role
 Continuous improvement supporter: Develop a quality
culture and explore the route for gradual improvement.
 Benchmarking Leader: Involves identifying the world –
class performers or ‘best practices’ in a specific
area ,identify the gap between world-class and the
organization and bridge the gap through systematic
planning and leadership.
 Re-engineering Leader: Instead of gradual
improvement allocate resources carefully for a radical
redesign of the system and take risk for dramatic
transformation
Management Competency
 Management competencies : sets of knowledge,
skills, behaviours, attitudes to transfer and exchange
effective information
 Team-work competency: Ability to design teams
properly, create a supportive team environment, and
manage team dynamics effectively.
 Planning and administration Competency: Ability to
decide what work needs to be done, determine how it
is to be done, allocate resources to enable it to be
done, and then monitor its progress and take
corrective action
 Strategic action competency: Includes understanding the
overall vision , mission, and strategy of the organization and
lead the actions and efforts of the team towards the
achievement of the mission.
 Global awareness competency: In a globalised business
environment, awareness of the global development and its
influence to one’s own industry is very important .
 Self-management competency : includes integrity,
ethical conduct, personal drive, resilience, balancing
work and personal life and self-awareness.

 With more focus on material well-being and urge to grow
fast and achieve higher status in life as early as possible,
there has been a tendency to ignore ethical behaviour.

 Value and ethics :In the context of recent scams and

scandal, value based thinking has evolved , giving more
focus on ethical behaviour and concern for the society.
 Value based management style has emerged as a new
management style in order to direct and manage efforts
and competence of people of an organization to attain
goals along with environmental and social goals

 Ethical awakening and social innovations: Because of

growing incidents of exploitation of workers, selling of
unsafe products, unethical lobbying, accounting frauds,
innovative business models have evolved to combine
profit with social welfare.
EVOLUTION OF MANAGEMENT THOUGHT
DIFFERENT APPROACHES

• SCIENTIFIC
CLASSICAL • ADMINISTRATIVE
• BUREAUCRATIC

• GROUP INFLUENCES
• MASLOW’S NEED THEORY
BEHAVIOURAL • THEORY X AND THEORY Y
• HAWTHORNE STUDIES

• SYSTEM
MODERN • CONTINGENCY
• THEORY Z AND QUALITY MANAGEMENT
CLASSICAL APPROACH
Focuses on the
individual worker’s Focuses on the
productivity overall
organizational
system

Focuses on the
functions of
management
 Scientific management theory

 Scientific Management: Scientific study of

relationships between people and tasks for the
purpose of redesigning the work process to
increase efficiency

 Taylor, Gantt and Gilbreth developed a number of

principles to increase efficiency and enhance
productivity.
Frederick W. Taylor(1856-1915) : founder of
Scientific management theory

 Principles: Determine one best way to do each Job

(studying the way workers perform their task,
gathering all job knowledge the workers possess and
experimenting with ways of improving the way tasks
are performed)

 Select the best person for the job: Carefully select the
right person to match the need of the task and train
them to perform the
 Train the best possible method to perform the task: Study
the task and determine the optimal way to perform it.

 Provide sufficient monetary incentive: establish a fair

level of performance for a task and then develop a pay
system that provides reward for performance above the
acceptable level.
SCIENTIFIC MANAGEMENT: Taylor

• develop a scientific approach for each element of one’s work

• scientifically select, train, teach and develop each worker
FOUR • cooperate with workers to ensure that jobs match plans and
PRINCIPLES principles
• ensure appropriate division of labor

• Task Performance
THREE AREAS OF • Supervision
FOCUS: • Motivation

TWO MANAGERIAL • Piece-rate-incentive system

PRACTICES: • Time and motion study
SCIENTIFIC MANAGEMENT:
Henry Gantt and The Gilberths
• Most famous for developing the Gantt chart in the 1910s.
HEN
RY • Implemented a wage incentive programme
GAN
TT
• Specialized in time and motion studies to determine the most efficient way
FRA to perform tasks.
NK • Used motion pictures of bricklayers to identified work elements (therbligs)
GIL such as lifting and grasping
BER
TH

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

IAN efficiency and productivity.
GIL
BER
TH
 BUREAUCRATIC MANAGEMENT

Focuses on the overall organizational system.

Need for organization's to function on a rational basis

Bureaucratic management is based upon:

• Firm rules
• Policies and procedures
• A fixed hierarchy
• A clear division of labor
BUREAUCRATIC MANAGEMENT: Weber

• A German sociologist and historian who

envisioned a system of management
MAX WEBER • “a bureaucracy is a highly structured,
formalized and impersonal organization.”

• Division of labor
•
FIVE •
Hierarchy of authority
Rules and procedures
PRINCIPLES •
•
Impersonality
Employee selection and promotion
Max Weber (1864-1920
 Developed the principles of bureaucracy—a formal
system of organization designed to ensure efficiency and
effectiveness

 Provides Formal system of rules on which an

organization should operate.

 Formal system of rules: An explicit set of rules to govern

the behaviour of the employees and provide discipline to
the organization
Max Weber (1864-1920
 Impersonality: everyone should be treated impersonally
and should be evaluated as per the rules.

 Division of labour: Division of duties into simple and

specialised forms to different employees and provide
training efficiently

 Hierarchical structure: All the positions and jobs should

be organized in hierarchy on the basis of amount of
authority
Max Weber (1864-1920
 Authority structure: Authority determines who has the
right to make decision of varying importance at different
levels within the organization. Superior must be obeyed
because of the position occupied by him within the
organization’s hierarchy.

 Life-long career commitment: Both employee and

organization view themselves as committed to each
other over the working life of the employee.
Max Weber (1864-1920
 Rationality: Use of the most efficient means available to
act and operate logically and scientifically with all
decisions leading directly to achieve organizational
goals.

 It is believed that bureaucracy leads to enhanced

efficiency and consistency in an organization .
Administrative Management
 Henri Fayol(1841-1925), the CEO of a mining
company , 14 basic principles essential for the
efficiency of the management process
 Division of labour ( more specialization, more

efficiency)
 Authority and responsibility (Right to give orders and

the power to get things done)

 Discipline ( respect the rules and agreement that govern
the organization)
Henri Fayol(1841-1925),
 Unity of command( An employee must receive orders
from only one superior)

 Unity of direction( Coordination in the efforts of

employees

 Line of authority( length of the chain of command must

be specific and limited )

 Centralisation( Authority should not be concentrated at

the top of the chain of command)
Henri Fayol(1841-1925),
 Equity( equal and fair justice to all employees)

 Order(proper guidance and use of material things

and employees to maximise efficiency)

 Initiative(motivation to be innovative and creative)

 Remuneration( Employees should be paid

equitably for performance
Henri Fayol(1841-1925),
 Stability of tenure of personnel( Long term employees
develop skills to improve efficiency)

 Subordination of individual interest to common

interest( Priority to achieve Performance of organization)

 Esprit de corps( culture to develop shared feelings of

comradeship, enthusiasm, or devotion to a common
cause)
ADMINISTRATIVE MANAGEMENT

Five management functions

Focused on principles
• planning
that could be used by
• organizing
managers to coordinate
• commanding
the internal activities of
• coordinating
organizations
• controlling
FAYOL’s PRINCIPLE OF MANAGEMENT

1. Division of work 8. Centralization

2. Authority and responsibility 9. Scalar chain

3. Discipline 10. Order

4. Unity of command 11. Equity

5. Unity of direction 12. Stability

6. Subordination of individual interest to

the common good 13. Initiative

7. Remuneration of personnel 14. Esprit de corps

BEHAVIOURAL APPROACH

The behavioural school of management

emphasized what the classical theorists
ignored.

Acknowledged the importance of human

behavior in shaping management style.

Personalities
• Mary Parker Follett
• Douglas McGregor
• Chester Barnard
• Elton Mayo
Behavioural Approach
 A business organizations :not merely a techno-economic
system but also a social system.

 Focus : understand the people, their needs, perceptions

and aspirations.

 Human relation movement :a new dimension to look at

the causes of human work behaviour and translates the
results into effective management techniques.
Behavioural Approach
 A worker does not always work for money only.
 Non-financial rewards (as affection, respect of his co-
workers) significantly affect his work behaviour.
 Employee-centred, democratic and participative style of
leadership
 Supervisors must be behaviourally trained to manage
subordinates in ways that elicit their cooperation and
increase their productivity.
Challenges before business and
management
Challenges:
 Globalization and intense competition

 Technological change and innovation

 Demographic change

 Ethical awakening and social responsiveness

 Global warming and environmental degradation

 Restructuring and transforming of organization

 Internal and emergence of e-business

Change, innovation and global
managers(Peter F. Drucker)
 New concepts: Management by objective (MBO),
Knowledge worker, Innovation and entrepreneurship.

 Peter F.Drucker(1993) : Change towards knowledge and

knowledge society .

 Knowledge the power to create a new society--- “Post-

Capitalist Society” written by Drucker
Change: Shift to knowledge and
knowledge society
 Clarified this shift from capitalism to knowledge society
acknowledging that knowledge was fast becoming the sole
factor of production (book ‘Post-Capitalist Society)
 Focus :critical role of managers to invent the modern concept
of management, and conceptualise MBO and knowledge
management.
 New term : Knowledge worker and later regarded knowledge
work productivity.
 Against excessive professionalisation and isolation of
managers from society
 integrated the professional responsibility of managers
with their duty to exercise sound judgement and act with
courage.
 Managers’ work :far-reaching impact on the development
and well-being of the people who work in corporation
 Business enterprise :As a representative of social
institution,
 responsibility to conduct business in ways that do not
undermine social beliefs and harmony.
Ethics and social responsibility
 Role of management viewed as a distinct function
characterised by a degree of responsibility(book
‘Management : Tasks, Responsibilities ,Practices (1973)
 Business corporation as a human organization, a social
organization and a community and micro-society of the
larger macro-society, in addition to being an economic
entity.
 Management philosophy based on a communitarian
philosophy
HIERARCHY’s HUMAN NEEDS

SELF
ACTUALIZATION
NEED FOR SELF
ESTEEM

NEED FOR SOCIAL

RELATIONS

NEED FOR SECURITY

PHYSIOLOGICAL NEEDS
FOLLETT ON EFFECTIVE WORK GROUPS

FOUR PRINCIPLES OF COORDINATION

• Coordination requires that people be in direct contact
with one another.
• Coordination is essential during the initial stages of any
endeavor.
• Coordination must address all factors and phases of
any endeavor.
• Coordination is a continuous, ongoing process.
McGregor's PROPOSED STYLES

THEORY X THEORY Y
• Most people dislike work and they avoid it • Work is a natural activity like play or
when they can. rest.
• Coerced and threatened with punishment • Capable of self direction and self
before they work. control.
• Avoid responsibility and have little ambition. • Committed to organizational
objectives.
 ELTON MAYO’s VIEW

Aimed to understand how psychological and social

processes interact with the work situation to influence
performance

Work represents the transition from scientific

management to the early human relations movement.

Emphasized on workers themselves and needs to

belong to a group
 HAWTHORNE EXPERIMENTS
(1924 – 1932)

“HAWTHORNE EFFECT”
• Workers perform and react differently when
researchers observe them.
• Productivity increased because attention was
paid to the workers in the experiment.
• Phenomenon whereby individual or group
performance is influenced by human behavior
factors
 CONTINGENCY THEORY

There is no “One Best Way” to manage all the

situations.

Also known as ‘Situational Theory’.

Developed by managers, consultants, and

researchers who tried to apply the concepts
depending on various Internal and External factors
MERGER COMPONENTS INTO CONTINGENCY
PERSPECTIVE
 Conclusion

 “In the past the man has been first; in the future the system
must be first.”

-Frederick Winslow Taylor