MANAGEMENT

Unit 1

Definition
Management is the accomplishment of results through the
efforts of the other people - (Lawrence)
Management is the art of getting things done through &
with the people in formally organized groups -(Koontz H)
Management is a process of planning, organizing,
actuating & controlling to determine the objectives &
accomplish the objectives by the use of people &
resources - (Terry G)

Meaning
The attainment of organizational
goals in an efficient & effective
manner through planning,
organizing, leading & controlling
organizational resources.

Manpow
er
Material
s

Money

Managem
ent

Methods

Machiner
y

Nature and Characteristics of

Management
The salient features which highlight the nature of
management are as follows:
Management is intangible
Management is goal-oriented
Management is universal
Management is a social process
Management is group activity
Management is dynamic
Management is science as well as art
Management is multidisciplinary
Management is continuous process

Scope & Functional areas of

management

The field of management is very wide. Basically, it

refers to three distinct ideas. According to Herbison
& Myers, Management may be understood as
An economic resource
A system of authority
A class or elite
The operational areas of business management may
be classified into the following categories:
Production Management:
Marketing Management
Financial Management
Personnel Management

 Production Management:

(a) designing the product

(b) location and layout of plant and building
(c) planning and control of factory operations
(d) operation of purchase and storage of materials
(e) repairs and maintenance
(f) inventory cost and quality control
(g) research and development etc.

Marketing Management:
(a) marketing research to determine the needs and
expectation
of consumers
(b) planning and developing suitable products
(c) setting appropriate prices
(d) selecting the right channel of distribution, and
(e) promotional activities like advertising and salesmanship to
communicate with the customers.

 Financial Management

(a) estimating the volume of funds required for both long-term

and short-term needs of business
(b) selecting the appropriate source of funds
(c) raising the required funds at the right time
(d) ensuring proper utilization and allocation of raised funds so
as to maintain safety and liquidity of funds and the creditworthiness
and profitability of business, and
(e) administration of earnings

Personnel Management

(a) manpower planning

(b) recruitments,
(c) selection,
(d) training
(e) appraisal,
(f) promotions and transfers,
(g) compensation,
(h) employee welfare services, and
(i) personnel records and research, etc.

Role of Management
Interpersonal Roles
The ones that, like the name suggests, involve people
and other ceremonial duties.
-Leader Responsible for motivation , staffing,
communication & directing.
- Figurehead The symbolic head of the
organization. Some duties of a ceremonial nature
like employee wedding.
-Liaison Maintains the communication between
all contacts and informers that compose the
organizational network. Developing external link

Cont.
Informational Roles
Related to collecting, receiving, and disseminating
information.
-Monitor Personally seek and receive
information, to be able to understand the
organization.
-Disseminator Transmits all import
information received from outsiders to the
members of the organization.
-Spokesperson Transmitting information to
people outside the organization.

 Decisional Roles
Roles that revolve around making choices.
-Entrepreneur Seeks opportunities. Basically they
search for change, respond to it, and exploit it.
-Negotiator Represents the organization at major
negotiations.
-Resource Allocator Makes or approves all
significant decisions related to the allocation of
resources.
-Disturbance Handler Responsible for corrective
action when the organization faces disturbances.

Levels of Management
In a large organization, three levels of
management are usually Identified.
Top level management
Middle level management &
The lower level management

Continue
The functions performed by top managers, middle
managers & lower level managers, respectively
may be briefly stated thus.
Top Management:
Determines objectives & policies.
Designs the basic operating & financial structure
of an organization
Provides guidance & direction.
Lays down standards of performance.
Maintains good public relations.

Continue
Middle Management
Interprets & explains the policies framed
by the top.
Issues detailed instructions.
Participates in operating decisions.
Trains other managers.

Continue
Lower management

Plans day-to-day operations.

Assigns jobs to workers.
Provides supervision & control over work.
Arranges material tools & equipment.
Maintains discipline.

Point of
Distinction

Top level Management

Middle level
management

Lower level
management

Action
focus

A small group of policy

makers deciding the
fate of the
organization.

Act as a connecting
link b/w top & lower
level people &
manage activities of
other managers.
Functional
Heads(Marketing,
personnel manager
etc)& immediate
subordinates.
Middle managers are
less physically active
compared to
superiors. More
involved in paper work
& meetings. Their job
is less hectic, more
reflective& frustrating.

Direct contact with

employees.

Represent
a
tion

Nature of
work

CEO, Presidents,
Chairman, Managing
Director.
They generally spend
most of their time with
peers, outsiders & to a
lesser extent,
subordinates. Their
schedule is typically
hectic.

Section head,
supervisor, Firstline manager etc.

Physically active,
experience
frequent
interruption, spend
most of their time
with subordinates
& peers caring for
monetary
problems.

Management as a Science, Art or

Profession Management &
Administration

Management as a Science
Science means a systematic body of knowledge pertaining to a
specific field of study. It contains general principles and facts which
explains a phenomenon. These principles establish cause-andeffect relationship between two or more factors. These principles
and theories help to explain past events and may be used to
predict the outcome of actions. Scientific methods of observations,
and experiments are used to develop principles of science. The
principles of science have universal application and validity.
Thus, the essential features of science are as follows:
(i) Basic facts or general principles capable of universal application
(ii) Developed through scientific enquiry or experiments
(iii) Establish cause and effect relationships between various
factors.
(iv) Their Validity can be verified and they serve as reliable guide
for predicting future events.

Management as a Art
Art implies the application of knowledge and skills
to bring about the desired results.
The essential elements of arts are:
(i) Practical knowledge
(ii) Personal skill
(iii) Result oriented approach
(iv) Creativity
(v) Improvement through continuous practice

Management as a Profession
A profession may be defined as an occupation that
requires specialized knowledge and intensive academic
preparations to which entry is regulated by a
representative body. The essentials of a profession are:
A profession is calling that requires specialized knowledge
and often, long intensive academic preparation. The
essential features of profession are as follows:
(i) Well defined body of knowledge
(ii) Restricted entry
(iii) Service motive
(iv) Code of Conduct
(v) Representative professional association

Management as a Administration
The administration is that part of management which
is concerned with the installation and carrying out the
procedures by which the progress of activities is
regulated and checked against plans.
Administration is different from management:
(i) According to this view point, administration is a higher
level activity while management is a lower level
function. Administration is a determinative function
concerned with the determination of objectives and
policies while management is an executive function
involving the implementation of policies and direction
of efforts for the achievement of objectives.

 Administration is a part of management: Management is

the generic term for the total process of executive control
involving responsibility for effective planning and guidance
of operations of an enterprise. Administration is that part
of management which is concerned with the installation
and carrying out of the procedures by which the
programme is laid down and communicated and the
progress of activities is regulated and checked against
plans.
Administration and management are one: Management or
administration is the guidance, leadership and control of
the efforts of a group of individuals towards some common
goals. There is one common science which can be applied
equally well to public and private affairs.
The foregoing description reveals that both management and
administration are based upon the same set of principles and
functions.

Scientific Management
Frederick winslow Taylore (1856-1915) is
considered to be the Father of scientific
management.
He made several important contribution which
are classified under scientific management.
Time & motion study/ work study
Differential payment
Drastic reorganization of supervision
Scientific requirement of supervision
Intimate friendly cooperation b/w the
management & workers.

Objectives of Scientific
Management
To assess industrial & market tendencies & to regularize
continuous operation
To earn large profit from a given expenditure on man &
materials by minimizing waste work & waste movement
To provide healthy & safe working environment
To build character through proper work
To develop self realization & self satisfaction among
workers there by improving their morale
To give better opportunity for individual through
scientific methods of working
To ensure happier & social life workers
To promote justice among by treating them equal
To perform planned & balanced operation.

Administration Management
Henri Fayol (1841-1925) is considered the father of Administration
Management theory with focus on the development of board
administrative principle applicable to general & higher managerial
levels.
He also presented 14 principles of management as general guides to
the management process & management practices. Theses are under:
1. DIVISION OF WORK: Work should be divided among individuals and
groups to ensure that effort and attention are focused on special
portions of the task. Fayol presented work specialization as the best
way to use the human resources of the organization.
2. AUTHORITY: The concepts of Authority and responsibility are closely
related. Authority was defined by Fayol as the right to give orders and
the power to exact obedience. Responsibility involves being
accountable, and is therefore naturally associated with authority.
Whoever assumes authority also assumes responsibility.

3. DISCIPLINE: A successful organization requires the common effort of

workers. Penalties should be applied judiciously to encourage this
common effort.
.

4. UNITY OF COMMAND: Workers should receive orders from only

one manager.
5. UNITY OF DIRECTION: The entire organization should be
moving towards a common objective in a common direction.

6. SUBORDINATION OF INDIVIDUAL INTERESTS TO THE

GENERAL INTERESTS: The interests of one person should not
take priority over the interests of the organization as a whole.

7. REMUNERATION: Many variables, such as cost of living, supply

of qualified personnel, general business conditions, and success
of the business, should be considered in determining a workers
rate of pay.

8. CENTRALIZATION: Fayol defined centralization as lowering the

importance of the subordinate role. Decentralization is increasing
the importance. The degree to which centralization or
decentralization should be adopted depends on the specific
organization in which the manager is working.

9. SCALAR CHAIN: Managers in hierarchies are part of a chain like

authority scale. Each manager, from the first line supervisor to the
president, possess certain amounts of authority. The President
possesses the most authority; the first line supervisor the least.
Lower level managers should always keep upper level managers
informed of their work activities. The existence of a scalar chain and
adherence to it are necessary if the organization is to be successful.

10. ORDER:For the sake of efficiency and coordination, all materials

and people related to a specific kind of work should be treated as
equally as possible.
11. EQUITY: All employees should be treated as equally as possible.

12. STABILITY OF TENURE OF PERSONNEL: Retaining productive

employees should always be a high priority of management.
Recruitment and Selection Costs, as well as increased productreject rates are usually associated with hiring new workers.

13. INITIATIVE: Management should take steps to

encourage worker initiative, which is defined as
new or additional work activity undertaken
through self direction.

14. ESPIRIT DE CORPS: Management should

encourage harmony and general good feelings
among employees.

Bureaucracy
Definition: A structure with highly routine operating task
achieved through specialization, very formalized rules &
regulations, tasks that are grouped into functional departments,
centralized authority, narrow spans of control & decision
making that follows the chain of command.
Important features of Bureaucratic administration

There is insistence on following standard rules.

There is a systematic division of work
Principle of hierarchy is followed
It is necessary for the individual to have knowledge
of & Training in the application of rules
Administrative acts, decisions & rules are recorded
in writing.
There is rational personnel administration

Neo classical approaches / Human

Relation Movement
Taylor & Fayols management techniques did not
completely achieve the efficient production &
harmony at work place. The unpredicted &
irrational pattern of behavior of workers made the
task of managers more difficult. These 2 theories
did not consider or focus on human . Elton Mayo
conducted series of experiments at Western
Electric Company, which are commonly known as
Hawthrown experiments. They are broadly
classified as:

Illumination experiments
Relay assembly test room
Interviewing programme
Bank wiring test room

Neo-Classical Theory
In the 1920s & 1930s observers of business
management began to feel the incompleteness &
shortsightedness in the Scientific as well as
Administrative management movements.
The SM analyzed the activities of workers where
as AM writers focused attention on the activities
of managers.
The importance of man behind the machine, the
importance individual as well as group
relationships in the work place was never
recognized.
These approach are called neo classical because
they do not reject the classical concept but only

Human Relations movement

The Hawthorne experiments, thus, indicated that
employees were not only economic beings, but
social & psychological beings as well.
The man at work is motivated by more than the
satisfaction of economic needs.
The main emphasis should be on creating a
humanistic or informal organization in place of
mechanistic or formal organization.
Keith Davis, Human relations is motivating people
in organizations in order to develop teamwork
which effectively fulfills their needs & achieves
organizational goals.

The experiments in the following 4

parts

Illumination experiments
Relay assembly test room
Interviewing programme
Bank wiring test room

EARLY MANAGEMENT
APPROCHES

Scientific
Managem
ent

Administrat
ion
Managemen
t

Bureaucr
acy

Neo
classical
approach
es

Modern
Approaches

Quantitative Approach:
An approach that focuses on the use of quantitative
tools for managerial decision making.
The quantitative management viewpoint focuses on
the use of mathematics, statistics and information
aids to supports managerial decision making and
organizational effectiveness. Three main branches
have evolved: operations research, operations
management and management information
systems.

Behavioral Approach
Thebehavioral management theoryis often
called the human relations movement because it
addresses the human dimension of work.
Behavioral theorists believed that a better
understanding of human behavior at work, such
as motivation, conflict, expectations, and group
dynamics, improved productivity.
The theorists who contributed to this school
viewed employees as individuals, resources, and
assets to be developed and worked with not as
machines, as in the past. Several individuals and
experiments contributed to this theory.

Contingency Approach:
A view point which believes that appropriate
managerial action depends on the peculiar nature of
every situation.
This approach is a viewpoint which argues that
there is no best way to handle problems. Managerial
action depends on the particular situation. Hence,
rather than seeking universal principles that apply
to every situation, this theory attempts to identify
contingency principles that prescribe actions to take
depending on the situation.

Systems Approach to management:

Systems theory is an approach based on the
notion that organizations can be visualized as
systems. A system is a set of interrelated parts
that operate as a whole in pursuit of common
goals. Every system has four major components:
1. Inputs are the various resources required to
produce goods and services.
2. Transformation processes are the organization
managerial and technological abilities that are
applied to convert inputs into outputs.
3. Outputs are the products, services and other
outcomes produced by the organization.
4. Feedback is information about results and
organizational status relative to the environment.