PRINCIPLES OF MANAGEMENT

Dr. Karnika Srivastava

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.

FEATURES 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
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 behaviour 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 behaviour of individuals and
groups. In a work place individuals work as a team. The behaviour 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.

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.
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 calibre 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.

FUNCTIONS OF MANAGEMENT / MANAGEMENT PROCESS / POSDCORB

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.
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.

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 the top management.
4. They prepare the departmental plans.
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 .
➢ Human skills: The ability to tactfully deal with human beings and mould their
behaviour at work in the desired manner to help attain the common objectives of the
enterprises most effectively and efficiently. It requires an understanding of human
behaviour 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 analyse 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.

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

MANAGEMENT VS ADMININSTRATION

1) All the policies are made by the Administration vs Management has a main function
of implementing the decisions made by the Administration.
2) They are the owners / proprietors of the company vs They are the managers of the
company.
3) Conceptual, human skills are necessary vs. Technical and human skills are more
important here.
4) The main functions are planning and controlling vs. The main functions are directing
and organizing.
5) Level of authority: Administration mainly comprise of Top level management vs.
Management mainly carried on by Middle and lower level management.
6) Administration is thus more permanent in nature vs. management may change during
the course of running the organization.
7) Objective: They are mainly interested in
➢ Profitability
➢ Sales volume
They actually work for remuneration, thus they direct their efforts towards the
attainment of goal.
8) They don’t take part in the day to day activity of the organization vs. Managers take
part in the day to day activity.
9) Administration is the thinking process vs. While the management are the doing
process.
ROLES OF A MANAGER

Mintzberg has identified ten roles of a manager which are grouped into three ategories.
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.
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.

EVOLUTION OF MANAGEMENT

PRE SCIENTIFIC MANAGEMENT ERA:

1. Robert Owen (1771- 1858) he advocated that workers should be treated as human
beings, he has taken efforts to improve working conditions in the factory reduce
working hours, increase minimum wages, provide meals to employees, allocate
education provision , housing and other labor welfare facilities. His main contribution
is that the effective and good personnel management was essential part of manager’s
job since it pays dividends to the employer.
2. Charles Babbage (1792-1872): he was a professor of math’s of Cambridge
university from 1828to 1839. He has suggested aspects like division of labor, work
measurement, profit sharing and engineering to improve the efficiency of management.
He has invented mechanical calculators which were called as “differential machine”.
He has emphasized in improving efficiency through the application of math’s and
science in the operation of factories.
3. Charles Dupin (1784-1873) he has emphasized systematic education in
management. He was French engineer and formally tried to structure the subject matter
of management. These early contributors focused attention on managerial problems.
They have not presented any unified theory of management. Systematic and scientific
study of management started after 1880. Due to the creation of joint stock corporate
organizational set up.

MANAGEMENT THEORIES
➢ Classical Theories
• Taylor’s Scientific Management theory
• Fayol’s Administrative theory
• Weber’s bureaucracy theory
➢ Behavioural theories
• Human Relations theory
• Behavioural Science theory
➢ Modern Management theories
• Quantitative theory
• Systems theory
• Contingency theory

CLASSICAL THEORIES
Classical approach is the oldest formal school of thought which began around 1850 and
continued into the 1920s. Its mainly concerned with the increasing the efficiency of
workers and organizations based on management practices, which were an outcome of
careful observation. Classical approach mainly looks for the universal principles of
operation in the striving for economic efficiency. Classical approach includes scientific.
Administrative & bureaucratic management.

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.
 Route clerk: his job is to determine the sequence of operations to be performed
in any work.
 Instruction card clerk: he will prepare the necessary instructions pertaining to
the work and accordingly the workers will perform their duties.
 Time and Cost Clerk: he will frame the timetable for doing the various jobs.
He will also keep the necessary cost records.

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.
▪ 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
 Time study involves the determination of time a movement takes to complete.
 Motion study involves the study of movements in parts which are involved in
doing a job and thereby eliminating the wasteful movements.
 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.
8. 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.

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
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.

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 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 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.

MAX WEBER BUREAUCRACY THEORY

Max Weber(1864-1920), a German sociologist introduced the rational-legal authority

system to manage the business organizations. His model is characterized by
➢ Division of work
➢ Rules and regulations
➢ Hierarchy of authority
➢ Technical competence
➢ Record keeping
➢ Impersonal relations
BEHAVIOURAL THEORY
These theories focus on organizational goals along with satisfaction of human needs.
Shift in focus from workplace conditions to human side of the organization People-
oriented approach substituted the production oriented approach
Two important theories:
• Human relations theory
• Behavioural science theory

HUMAN RELATIONS THEORY

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 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 16 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 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.

BEHAVIOURAL SCIENCE THEORY

It applies scientific vision to human relations theory. Concepts from Psychology,

Sociology and Anthropology are applied to study human behaviour
• Psychology – Study of individual behaviour
• Sociology – Study of human behaviour in groups
• Anthropology - Study of human behaviour as individuals and members of groups
Concepts from various disciplines are tested before applying them in business
organisations.

MODERN MANAGEMENT THEORY

These theories are responsive to environment changes. They view organizations as
dynamic open systems having multiple objectives. Management is multi-disciplinary
and draws knowledge from various fields to solve complex business problems. They
forecast environment changes through scientific techniques and discount them to the
present business situations. These theories include:
• Quantitative theory
It uses the services of quantitative specialists to apply interdisciplinary techniques to
solve business problems. It includes: -
▪ Management science: it uses mathematical models like PERT, CPM, Simulation etc.
to solve business problems.
▪ Operations management: It applies quantitative techniques of inventory
management, statistical quality control etc. to manage the production and delivery of
goods and services. It uses quantifiable data to frame mathematical models and handles
complex decision- making problems.
• Systems theory
As per this approach organization is viewed from a systems point of view.
The main elements of systems approach are as follows:
 Organization as a purposeful system consisting of several interconnected and
interdependent parts.
 The parts or components of a system are called sub- systems.
 The position and function of each subsystem can be analyzed and understood
only in relation to the other sub-systems and to the organization as a whole.
 Synergy effect.
 Every system has a boundary that separates it from its environment.
 Contingency theory.
 The view that the management technique that best contributes to the attainment
of organizational goals might vary in different types of situation or
circumstances. It is also called as situational approach.

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
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.