Spring Semester 2019-20

“Management is a multipurpose organ that manages a

business, manages a manager and manages workers and
work”- Drucker

“Creation and maintenance of internal environment in an

enterprise where individuals working in a group
together can perform efficiently towards the attainment
of goals”- Koontz
From definitions it can be concluded that:
 Management involves getting things done
through others in an integrated and
coordinated manner to achieve the objectives
of the organization.
 It is mobilization of physical, human and
financial resources, and planning their
utilization for business operations in such a
manner so that the goals of an organization
are achieved.
 Management is a process: which continues till the objectives are achieved.
 Management implies skill and experience of getting things done through others.
 Universal activity, means required by all types of organizations.
 Management is a Science as well as an Art,
◦ Science because it has universally accepted principles, cause and effect
relationship
◦ Art because it requires practical experience, creativity and personal skills.
 Management is a Profession,
◦ Requires skills, knowledge and development of a positive attitude.
 Management involves decision making
 Management is dynamic activity
 Management is multidisciplinary, depends on knowledge from various disciplines
economics, psychology, engineering etc.
 Management is Goal Oriented.
 Management is a system of authority.
 Management is a social process, concerned with interpersonal relations.
 Planning: Setting goals, establishing strategies,
and developing plans to coordinate activities
 Organizing: Determining what needs to be done,
how it will be done, and who is to do it
 Leading: Motivating, leading, and any other
actions involved in dealing with people
 Staffing: Setting right people at the right job.
 Controlling: Monitoring activities to ensure that
they are accomplished as planned
 Interpersonal
◦ Figurehead
◦ Leader
◦ Liason
 Informational
◦ Monitor
◦ Disseminator
◦ Spokesperson
 Decisional
◦ Entrepreneur
◦ Disturbance handler
◦ Resource allocator
◦ Negotiator
 Top level of Management:
◦ consists of board of directors, chief executive or managing director.
◦ is the ultimate source of authority
◦ lays down the objectives and broad policies of the enterprise.
◦ devotes more time on planning and coordinating functions.
 Middle level of Management:
◦ branch managers and departmental managers constitute middle level.
◦ responsible to the top management for the functioning of their department.
◦ Devote more time to organizational and directional functions.
◦ make plans for the sub-units of the organization.
◦ participate in employment & training of lower level management.
◦ responsible for coordinating the activities within the division or department.
◦ sends important reports and other important data to top level management.
 Lower level of Management:
◦ also known as supervisory / operative level of management.
◦ consists of supervisors, foreman, section officers,
superintendent etc.
◦ concerned with direction and controlling function of
management.
◦ Assigning of jobs and tasks to various workers.
◦ responsible for the quality as well as quantity of
production.
◦ communicate workers problems, suggestions, and
recommendatory
appeals etc to the higher level and higher level goals and
objectives to the workers.
◦ ensure discipline in the enterprise.
◦ image builders of the enterprise because they are in direct
contact
with the workers.
 Technical skills: front line managers: A persons’ knowledge and ability to

make effective use of any process or technique constitutes his technical

skills.

 Human skills: all levels: An individuals’ ability to cooperate with other

members of the organization and work effectively in teams.

 Conceptual skills: top level: Ability of an individual to analyze complex

situations and to rationally process and interpret available information. For

e.g.: Idea generation and analytical process of information.

 CONCEPTUAL

HUMAN

TECHNI
CAL
Two or more people who work together in a structured
way to achieve a specific goal or set of goals.
 It has a distinct purpose
 composed of people
 has some structure with in which members work
 Classical approach
 Behavioral approach
 Quantitative approach
 Contemporary approach
Emphasize on rationality and making workers as efficient as
possible.
Two theories under classical approach are:
 Scientific Management theory: analyzes and synthesizes
workflows, with the objective of improving labor
productivity.
◦ Frederick W. Taylor
◦ Frank and Lilian Galbreath
 General administrative theory: 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
 Bureaucratic theory of management: focuses on the ideal
form of organization.
◦ Max Weber
 Use of scientific method to define the one best way of doing job. Four
principles of scientific management are:
 Develop a science for each element of an individual’s work to
replace the old rule-of thumb method.
 Scientifically select and then train, teach, and develop the
worker.
 Heartily cooperate with the workers so as to ensure that all work is
done in accordance with the principles of the science that has been
developed.
 Divide work and responsibility almost equally between
management and workers.
 Management does all work for which it is better suited than the
workers.
 Time and Motion study: the time for each motion of

hands and legs were recorded and the wasteful motions

were eliminated to do the work efficiently in less time.

Focuses on what managers do and what constituted good
management practice

Henry Fayol identfied five functions of management i.e.

 Planning
 Organizing
 Leading/Commanding/Directing
 Coordinating
 Controlling
These principles can be applied to all organizational
situations:
1. Division of Work. Specialization increases
output by making employees more efficient.
2. Authority. Managers must be able to give orders,
and authority gives them this right.
3. Discipline. Employees must obey and respect the
rules that govern the organization.
4. Unity of command. Every employee should
receive orders from only one superior.
5. Unity of direction. The organization should have a
single plan of action to guide managers
and workers.
6. Subordination of individual interests to the
general interest. The interests of any one
employee or group of employees should not take
precedence over the interests of the
organization as a whole.
7. Remuneration. Workers must be paid a fair wage
for their services.
8. Centralization. This term refers to the degree to
which subordinates are involved in
decision making.
 9. Scalar chain. The line of authority from top management
to the lowest ranks is the scalar chain.
10. Order. People and materials should be in the right place
at the right time.
11.Equity. Managers should be kind and fair to their
subordinates.
12.Stability of tenure of personnel. Management should
provide orderly personnel planning
and ensure that replacements are available to fill vacancies.
13.Initiative. Employees who are allowed to originate and
carry out plans will exert high levels of effort.
14.Esprit de corps. Promoting team spirit will build harmony
and unity within the organization.
 Defined a type of organization called bureaucracy that is characterized by
division of labour, clearly defined hierarchy, detailed rules and regulations
and impersonal relationships.
 Characteristics of bureaucracy:
◦ Division of labor: breaking down jobs into simple routine tasks
◦ Authority hierarchy: Positions organized
in a hierarchy with a clear chain of command
◦ Formal selection: People selected for
jobs based on technical qualifications
◦ Formal rules and regulations: System of written rules and standard
operating procedures.
◦ Impersonality: Uniform application
of rules and controls, not according to personalities
◦ Career orientation: Managers are career
professionals, not owners of units they manage
 Based on the philosophy that managers get work done
through human beings, so focus on employees is
considered important.
 Classical approach emphasized efficiency, process, and
principles and disregarded human beings.
 Behavioral approach emphasized on trying to
understand the factors that effect human behavior at
work
 Human Relations theory
Elton Mayo based on Hawthorne experiment concluded that:
◦ workers' attitudes and behavior are associated
◦ workplace is a social system and informal group influence could exert a
powerful effect on individual behavior.
◦ the style of supervision is an important factor in increasing workers' job
satisfaction.
 Behavioral Science Approach
contributed to the study of management through its focus on personality,
attitudes, values, motivation, group behavior, leadership, communication,
and conflict, among other issues.
 Mary Parker Follett
◦ Realized the importance of group and stated that human beings grow
through relationships with others.
◦ Believed in the power of group and opined that in groups individuals
can combine their diverse talents into something bigger.
◦ Stated that organizations must be based on group ethics
 Chester I. Barnard
◦ Asserted that people come together in formal organizations to
achieve ends which cannot be accomplished alone.
◦ But while pursuing organization goals individual goals must also be
achieved through informal groups.
◦ Zone of indifference was elaborated as all the orders that an
employee would do without questioning the manager i.e. all the
orders that lie within the familiar range of responsibility or activity.
Also called Management science.
Approach makes use of quantitative techniques to improve
decision making.
evolved from mathematical and statistical solutions
developed for military problems during World War II.
It involves applying statistics, optimization models,
information models, computer simulations, and other
quantitative techniques to management activities.

For e.g. Linear Progarammng problems are used for

resource allocation, Workscheduling is done using CPM.
It includes modern theories of management:

 Systems Approach

 Contingency approach
A system can be defined as a set of interrelated and
interdependent parts arranged in a manner that produces a
unified whole. The two basic types of systems are:
 Closed system: not influenced by and do not interact with
their environment.
 Open system: influenced by and do interact with their
environment.
It observes an organization as a open system that takes the inputs
(resources) from the environment and transforms or processes
these resources into outputs that are distributed into the
environment.
Managers coordinate work activities in the various parts of the
organization, they ensure that all these parts are working
together so the organization’s goals can be achieved.
System approach implies:

 that decisions and actions in one organizational area will affect other areas.

For example, if the purchasing department doesn’t acquire the right

quantity and quality of inputs, the production department won’t be able to

do its job.

 the systems approach recognizes that organizations are not self contained.

They rely on their environment for essential inputs and as outlets to absorb

their outputs. No organization can survive for long if it ignores government

regulations, supplier relations, or the varied external constituencies upon

which it depends.
The contingency approach (sometimes called the situational
approach) says that organizations are different, face
different situations (contingencies), and require different
ways of managing.

Management is not (and cannot be) based on simplistic

principles to be applied in all situations.

For example, division of labor is valuable and widely

used, but jobs can become too specialized. Bureaucracy is
desirable in many situations, but in other circumstances,
other structural designs are more effective.
Planning is the first managerial function to be performed.
It is concerned with deciding in advance what is to be
done in future, when, where and by whom it is to be
done. It is a process of thinking before doing.
“Planning involves selecting missions and objectives and
the actions to achieve them; it requires decision
making, that is, choosing from among alternative future
courses of action” -Weihrich & Koontz .
 Goals/Objectives:
◦ Desired outcomes for individuals, groups, or entire
organizations
◦ Provide direction and evaluation performance criteria
 Plans:
◦ Documents that outline how goals are to be
accomplished
◦ Describe how resources are to be allocated and
establish activity schedules
1. Focus on realizing the objectives set
2. Intellectual process involving mental exercise
3. Selective as it selects the best course of action
4. Pervasive, as all the levels of management plan
5. Lays foundation of the successful actions of management
6. It is flexible.
7. Continuous process : An on-going/dynamic exercise as
old assumptions change, old plans are revised or new
ones are prepared.
8. Forward process : No plan can be prepared without
knowledge of future.
9. Efficiency is measured by what it contributes to the
objectives.
 Goal Focus/ Provides direction
 Minimize Uncertainty
 Improve efficiency
 Innovation and Creativity
 Better Coordination
 Ensures Commitment
 Aid to Business Success
 Brings Systematization
 Minimizes waste and redundancy
 Sets the standards for controlling
On the basis of breadth or scope plans are classified as:
 Strategic Plans:
◦ Apply to the entire organization.
◦ Establish the organization’s overall goals.
◦ Seek to position the organization in terms of its
environment.
◦ Cover extended periods of time.
Examples: diversification, mergers and acquisition
 Tactical Plans:
◦ Made for short term moves.
◦ Required to meet the sudden changes in the environment
forces.
◦ Periodically reviewed and updated
◦ Represent short term efforts to achieve strategic goals.
 Operational Plans:
◦ specify the details of how the overall goals are to be achieved
◦ tend to cover short time periods
◦ define what needs to be done in specific areas to implement
strategic plans.
 Production plans
 Financial plans
 Facilities plans
 Marketing plans
 Human resource plans
On the basis of time frame:
1. Long range planning: for a period of five years at
least. Involves capital budgeting, product planning,
project planning etc. deals with a great uncertainty.
2. Medium range: for one to five years. Relate to
development of new products and markets, product
publicity etc. supportive to long range plans.
3. Short range: upto one year. Made to achieve short
term goals. Focused on the internal environment of the
business.
On the basis of level:
 Corporate planning or top level planning: It lays
down the objectives, policies and strategies of an
organization. Usually made for a longer time period.
 Divisional planning or middle level planning: It is
related to a particular department or division. It lays
down the objectives, policies and strategies of a
department.
 Sectional planning or lower level planning: focused
on laying down detail plans for the day to day
guidance.
On the basis of frequency:
 Single Use Plans: one-time plan specifically
designed to meet the needs of a unique situation. For
instance, when Walmart wanted to expand the
number of its stores in China, top-level executives
formulated a single-use plan as a guide.
 Standing Plans: ongoing plans that provide guidance
for activities performed repeatedly. Standing plans
include policies, rules, and procedures.
(1) Mission/ Purposes
(2) Objectives or Goals
(3) Strategies
(4) Policies
(5) Procedures
(6) Rules
(7) Programs
(8) Budgets
 The mission, or purpose, identifies the basic purpose or function or
tasks of an enterprise or agency or any part of it
 Objectives, or goals, are the ends toward which activity is aimed
 Strategy is the determination of the basic long-term objectives of an
enterprise and the adoption of courses of action and allocation of
resources necessary to achieve these goals
 Policies are general statements or understandings that guide or
channel thinking in decision making
 Procedures are plans that establish a required method of handling
future activities
 Rules spell out specific required actions or
non actions, allowing no discretion
 Programs are a complex of goals, policies, procedures,
rules, task assignments, steps to be taken, resources to be
employed, and other elements necessary to carry out a
given course of action
 A budget is a statement of expected results expressed in
numerical terms
 Scan the environment
 Establish objectives
 Develop premises
 Determination of alternatives
 Evaluation of alternatives
 Selecting a course of action
 Formulation of derivative plans
 Implementation of plans
 Reviewing the planning process
 Scan the environment: Pre step of planning where the
internal as well as external environmental scanning is
conducted to determine the opportunities and threats
existing in the external world and also assess the
strength and weaknesses of the organization i.e. SWOT
analysis.
 Establish objectives: Organizations must develop
SMART (Specific, Measurable, Attainable, Realistic
and Timely) goals.
◦ Goals must be specifically mentioned
◦ They must be measurable
◦ Reachable or do able
◦ Goals must be objective or realistic not abstract
◦ Goals must have a timeframe that is realistic
 Develop Premises: Premises are the assumptions about
the future in which the planning is implemented.
◦ Provide boundaries and environment for the implementation of
plan in practical operations.
◦ They can be tangible as well as intangible and also they can be
classified as internal and external.
 Determination of alternatives: Based on the
premises developed in previous step alternatives
for achieving the objectives must be developed.

 Evaluation of alternatives: Different

alternatives developed are evaluated on the basis
of risk involved, strengths and weaknesses of the
organization, resources required etc.
 Selecting a course of action: After evaluating the
alternatives, the best alternative is selected.
 Formulation of derivative plans: these are the action
plans of different departments for different jobs to be
performed for accomplishing the goals. These plans
comprise policies, rules, procedures, schedule and
budget.
 Implementation of Plans: it involves the actual
execution of plan. Here the plans are communicated to
the subordinates along with the guidelines.
 Reviewing the planning process: It involves time to
time monitoring the actions to ensure that they are
moving in the right direction. Otherwise, re planning is
done.
 It is a process of making a choice between a number of
available alternatives and committing to a future course
of action.
 It is the essential function of the managers.
 It is a mental process.
 Structured Problem and Programmed Decisions:
Structured problems are straightforward. The decision
maker’s goal is clear, the problem is familiar, and
information about the problem is easily defined and
complete.
A programmed decision, a repetitive decision that can be
handled by a routine approach.

 Unstructured Problem or Non Programmed Decisions:

Unstructured problems are new or unusual and for which
information is ambiguous or incomplete.
Non Programmed Decisions, are unique
and nonrecurring and involve custom-made solutions.
1. Identifying Problem: the problem arises due to discrepancy in the
existing and desired state.
2. Identifying decision criteria: these are the criteria that guide the
decision making process.
3. Allocating weights to criteria: criteria identified vary in their
importance and hence must be assigned some weight.
4. Developing alternatives
5. Evaluating alternatives: alternatives are evaluated on the basis of
criteria established in step 2.
6. Selecting an alternative: choosing the best alternative.
7. Implementing the alternative: put the decision into action by
conveying it to those affected and getting their commitment to it.
8. Evaluating decision effectiveness: The last step in the decision-
making process involves evaluating the outcome or result of the
decision to see whether the problem was resolved. If the evaluation
shows that the problem still exists, then the manager needs to assess
what went wrong (if it is effective than continue else go to step 1).
 Rationality:
◦ Fully objective and logical
◦ Problem is clear without any ambiguity
◦ Clear and specific goal
◦ All possible alternatives and consequences are known
◦ Alternative with maximum likelihood of achieving goal is
selected.
 Bounded Rationality:
◦ Decision making that’s rational, but limited
(bounded) by an individual’s ability to process
information.
◦ managers make decisions rationally, but are limited
(bounded) by their ability to process information because
they can’t possibly analyze all information on all
alternatives, managers satisfice, rather
than maximize. That is, they accept solutions that are “good
enough.” They’re being
rational within the limits (bounds) of their ability to process
informant