Principles of Management

(BBA 131)

Unit 1. Introduction To Management

 Definition of Management
• Koontz,“Management is the art of getting things done through and with
people in formally organised groups.”

• Louis Allan, “Management is what a manager does.”

• Ross Moore states, “Management means decision-making.”

• W F Glueck, “Management is effective utilisation of human and material

resources to achieve the enterprise objectives.”

• F. W. Taylor, “Management is the art of knowing what you want to do

and then seeing that it is done in the best and cheapest way.”
● Management is the attainment of organizational goals in an
effective and efficient manner through planning, organizing,
staffing, directing and controlling organizational resources.
(Organizational resources include men(human beings), money,
machines and materials.)
NATURE OF MANAGEMENT:

Multidisciplinary
Dynamic nature of principle
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Relative, Not Absolute Principles

• BSc- Mathematics.
• BSc-Computer Science
• BSc-Biological sciences
• BSc-physical sciences
• BSc-Biochemistry
• BSc-Statistical science

• BA English.
• BA English Literature.
• BA Fine Arts.
• BA Psychology.
• BA Archaeology.
• BA Social Work.

Management Science or Art

Management as Profession
NATURE OF MANAGEMENT:

● Multidisciplinary

● Dynamic nature of principle

● Relative, not absolute principles

● Management Science or Art

● Management as profession
Significance of Management
Achieving Group Goals

Management promotes worker cooperation and integration.

Increases Efficiency

Management promotes efficiency by handling resources in the most efficient way

possible to reduce costs and increase efficiency.
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4pS9XtmDiWfe0zDJw/view?usp=sharing

Creates Dynamic organization

Management takes on the situation by ensuring that these variances are well-
acknowledged internally and that objection to change is managed.
Achieving personal objectives

Management encourages leadership and motivates workers to work successfully to

achieve their objectives while contributing to their goals.
Development of Society

Management contributes to the betterment of society by producing high-quality

goods, creating job opportunities, and nurturing innovative technology.
Basic Levels of Management
Types of Skills

Conceptual Skills
Human Skills
Technical Skills
Management Level and Skills
 Three skill sets that managers need to perform
effectively
1. Conceptual skills: the ability to analyze and diagnose a situation and find the
cause and effect. Conceptual Skills involve the formulation of ideas,
conceptualization about abstract and complex situations. Managers understand
abstract relationships, develop ideas and solve problems creatively. Using these
skills, managers must be able to see the organization as a whole.
Example:
strong idea about their business, market, customers and competitors, business
environment etc.
2. Human skills: the ability to understand, alter, lead, and control people’s
behavior.
3. Technical skills: the job-specific knowledge required to perform a task.
Common examples include marketing, accounting, and manufacturing.

All three skills are enhanced through formal training, reading, and practice.
Roles of a manager
Interpersonal Roles
Roles Description

Figurehead Managers perform symbolic

duties required by the
status of his office
Leader Responsible for motivation
and direction of
subordinates
Liaison Relationship with outsiders
Informational Roles
Roles Description

Monitor Manager scans the

environment and control
internal and external
activities
Disseminator Transmitting the
information

Spokesperson Transmitting the

information to the outsiders
Decisional Roles
Roles Description

Entrepreneur Initiates projects

Disturbance Handler Responsible for corrective

actions when organization faces
important and unexpected
disturbances
Resource Allocator Responsible for allocation of
resources
Negotiator Bargains with suppliers, dealers,
trade unions, agents etc
S.No Basis of Administration Management
difference
1 Level of authority It is a top-level activity. It is a middle level activity.

2 Nature of work It is concerned about the determination of It puts into action the policies and plans laid down
objectives and major policies of an by the administration. Doing function.
organization. Thinking function.
3 Scope It takes major decisions of an enterprise as It takes decisions within the framework set by the
a whole. administration.
4 Skill required More of Conceptual and Human Skills Conceptual skills, Human Skills and Technical skills

5 Nature of status It consists of owners who invest capital in It is a group of managerial personnel who use their
and receive profits from an enterprise. specialized knowledge to fulfill the objectives of an
enterprise.
6 Nature of usage It is popular with government, military, It is used in business enterprises.
educational, and religious organizations.

7 Decision making Its decisions are influenced by public Its decisions are influenced by the values, opinions,
opinion, government policies, social, and and beliefs of the managers.
religious factors.

8 Main functions Planning and organizing functions are Motivating and controlling functions are involved in
involved in it. it.

9 Abilities It needs administrative rather than technical It requires technical activities.

abilities.
FUNCTIONS OF MANAGEMENT
• Planning: It is the first and foremost function of management, i.e. to
decide beforehand what is to be done in future. It encompasses
formulating policies, establishing targets, scheduling actions and so
forth.

• Organizing: Once the plans are formulated, the next step is to

organise the activities and resources, as in identifying the tasks,
classifying them, assigning duties to subordinates and allocating the
resources.
• Staffing: It involves hiring personnel for carrying out various
activities of the organization. It is to ensure that the right person is
appointed to the right job.

• Directing: It is the task of the manager to guide, supervise, lead and

motivate the subordinates, to ensure that they work in the right
direction, so far as the objectives of the organization are concerned.

• Controlling: The controlling function of management involves a

number of steps to be taken to make sure that the performance of
the employees is as per the plans. It involves establishing
performance standards and comparing them with the actual
performance. In case of any variations, necessary steps are to be
taken for its correction.
FUNCTIONAL AREAS OF MANAGEMENT

THE IMPORTANT FUNCTIONAL AREAS OF MANAGEMENT

1. HUMAN RESOURCE MANAGEMENT

2. PRODUCTION / OPERATIONS MANAGEMENT
3. FINANCIAL MANAGEMENT
4. MARKETING MANAGEMENT
MANAGEMENT SCIENCE OR ART

• 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.
HOW MANAGEMENT IS AN ART?
• To manage effectively, one must have not only the
necessary abilities to lead but also a set of critical
skills acquired through time, experience, and
practice.
• The art of managing is a personal creative attribute
of the manager, which is more often than not,
enriched by education, training, experience.
Elements of art in management
• Practical Knowledge
• Personal Skill
• Creativity
• Perfection through practice
• Goal-Oriented
How Management is Science?
• Science is obtaining information about a particular object by a
systematic pattern of observation, study, practice, experiments, and
investigation.
• The management process also follows the same pattern. Gathering
data and facts, analyzing them and making a decision based on
analysis, are the basic functions of the management.
• Management follows a systematic method to find a possible solution
for a problem. The science underlying managing is indeed inexact or
a soft science at best.
• It is not as “Science” as physical sciences such as chemistry or
biology which deal with non-human entities.
• The inclusion of the human element in managing makes this
discipline not only complex but also debatable as pure science.
• Human behavior is unpredictable; people think, act or react
differently under identical circumstances.
• And so, management can never become as pure science. However,
the study of the scientific foundations of management practice can
improve one’s management skills.
• Managers who attempt to manage without management science
have to trust their intuition or luck at their peril rather than their
expertise or skill.
• Thus, they have to turn for meaningful guidance to the accumulated
knowledge of managing.
Elements of Science in Managing

• Concepts
• Methods and principles
• Theories
• Organized knowledge
 Science Art
Advances by knowledge Advances by Practice
Proves Feels
Predicts Guesses
Defines Describes
Measures Opines
Impresses Expresses
Management as a Profession
A profession is a form of occupation in which a person renders his/her
services after acquiring expertise in a particular domain. The professional
is remunerated by the company for which he/she renders the services.

The significant factors of professions which are familiar to Management are

● Formal Education and systems

● Restricted entry
● Code of conduct and associations
To explore further visit

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profession/
Evolution of Management

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The Development of Management Theory

● Up to the 20th century (pre-modern era) before 1900

❖ Adam smith’s contribution to the field of management
❖ Industrial revolution’s influence on management practices

● In the early 20th century (1900-1999)

❖ Scientific management
❖ General administrative theory
❖ The human resources approach
❖ The quantitative approach

● From the later 20th century to the present (2000 – till date)
❖ The process approach
❖ The systems approach
❖ The contingency approach

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Development of Major Management Theories

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Historical Background of Management

● Ancient Management
○ Egypt (pyramids) and China (Great Wall)
○ Venetians (floating warship assembly lines) – Venice, Italy

● Adam Smith
○ Published “The Wealth of Nations” in 1776
■ Advocated the division of labor (job specialization) to increase the
productivity of workers

● Industrial Revolution
○ Substituted machine power for human labor
○ Created large organizations in need of management

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In the early 20th century (1900-1999)
1. Scientific Management

● Fredrick Winslow Taylor

○ The “father” of scientific management
○ Published Principles of Scientific Management (1911)
■ The theory of scientific management
● Using scientific methods to define the “one best way” for a job
to be done:
○ Putting the right person on the job with the correct tools
and equipment.
○ Having a standardized method of doing the job.
○ Providing an economic incentive to the worker.

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Taylor’s Four Principles of Management
1. Develop a science for each element of an individual’s work, which will replace
the old rule-of-thumb method.

2. Scientifically select and then train, teach, and develop the worker.

3. 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.

4. Divide work and responsibility almost equally between management and

workers. Management takes over all work for which it is better fitted than the
workers.

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Scientific Management (cont’d)

Frank and Lillian Gilbreth

○ Focused on increasing worker productivity through the reduction of wasted

motion
○ Developed the microchronometer to time worker motions and optimize work
performance
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How Do Today’s Managers Use Scientific Management?

•Use time and motion studies to increase productivity
•Hire the best qualified employees
•Design incentive systems based on output

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2. General Administrative Theory

● Henri Fayol
○ Believed that the practice of management was distinct from other
organizational functions
○ Developed fourteen principles of management that applied to all
organizational situations
● Max Weber
○ Developed a theory of authority based on an ideal type of organization
(bureaucracy)
■ Emphasized rationality, predictability, impersonality, technical
competence, and authoritarianism

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Henri Fayol’s 14 Principles of Management

1. Division of work. Specialization increases output by making employees

more efficient.
2. Authority. Managers must be able to give orders. Authority gives them
this right. Along with authority, however goes responsibility.
3. Discipline. Employee must obey and respect the rule that govern the
organization.
4. Unity of command. Every employee should receive orders from only
one superior.

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Henri Fayol’s 14 Principles of Management…

5. Unity of direction.The organization should have single plan of action to

guide Managers and Workers.
6. Subordination of individual interest to the general interest. The interest of
any one employee or group of employees should not take procedure over
the interest 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 the subordinates are
involved in decision making.

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Henri Fayol’s 14 Principles of Management

9. Scalar chain. The line of authority from top management to the lowest ranks in
the scalar chain. Any information should follow a pre-defined path, which is
from the supervisor to the one in lowest position, to avoid any ambiguity.
10. Order. People and material 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 personal
planning and ensure that replacements are available to fill vacancies.
13. Initiative. Employees who are allowed to originate cary out plans will exert high
level of effort.
14. Esprit de corps. Promoting team spirit will build harmony and unity in the
organization. (The term is French, and it literally means "the spirit of the body," with body in this
case meaning "group." )

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Weber’s Ideal Bureaucracy

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3.Behavioural Management Theory (HR approach)

● Behavioural Management
○ The study of how managers should behave to motivate employees and
encourage them to perform at high levels and be committed to the
achievement of organizational goals.

○ Focuses on the way a manager should personally manage to motivate

employees.

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 Early Advocates of OB

Organizational Behavior:
The study of the actions
(behaviors) of people at
work; people are an
organization’s most
important asset.

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The Hawthorne Studies

● A series of productivity experiments conducted at Western Electric

(Cicero, Ill.) from 1927 to 1932.

● Experimental findings
○ Productivity unexpectedly increased under imposed adverse working
conditions.

● Research conclusion
○ Social norms, group standards and attitudes more strongly influence
individual output and work behavior than do monetary incentives.

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The Hawthorne Studies – Experimental Findings

● Behavior and sentiments are closely related.

● Group influences significantly affect individual behavior.
● Group standards establish individual worker output.
● Money is less a factor in determining output than are group
standards,
● group sentiments, and security.

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4. Quantitative Approach to Management

● Quantitative Approach
○ Also called operations research or management science
○ Evolved from mathematical and statistical methods
developed to solve World War II military logistics and
quality control problems
○ Focuses on improving managerial decision making by
applying:
■ Statistics, optimization models, information models, and
computer simulations

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From the later 20th century to the present (2000 – till date)

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 1. Process Approach
● Pushes an organization to plan its
processes and their interactions.
● It incorporates the (PDCA) cycle and
risk-based thinking, which means that
any organization should manage and
control the processes that make up
their organizations.
● inputs and outputs that tie these
processes together.
● they manage these process
interactions as a system.
● The PDCA cycle - ensure that its
processes are adequately resourced
and managed, and opportunities for
improvement are determined and acted
on.
2. The Systems Approach
● Closed systems are not
influenced by and do not
interact with their
environment. In contrast,
an open system
dynamically interacts with
its environment.
● An organization is an open
system
● The set of interrelated and
interdependent parts
arranged in a manner that
produces a unified whole.
An Organization Is an Open System

● An organization is a system that interacts with and

depends upon its environment.

■ Organization’s stakeholders: Any group that is affected by

organizational decisions and policies. The manager’s job is to

coordinate all stakeholders to achieve the organization’s goals.

● Organizational survival often depends on successful

interactions with the external environment.

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3.Contingency Approach

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