UNIT 1-

• CONCEPTS OF MANAGEMENT
• importance, functions, competencies, levels, managerial roles
• Evolution of management thoughts
• Taylor’s, Fayol’s, Elton Mayo ( Human relations approach )
• Hawthorne experiment
• Ancient and modern management
• Chanakya ( Arthashatstra ) , Mgt practices (Indian values), Peter Drucker’s
dimensions of mgt
• UNIT 2-
• Planning & Organizing
• Planning, M.B.O, Decision making, Organizing
• UNIT 3-
• Directing & Controlling
• Departmentation, Delegation of authority, Motivation, Leadership,
Controlling
•UNIT 4-
• Mgt challenges in changing environment
•Mergers & Acquisitions- Integration of corporate
• Turnaround- Top mgt challenges in turnaround process
• Change & disruptions - technology gaps
CHAPTER 1
 MANAGEMENT
• 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.

Harold Koontz-
• “Management is an art of getting things done through and with the people in
formally organized groups.

•It is an art of creating an environment in which people and individuals can perform
& co-operate towards attainment of group goals”.

According to F.W. Taylor, “Management is an art of knowing what to do, when to do

and see that it is done in the best and cheapest way”.

• Management is a purposive activity ( directs group efforts towards attainment of

certain pre-determined goals).

• its the process of working with and through others to effectively achieve the goals
of the organization, by efficiently using limited resources in the changing world.

• These goals may vary from one enterprise to another.

•E.g.: For one enterprise it may be launching of new products by conducting market
surveys and for other it may be profit maximization by minimizing cost.
• Management involves creating an internal environment: -

• create conducive conditions for people to perform their task efficiently and effectively

– ensuring availability of raw materials, determination of wages and salaries, formulation of rules &

regulations etc.

• Being effective (right task) means doing the appropriate task

• i.e, fitting the square pegs in square holes and round pegs in round holes.

• Being efficient means doing the task correctly, at least possible cost with minimum wastage of

resources.

• Management can be defined in detail in following categories :

• Management as a Process

• Management as an Activity

• Management as a Discipline

• Management as a Group

• Management as a Science

• Management as an Art & Management as a Profession

IMPORTANCE OF MANAGEMENT-

1. helps in Achieving Group Goals –

arranging , assembles and organizes the factors of production, integrating the

resources in effective manner to achieve pre-determined goals.

• - By defining objective of organization , there would be no wastage of time, money and

effort.

2. Optimum Utilization of Resources –

-makes use of experts, professional and these services leads to use of their skills,

knowledge, and proper utilization and avoids wastage.

3. Reduces Costs –

-minimum input & getting maximum output.

- uses physical, human and financial resources in a manner resulting in best

combination & cost reduction.

4. Establishes Sound Organization –

-Sound organizational structure in tune with objective of organization

-effective authority & responsibility relationship (accountability)

- fills up various positions with right persons, having right skills, training and qualification

5. Establishes Equilibrium –

- adapts organization to changing demand of market/changing needs of societies, responsible for

growth and survival of organization.

6. Essentials for Prosperity of Society –

- Efficient management  better economical production  increase the welfare of people.

-Good management makes a difficult task easier by avoiding wastage of scarce resource.

- improves standard of living.

-maximum output at minimum cost

-creating employment opportunities which generate income in hands.

- Organization comes with new products and researches beneficial for society.
• Levels of Management - Top, Middle and Lower
• refers to a line of demarcation between various managerial positions in an organization.
• The number of levels in management increases when the size of the business and work
force increases
• The level of management determines-
– a chain of command,
– the amount of authority & status enjoyed by any managerial position.
• The levels of management can be classified in three broad categories:
• Top level / Administrative level
• Middle level / Executory
• Low level / Supervisory / Operative / First-line managers
• Managers at all these levels perform different functions.
LEVELS OF MANAGEMENT Top Level of Management

• Board of directors, chief executive or managing director.

• Manages goals , strategies and policies for an enterprise.

• devotes more time on planning and coordinating functions.

• The role of the top management can be summarized as follows –

– Issues necessary instructions for preparation of department budgets, procedures,
schedules etc.
– appoints the executive for middle level i.e. departmental managers.

– controls & coordinates the activities of all the departments.

– responsible for maintaining a contact with the outside world.

– provides guidance and direction, responsible towards the shareholders for the
performance of the enterprise.
Middle Level of Management

• Branch managers and departmental managers constitute middle level.

• responsible to the top management for the functioning of their department.

• They devote more time to organizational and directional functions.

• In small organization, there is only one layer of middle level of management but in big

enterprises, there may be senior and junior middle level management.

• Their role can be emphasized as -

– Execute the plans w.r.t policies and directives of the top management.

– plans for the sub-units of the organization.

– participate in employment & training of lower level management.

– interpret and explain policies from top level management to lower level.

– responsible for coordinating the activities within the division or department.

– sends important reports and other important data to top level management.

– evaluate performance of junior managers.

– responsible for inspiring lower level managers towards better performance.

Lower Level of Management

• Lower level is also known as supervisory / operative level of management.

• consists of supervisors, foreman, section officers, superintendent etc.
• Their activities include -
– Assigning of jobs and tasks to various workers.
– guide and instruct workers for day to day activities.
– Responsible for the quality as well as quantity of production.
– entrusted with the responsibility of maintaining good relation in the organization.
– Communicate workers problems, suggestions, and recommendatory appeals etc to
the higher level and higher level goals and objectives to the workers.
– help to solve the grievances of the workers.
– Supervise & guide the sub-ordinates.
– Responsible for providing training to the workers.
– Arrange necessary materials, machines, tools etc for getting the things done.
– Prepare periodical reports about the performance of the workers.
– Ensure discipline in the enterprise.
– Motivate workers.
– Image builders of the enterprise
Functions of Management - Planning, Organizing, Staffing, Directing & Controlling

• dynamic process consisting of various elements and activities.

• different from operative functions like marketing, finance, purchase etc

• these activities are common to each and every manger irrespective of his level or status.

• Henry Fayol, “To manage is to forecast and plan, to organize, to command, & to control”.

• Luther Gullick has given a keyword ’POSDCORB’ where P stands for Planning, O for

Organizing, S for Staffing, D for Directing, Co for Co-ordination, R for reporting & B for

Budgeting.

• KOONTZ and O’DONNEL i.e. Planning, Organizing, Staffing, Directing and Controlling.

• functions are overlapping in nature i.e. they are highly inseparable.

• Each function blends into the other & each affects the performance of others.
Planning
• basic function of management.

• chalking out a future course of action & deciding in advance the most appropriate

course of actions for achievement of pre-determined goals.

• According to KOONTZ, “Planning is deciding in advance - what to do, when to do & how

to do.
– It bridges the gap from where we are & where we want to be”. It is an exercise in problem

solving & decision making.

• is a systematic thinking about ways & means for accomplishment of pre-determined

goals.

• Planning is necessary to ensure proper utilization of human & non-human resources.

• It is all pervasive, it is an intellectual activity

• it also helps in avoiding confusion, uncertainties, risks, wastages etc.

Organizing
• process of bringing together physical, financial and human resources

• developing productive relationship amongst them for achievement of organizational goals.

• According to Henry Fayol, “To organize a business is to provide it with everything useful or

its functioning i.e. raw material, tools, capital and personnel’s”.

• To organize a business involves determining & providing human and non-human resources

to the organizational structure.

• Organizing as a process involves:

– Identification of activities.

– Classification of grouping of activities.

– Assignment of duties.

– Delegation of authority and creation of responsibility.

– Coordinating authority and responsibility relationships.

STAFFING

•It is the function of manning the organization structure and keeping it manned.

•Staffing has assumed greater importance due to advancement of technology, increase in size of business,

complexity of human behavior etc.

•The main purpose of staffing is to put right man on right job i.e. square pegs in square holes and round pegs

in round holes.

• According to Kootz & O’Donell, “Managerial function of staffing involves manning the organization

structure through proper and effective selection, appraisal & development of personnel to fill the roles

designed un the structure”.

• Staffing involves:

–Manpower planning (estimating man power in terms of searching, choose the person and giving the

right place).

–Recruitment, Selection & Placement.

–Training & Development

–Remuneration , Performance Appraisal , Promotions & Transfer.

Directing

• part of managerial function which actuates the organizational methods

to work efficiently for achievement of organizational purposes.

• Direction is that inert-personnel aspect of management which deals

directly with influencing, guiding, supervising, motivating sub-ordinate

for the achievement of organizational goals. Direction has following

elements:
– Supervision

– Motivation

– Leadership

– Communication
• Supervision- implies overseeing the work of subordinates by their

superiors. It is the act of watching & directing work & workers.

• Motivation- means inspiring, stimulating or encouraging the sub-

ordinates with zeal to work. Positive, negative, monetary, non-

monetary incentives may be used for this purpose.

• Leadership- may be defined as a process by which manager guides

and influences the work of subordinates in desired direction.

• Communications- is the process of passing information,

experience, opinion etc from one person to another. It is a bridge

of understanding.
Controlling
• It implies measurement of accomplishment against the standards

• correction of deviation if any to ensure achievement of organizational goals.

• The purpose of controlling is to ensure that everything occurs in conformities with the standards.

• An efficient system of control helps to predict deviations before they actually occur.

• According to Theo Haimann, “Controlling is the process of checking whether or not proper progress is

being made towards the objectives and goals and acting if necessary, to correct any deviation”.

• According to Koontz & O’Donell “Controlling is the measurement & correction of performance activities

of subordinates in order to make sure that the enterprise objectives and plans desired to obtain them

as being accomplished”.

• Therefore controlling has following steps:

–Establishment of standard performance.

–Measurement of actual performance.

–Comparison of actual performance with the standards and finding out deviation if any.

–Corrective action.
 Define “role”
• A role is a set of behaviours associated with a
particular job

19
Mintzberg’s Managerial Roles

Henry Mintzberg studied CEOs at work and created a

scheme to define what managers do on the job.
These are commonly referred to as Mintzberg’s
managerial roles.
These can be grouped into three primary headings:
interpersonal,

informational
decisional

20
 INTERPERSONAL
Role Description Identifiable Activity

Figurehead Manager serves as an official Greeting visitors;

representative of the organization signing legal documents
or unit

Leader Manager guides and motivates Staffing, training

staff and acts as a positive
influence in the workplace

Liaison Manager interacts with peers and Acknowledging

with people outside the mail/email; serving on
organization to gain information boards; performing
activities that involve
outsiders
21
 INFORMATIONAL
Role Description Identifiable Activity

Monitor Manager receives and collects Reading magazines and

information reports; maintaining
personal contacts

Communication Manager distributes Holding meetings;

(Disseminator) information within the making phone calls to
organization relay information;
email/memos

Spokesperson Manager distributes Holding board meetings;

information outside the giving information to
organization the media
22
 DECISIONAL
Role Description Identifiable Activity
Entrepreneur Manager initiates change Organizing sessions to
develop new programs;
supervises design of
projects
Disturbance Manager decides how conflicts Steps in when an
Handler between subordinates should be employee suddenly
resolved leaves or an important
customer is lost
Resource Manager decides how the Scheduling; requesting
Allocator organization will use its authorization;
resources budgeting

Negotiator Manager decides to negotiate Participating in union

major contracts with other contract negotiations
23
organizations or individuals or in those with
MANAGERIAL SKILLS-
1. Conceptual skills- helps managers to visualize , to diagnose and
understand various aspects of managerial problems. Top mgt requires
more conceptual skills
2. Human skills-all mgrs at all levels need interpersonal skills to
understand others, to lead, to communicate, to motivate, to develop
team spirit, to work with others.
3. Technical skills- helps to undertake day-to-day operations (Lower
level)
4. Design skills- identify problem & design the best solution
( intelligent, experienced, upto date)
5. Administrative skills- ability to frame plans and policies to get work
done through co-ordination, regulate performance with discipline
6. Decision making skills- all mgrs at all levels need skills to generate
alternatives & select best alternative to solve problem.
7. Communication skills- what, when, where, whom & how to
communicate (all mgrs)
8. Leadership skills- lead & motivate by example, good qualities & right
FUNCTIONS OF TOP LEVEL MGT-
a. Mission statement- clear direction to the activities of orgn
b. Plan & policies- Long term goals & objectives, preview
c. Organizing resources- arrangement of physical, financial, other
resources
d. Selection- responsibility of selecting dept heads & key executives
e. Direction- direction to middle level executives to implement plans
f. Control of activities-designing , develops system of monitoring,
measurement & evaluation of performance
g. Motivation- train & motivate key personnel of orgn
h. Reporting- reports to BOD regarding performance of orgn
FUNCTIONS OF MIDDLE LEVEL MGT-
a. Planning- frames plans , policies for departmental activities,
periodic review, approval by top mgt
b. Organising-arrangement of resources for departmental activities
c. Selection- recruiting & training lower level executives
d. Direction- guiding executives to undertake activities efficiently
e. Motivation- motivating low level executives for efficiency,
effectiveness
f. Controlling- monitors & controls dept performance
g. Reporting- reports to top level reg dept performance, provide
recommendations
FUNCTIONS OF LOWER LEVEL MGT-
a. Planning- undertake day-to-day activities
b. Organising- arrangement of resources, maintenence
c. Direction- directions to operative personnel, assign jobs, issue
orders & instructions to operative personnel
d. Motivation- motivation by incentives, training
e. Controlling- monitors & controls activities so as to achieve
targets as per plans
f. Reporting –reports to middle level executives about
performance of operative personnel.
CHAPTER 2
F. W. Taylor’s 4 Principles of Scientific Management

•The fundamental principles that Taylor saw underlying the scientific approach to management may be

summarized as follows:

•1. Replace rule-of-thumb work methods with methods based on a scientific study of the tasks.

•2. Scientifically select, train, and develop each worker rather than passively leaving them to train

themselves.

•3. Cooperate with the workers to ensure that the scientifically developed methods are being

followed.

•4. Divide work nearly equally between managers and workers, so that the managers apply scientific

management principles to planning the work, and the workers actually perform the tasks.

•Taylor concentrated more on productivity and productivity based wages.

•stressed on time and motion study and other techniques for measuring work.

•He had an idealist’s notion that the interests of workers, managers, and owners should be

harmonized.
Fayol’s 14 principles of management-
• Fayol principles of management consist of 14 principles of management, which are based on fundamental truths-

1. Division of Work: Work done as small jobs or operations, creating specialization.

2. Authority and Responsibility: Authority suggests the right to give the order and obtain obedience and responsibility is the sense of

dutifulness that arises out of authority.

3. Discipline: Respect to organizational rules and the terms of employment.

4. Unity of Command: Employees will work for command by their Superior.

5. Unity of Direction: All are working for the same targets for the betterment of the company.

6. Subordination: No personal or group interest, only a general interest persists.

7. Remuneration: The payment system contributes to the success of the organization.

8. Centralization: There must be the finest utilization of an organization’s resources.

9. Scalar Chain: This implies the superior-subordinate relation within the organization.

10.Order: Everything has a place or sequence

11.Equity: No discrimination

12.Stability of tenure of Personnel: Employee retention or long term employment is important.

13.Initiative: Bringing new thing to the company.

14.Esprit de Corps (Unity is strength): Team spirit in the organization.

• these are useful tools for various organizational tasks such as predicting, planning, decision-making, coordination and control.
Elton Mayo’s Human Relations Approach:

• is the Study of behavior of people at work.

• series of experiments conducted by Professor Elton Mayo and his

associates at the Harvard School of Business at the Western Electric

Company’s Hawthorne Works, near Chicago.

• Earlier only physical conditions of work and money wages paid were

considered,, hese studies focussed social factors and productivity

( satisfaction of the employees in work situations)

• Following the Hawthorne Experiments, behavioural scientists belonging

to a variety of disciplines including Psychology, Sociology, Philosophy

and Anthropology in studying the behaviour of people at work.

Human Relations School of Thought-
– are of the view that the effectiveness of any organisation depends on the
quality of relationships among the people working in the organization.
– the managers must concern themselves with interaction of people with the
organisation.
– basic assumption is that the goals of the organisation are achieved through
and with the people
• this school studies the-
– psychological processes in the organisations,
– informal organisations,
– Conflict,
– change,
– motivation and
– relationships,
– various techniques of achieving organisational development by improving the
relationships among the various groups of people constituting the organisation
and its internal environment.
• Thus, it may be said that this school concentrates on people and their behaviour
within the formal and informal organisations.
Features of Elton Mayo’s Human Relations Approach:
The main features of the Human Relations Approach to management
are the following:

• (a) Since management is getting things done through and with people,
a manager must have a basic understanding of human behavior in all
respects particularly in the context of work groups and organizations.

• (b) The managers must study the inter-personal relations among the
people at work.

• (c) Larger production and higher motivation can be achieved only

through good human relation.

• (d) The study of management draws the concepts and principles from
various behavioral sciences like Psychology and Sociology.
These experiments are described below:
1. Illumination Experiments:
• From these experiments, it was revealed that productivity could be increased not only by
improving the working environment, but also through informal social relations among the
members of the working group.
2. Relay Assembly Test Room Experiment:
• In this experiment a small homogeneous working group was constituted. Several new
elements were introduced in the work environment such as shorter working hours, proper
rest periods, improved physical conditions, friendly supervision, free social interaction among
the group members, and so on.
• During this period of the experiment, productivity and morale increased. Productivity and
morale were maintained even if the improvements in the working conditions were
withdrawn. The researchers concluded that socio- psychological factors such as the feelings
of being important, recognition, participation, in­formal work group, non-directive
supervision etc. held the key for higher productivity.
3. Mass Interviewing Programme:
• A large number of workers were interviewed to know their perceptions and orientation on the
working life. The results again confirmed the importance of informal relation, social and
psychological needs and their impact on the behaviour of the workers.
4. Bank Wiring Observation Room Experiment:
• A group of 14 workers was observed with regard to their work behavior. The observation
revealed the informal production norms set by the workers and the existence of informal
relations in the group.
The conclusions of the Hawthorne Experiments are pointed out below:

• (i) A factory is not only a techno-economic unit but a psycho-social organisation also.

• (ii) The workers spontaneously form small informal groups. The norms and values of such

groups have significant influence on the behaviour and performance of the workers.

• (iii) Physical conditions of work have some influence on the workers’ morale and pro­

ductivity. But their inter-personal relations, attitude of the supervisors and other social

and psychological factors have a far greater influence.

• (iv) Usually, the workers act or re-act not as individuals but as the members of a group.

• (v) The workers are not mere economic men motivated by money alone. They respond to

the total work situation including recognition, participation etc.

• (vi) The informal leaders play an important role in setting and enforcing group norms.

• (vii) The managers must understand and recognize the inter-personal and group rela­tions

on the job.
• Elton Mayo is known as the ‘Father of Human Relations Movement’. The

Hawthorne Experiments provided a landmark in the evolution of management

thought.

• Many organizations initiated the measures to improve relations with the

workers. The managers were sup­posed to assume a new role and to develop

new concepts of authority, motivation and leader­ship.

• Experiments were criticised for lack of scientific analysis and research. It was

alleged that the researchers had certain pre-conceived perceptions and

orientations. The experiments were too narrow and small to provide

generalization.

• The findings are however, accepted even today. Mayo’s work was a turning

point in the development of management thought. His work challenged the

basic postulates of the classical approach. His studies revealed the over-
• Arthashastra, written by Kautilya in the 4th century is the first ever book written on Practice
of Management consisting of 15 chapter, 380 Shlokas and 6000 Sutras.
• Kautilya was interested in establishment and operation of the machinery through which the
king preserves the integrity and solidarity of the State and generates power.
• the importance of vision, mission and motivation was captured in Arthashastra. Kautilya
advise his swamy to rule through Prabhu Shakti (vision), Mantra Shakti (mission) and Utsah
Sahkti (motivation).
• Kautilya reminds his swamy that his objectives for his rule are:
• - Acquire power; (Making present business effective)
• - Consolidate what has been acquired; (Making present business effective)
• - Expand what has been acquired; and (Identify potential and realize it)
• - Enjoy what has been acquired. (Making it a different business for a different future)
• Arthashashtra has detailed policies for the society, individual industries, labor and
employment, calamities and control of vices. Drucker & Chanakya defines an organization as
having ‘social dimension and economic objective’.
• Kautilya reminds about complex human nature for effective, efficient and honest running of
the orgn. He warns of two undesirable attitudes of human nature, Pramada, and Alasya to
be avoided by leaders. Consider the two pillars of Nyay, the justice and Dharma, the ethics..
• he advises the top mgt to identify deficiencies to improve /develop him & othersa
• Successor should be trained in three specific areas: Arthashastra (economic administration),
Nitishastra (foreign affairs) and Dandaniti (political science).
• Kautilya specifies qualities as qualifying standards for appointment
of employees These qualities are: Drudhachitta (power of
concentration), Shilavan (character), Pragna (thinking capability),
Vangmi (communication skills) and Daksha (observation / vigilance).
In addition, Knowledge, Skills and Attitude.
• Kautilya’s advises about six emotional devils who do not allow
appropriate decision making in any operation. The emotional devils
identified by Kautilya are: Kama (lust), Krodha (anger), Lobha (greed),
Mana (vanity), Mada (haughtiness) and Harsh (overjoy).
• Kautilya provides the essentials’ of an organized State-the territory ,
population, organization, unity within the kingdom. According to
Kautilya, the essentials of the State should be taken care of through
‘constituents of the State’ identified by him. These constituents are:
Swamy (King), Amatya (Prime Minister), Janapada (populated
territory), Durga (fort), Ksha (treasury), Bala (force / army) and Mitra
(ally).
• Kautilya refers to diplomacy in Nitishastra (foreign affairs). The six attributes of
diplomacy : intelligence, Memory, Cleverness of Speech, Knowledge of Politics,
Morals and Readiness to Provide resources.
• Kautilya advise networking with other kings defeated or threatened by the strong
king on one hand and develop nuisance value through ‘nibbling by the sides’.
• Efficient management means setting up of realistic targets and meeting targets
without using over zealous methods.
• Wealth lies in economic activities which ensure current prosperity and future gains,
the orgn with no resources is weak & easy target, ensure equal opportunity for all
to earn a decent living.
• Profitability should not only mean surplus over costs. It should also mean provision
of investment for future growth.
• While limiting the span of control for the Swamy, Kautilya warns against
centralization of power by stating “one wheel alone does not move a chariot”.
• Swamy should take proper care in appointing advisors. He should have clarity in
terms of qualities an advisor should possess. Most important being practical
experience, thinking prowess, sound judgement and ability to differ while keeping
total devotion to the Swamy.
• Pearls of wisdom from Arthashastra:
• Knowledge, Planning , Leadership:
• A great leader shows ability to make decision and act boldly in the face of setbacks
PETER F. DRUCKER –
• Peter F. Drucker became Professor of Management in the New York University in 1950.
• The concept of Management , objectives were introduced by Peter F. Drucker.
• According to him, Management is not an exact science or profession, criticised Scientific Management and human relations
approach.
CONTRIBUTION OF PETER F. DRUCKER
1.Nature of Management:
basic objective of Management is innovation. The term innovation includes the development of new ideas, combination of
the old idea with new idea and adoption of ideas from other fields. Management is treated as a discipline and a
profession. As a profession, Management gives importance only to results in achievement rather than following the
criteria of true profession. As a discipline, Management has separate tools, techniques, approaches and skils.
2. Functions of management: Management is the starting point of any institution. The existence and functions of
Management are concurrent with the existence and functions of a manager & has to determine the objectives and
activities, and is concerned with the direction and controlling of the activities.
3. Organisation structure: An effective organisation structure has the following three basic characteristics. They are: (1) The
structure is framed in such a way that it enables smooth pertormance, Containing possible minimum number of
managerial levels; and (ii) Providing a chance to test the ability of young people who are accepting the responsibility.
4. Centralised control with a structure of decentralisation: Itis similar to our Indian constitution. Central Government has
more powers compared to State Governments. According to Drucker, Top management has more powers than various
departments. But the decisions regarding the departments nave to be taken by both of them. Departments are allowed
to take decisions within the limits set up by the top management.
5. Management by Objectives (MbO): Drucker introduced MBO concept in 1954 includes method of planning, setting
standards, performance appraisal and motivation giving importance to self control . It is necessary to change the
organisation itself.
6. Organisational changes: Drucker visualised rapid changes due to the rapid technological which affects human life. He
stressed that human beings should develop an attitude to face the changes and consider them indispensable for making
the society better. This is done by developing dynamic organisations only by absorbing the rapid changes.