Principles of

Management
 Definition
Management is the process of reaching
organizational goals by working with and
through people and other organizational
resources.
Management is the process of designing
& maintaining an environment in which
individuals working together in groups
efficiently accomplish selected aims.
Management is the art of getting things
done by a group of people with the
effective utilization of available
resources.
 Characteristics -
Management Art as well as science
 Management is an activity
Management is a continuous process
Management achieving pre-determined
objectives.
Management is a factor of production
 Management as a system of activity
Management is a discipline
Management is a purposeful activity
Management is a distinct entity
 Nature
Management aims at maximizing
profit
Management is a profession
Management has universal application
Management is getting things done
Management as a career
Management is needed at all levels
 Importance
Management meets the challenge of
change.
Helps in accomplishment of group goals.
Provides effective utilization resource.
Helps in developing a sound organization.
Directs the organization.
Integrates various interests.
Brings in Innovation.
Builds up stability, co-ordination and team
spirit.
Provides knowledge to tackling problems.
A tool for personality development.
 Functions
Planning
Organizing
Staffing
Directing
Co-coordinating
Motivating
Controlling
Innovation
Representation
Decision
Making
Communication
Levels of management
 Managerial Skills
Technical skills
Human skills
Conceptual skills
Design skills
Analytical skills
Administrative skills
 Mintzberg's Management
Roles
Interpersonal roles
 Figurehead
 Leader
 Liaison

Informational roles
 Monitor
 Disseminator
 Spokesperson
Decisional roles
Entrepreneur
Disturbance
Handler
Resource Allocator
Negotiator
 Figurehead - A manager has the quality of inspiring. The
manager has authority.
 Leader – Manager leads the team and manages the
performance and responsibilities of everyone in the group.
 Liaison - Managers is responsible for communicating with
internal and external contacts.
 Monitor – Manager is responsible for monitoring internal
and external environment (functioning) of the organization.
 Disseminator - This is where you communicate potentially
useful information to your colleagues and your team.
 Spokesperson - Managers represent and speak for their
organization to the people outside it
 Entrepreneur - As a manager you involve in solving
problems, generating new ideas, and implementing them.
 Disturbance Handler – Handles disputes and problems.
 Resource Allocator – Manager allocates funding, as well as
assigning staff and other organizational resources.
 Negotiator - You may be needed to take part in, and direct,
important negotiations within your team, department, or
organization.
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 Scientific Management: F.W.
Taylor
Taylor's Scientific Management (USA 1856-1915):
Frederick Taylor was called as the father of
Scientific management. His book The
Principles of Scientific management was
published in 1911. Immediately, its contents
became widely accepted by managers
throughout the world.
The scientific method consists essentially of
(a) Observation
(b) Measurement
(c) Experimentation
(d) Inference
Elements of Scientific
Management:

 Scientific Task and Rate-setting,

 work study- methods study, time study,
fatigue study and motion study,
 Scientific Selection and Training,
 Standardization (of working conditions,
material equipment etc.),
 Specialization through functional
foremanship .
Taylors Principles:
1. Science, not rule of the thumb
2. Harmony in group action, not discord
3. Cooperation, not individualism
4. Maximum output
 functional foremanship
 The Route Clerk: To lay down the sequence of operations and
instruct the workers concerned about it.
 The Instruction Card Clerk: To prepare detailed instructions
regarding different aspects of work.
 The Time and Cost Clerk: is concerned with setting a time table
for doing a job & specifying the material and labor cost involved in it.
 The Shop Disciplinarian: To deal with cases of breach . To send
all information relating to their pay to the workers and to secure proper
returns of work from them. Looks into discipline and absenteeism of
workers.
 The Gang Boss: To assemble and set up tools and machines and to
teach the workers to make all their personal motions in the quickest and
best way.
 The Speed Boss: To ensure that machines are run at their best
speeds and proper tools are used by the workers.
 The Repair Boss: To ensure that each worker keeps his machine in
good order and maintains cleanliness around him and his machines.
 The Inspector: To show to the worker how to do the work
Criticism:
Worker's Criticism:
 Loss of individual worker's initiative
 Problem of monotony
 Weakening of Trade Unions
 Exploitation of workers

Employer's Criticism:
 Heavy Investment
 Loss due to re-organization
 Unsuitable for small scale firms

.
 Henry Fayol ( 1841-1925) -
 He argued that management was an activity common to all
human undertakings in business, in government, and even
in the home. He stated 14 principles of management—
fundamental or universal truths.
1. Division of labour
2. Authority and responsibility
3. Discipline
4. Unity of command
5. Unity of direction
6. Subordination of individual interest to common good
7. Remuneration
8. Centralization
9. Hierarchy (Scalar Chain)
10. Order
11. Equity
12. Stability of tenure
13. Initiative
14. Esprit De Corps
Fayol - industrial activates - divided
into six groups
 Technical (Production)
 Commercial (buying, Selling and
exchanging).
 Financial (Search for, and optimum use of
capital).
 Security (Protection of property and
persons).
 Accounting (including Statistics).
 Managerial (Planning, organization,
command, contribution and control).
 Max Weber , 1864-1920
Weber developed a theory of authority
structures and described organizational activity
on the basis of authority relations. He described
an ideal type of organization that he called a
bureaucracy, characterized by: -
 Hierarchy
 Division of Labor
 Consistency
 Formal selection
 Formal rules and regulations
 Impersonality
 Career orientation
 Other classical theory……
 Charles Babbage
1. Specialization
2. Work measurement/ methods
3. Utilization of machines and tools
4. Division of labor
5. Science and mathematics
6. Cost reduction

 Frank and Lillian Gilberth (1868-1924 & 1878-1972)

1. Time and motion study
2. Worker welfare
3. Potential of workers

 Henry Gantt (1861-1919)

1. Gantt Chart (It illustrate the start and finish dates of the
terminal elements and summary elements of a project)
2. Bonuses for Workers and Supervisors
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 Hawthorne Studies – Human Relation
approach
 Time: 1924—the early 1930s
 Place: Hawthorne plant in the Western Electric Company
 Designer: Western Electric industrial engineers Elton
Mayo and his associates
 Experiments conducted-
Illumination Studies – 1924-1927
Relay Assembly Test Experiments 1927-1929
Plant Interview Program – 1925-1932
Bank Wiring Observation Group – 1931-1932
 Mayo’s Finding:
 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.
 Behavioral Approach- Theory X
and Theory Y
Douglas McGregor proposed the two different sets of
assumptions about workers.
◦ Theory X assumes the average worker is lazy,
dislikes work and will do as little as possible.
 Workers have little ambition and wish to avoid
responsibility
 Managers must closely supervise and control
through reward and punishment.

◦ Theory Y assumes workers are not lazy, want to do

a good job and the job itself will determine if the
worker likes the work.
 Managers should allow workers greater latitude,
and create an organization to stimulate the
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Management Science Theory
◦ Quantitative management — The
quantitative approach to management,
sometimes referred to as operations research
(OR) or management science. It includes
applications of statistics, optimization models,
information models, and computer
simulations, linear programming, and so on,
which can be used to solve management
problems.
◦ Operations management —techniques used to
analyze any aspect of the organization’s
production system.
◦ Total Quality Management (TQM) —focuses
on analyzing input, conversion, and output
activities to increase product quality.
◦ Management Information Systems (MIS) —
provides information vital for effective decision
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Organizational Environment Theory
Organizational Environment –

The set of forces and conditions that operate

beyond an organization’s boundaries but affect a
manager’s ability to acquire and utilize resources
Open System -
◦ A system that takes resources for its external
environment and transforms them into goods and
services that are then sent back to that
environment where they are bought by
customers.

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 The Open-Systems View
◦ Inputs: the acquisition of external
resources to produce goods and
services
◦ Conversion: transforms the inputs into
outputs of finished goods and services.
◦ Output: the release of finished goods
and services to its external
environment.

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 Closed System
A self-contained system that is not
affected by changes in its external
environment.
Likely to experience entropy and
lose its ability to control itself

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 Systems
Synergy – the performance gains
that result from the combined
actions of individuals and
departments
◦ Possible only in
an organized system

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Contingency Theory
 “There is no one best way to organize”
 The idea that the organizational structures and
control systems manager choose depend on—
are contingent on—characteristics of the
external environment in which the organization
operates.
 The environment impacts the organization and
managers must be flexible to react to
environmental changes.
 The way the organization is designed, control
systems selected, depend on the environment.
 Technological environments change rapidly, so
must managers.
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 Structures
 Mechanistic: Authority is centralized at the
top. (Theory X)
◦ Employees are closely monitored and managed.
◦ Very efficient in a stable environment.

 Organic:Authority is decentralized
throughout employees. (Theory Y)
◦ Much looser control than mechanistic.
◦ Managers can react quickly to changing
environment.
Contingency Theory

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Other theories
 McKinsey 7-S

 Maslow’s need hierarchy theory.

Hezberg’s Two Factor
Theory….
What Is an Objective?

“objective are goals, aims or

purposes that organisation wish
over varying periods of time”
Management By Objectives (MBO)

A method whereby managers and

employees define objectives for every
department, project, and person and use
them to monitor subsequent performance.
 THE NATURE & PURPOSE
OF MBO
• MBO is concerned with goal setting and
planning for individual managers and their
units.
• The essence of MBO is a process of joint goal
setting between a supervisor and a
subordinate.
• Managers work with their subordinates to
establish performance goals that are
consistent with higher organizational
objectives.
• MBO helps clarify the hierarchy of objectives
as a series of well-defined means-ends chains.
Essential Steps for MBO
Set Goals Develop Action Plan
– The most difficult step. – Course of action
– Concrete – For both workgroups
– Specific target and and individuals
timeframe
– Assign responsibility

Review Progress
– Periodicity?
– Course corrections

Appraise Overall Performance.

– How are we doing?
– Do we need to restate our goals?
 MAKING MBO PROCESS EFFECTIVE
• If MBO is to be successful, it must start at the
top of the organization
• Employees must be educated about what MBO is
and what their role in it will be.
• Managers must implement MBO in a way that is
consistent with overall organizational goals.
• Goals are refined to be as verifiable as possible
and achievable within a specified period of time.
• Goals must be written and very clearly stated.
• Managers must play the role of counselors in the
goal-setting and planning meeting.
• Conducting periodic reviews
• The employee is rewarded on goal attainment.
 MBO - STRENGTHS
• Organizations create a powerful motivational
system for their employees by adopting MBO.
• Through the process of discussion and
collaboration, communication is greatly
enhanced.
• With MBO performance appraisal may be done
more objectively.
• MBO helps identify superior managerial talent
for future promotion.
• MBO provides a systematic management
philosophy.
• MBO facilitates control through the periodic
development and subsequent evaluation of
individual goals and plans.
 MBO - WEAKNESSES
• The major reason for MBO failure is lack of top
management support
• Some firms may overemphasize quantitative goals
• Some managers will not or cannot sit down and work
out goals with their subordinates
MBE….
•Management by Exception (MBE) is a
"policy by which management devotes its
time to investigating only those situations in
which actual results differ significantly from
planned results.’’
• The concept of MBE was propounded by:
Frederick Winslow Taylor.
• Attention and priority is given only to
material deviations requiring investigation
and correction. It is a part of motivational
and control techniques.
• Its objective is to facilitate managements
focus on really important tactical and
strategic tasks.
Significance of MBE:

 Proper and timely decision making and

appropriate flow of action and employees’
activities.
 Better utilization of managers’ time by
bringing their attention only to those
conditions that appear to need managerial
action.
 Easy identification of discrepancies.
 Benefit to customers since MBE makes it
easier for the business to grow and improve
its service rather than use valuable
resources on routine tasks.
Process of MBE
 Identifying and specifying Key Result Areas
(K.R.A.s)
 Setting standards and outlining
 permissible deviations, especially for K.R.A.’s
 Comparing actual results with the standards
 Computing and analyzing deviations
 Identifying non - permissible, that is, critical
deviations in K.R.A.s
 Strategizing and taking corrective actions
Management By Crisis
Crisis management includes the
development of plans to reduce the risk of a
crisis occurring and to deal with any crisis
that do arise, and the implementation of
these plans so as to minimize the impact of
crisis and assist the organization to recover
from them.
Crisis situations may occur as result of
external factors such as the development of
a new product by a competitor or internal
factors such as a product failure or faulty
decision-making, and often involve the need
to make quick decisions.
TYPES OF CRISIS

 Industrial Crisis
 Natural Crisis
 Professional Crisis
 Social Crisis
 Financial Crisis
 Technological crises
 Confrontation (boycott or disobeying or
resisting policies)
 Organizational Misdeeds (misrepresentation
of information's, disregarding interest of of
stakeholders, customers, society, etc)
Stages in crisis management

Pre-Crisis Phase
 The pre-crisis phase is concerned with
prevention and preparation.
 Prevention involves seeking to reduce known
risks that could lead to a crisis. This is a part
of an organizations risk management
program.
 Preparation involves creating the crisis
management - Plan, selecting and training
the crisis management team, and
conducting exercises to test the Crisis
management
Continued..
Crisis Response
 The crisis response is what management
does and says after the crisis hits. Public
relations plays a critical role in the crisis
response by helping to develop the
messages that are sent to various publics.
 A great deal of research has examined the
crisis response. That research has been
divided into two sections:
(1) the initial crisis response and
(2) Reputation repair and behavioral intentions
Continued….
Post-Crisis Phase
 In the post-crisis phase, the organization is
returning to business as usual. The crisis is
no longer existing
Process of management