PRINCIPLES & PRACTICE

OF MANAGEMENT
(MBA 011)

MANAGEMENT
Definitions : Frederick W Taylor Management has been defined as the art of knowing what you want to do and seeing that it is done in the best and cheapest way.

Stanley Vance (From the point of view of decision making) Management is the process of decision making and control over the action of human beings for the expressed purpose of attaining predetermined goals. Lawrence Appley (From the view point of people orientation) It is the accomplishment of results through the efforts of other people.
Harold Koontz Management is the art of getting things done through and with people in formally organized groups. John Mee Management is the art of securing maximum results with minimum effort so as to secure maximum prosperity and happiness for both employer and employee and giving the public the best possible service.

MANAGEMENT
Finally

Contd.

Management is a process of effective utilization of human and other resources to achieve the stated organizational objectives. Management is a process consisting of management functions i.e. Planning, Organising, Staffing, Directing and Controlling. For What To achieve the organizational objectives like: To earn profits. To provide Goods and Services desired by customer. To provide Goods and Services with Quality. For satisfaction of all i.e. Employees, Customers, Govt. and other parties like suppliers, distributors etc. How By effective utilization of resources i.e. 6Ms (Men & Women, Materials, Machines, Methods, Money and Market)

MANAGEMENT FUNCTIONS

Planning :

Determining the objectives of the activity Making Decisions & Policies for the activities.

Organising : Identification of activities or processes.

Grouping of similar activities.

Creation of Departments.
Delegation of Authority and Responsibilities. Establishment of relationships.

Staffing :

Man power Planning Employment of personnel

Training, Appraisal, Remuneration etc.

MANAGEMENT FUNCTIONS

Contd.

Directing :

Inter personnel Relationships. Instruction, Supervision, Guidance & Support. Communication with subordinates. Providing Leadership. Motivation of employees.

Controlling : Comparing the actual performance with the planned & standards
Taking regular and timely corrective action.

____________________

Characteristics of MANAGEMENT

1. Management is a continuous process unless its objectives are not achieved. 2. It is a human activity, where human beings plan, implement and control the activities. 3. Management is an integrative force i.e. it binds together the different elements of the organisation.

4. It is a social process i.e. it is done by the people, through people and for the people. (Interpersonal Relationship)
5. Management is required at all levels of the organisation (Top, Middle and Lower Level) with difference of nature and authority. 6. It is a dynamic activity which is continuously performed to update the organisation for changing environment. 7. Management is getting the things done. It always promotes to perform tasks as and when required.

Characteristics of MANAGEMENT

contd.

8. Management is intangible i.e. it can not be seen but can be felt in the form
of their results. 9. Management is a combination of both science and an art. 10. Management is a profession. ____________________

Importance of MANAGEMENT

1. It makes people realize the objectives and directs their efforts to achieve them. 2. It helps in utilizing the various resources optimally. 3. It helps in reducing the cost and enables organisations to face competition. 4. It provides efficient and smooth running of business processes. 5. It helps in generation of new ideas and methods to tackle day-to-day problems.

6. It helps in moulding organisations in changing environment.

7. It provides a concrete system to forecast future opportunities and threats and thereby prepare organisation for all outcomes.

MANAGEMENT is Science or an Art Management as a Science

Use of Scientific Methods : Management possesses a systematised body of knowledge and uses scientific methods in its processes. As a Social Science: Management deals with the behaviour of the people in the organsiations, which is very complex and difficult to deal in a controlled environment. Cause and Effect Relationship: likewise the concept of science especially Physics or Chemistry, Management concepts are also applied with definite results as and when required. Proper verification of principles: Management principles are developed after a long period of research and observations and are thereby proved & verified. Reliability: Its results are uniform & reliable depending upon the circumstances. It provides a reliable basis for predicting future events.

MANAGEMENT is Science or an Art Management as an Art

Personal skills and knowledge: management makes use of Personal skills and knowledge in solving many complicated problems to achieve the organizational objectives. Practical knowledge: Management does not merely a theoretical concept. It is concerned with application of knowledge which makes it effective and useful.

Art of decision making: A management professional regularly practicize the Art of decision making.
Creativity: Management itself is one of the most creative Arts as it is concerned with getting work done through others by motivating them to work and coordinating their activities. Discretionary Role: As an Artist, uses his own wish and choice to prepare an Art, also Management professionals always requires certain discretionary powers to choose the way or method, time and people for getting the things done effectively.

Management as a Profession
Systematic Knowledge: Management provides systematic knowledge and formal training to its individuals. Ethical code of conduct: Management professionals are required to adopt an ethical behaviour & code of conduct for appealing and convincing others. Attitude: Management professionals always have an attitude to take things or issues in a positive & professional manner with proper utilization of resources to provide better results.

Recognition: Society always recognize the status of managers in an organization as a respectable person as they provides solutions to every problem and also produce units to benefit the society.
Competition: Increasing competition in the business would also leads to involve more and more management professionals in the organization in different roles and processes. Professional characteristics: Management professionals have knowledge, positive attitude, competent application, self control and social responsibility which recognize their job as a profession.

Management Vs. Administration

Are Separate functions: Management means to manage and implement, while administration meant to administer i.e. plan and control. Administration is one step ahead of management. Administration pre-determines the specific goals. It is a policy making function, while management is an executive function, which is primarily concerned with carrying out the policies laid down by the administration. Are synonymous: All organizations requires planning, organizing, staffing, directing and controlling. A manager or an administrator both has to perform these functions. According to Keith Davis management is divided into three levels. Top level Management performs Administrative functions. Middle level performs implementation and control and lower level management is meant for only implementation (Operational Management).

Levels of Management
Top Management : It consist of Board of Directors, Chairman, Chief Executive Officer, Managing Director and Other Directors etc.

Functions:
To determine the objectives Setting up an organizational framework Framing policies and making plans to achieve organizational objectives. To work as a bridge between internal and external environment. Providing overall leadership Exercising effective measures to overall control.

Levels of Management
Middle Management: It consists of Departmental Heads, Branch Managers, Superintendents etc. Functions: Interpreting the policies framed by Top Management. Selecting suitable operative & supervisory personnel. Assigning duties and responsibility for timely execution.

Motivating the personnel to achieve higher productivity.

Coordinating with other departments to ensure smooth running of organization. Compiling and issuing instructions to supervisors under their control. Reporting the feedback to the Top Management. Collecting the information and reports on performances. Making recommendations to top management for better implementation of plans & policies.

Levels of Management
Lower Management: It consist of Foreman, Supervisors, Sales Officer, Finance and Account Officer, HR Officer etc. Functions: To issue order & instructions to the workers and control their activities. To plan the activities of their section and assign job to the worker. To provide on-the-job training.

To solve problems of the subordinate.

Maintain good human relations Act as Liaison Officer between middle management and employees.

Levels of Management

Management Levels Planning Top Management Organising Staffing Middle Management Directing Lower Management Controlling Managerial Functions

Managerial Skills
Conceptual skills: It is the activity To see or review the organization as a whole. Having broad knowledge and skills To recognize inter relationship among different functions. To review the functions involved in the organization. To plan for various activities and formulate strategies. Making decision based on circumstances in the best interest of the organization. To conceptualize, which requires imagination, broad knowledge, mental capacity to conceive abstract ideas.

Managerial Skills
Human Skills: It is the ability To work with others and to win cooperation from people in the work To effectively communicate the message. To resolve conflicts. To motivate employees To provide effective leadership To understand the problems of others. Technical Skills: It consists of Proficiency in technical knowledge and skills Instant solution to the day to day problems troubleshooting. Ability to conduct various processes on its own. Guide and support on technical points to subordinate. group

Managerial Skills Requirement

Conceptual Skills

Human Skills

Technical Skills

Top Management

Strategic Planning

Middle Management

Coordination & Planning for Implementation

Lower Management

Implementation

Characteristics of Quality Managers

Education: Manager must be well educated having specific education in management or administration with a sense of estimating business environment. Training: Managers must acquire skills through training in the branch of management where he is working. Intelligence: A managers should have higher level of intelligence then an average human being. They should have the ability to think scientifically and analyze the problems accurately. Leadership: Managers supposed to provide guidance and leadership to their subordinate, they should be able to utilize their subordinate effectively in the best interest of organization.

Foresight: A good manager should have an open mind and be receptive to new ideas. He should be able to foresee the problems and can pre-mature formulate its solution.

Characteristics of Quality Managers

Maturity: A good manager should be emotionally matured and have balanced temperament. He should have high frustration tolerance etc. Technical Knowledge: A managers should have sufficient knowledge of technique of production so that he can involve himself in the production process also. Human Attitude: A good manager should try to develop social relationship and treat their subordinate as human being.

Self-confident: A manager should be able to take initiative and take decisions after scientific analysis.

Evolution of Management
1. Classical Theory of Management (a) (b) Bureaucracy Max Weber Scientific Management FW Taylor

(c)

Administrative or Process Management Theory Henry Fayol

2. Neo Classical Theory (a) (b) Behavioral Science Approach Human Relations Approach Hawthrone Experiments Elton Mayo 3. Modern Theory (a) (b) (c) (d) Social System Approach Quantitative Approach Decision Theory Approach 7-S Framework McKinsey

(e)

Contingency Theory

Bureaucratic Model
Max Weber specified several characteristics and elements in his ideal bureaucratic organization:
1. Specialization and Division of Labour: Weber concentrates basically on the competence. This includes:

Obligation to perform assigned functions as a part of systematic division of labour.

Providing necessary authority

2. Rules & Regulations of performance are strictly followed and is subject to definite conditions.
3. Hierarchical position: Positions are arranged in hierarchical order. Each lower office is under control and supervision of the higher one. 4. A system of abstract rules: A set of formal rules are provided to ensure uniformity & coordination of efforts. These rules also provide the continuity & stability. People may come & go in the organization but the rules persist as such.

Bureaucratic Model

Contd.

5. Impersonal relationships: In order to make complete rational decisions, bureaucrats must avoid emotional attachment for subordinates, clients & customers. Their formal behaviour should be above any affection & enthusiasm.
6. Employee Selection, Promotion and Dismissal: Employment is based on technical qualification. Bureaucrats are provided the authority of arbitrary dismissals, promotion are made according to seniority and for achievements.

Advantages in Bureaucracy Predictable behaviour of employees under the framework of defined guidelines It leads to efficiency in the organization There is proper delegation of the authority People avoid their own emotions or preferences and will go forward with rules & regulations.

Bureaucratic Model
Criticism of Bureaucracy:

Contd.

With the strict follow up of the organizational rules & regulations, the development of individual personality harnessed. Bureaucracy does not emphasize on the goals of individual.

Bureaucracy discourages innovations.

Bureaucratic structure is not effective under turbulent or dynamic environment.

It does not believe in interpersonal difficulties.

The strict rules or guidelines becomes a source of inefficiency and may be misused or misinterpreted. Red-tapism may follow as a result. The different layers of executives in the hierarchy will leads to the requirement of long period to complete a process.

Scientific Management By Frederick Winslow Taylor

Scientific Management is the process of directing human efforts which employ scientific methods in making observation, measurement, experimentation and generating inference.
According to F. W Taylor also called father of Scientific Management Scientific management means knowing exactly what you want men to do and seeing that they do it in the best and the cheapest way Objectives of Scientific Management 1. Avoidance of wastage of resources, time and method of production. 2. Ensuring a regular supply of goods to customers at reasonable price. 3. Betterment in quality through continuous research & quality control. 4. Accelerate the production rate by standard tools, techniques and equipments. 5. Decrease in production cost by systematic planning & cost control techniques. 6. Setting up a system of wage payment to attain maximum employee efficiency. 7. Placing right person at right job through scientific selection and training.

Scientific Management stresses on 1. Scientific study and analysis of different units of the business. 2. Scientific study of different methods of doing a work. 3. Scientific selection of workers. 4. Determination of the most efficient unit of the work.

5. Determination of standards based on scientific approach and analysis.

6. Determination of speed or pace in order to achieve the goals. Principles of Scientific Management 1. Conducting the scientific study and analysis of each element of a job. 2. People should be selected and trained in accordance with the requirements of the jobs.

3. The interest of employer and the employees should be fully harmonized to create mutual benefit relationship. The aim of both management and workers should be to maximize output.
4. Management should decide the method of work, working conditions, time of completion instead of leaving them at the discretion of workers.

Techniques of Scientific Management a) Scientific Work Study i) Method Study: Here the entire production process is studied to improve plant layout, product design, material handling and to reduce time & efforts involved. ii) Motion Study: It includes the study of movement of an operator in performing an operation for the purpose of eliminating useless motions.

iii) Time Study is the estimation of standard time required to complete an operation.

iv) Fatigue Study indicates that the workers feel tired after putting on work over a period of time and after that they are unable to work with their full capacity. It recommends the relax time and its frequency at appropriate intervals during a working day. b) Scientific Task Planning i) Routing: It specifies the route that a raw material should follow before its conversion into finished material.

ii) Scheduling: It is the timetable of operation with their priority to ensure the completion of each operation at the right time. iii) Dispatching: It involves assembling of necessary resources, job assignment, supervision, coordinating activities and issuing instructions to start a work etc. iv) Follow Up: It involves checking of work and taking corrective measures to ensure the completion of work at right time in right time and at a right cost.

Techniques of Scientific Management c) Scientific Selection and Training: It includes systematic selection of workers as per the nature & requirement of job. Its objective is to select & place right person at right job. d) Standardization: It is a process of fixing tested standards or norms with a view to maximize efficiency of work. Taylor suggested standardization of methods, tools & equipments and even working conditions. e) Differential Piece Wage System: Taylor suggested the use of such System (Incentive system) in order to motivate workers to produce maximum quantity of output.

f) Functional Foremanship: Under this scheme, planning and execution are separated from each other and each worker is supervised by different experts in different phases. It avoids the system of one foreman over a number of workers. Taylor advocated the appointment of eight foremen, four of them in the office responsible for planning and other four with the execution of work. These are
a) Route clerk specifies the sequence/path that each operation is to follow. b) Instruction card clerk prepares detailed instructions for workers to perform the jobs. c) Time and cost clerk frames the timetable of jobs and maintains record of work cost. d) Shop Disciplinarian enforces the discipline among the workers. e) Gang Boss is concerned with all the preliminary work before the actual operation. f) Speed boss is responsible for ensuring that the work is done well in time. g) Repair Boss ensures that each worker keep his machine clean with proper oiling.

Mental Revolution: It involves the change in attitude of both the management and the workers. Scientific Management seeks to bring about the prosperity of both the management and the workers. According to Taylor, the Scientific management would be fruitless until and unless there is a complete mental revolution on the part of both the management and the workers as to their outlook and attitude towards one another.

Benefits of Scientific Management 1. Establishment of harmonious relationship between management and workers.
2. Detailed instructions and constant guidance to the workers. 3. Proper selection and training of the workers. 4. Standardisation of tools, equipments and work methods. 5. Applying scientific techniques for each element of mans work. Criticism of Scientific Management: 1. The concept of functional foreman is not feasible in practice as it violates the principle of unity of command. 2. Trade unionist opposed Scientific Management on the grounds that the wages of the workers were not increased in direct proportion of the productivity increase. 3. The principle of Scientific Management except production is not applicable to other