Unit- 1

Notes:1

MANAGEMENT
DEFINITIONS OF MANAGEMENT
 Management is an art of getting things done though people – Mary Parker Follet
 To manage is to forecast and plan, to organize, to command, to co-ordinate and to
Control – Henry Fayol
 Management is the art of knowing exactly what you want your men to do and
then seeing that they do it in the best and the cheapest way. – F.W Taylor
 Management is the creation and maintenance of an internal environment in an
enterprise where individuals working in groups can perform efficiently and
effectively towards the attainment of group goals, it is an art of getting the work done
through and with people in formally organized groups – Koontz and O Donnel

NATURE OF MANAGEMENT
1. It is a Universal Activity: Management is relevant in every sphere of activity. It is
relevant in army, government, private household work etc. the work can be done in a
more systematic manner with the application of the techniques of management. The
material and human resources can be effectively handled and the goal can be attained
with maximum efficiently.
2. It is goal oriented: Management focuses attention on the attainment of specific
objectives. For Ex. a business may aim for a particular level of sales. This can be
achieved by proper forecast of sales by planning production by fixing the targets.
3. It is an Intellectual activity: the practice of management requires application of mind
and intelligence. Every work needs to be properly planned and Execute work has to be
assigned to different Individuals and responsible have to be fixed on them. Ex. in a
manufacturing unit production finance and marketing are the important activities

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 performed. It has to work in proper co-ordination with the other departments. Then only
objectives of the firm can be achieved.
4. It is a process: it is process consisting of various stages/ functions. Planning is the
starting point of management and control is its last stage.
5. Management is both art and science: the practice of science needs knowledge of theory
and formulae. But the practice of art requires skill management is social science. It
focuses attention on the behavior of individuals and groups. The theoretical knowledge
may not help always that time they require skill. Ex if the workers in a factory demand
more pay and threaten to go on strike if their demand is not considered. Here the skill of
the manager will help to avert the strike then it’s theoretical.
6. It is a social process: management deals with the behavior of individuals and groups. In
a work place individuals work as a team. The behavior of an individual is bound to be
different while he is part of a group Eg.: an individual worker may be forced to join a
strike program because of the union.
7. It is an on going activity: it is a continuous process planning, organizing etc have
unlimited use. Management will exist as long as there are human activities.
8. It is intangible: it is invisible cannot be seen. But it can be felt.
9. Management is a Profession: like medical, law and engineering, management has also
come to be recognized as a profession.

Notes:2
Importance of Management:
1. Achievement of Group Goals: Management enables an enterprise to achieve its desired
objectives through proper planning and control. It decides what should be done and how.
It lays down the long term and short term goals keeping in mind the resources of the
enterprise.
2. Optimum utilization of resources: Materials, machines and money are the physical
factors of production. The efficient use of these resources depends upon the efficiency
and motivation of workers. Management makes the workers efficient and motivate
through training, supervision and inspiring leadership. Managers guide and motivate
workers towards best performance

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 3. Fulfillment of social obligations: Sound management monitors the environment of
business and makes necessary changes in business policies and practices. So as to keep
the customers and workers satisfied.
4. Stability of Management it ensures the survival of an organization in a fast changing
environment. It coordinates the activities of different departments in an organization and
monitors team spirit amongst the personnel.
5. Human development Management improves the personality and caliber of people to
raise their efficiency and productivity. A good manager serves as a friend and guide to his
subordinates. He provides vision and confidence.
6. Meets the challenge of change Managers maintain a dynamic equilibrium b/w and
enterprise and its development through innovation and creativity.
7. Integrate various interests: Each person has his own interests. These interests are
different in nature. Management takes steps to integrate various interests to achieve the
objectives of an organization
8. Coordination and team spirit: All the activities of business are grouped into department
wise; management coordinates the activities of different departments and establishes
team spirit to achieve the objectives.
Notes:3

FUNCTIONS OF MANAGEMENT / MANAGEMENT PROCESS

1. Planning: Planning means forecasting or predicting the future activity in a specific
manner or structure. It is the basic function and essential for all the organization.
2. Organizing: It is collection or joining of all the resources available within the
organization and outside, in order to achieve the organizational goal with efficiency.
3. Staffing: It involves appointing the right man for the right job at the right time. The
management is to analyze the human resource, see if he is suitable for the job and
accordingly allocate the work in the organization.
4. Directing: It is showing the correct path or correct way to achieve the organizational goal
within the stipulated time.
5. Controlling: Controlling as a function involves regulating the person or examining the
person whether he is working in the right way or not. In order to achieve the common
goal as efficient as possible.
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 6. Coordinating: It is a type of support function. It involves accumulating the work to
achieve the task.
7. Budgeting: It means allocation of the resources. It involves financial planning for the
future activities.
8. Reporting: It is a statement showing the various activities to the top management. It
shows the status of the work done.

Notes :4

LEVELS OF MANAGEMENT
A) Top Level Management: the top level management derives its powers and authority
directly from the owners of the enterprise. They are Board of Directors, Chairman,
Managing Directors, COO, CEO etc.
Functions
1. They are setting out the fundamental objectives of the enterprises.
2. They frame major policies for the business.
3. They design the strategies for the attainment of organizational objectives.
4. They appoint key managerial personnel for the middle management.
5. Develop master plans in areas of finance, human resource, technology, marketing and
other functions of organization.
6. To represent the business outside, particularly in discussing business problems with the
Government trade association and so on.
B) Middle Level Management: they are departmental managers (Head of Department) like
Production managers, Marketing managers, Personnel managers, Finance manager,
Regional manager and other managers.
Functions:
1. They play the role of a linking pin between top level management and the lower level
management.
2. They explain the objectives, strategies, policies laid down by the top level management to
the low level management.
3. Communicates the problems, suggestions and view points of the lower management to
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 the top management.
4. They prepare the departmental plans.

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 5. They submit reports on the performance at various departments to the top management.
6. They offer suggestions and recommendations to the top management for the betterment
of overall management of the enterprise.
C) Lower Level of Management: It is called as operating level management or supervisory
level. This is the level where actual operational work for the enterprise in the areas of
production, finance, marketing, personnel, etc is performed by workers. This level of
management consists of manger like supervisors, the foreman, the sales officers the
accountants the sectional officers.
Functions:
1. They do day to day operational planning in view of the instructions given by the middle
level management.
2. They provide necessary instructions to operators for the best performance of their
assigned jobs.
3. They supervise the work of operators to ensure that their performance is in accordance
with the standards laid down in plans.
4. They submit reports on the performance of operating staffs to the middle management.
5. They operate as a channel of communication between the middle management and the
operators.
6. The problems, suggestions and recommendations of operators are informed by them to
the middle management.
SKILLS OF MANAGEMENT
1. Technical Skills
2. Human Skills
3. Conceptual Skills
 Technical Skills: Technical skill is an imperative skill for managers at the lower level of
management. These people who guide and supervise work of operators under their
subordination. E.g. Production manager must know the type of raw materials to be used, the
proportion the production process and the knowledge of handling the various m/c.
 Human skills: The ability to tactfully deal with human beings and mould their behavior at
work in the desired manner to help attain the common objectives of the enterprises most

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 effectively and efficiently. It requires an understanding of human behavior and it is necessary
for motivating people.
 Conceptual Skills: It is concerned with concepts or ideas. Conceptual means ability to view
the enterprise as whole in totality. To analyze the implications of relevant external
environmental factors economic, social, political, technological etc. for the successful
functioning of the enterprise.
CHARACTERISTICS OF QUALITY MANAGERS
Manager is a person who has the ability or strength to coordinate, motivate and guide all
the personnel working under him so as to make sure they attain the organizational goal in the
most efficient manner possible.

Notes:5
Qualities of a Good manager
1. Good Education
2. Technical Knowledge
3. Personality
4. Communication skills
5. Honesty
6. Positive thinking
7. Control Management
8. Motivation
9. Guide
10. Leadership qualities
11. Coordinate
12. Decision making (planning, forecasting)
13. Innovative
14. Good analysis
15. Risk taking

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Notes:6

ROLES OF A MANAGER
Mintzberg has identified ten roles of a manager which are grouped into three categories.
1. Interpersonal Roles
a) Figure head : Manager performs symbolic duties required by the status of his office,
making speeches, bestowing honors, welcoming official visitors; distributing gifts to retiring
employees are Examples of such ceremonial and social duties
b) Leader : The manager relationship with his own subordinates. The manager sets an
Example legitimizes the power of subordinates and brings their needs in accord with
those of his organization.
c) Liaison: It describes a manager’s relationship with the outsiders Eg.
Government, industry groups

2. Information Roles
a) Monitor: Seeks and collects information to obtain thorough understanding
of organization and environment Eg. Reading periodicals
b) Disseminator: Transmits information received from outsiders or insiders to
other organization members Eg. forwarding mail.
c) Spokes man: Transmits information to outsiders on organization plans,
Policies, actions Eg. board meetings , handling mail.
3. Decisional roles
a) Entrepreneur: an initiate change adapting to the environment and
supervises Design of organization. Improvement projects as opportunities
arise.
Prepare strategies
B) Disturbance handler: Responsible for corrective action when organization
faces unexpected crisis.
c) Resources allocator: responsible for allocation of human monetary and materials
resources Eg. scheduling , requests.
D) Negotiator: Responsible for representing the organization in bargaining
and negotiations with others.

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Notes:7

TAYLOR’S SCIENTIFIC MANAGEMENT THEORY

F.W. Taylor : He is known as the father of scientific management. He started his career as
apprentice (machinist) in a small machine shop in USA in 1875 and by his handwork he could go
up to chief engineer in the organization. Acc to him management “the art of knowing exactly
what you want your meant to do and seeing that they do it in the best and the cheapest way”
ELEMENTS AND TOOLS OF SCIENTIFIC MANAGEMENT

 Separation of planning & doing: Taylor emphasized the separation of planning aspect from
actual doing of the work. In other words planning should be left to the supervisor and the
worker should concentrate only operational work.
 Functional foremanship: Taylor introduced the concept of functional foremanship based on
specialization of functions. In this system, eight persons are involved to direct the activities
of workers. Out of these four persons are concerned with planning viz., route clerk,
instruction card clerk, time and cost clerk and disciplinarian. The remaining four persons are
concerned with doing aspect of the job, viz., speed boss, inspector, gang boss and
maintenance foreman. It is against to the principle of unity of command.
o Route clerk: his job is to determine the sequence of operations to be performed in
any work.
o Instruction card clerk: he will prepare the necessary instructions pertaining to the
work and accordingly the workers will perform their duties.
o Time and Cost Clerk: he will frame the timetable for doing the various jobs. He
will also keep the necessary cost records.
o The persons who will work in the factory are as follows.
 Gang Boss: his duty is to keep all the materials and tools ready so that the
workers can start their work without any delay.
 Speed boss: he will ensure that each job is done well in time
 Repair Boss: he will keep all the tools and machines in the factory in perfect
condition.
 Inspector: his duty is to ensure that the work is done in accordance with
standard laid down by the planning department.
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  Disciplinarian: to coordinate the work of all the seven persons mentioned
above.
 Job Analysis: It is useful to find out the one best way of doing the things. The best way of
doing a job is one which requires the least movements, consequently less time and cost. The
best way of doing the thing can be determined by taking up time –motion - fatigue studies.
o Time study involves the determination of time a movement takes to complete.
o Motion study involves the study of movements in parts which are involved in doing
a job and thereby eliminating the wasteful movements.

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 o Fatigue study shows the amount and frequency of rest required in completing the
work. Thus, job analysis identifies the fair amount of a day’s work requiring certain
movements and rest periods to complete it.
 Standardization: As far as possible, standardization should be maintained in respect of
instruments and tools, period of work, amount of work, working conditions, cost of
production etc.,. These things should be fixed in advance on the basis of job analysis and
various elements of costs that in performing a work.
 Scientific Selection and Training of Workers: A worker should be given work for which
he is physically and technically most suitable like, education, work experience, aptitude,
physical strength etc.
 Financial Incentives: Financial incentives can motivate workers to put in their maximum
efforts. If provisions exist to earn higher wages by putting in extra effort, workers will be
motivated to earn more.
 Economy: The economy and profit can be achieved by making the resources more
productive as well as by eliminating the wastages.
7. Mental Revolution: Scientific management depends on the mutual co-operation between
management and workers. For this co-operation, there should be mental change in both
parties from conflict to co-operation.
Notes:8
PRINCIPLES OF SCIENTIFIC MANAGEMENT:
 Replacing rule of thumb with Science: scientific management requires scientific study and
analysis of each element of a job in order to replace the old rule of thumb method. Decisions
should be made on the basis of facts rather than opinions and beliefs. Ex. a school
admission.
 Harmony in group action
Scientific management enables efficient workers to earn more as payment is linked to output.
As the management is also benefited as a result of increased output, there exists harmonies
relationship between the workers and the management.
 Cooperation
Management can expect higher profits only if the workers work with maximum efficiency
than the management comes forward recognizes their efficiency and reward them.
 Maximum Output
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 More output enables the workers to earn more remuneration this
both the management and the workers are interested in maximizing
protection under scientific management.
 Development of workers
The workers should be selected and trained in accordance with the
requirements of the jobs. Placement of workers will be done based
on their capacities. Training enables the workers to perform their
duties with maximum efficiency.

Notes :9
HENRY FAYOL (1841-1925) GENERAL PRINCIPLES OF MANAGEMENT
1. Division of work: The total work to be done is divided into small
parts, each entrusted to a particular individual. As each individual
performs only a particular activity, he becomes specialist in due
course.
2. Authority and Responsibility: Authority is the official right of the
manager. It comes to him by virtue of his official position.
Responsibility is the duty on the part of a subordinate to account for
the work done by him.
3. Discipline: Fayol says that employees must follow the discipline by
being obedient, by applying themselves fully in the task undertaken by
being energetic and leader must be efficient to enforce discipline.
4. Unity of Command: An employee should receive orders from one
superior only and is accountable to him alone. If there are two
superiors for an employee he will not know whom he should report to
and whose orders he should carry out first.
5. Unity of direction: Each group of activities having the same
objective should have one head and one plan, the efforts of all the
members of departments must be directed towards the attainment of
that departmental target.
6. Subordination of Individual interest to common interest: The
interest of the individual is should be based on common interest. This

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should be maintained by constant supervision and fair agreement.
7. Remuneration of Personnel: Remuneration payable to the
employees should be fair and should give maximum satisfaction to
both the employees and the employers. It should be based on cost of
living, financial position of the company etc.
8. Centralization: The authority at a particular place is centralization
and dispersal of authority in different places of the organization is
known as decentralization. It is based on the size of the organization.

9. Scalar chain: it is chain of superiors ranging from the highest to the

lowest level in the organization. Every communication should follow
the prescribed line of authority.

Gang Plank
If E wants to communicate anything to I, it will be route through
DCBAFGH and if I wants to convey any information to E, it will pass
through HGFABCD. In such an arrangement there is scope for delay.
So to avoid delay E and I may establish direct contact with each other
after obtaining permission from their respective superior namely D &
H.
10. Order: two types to order, material order and social order.
Material order means everything in its place, in order to avoid loss of
material. Social order means the selection of the right man for the right
job.
11. Equity: it ensures fairness, kindness and justice in the treatment of
employees by their managers. The managers shall be impartial in their
dealings with their subordinates.
12. Stability of Tenure of Personnel: it means that an employee shall
not be shifted unnecessarily from one job to another. An employee
should be given enough opportunity to learn every aspect of his work
only then he will become an expert in his time of work.
13. Initiative: according to him the freedom to think and act is what

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initiative is. An employee who has the freedom to think and act in an
organization will show greater interest in his work and this will lead to
a higher level of job satisfaction.
14. Espirit De Corps: Union is strength, team spirit and co-operation
among the members of an organization are essential for its success.
Notes:10

ELTON MAYO: HAWTHRONE EXPERIMENTS

Illumination Experiments, Relay assemble test room Experiments,
Interview programme, Bank wiring group observations
The Hawthorne experiments were conducted in four stages. These are given
below:
1. Illumination Experiments: the main objective of the
illumination experiments was to study the effect of the quality
of lighting in the workroom on the efficiency of the workers.
For this purpose the workers were divided into two groups. One
group of workers was made to work in a room where lighting
remained constant. The other group was made to work in a
room where lighting was varied. The experiments revealed the
production increased in both the rooms and therefore the
quality of lighting had no impact on the efficiency level of the
workers.
2. Relay Assembly Test room experiments – these experiments
were conducted in an assembly department where telephone
relay units were assembled. The object of the experiments was
to ascertain the relationship between working conditions and
productivity. Those employed in the department were all
women and the work was repetitive one. A group of six women
workers was made to take in a separate room. As they were
doing their work a series of changes were introduced during the
period of investigation. A new financial incentive plan was
introduced to the group that assured additional remuneration for

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 an each worker depending on the collective performance of the
group. The rest periods during week were also gradually
increased. The workers were also permitted to leave an hour
earlier. They were also given one full day holiday (on

Saturdays). The study revealed that output of each individual

and also that of the group increased due to the changes
introduced.
3. Interview program: a massive interview programmed was
conducted covering more than ten thousand workers to find out
their views on their jobs, working conditions , supervision etc.
the interview programmed revealed that the morale of the
workers improved as they had the satisfaction that their views
were heard. The complaints of the workers were not objective
statements of facts. They were reflections of a workers
personal feelings and sentiments.
4. Bank wiring Group observations- the main aim of the study
here is to find out the influence of the group on a worker to
restrict his output in spite of the existence of incentives for
higher output. The working conditions were not altered for the
sake of the investigation. The group consisted of fourteen
workers and its task was to attach wires to the telephone
equipment, soldering and to check the quality of work. The
incentives given for the work were attractive. But neither an
individual worker not he group as a whole made an attempt to
increase output. The group also did not let any worker exceed
his output.
Findings of Hawthorne Experiments: the following are the
findings of the Hawthorne Experiments:
1. A social factors such as recognition, sense of belongings etc,
influence production more than physical factors.
2. Monetary incentives do not induce a worker, working in a

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group to increase output. He cares more for the friendship and
respect of his co-workers.
3. Workers do not react as individuals but as members of a group. No
workers want to incur the ill will or displeasure of his co – workers.
4. An individual in a group is a accepted as its leader by the other
members. Such an informal leader is able to guide and influence the
co-workers.
5. What encourages worker more is the feeling that his views and
suggestions are heard by the management.

Notes: 11

MANAGEMENT AS AN ART AS WELL AS SCIENCE

Management as a Science
1. Science is a systematized body of knowledge pertaining to a particular field
of inquiry.
2. It contains underlying principles and theories developed
through continuous observations experimentation and research
3. The principles have universal applicability they can be applied with logic.
4. The organized body of knowledge can be taught and learnt in
the classroom and outside, physics, mathematics etc are
examples
It is a science because the principles and theories are now
available in every area of management.
Management as an Art:
Art involves the practical application of personal skills and
knowledge to achieve concrete results. Art is a personalized process
and every artist has his own style. Art is creative and success of an
artist is measured by the results he achieves. Art is practice based over
a long period of time Eg. A carpenter making furniture out of wood,
goldsmith shaping gold into ornaments are Examples.
Management is an art because

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1. A Manager applies his knowledge and skills to co-ordinate
the efforts of his people like any other artist
2. Management seeks to achieve concrete results Eg. profits,
growth, social service etc in a given situation.
3. Every manager adopts his own approach towards problems
depending upon his perception and the environmental
conditions.
4. Management requires a sufficiently long period of
Experience in managing. The managerial art can be refined
through continuous practice.

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