MG6851 PRINCIPLES OF MANAGEMENT L T P C
3 0 0 3
OBJECTIVES:
To enable the students to study the evolution of Management, to study the functions and principles of
management and to learn the application of the princip
...
MG6851 PRINCIPLES OF MANAGEMENT L T P C
3 0 0 3
OBJECTIVES:
To enable the students to study the evolution of Management, to study the functions and principles of
management and to learn the application of the principles in an organization.
UNIT I INTRODUCTION TO MANAGEMENT AND ORGANIZATIONS 9
Definition of Management – Science or Art – Manager Vs. Entrepreneur - types of managers -managerial
roles and skills – Evolution of Management – Scientific, human relations , system and contingency
approaches – Types of Business organization - Sole proprietorship, partnership, company-public and
private sector enterprises - Organization culture and Environment – Current trends and issues in
Management.
UNIT II PLANNING 9
Nature and purpose of planning – planning process – types of planning – objectives – setting objectives –
policies – Planning premises – Strategic Management – Planning Tools and Techniques – Decision
making steps and process.
UNIT III ORGANISING 9
Nature and purpose – Formal and informal organization – organization chart – organization structure –
types – Line and staff authority – departmentalization – delegation of authority – centralization and
decentralization – Job Design - Human Resource Management – HR Planning, Recruitment, selection,
Training and Development, Performance Management , Career planning and management.
UNIT IV DIRECTING 9
Foundations of individual and group behavior – motivation – motivation theories – motivational
techniques – job satisfaction – job enrichment – leadership – types and theories of leadership –
communication – process of communication – barrier in communication – effective communication –
communication and IT.
UNIT V CONTROLLING 9
System and process of controlling – budgetary and non-budgetary control techniques – use of computers
and IT in Management control – Productivity problems and management – control and performance –
direct and preventive control – reporting.
TOTAL: 45 PERIODS
OUTCOMES:
Upon completion of the course, students will be able to have clear understanding of managerial functions
like planning, organizing, staffing, leading & controlling and have same basic knowledge on international
aspect of management
TEXTBOOKS:
1. Stephen P. Robbins & Mary Coulter, “Management”, 10th Edition, Prentice Hall (India) Pvt. Ltd.,
2009.
2. JAF Stoner, Freeman R.E and Daniel R Gilbert “Management”, 6th Edition, Pearson Education, 2004.
REFERENCES:
1. Stephen A. Robbins & David A. Decenzo & Mary Coulter, “Fundamentals of Management” 7th
Edition, Pearson Education, 2011.
2. Robert Kreitner & Mamata Mohapatra, “Management”, Biztantra, 2008.
3. Harold Koontz & Heinz Weihrich “Essentials of management” Tata Mc Graw Hill, 1998.
4. Tripathy PC & Reddy PN, “Principles of Management”, Tata McGraw Hill, 1999.UNIT I
INTRODUCTION
Definition of Management
According to F.W. Taylor, "Management is the art of knowing what you want to do and then
seeing that they do it in the best and the cheapest may."
According to Harold Koontz, "Management is the art of getting things done through others and
with formally organised groups."
Management is a multipurpose organ that manage a business and manages Managers and
manages Workers and work.—Peter Drucker
Management as a Science and as an Art and as both
According to the nature of management, there is a controversy that whether management is a
science or an art. This controversy is very old & is yet to be settled. It should be noted that,
learning process of science is different from that of art. Learning of science includes principles
while learning of art involves its continuous practice.
Management as a Science
Science is a systematic body of knowledge relating to a specific field of study that contains
general facts which explains a phenomenon. It establishes cause and effect relationship between
two or more variables and underlines the principles governing their relationship. These principles
are developed through scientific method of observation and verification through testing.
Science is characterized by following main features:
1. Universally accepted principles – Scientific principles represents basic truth about a
particular field of enquiry. These principles may be applied in all situations, at all time & at all
places. E.g. – law of gravitation which can be applied in all countries irrespective of the time.
Management also contains some fundamental principles which can be applied universally like
the Principle of Unity of Command i.e. one man, one boss. This principle is applicable to all type
of organization – business or non-business.
2. Experimentation & Observation – Scientific principles are derived through scientific
investigation & researching i.e. they are based on logic.
E.g. the principle that earth goes round the sun has been scientifically proved. Management
principles are also based on scientific enquiry & observation and not only on the opinion ofHenry Fayol. They have been developed through experiments & practical experiences of large
no. of managers.
E.g. it is observed that fair remuneration to personal helps in creating a satisfied work force.
3. Cause & Effect Relationship – Principles of science lay down cause and effect
relationship between various variables.E.g. when metals are heated, they are expanded. The
cause is heating & result is expansion.
The same is true for management; therefore it also establishes cause and effect relationship.
E.g. lack of parity (balance) between authority & responsibility will lead to ineffectiveness. If
you know the cause i.e. lack of balance, the effect can be ascertained easily i.e. ineffectiveness.
Similarly if workers are given bonuses, fair wages they will work hard but when not treated in
fair and just manner, reduces productivity of organization.
4. Test of Validity & Predictability – Validity of scientific principles can be tested at any time
or any number of times i.e. they stand the time of test. Each time these tests will give same
result. Moreover future events can be predicted with reasonable accuracy by using scientific
principles.
E.g. H2 & O2 will always give H2O.
Principles of management can also be tested for validity.
E.g. principle of unity of command can be tested by comparing two persons – one having single
boss and one having 2 bosses. The performance of 1st person will be better than 2nd.
It cannot be denied that management has a systematic body of knowledge but it is not as exact as
that of other physical sciences like biology, physics, and chemistry etc. The main reason for the
inexactness of science of management is that it deals with human beings and it is very difficult to
predict their behaviour accurately. Since it is a social process, therefore it falls in the area of
social sciences. It is a flexible science & that is why its theories and principles may produce
different results at different times and therefore it is a behaviour science.Management as an Art
Art means application of knowledge & skill to get the desired results. An art may be defined as
personalized application of general theoretical principles for achieving best possible results. Art
has the following characters –
1. Practical Knowledge: Every art requires practical knowledge therefore learning of theory is
not sufficient. It is very important to know practical application of theoretical principles.
E.g. to become a good painter, the person not only should know about the different colour and
brushes but different designs, dimensions, situations etc to use them appropriately. A manager
can never be successful just by obtaining degree or diploma in management; he must have also
known how to apply various principles in real situations, by functioning as a manager.
2. Personal Skill: Although theoretical base may be same for every artist, but each one has his
own style and approach towards his job. That is why the level of success and quality of
performance differs from one person to another.
E.g. there are several qualified painters but M.F. Hussain is recognized for his style. Similarly
management as an art is also personalized. Every manager has his own way of managing things
based on his knowledge, experience and personality, that is why some managers are known as
good managers (like Aditya Birla, Rahul Bajaj) whereas others as bad.
3. Creativity: Every artist has an element of creativity in line. That is why he aims at producing
something that has never existed before which requires combination of intelligence &
imagination. Management is also creative in nature like any other art. It combines human and
non-human resources in an useful way so as to achieve desired results. It tries to produce sweet
music by combining chords in an efficient manner.
4. Perfection through practice: Practice makes a man perfect. Every artist becomes more and
more proficient through constant practice. Similarly managers learn through an art of trial and
error initially but application of management principles over the years makes them perfect in the
job of managing.
5. Goal-Oriented: Every art is result oriented as it seeks to achieve concrete results. In the same
manner, management is also directed towards accomplishment of pre-determined goals.
Managers use various resources like men, money, material, machinery & methods to help in the
growth of an organization.
Thus, we can say that management is an art therefore it requires application of certain principles
rather it is an art of highest order because it deals with shaping the attitude and behaviour of
people at work towards theS desired goals.Management as both Science and Art
Management is both an art and a science. The above mentioned points clearly reveal that
management combines features of both science as well as art. It is considered as a science
because it has an organized body of knowledge which contains certain universal truth. It is called
an art because managing requires certain skills which are personal possessions of managers.
Science provides the knowledge & art deals with the application of knowledge and skills.
Manager vs. Entrepreneur
Characteristic Entrepreneur Manager
Behavior Characterized by Desire for Control Delegation of Authority
Management Style One-Man Show Management Team
Driving Force Creativity - Innovation Establish and Preserve the
Status Quo
Organizational Growth Rapid Reaction Strategic Planning
Organization Structure Informal, Flexible Organized
Decision-Making Intuitive Collect Information and Seek
Advice
Definition of Aims In terms of "Vision" In Commercial Terms
Attitude to Money A By-Product Measure of Success
Attitude to Risk Calculated Risks Avoidance of Risks
Organizational Culture "Entrepreneurial Culture" "Management Culture"
Let's summarize the significant differences between the entrepreneur and the manager:
1. Behavioral Differences
The typical entrepreneur wants to "be in control" of his life (which is often the reason
why he started the business), of his business and especially of his employees.
The professional manager, on the other hand, enters a company which needs to delegate
authority, since it has reached the stage in its development where the entrepreneur can no
longer "do it all himself".
2. Management StyleThe entrepreneurial management style is very demanding, leaving very little room for
error, and none at all for actual failures, since in most cases the business is a "one man
show", even if there are other employees.
The professional manager, however, must be tolerant of failure (and see it as a basis for
learning) and develop an administrative team, since a basic assumption is that
responsibility in the organization must pass from the "all-knowing" entrepreneur to
people who still have to learn about the business.
3. The Moving Force
Entrepreneurial management is characterized by concepts such as "entrepreneurship",
"creativity", "innovation", and so on, indicators of the desire to create "something from
nothing".
Professional management is characterized by concepts such as "order", "organization",
"procedures", and so on, indicating the desire to organize and maintain what exists.
4. Growth
Entrepreneurial management is noted for its ability to react quickly and effectively to
new business opportunities. This ability is the foundation for rapid growth of the
company in its entrepreneurial stage.
Professional management is noted for medium and long term strategic planning, which
leads to controlled growth of the company during the process of establishment.
5. Organizational Structure
The entrepreneurial organization is characterized by its informal, flexible structure, which
allows it to adapt to changes required by its rapid growth.
Professional management, on the other hand, requires a formal and fairly rigid
organizational structure, which leaves no room for rapid reactions to business
opportunities, but protects the organization from sudden collapse.
6. Decision-Making
The entrepreneur usually makes decisions, even those of critical importance for his
business, on the basis of his own personal intuition and "gut feelings".
The professional manager makes decisions after collecting detailed information and
reaching operative conclusions, while relying on experts both from within and outside the
organization.
7. Definition of AimsThe entrepreneur describes his organization in terms of "vision", "dream" and "mission"
and manages to give his employees the feeling that they are working for a higher aim
than just marketing a product and/or service.
The professional manager describes the company aims in terms of market segments, yield
per worker and profitability.
8. Attitude toward Money
Although the accepted myth is that entrepreneurs are driven by the desire for power and
money, both theoretical and empirical studies have shown that typical entrepreneurs are
in fact driven by the desire for success rather than power. This means that, in the eyes of
most entrepreneurs, while money is a welcome by-product of their efforts, it is not the
reason for their efforts.
The professional business manager, on the other hand, looks at the business he manages
through "financial eyes" and defines its aims (usually in the short term only) purely in
financial terms.
9. Attitude toward Risk
The myths describe entrepreneurs as "wild risk-takers", although many studies have
shown that in fact the typical entrepreneur is very good at assessing risks.
On the other hand, the professional manager, who sees his task as strengthening and
maintaining the company, is naturally afraid of risks and tries to maintain the status quo.
10. Company Culture
The typical entrepreneur does not usually try to define a "culture" for the organization he
sets up, since in most cases he himself is the organization. The literature defines this
situation as "the entrepreneurial organizational culture", characterized by large doses of
charisma and "manipulativeness".
The professional manager does try to establish a well-defined company culture, based on
company values on one hand and commercial aims on the other.
Types of Managers
In organizations, there are generally three different levels of managers: first-level managers,
middle-level managers, and top-level managers. These levels of managers are classified in a
hierarchy of importance and authority, and are also arranged by the different types of
management tasks that each role does. In many organizations, the number of managers in every
level resembles a pyramid, in which the first-level has many more managers than middle-level
and top-level managers, respectively. Each management level is explained below in
specifications of their different responsibilities and likely job titles.Top-level managers
Typically consist of board of directors, president, vice-president, chief executive officers, etc.
These individuals are mainly responsible for controlling and overseeing all the departments in
the organization. They develop goals, strategic plans, and policies for the company, as well as
make many decisions on the direction of the business. In addition, top-level managers play a
significant role in the mobilization of outside resources and are for the most part responsible for
the shareholders and general public.
According to Lawrence S. Kleiman, the following skills are needed at the top managerial level.
Broadening their understanding of how factors such as competition, world economies,
politics, and social trends influence the effectiveness of the organization.
Middle-level managers
These personnel typically consist of general managers, branch managers, department managers.
These individuals are mainly responsible to the top management for the functioning of their
department. They devote more time to organizational and directional functions. Their roles can
be emphasized as executing plans of the organization in conformance with the company's
policies and the objectives of the top management, they define and discuss information and
policies from top management to lower management, and most importantly they inspire and
provide guidance to lower level managers towards better performance. Some of their functions
are as follows:
Designing and implementing effective group and intergroup work and information
systems.
Defining and monitoring group-level performance indicators.
Diagnosing and resolving problems within and among work groups.
Designing and implementing reward systems that support cooperative behavior.
First-level managers
Typically consist of supervisors, section officers, foreman, etc. These individuals focus more on
the controlling and direction of management functions. For instance, they assign tasks and jobs
to employees, guide and supervise employees on day-to-day activities, look after the quantity
and quality of the production of the company, make recommendations, suggestions, and
communicate employee problems to the higher level above, etc. In this level, managers are the
"image builders" of the company considering they are the only ones who have direct contact with
employees.
Basic supervision.
Motivation.
Career planning. Performance feedback.
Managerial Roles And Skills
Mintzberg defined ten management roles within three categories: interpersonal, informational,
and decisional.
Management is incorporated into every aspect of an organization and involves different roles and
responsibilities. Henry Mintzberg (1973), the Cleghorn Professor of Management Studies at
McGill University, defined ten management roles within three categories: interpersonal,
informational, and decisional.
Each of the three categories embraces the different roles.
Interpersonal
1. Figurehead: symbolic head; performs a number of routine duties of a legal or social
nature.
2. Leader: motivates and activates subordinates; performs staffing, training, and associated
duties.
3. Liaison: maintains a self-developed network of outside contacts and informers who
provide favors and information.
Informational
1. Mentor: seeks and receives a wide variety of special information (much of it current) to
develop a thorough understanding of the organization and environment; emerges as the
nerve center of internal and external information for the organization.
2. Disseminator: transmits information received from outsiders or from other subordinates
to members of the organization. Some information is factual; some involves
interpretation and integration of diverse value positions of organizational influences.
Disseminating what is of value, and how, is a critical informational role.
3. Spokesman: transmits information (plans, policies, results, etc.) within and outside of the
organization; serves as an expert on the organization's industry.Decisional
1. Entrepreneur: searches the organization and its environment and initiates improvement
projects to bring about change; supervises design of certain projects as well.
2. Disturbance Handler: takes corrective action when the organization faces important,
unexpected disturbances.
3. Resource Allocator: allocates the organization's resources; makes or approves of all
significant organizational decisions.
4. Negotiator: represents the organization at major negotiations.
A manager's job is never static; it is always dynamic. At any given time, a manager may carry out
some combination of these roles to varying degrees, from none of the time to 100 percent of the
time. Throughout an individual's working life, a person may hold various management positions
that call upon different roles.
No one person can be all things to all people. While these ten roles are highly useful in framing
organizational leadership, to expect one person to fill each role in a large organization is
impractical. Instead, astute hiring managers will hire people with one or two specific roles in
mind, thereby creating a team of managers capable of handling the wide variety of challenges in
the business world today.
The figure below indicates the skills managers must have and the degree of importance for each
level of managers.
Conceptual skills is the ability to analyze complex information. It enables managers to process
information about the internal/external environment of the organization and determine its
implications. Top level managers need to have strong conceptual skills if they are to effectively
accomplish goals.
Human skills is the ability to work effectively with people. It involves motivating and
disciplining employees, monitoring performance, providing feedback, improving communication
and instructing employees. Human skills are most important for middle managers as these
managers must coordinate efforts of the members in his group as well as other work groups
within the organization.Technical skills is the knowledge and the ability to use tools, techniques and procedures that are
specific to their particular field. Technical skills tend to be most important for first line managers
as they must have the knowledge and the "know-how" to ensure that the products and services of
their organization are delivered to customer.
EVOLUTION OF MANAGEMENT THOUGHT
The practice of management is as old as human civilization. The ancient civilizations of
Egypt (the great pyramids), Greece (leadership and war tactics of Alexander the great) and
Rome displayed the marvelous results of good management practices.
The origin of management as a discipline was developed in the late 19th century. Over
time, management thinkers have sought ways to organize and classify the voluminous
information about management that has been collected and disseminated. These attempts at
classification have resulted in the identification of management approaches. The approaches of
management are theoretical frameworks for the study of management. Each of the approaches
of management are based on somewhat different assumptions about human beings and the
organizations for which they work.
The different approaches of management are
a) Classical approach,
b) Behavioral approach,
c) Quantitative approach,
d) Systems approach,
e) Contingency approach.
The formal study of management is largely a twentieth-century phenomenon, and to some
degree the relatively large number of management approaches reflects a lack of consensus
among management scholars about basic questions of theory and practice.
a) THE CLASSICAL APPROACH:
The classical approach is the oldest formal approach of management thought. Its roots pre-date
the twentieth century. The classical approach of thought generally concerns ways to manage
work and organizations more efficiently. Three areas of study that can be grouped under the
classical approach are scientific management, administrative management, and bureaucratic
management.(i) Scientific Management.
Frederick Winslow Taylor is known as the father of scientific management. Scientific
management (also called Taylorism or the Taylor system) is a theory of management that
analyzes and synthesizes workflows, with the objective of improving labor productivity. In other
words, Traditional rules of thumb are replaced by precise procedures developed after careful
study of an individual at work.
(ii) Administrative Management.
Administrative management focuses on the management process and principles of
management. In contrast to scientific management, which deals largely with jobs and work at
the individual level of analysis, administrative management provides a more general theory of
management. Henri Fayol is the major contributor to this approach of management thought.
(iii) Bureaucratic Management.
Bureaucratic management focuses on the ideal form of organization. Max Weber was
the major contributor to bureaucratic management. Based on observation, Weber concluded
that many early organizations were inefficiently managed, with decisions based on personal
relationships and loyalty. He proposed that a form of organization, called a bureaucracy,
characterized by division of labor, hierarchy, formalized rules, impersonality, and the selection
and promotion of employees based on ability, would lead to more efficient management. Weber
also contended that managers' authority in an organization should be based not on tradition or
charisma but on the position held by managers in the organizational hierarchy.
b) THE BEHAVIORAL APPROACH:
The behavioral approach of management thought developed, in part, because of
perceived weaknesses in the assumptions of the classical approach. The classical approach
emphasized efficiency, process, and principles. Some felt that this emphasis disregarded
important aspects of organizational life, particularly as it related to human behavior. Thus, the
behavioral approach focused on trying to understand the factors that affect human behavior at
work.
(i) Human Relations.
The Hawthorne Experiments began in 1924 and continued through the early 1930s. A
variety of researchers participated in the studies, including Elton Mayo. One of the major
conclusions of the Hawthorne studies was that workers' attitudes are associated with
productivity. Another was that the workplace is a social system and informal group influence
could exert a powerful effect on individual behavior. A third was that the style of supervision isan important factor in increasing workers' job satisfaction.
(ii) Behavioral Science.
Behavioral science and the study of organizational behavior emerged in the 1950s and
1960s. The behavioral science approach was a natural progression of the human relations
movement. It focused on applying conceptual and analytical tools to the problem of
understanding and predicting behavior in the workplace.
The behavioral science approach has contributed to the study of management through
its focus on personality, attitudes, values, motivation, group behavior, leadership,
communication, and conflict, among other issues.
c) THE QUANTITATIVE APPROACH:
The quantitative approach focuses on improving decision making via the application of
quantitative techniques. Its roots can be traced back to scientific management.
(i) Management Science (Operations Research)
Management science (also called operations research) uses mathematical and statistical
approaches to solve management problems. It developed during World War II as strategists
tried to apply scientific knowledge and methods to the complex problems of war. Industry began
to apply management science after the war. The advent of the computer made many
management science tools and concepts more practical for industry
(ii) Production And Operations Management.
This approach focuses on the operation and control of the production process that
transforms resources into finished goods and services. It has its roots in scientific management
but became an identifiable area of management study after World War II. It uses many of the
tools of management science.
Operations management emphasizes productivity and quality of both manufacturing and
service organizations. W. Edwards Deming exerted a tremendous influence in shaping modern
ideas about improving productivity and quality. Major areas of study within operations
management include capacity planning, facilities location, facilities layout, materials requirement
planning, scheduling, purchasing and inventory control, quality control, computer integrated
manufacturing, just-in-time inventory systems, and flexible manufacturing systems.
d) SYSTEMS APPROACH:
The simplified block diagram of the systems approach is given below.The systems approach focuses on understanding the organization as an open system
that transforms inputs into outputs. The systems approach began to have a strong impact on
management thought in the 1960s as a way of thinking about managing techniques that would
allow managers to relate different specialties and parts of the company to one another, as well
as to external environmental factors. The systems approach focuses on the organization as a
whole, its interaction with the environment, and its need to achieve equilibrium
e) CONTINGENCY APPROACH:
The contingency approach focuses on applying management principles and processes
as dictated by the unique characteristics of each situation. It emphasizes that there is no one
best way to manage and that it depends on various situational factors, such as the external
environment, technology, organizational characteristics, characteristics of the manager, and
characteristics of the subordinates. Contingency theorists often implicitly or explicitly criticize
the classical approach for its emphasis on the universality of management principles; however,
most classical writers recognized the need to consider aspects of the situation when applying
management principles
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