Principles of

Management

By Sapna Suri
 Define Management

“ Management is the process of designing &

maintaining an environment in which
individuals, working together in groups,
efficiently accomplish selected aims.”
 Contd>>>>>>>
 As managers, people carry out the managerial
functions of planning, organizing, staffing,
leading, & controlling.
 Management applies to any kind of organization.
 It applies to managers at all organizational levels.
 The aim of all managers is the same: to create a
surplus.
 Managing is concerned with productivity, this
implies effectiveness & efficiency.
 Define Organizations :

“Organizations which can be defined as group of

people working together to create a surplus.”

 In business organizations, this surplus is profit.

 In nonprofit organizations, such as charitable
organizations, it may be the satisfaction of needs.
 Features of Management :

 Organized activities
 Existence of objectives
 Relationship among resources
 Working with & Through people
 Decision- Making
Management & Administration :

 Administration is above management

 Administration is part of management
 Management & administration are same
 Administration is above management :

 “administration is that phase of business

enterprise that concerns itself with the overall
determination of institutional objectives & the
policies necessary to be followed in achieving those
objectives.”
 “Management on the other hand, is an executive
function which is primarily concerned with
carrying out broad policies laid down by the
administration.”
 Difference between administration &
management :
Basis of Administration Management
difference
1 Level in Top level Middle & lower
organization
2 Major focus Policy formulation & Policy execution for
objective determination objective achievement
3 Nature of Determinative Executive
functions
4 Scope of Broad & conceptual Narrow & operational
functions
5 Factors affecting Mostly external Mostly internal
decisions
6 Employer- Entrepreneurs & owners Employees
employee relation
7 Qualities Administrative Technical
required
 Administration is a part of management :

 Management is a generic name for the total process of

executive control in industry or commerce.

 It is a social process entailing responsibility for the

executive & economic planning & regulation of the
operation of an enterprise, in the fulfillment of a given
purpose or task.

 Administration is that part of management which is

concerned with the installation & carrying out the
procedures by which it is laid down & communicated, &
the process of activities regulated & checked against plans.
Management & Administration are same
 Management & administration are synonymous; the
difference between the two terms lies mostly in their usage
in different countries or different fields of human
organizations.

 The distinction between the two terms may be drawn by

analyzing the origin of the word “administration”.

 The government often uses the word administrator,

instead of manager, to handle & manage its affairs
 The functions of management :
 Management can be break down into 5
managerial functions : planning,
organizing, staffing, leading & controlling

 Management as an essential for any

organization
Managerial functions as at different
organizational levels .

Top
level
Managers

Middle-level
Managers

First-level
Supervisors
 Functions of Top Management :
 To analyze, evaluate & deal with the external
environmental forces
 To establish overall long-term goals strategy & policies of
the company including the master budget to allocate
resources.
 To create an organizational framework consisting of
authority responsibility relationships.
 To appoint departmental & other key executives.
 To provide overall leadership to the company.
 Contd >>>>>>>

 To represent the company to the outside world, e.g. ; trade

associations, government, trade unions, etc.
 To exercise overall review & control on the company’s
operations &
 To coordinate the activities & efforts of different
departments.
 Functions of Middle Management :

 To interpret & explain the policies framed by top

management .
 To compile & issue detailed instructions regarding
operations.
 To maintain close contacts with operating results so as to
evaluate performance.
 To participate in operating decisions
 To cooperate among themselves so as to integrate or
coordinate various parts of a division or a department
Functions of Supervisory Management :

 To plan day-to-day production within the goals laid down

by higher authorities.
 To assign jobs to workers to make arrangements for their
training & development.
 To supervise & control workers & maintain personal
contact with charge hands.
 To arrange materials & tools & to maintain machinery.
 To advise & assist workers by explaining work procedures,
solving their problems, etc
 Importance of Management :

 Effective Utilization of Resources

 Development of Resources
 To Incorporate Innovations
 Integrating Various Interest Groups
 Stability in the Society
 Skills of Management :


Technical skills
 Human skills
 Conceptual skills
 Design skills
 Nature of Management :

 Management as an activity (or a process )

I. Planning
II. Organizing
III. Staffing
IV. Directing &
V. Controlling
 Contd >>>>>>>
 Management as a discipline
I. Management education is gaining popularity in the
present –day-times.
II. Scholars are interested in study of management
discipline, for purposes of conducting research studies
& making new & valuable contributions to this
discipline
III. Practitioners of management are much interested in a
study of management discipline
IV. Management discipline is growing into specialized
branches of management like production, marketing,
personnel, finance & several others
 Contd >>>>>..
 Management as a group ( class or team or society)
I. Micro-level : the economic results, in terms of the
attainment of common objectives, of the group-
endeavor
II. Macro-level : the survival, growth & prosperity of the
economy would be determined by the integrity,
competence & efforts of the total management class

 Management as an economic resource (or a factor of

production) . The economist has been all the time been
speaking of 4 factors viz , land, labour, capital &
enterprise.
 Management science or Art :
Management science or art differ in the following ways :
 Commonsense is vague as compared to scientific knowledge

 Flagrant inconsistency often appears in commonsense

whereas logical consistency is the basic of science

 Science systematically seeks to explain the events with

which it deals, commonsense ignores the need for

explanation
 The scientific method deliberately exposes claims to the

critical evaluation of experimental analysis, commonsense

method fails to test conclusions in any scientific fashion
 Management as profession :

“Profession is an occupation for which specialized

knowledge, skills & training are required & the use of
these skills is not meant for self-satisfaction but these are
used for larger interests of the society & the success of the
use of these skills is measured not in terms of money
alone.”
 Characteristics of profession :

 Existence of knowledge
 Acquisition of knowledge
 Professional association
 Ethical codes
 Service motive
Objectives/ Advantages OR Significance
of Management :
 Micro level

 Macro level
 Micro level
Enterprise level

 Maximum results with minimum inputs

I. Securing results in terms of production, sales, employee
satisfaction
II. Maintaining a balance between the internal
environment of the enterprise & the external
environment
 Contd >>>>>>>

 Ensuring maximum prosperity for both employers &

employees
I. Stability of employement
II. Satisfactory working conditions
III. Fair remuneration
IV. Job-satisfaction
V. Justice & human treatment

 Ensuring survival, growth & prestige of the enterprise

 Macro level

 To further the process of economic growth

 To ensure social welfare
 Generation of employment opportunities
 Helping maintain healthy industrial relations
 Conversion of challenges into opportunities
Role of Management Principles :

 To increase efficiency
 To crystallize the nature of Management
 To carry on Researches
 To attain social objectives
Evolution of Management Thought :

 Many different contributors of writers &

practitioners have resulted in different
approaches to management, & these make
up a “management theory jungle”
Taylor & scientific management :
 The concept of scientific management was introduced by
Frederick Taylor in USA in the beginning of 20th century.

 Scientific management was concerned essentially with

improving the operational efficiency at the shop floor level
 Contd >>>>>>>>

 “scientific management is concerned with

knowing exactly what you want men to do
& then see in that they do in the best &
cheapest way”
 Elements & Tools of scientific Management :

 Separation of planning & doing

 Functional Foremanship
 Job analysis
1. Time study involves the determination of time a
movement takes to complete
2. Motion study involves the study of movements in parts
which are involved in doing a job & thereby eliminating
the wasteful movements & performing only necessary
movements
 Contd >>>>>>>

3. Fatigue study shows the amount & frequency of rest

required in completing the work.
 Standardization
 Scientific selection & training of workers
 Financial Incentives
 Economy
 Mental Revolution
Principles of scientific management :

 Replacing rule of Thumb with science

 Harmony in Group Action
 Co-operation
 Maximum output
 Development of workers
 A more equal division of responsibility between
management & workers
 Contd >>>>>>>>>>>.

 Mental revolution on the part of management & workers

Merits of scientific Management :

 More production & higher profits

 Job-satisfaction
 Personality development
 Higher standard of living
 Fayol’s Administrative management :

 Henry Fayol was a french mining engineer who turned a

leading industrialist & a successful manager
 Perhaps the real father of modern operational
management theory is the French industrialist Henry
Fayol.
 Contd >>>>>>>
Fayol found that activities of an industrial organization
could be divided into 6 groups such as :
1. Technical (relating to production)
2. Commercial (buying, selling & exchange)
3. Financial (search for capital & its optimum use )
4. Security (protection of property & person)
5. Accounting (including statistics ) &
6. Managerial (planning, organization, command,
coordination, & control )
Managerial qualities & training :

 Physical (health, vigour , & address )

 Mental (ability to understand & learn, judgment, mental
vigour, & capability)
 Moral (energy, firmness, initiative, loyalty, tact, & dignity)
 Educational (general acquaintance with matters not
belonging exclusively to the function performed)
 Technical (peculiar to the function being performed) &
 Experience (arising from the work )
General Principles of Management :

 Division of work
 Authority & Responsibility
 Discipline
 Unity of Command
 Unity of Direction
 Subordination of Individual to General Interest
 Remuneration of Personnel
 Contd >>>>>.

 Centralization
 Scalar chain
 Order
 Equity
 Stability of Tenure
 Initiative
 Esprit de corps
 Role & Functions of a
manager & activities of
management
 Functions of Manager :

 Planning
 Organizing
 Staffing
 Directing
 Controlling
Nature Management Functions :

 Management functions are universal

 Management functions have interactive quality
 Although management process suggests a sequential
arrangement of functions its not always possible in the
performance of managerial functions strictly in a sequence
 Since there are many managerial functions often a
question arises which management function is more
important so that managers devote more time to that
 Diagram

Controlling Planning

directing organizing

Staffing
 Roles Of Manager :

 Interpersonal Role
 Informational Role
 Decisional Role
 Management Role :

Formal authority &status

+
Personal skills & characteristics

Decision roles
International roles
Interpersonal roles Entrepreneur
Monitor
Figurehead Disturbance
Disseminator
Leader Handler
spokesperson
Liaison Resource allocator
Negotiator
 Functions at Various Levels of
Management :
Management

Top Management Middle Management Supervisory Management

Board of Directors Departmental heads Senior supervisors

chairman Divisional heads Intermediate supervisors

Chief executive Sectional heads Front-line supervisors

 Top Management :

 Top management of an organization consists of board of

directors, chairman & chief executive officer
Functions of Board of Directors :
 A board is elected by the owners (shareholders) & is
responsible to them as their agent for managing the affairs
of the organization.

 Board has authority to manage subject to the limitations

imposed by the Memorandum of Association & Articles of
Association of the company as well as the provisions of the
Companies Act
 Board of Directors
Divided into 6 categories :
 trusteeship, function implying that board

must use the property of the company

 Determination of basic objectives & policies

of the organization
 Selection of top executives & determination

of overall organization structure

 Approval of financial matters like