Name of the Faculty : J.

Poongodi
Subject Name and Code : GE3751 – Principles of Management
Branch & Department : B.Tech CSBS
Year & Semester : IV / VII
Academic Year : 2024-2025(Odd)

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 GE3751 – Principles of Management

COURSE OBJECTIVES:
∙ Sketch the Evolution of Management.
∙ Extract the functions and principles of management.
∙ Learn the application of the principles in an organization.
∙ Study the various HR related activities.
∙ Analyze the position of self and company goals towards business.

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 COURSE OUTCOMES
At the end of this course, the students will be able to:

CO1: Upon completion of the course, students will be able to have clear
understanding of managerial functions like planning, organizing, staffing,
leading & controlling.
CO2: Have same basic knowledge on international aspect of management.
CO3: Ability to understand management concept of organizing.
CO4: Ability to understand management concept of directing.
CO5: Ability to understand management concept of controlling.

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 UNIT I - INTRODUCTION TO
MANAGEMENT AND ORGANIZATIONS

Definition of Management – Science or Art – Manager Vs

Entrepreneur- types of managersmanagerial roles and skills
– Evolution of Management –Scientific, human relations,
system and contingency approaches– Types of Business
organization- Sole proprietorship, partnership, company-
public and private sector enterprises- Organization culture
and Environment – Current trends and issues in
Management.
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 UNIT II- PLANNING

Nature and purpose of planning – Planning process – Types of planning

– Objectives – Setting objectives – Policies – Planning premises –
Strategic Management – Planning Tools and Techniques – Decision
making steps and process.

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 UNIT III- ORGANISING

Nature and purpose – Formal and informal organization –

Organization chart – Organization structure – Types – Line and
staff authority – Departmentalization – delegation of authority –
L T P C 3 0 0 3 173 Centralization and decentralization – Job
Design - Human Resource Management – HR Planning,
Recruitment, selection, Training and Development, Performance
Management, Career planning and management.

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 UNIT IV - DIRECTING

Foundations of individual and group behaviour– Motivation –

Motivation theories – Motivational techniques – Job satisfaction –
Job enrichment – Leadership – types and theories of leadership –
Communication – Process of communication – Barrier in
communication – Effective communication – Communication and
IT.

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 UNIT V- CONTROLLING

System and process of controlling – Budgetary and non -

Budgetary control techniques – Use of computers and IT in
Management control – Productivity problems and
management – Control and performance – Direct and
preventive control – Reporting.

23-07-2024 GE3751/POM/IV CSBS/VII-SEM/KG-KITE

 GE3751 – Principles of Management

TEXT BOOKS :
1. Harold Koontz and Heinz Weihrich “Essentials of management” Tata McGraw
Hill,1998.
2. Stephen P. Robbins and Mary Coulter, “ Management”, Prentice Hall (India)Pvt. Ltd.,
10th Edition, 2009.
REFERENCES :
3. Robert Kreitner and MamataMohapatra, “ Management”, Biztantra, 2008.
4. Stephen A. Robbins and David A. Decenzo and Mary Coulter, “Fundamentals of
Management” Pearson Education, 7th Edition, 2011.
5. Tripathy PC and Reddy PN, “Principles of Management”, Tata Mcgraw Hill, 1999

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CONTROLLING
BASIC PROCESS IN CONTROLLING
 CONTROLLING

The basic control process involves three

steps:
1. Establishing Standards
2. Measuring performance against these standards
3. Correcting variations from standards and plans
Critical Point Standards
 Critical Point Standards
a. Physical Standards
where materials are used, labor is
employed, services are rendered & goods
are produced
• Labor hours per unit of output
• Pounds of fuel per horse power produced
• Ton-miles of freight traffic carried
• Units of production per machine hour
• Feet of wire per tone of copper
 COST STANDARDS

• Direct & Indirect cost produced per unit

• Labor cost per unit or per hour
• Material cost per unit, machine hour cost
• Selling costs per rupee or unit of sales
 CAPITAL STANDARDS
The typical Balance sheet disclose capital
standards
o Standard for New Investment
o Standard for overall control
o Standard for ROI
o Standard for current Assets to current liabilities
o Standard for debt to net worth
o Standard for fixed investment to total Investment
Case receivables & payables, notes or bonds to
stock, size and turnover of inventories
 Revenue Standards
• Revenue per bus passenger – mile
• Average sale per customer
• Sales per capita in a given market
Program Standards
• To install a variable budget program
• A program for the development of new
products
• Program for improving the quality of
sales force
 Intangible Standards
What standard can a manager use for
determining the competence of the
divisional purchasing agent or personnel
director?
• Whether public relation program is successful
• Whether the advertising program meets both
short & Long term objectives
• Are supervisors loyal to company objectives
 Goal as standard
• Goals can be used as performance standards
 Real time Information and
Control
• Information about what is happening while it is
happening
• Vacant seat about airlines, super markets (Sales
– data, inventory, gross profit), Production
system
• Real time data is used to measure performance
 Future Directed Control

• Forecasts based on latest available information

Ex. Sales forecast indicating that sales will be lower than desirable,
managers may develop new plans for advertising, sales
promotion or the introduction of the new products, in order to
improve the sales forecast.
Feed forward Vs Feedback
Control Systems
 Requirements for feed
forward control
1. Make a through and careful analysis of the
Planning and control system, and identify
the more important input variables
2. Develop a model of the system
3. Take care to keep the model up to data
4. Collect the data on input variables regularly
and put into the system
5. Regularly access the variations of actual
input data from planned for inputs
Systems of Inputs for Feed F
orward Control
 Requirements for Effective
Controls
 Tailoring Controls to plans and Positions
(Control of sales department will defer for finance
department)
• Use budgets, standard hours & costs & Financial
ratios
 Tailoring controls to Individual Manager
 Designing controls to point up Exceptions at critical
points
 Seeking objectivity of controls
 Ensuring flexibility of controls
 Fitting the control system to the Organizational
Culture
 Achieving Economy of controls
 Establishing controls that lead to corrective action
 Controlling Techniques :
BUDGET
Budget is the device for accomplishing
control
• Budget is the formulation of plans for a given
future period in numerical terms
• Budgets are statements of anticipated results
either in financial terms – Expense & Capital
budgets or nonfinancial terms - labor hours,
materials, physical sales volume, units of
Production
Types of Budgets
 Types of Budgets
1. Revenue and expense budgets
2. Time, space, material and
product budgets
3. Capital Expenditure budgets
4. Cash budgets
Dangers in Budgeting
 Dangers in Budgeting

o Budgets are used for planning and control

o Unfortunately some budgetary control
programs are so complete and detailed that
they become cumbersome, meaningless, and
unduly expensive.
BUDGETRY CONTROL
Zero – Base Budgeting
 Zero – Base Budgeting

• It is also a type of budgeting

• The idea is divide the enterprise into
“Packages” composed of goals, activities and
needed resources and then to calculate costs
for each package from the group up.
• It is useful for support areas rather than to
production areas
 Traditional Non budgetary
control Devices
 Statistical data of operations
 Special reports analysis of specific areas
 Operational audit
 Independent appraisal by a staff of internal
or external auditors
 Personal observation such as managing by
walking around
 Break even analysis
 MODERN TECHNIQUES

• Program Evaluation & Review Techniques (PERT)

• Critical path method(CPM)

• Gantt chart

• benchmarking
Program Evaluation & Review
Techniques (PERT)
 MAJOR CHARACTERISTICS

• Optimistic time

• Pessimistic time

• Most likely time

GANTT CHART
 Information Technology
• MIS provides the communication link that makes managing
possible
• MIS is defined as a formal system of gathering, integrating,
comparing, analyzing and dispersing information internal
and external to the enterprise in a timely, effective and
efficient.
• Electronic equipment permits fast and economical
processing of huge amounts of data
 Expansion of basic data

• In traditional accounting information, aimed at

calculation of profits, has been of limited value for
control
• Managers need all kinds of non accounting
information above the external environmental such as
social, economic, political and technical
developments
 Intelligent Services
• To solve the problem of information overhead,
the establishment of intelligent services and
the development of a new profession of
intelligence experts.
 The use of Computers in
Handling Information

• Mainframe Computer
• Mini Computer
• Micro Computer
 Business Applications
 Material Requirements Planning
 Manufacturing Resource Planning
 Computer – aided control of Manufacturing
machinery
 Project costing
 Inventory control
 Purchasing
 Design and Engineering (U.S.Space Program)
 A/Cs receivable & Payable
 Pay roll
 Capital Budgeting
 Financial Planning
Supervisory Level  Scheduling, daily
Planning & Controlling
Middle level Managers  Plant Managers
Administration &
Co-ordination
Too Level Managers  Strategy & Overall
policy (Interaction between enterprise and
environment)
Applications and Impacts of
Microcomputers
• Budget Preparation
• Graphic Presentation
• Electronic Spread Sheets
• Financial Analyses
• Word Processing
• Simulation Models
• Forecasting
• Electronic Mail
• Tapping into databases
• Time - sharing
 Challenges created by IT

• Resistance to Computer Applications

• Speech Recognition Devices (then, than-
to, too & two)
• Telecommuting
• Computer Networks
• Internet
Digital Economy

• The internet changing how

business is conducted
• e-mail, e- commerce, e-business, e-
cash, e-travel, e-finance, e-loan, e-
music, e-books & many e-activities.
(Deleting intermediaries, reducing
distribution costs)
1. Consumer to Business (C2B)
• Flyers can bid for airline tickets through
priceline.com
2. Business to Consumers (B2C)
• One can order books or other items from
amazon.com
3. Consumer to Consumer (C2C)
• Individual can sell items over the web through
eBay
4. Business to Business (B2B)
• These transactions are probably going to have
the greatest impact on the economy
• Ex. G.M & Ford plan to transfer all purchasing to
the web with in next few years
 M- Commerce

• Development of WAP
(Devices like cell phone, Personal Digital Assistance)
( Palm Pilot)
 Productivity

• It is the input –output ratio with in a time

period with due consideration for quality
 Production Management
• It is used to refer to those activities necessary to
manufacture products.
[purchasing, warehousing, transportation]
Operations Management refers to activities
necessary to produce and deliver a service as
well as a physical product.
 FACTORS AFFECTING PRODUCTIVITY

• Technology
• Human resources
• Government policy
• Machinery and equipment design
• Skill of the workers
• Capital
• Research and development
• Trade unions
• Raw materials
• Job layout
 PRODUCTIVITY MEASURES

• Physical productivity

• Functional productivity

• Economic productivity
 PROBLEMS IN MEASUREMENT OF
PRODUCTIVITY

• Difficulty in measuring output

• Difficulty in measuring inputs
• Factorial productivity
• Changing conditions
• Service sector
• Different periods
• Difficulty in measuring man hours
• Technological change
Operations Management System
Product and Production Design
 Product and Production
Design
• Create product ideas by searching for consumer needs and
searching the various alternatives
• Select the product on the basis of various considerations
including data from market and economic analyses and make
a general feasibility study
• Prepare a preliminary design by evaluating various
alternatives, taking into consideration reliability, quality and
maintenance requirements.
• Reach a final decision by developing, testing and simulating the
process to see if they work
• Decide whether the enterprise’s current facilities are adequate or
if new or modified facilities are required
• Select the process for producing the product, consider the
technology and the methods available
• After the product is designed, prepare the layout of the facilities to
be used, plan the system of production, and schedule the various
things that must be done.
 System Design
1. Layout in the order in which the product is produced or assembled
2. Layout according to the process employed (E.g. Clinic)
3. Fixed Position layout Ex. Printing Press, Ships
4. According to the nature of the project Ex. Bridge – Building or
Tunnel
5. Arranged to facilitate the sale of products Ex. Super market
6. Layout facilitates storage or movement of products
 PRODUCTION CONTROL

• Process that keeps an eye on the production flow and size of

resources along with the location of any deviation from the present
action and to arrange for the prompt adjustment.
 REASONS

• Increasing production
• Coordinating plant activity
• Cost control
• Rationalization of production activities.
 Tools and Techniques for
improving Productivity
a) Inventory Planning and Control
2 DS
Qe 
H
Qe
= EoQ
D = Demand Per year
S = Setup Costs
H = Inventory holding cost per item, per year

Goal: Optimal Total cost for purchasing or

manufacturing, inventory holding and shortages
 Inputs

Purchasing /
Goal Inputs Feedback Outputs (Planned
manufacturing cost
measures events)
per unit

Purchasing /
Inventory cost per manufacturing
unit Schedule

Demand for product

Shipping Schedule
Inventory
Model
Distribution of
product Inventory Schedule

Reorder lead time

Shortage
probabilities
Shipping costs and
lead time
b) Just – in – Time Inventory System (Japan)
• Zero Inventory & stockless Production Requirements
• The quality of the parts must be very high
• Dependable relationship & smooth
cooperation with suppliers
• Supplier should be located near the
company
c) Outsourcing  USA & Europe
• Products and operations are contracted to
outside vendors that have expertise in a
particular area
d) Operations Research
It is the application of scientific methods to the
study of alternatives in a problem situation, with a
view to obtaining a quantitative basis for arriving at
a best solution
e) Value Engineering
Analyzing the operations of the product/ service,
estimating the value of each operation, and attempting to
improve that operation by trying to keep costs low at each step
or part
f) Work Simplification
Process of obtaining the participation of workers in
simplifying their work
Training sessions are conducted to teach
 Time & motion studies
 Work flow analyses
 Layout of workstation
g) Quality Circles
It is a group of people from the same
organizational area, who meet regularly to solve
problems they experience at work
h) Total Quality Management
TQM involves the organization’s long term commitment to
the continuous improvement of quality – throughout the
organization, and with the active participation of all members at
all levels-to meet and exceed customers’ expectations.
i) Learn Manufacturing Kaizen, Zero defects, JIT, Team
Management
j) Computer Aided Techniques – CAD, CAM
k) Break Even Analysis
It is a graphical method of analyzing and understand the
relationships among sales volume, costs and revenues in any
organization.
BEP :-
• The level of sales volume to which TR=TC
• After the BEP, the organization begins to make profits

Margin of safety = Actual Sales – Sales at BEP

• Large angle of incidence means higher profits
 Scope of BEA
1. It shows profit & losses at various levels of production
2. It gives relationship between revenue and output
3. Helps in budgeting and profit planning
4. It is a decision making tool in the hands of Management
 Productivity
It measures how well an organization is using its resources in
producing its goods and services
• It is defined as the ratio of output to input

Goods and services produced

Pr oductivity 
Labour  Money  Material  Techno log y
• Greater Productivity leads to greater profitability
 Productivity Problems
Causes of low productivity
1. Less skilled labor force
2. Less importance to R & D
3. Less ambitious workers
4. Worker’s attitude and loyalty
5. Government policies and
regulation
 Approaches to improve
Productivity
1. Formulation of objectives
2. Performance against these objective
3. Effective reporting system
4. Reinforcing good performance
5. Knowledge workers
6. Principles and guidelines
7. Recognition of good performance
8. Preparing work modules
9. Emphasizing goals
10.Developing ability to work with people
 Cost Control
• Cost control can bring immediate savings and ensure that
business remain competitive in the long term
• Cost control is a continuous process that begins with the proposed
annual budget. The budget helps
• To organize and coordinate production and the selling, distribution,
service and administrative functions
• To take maximum advantage of available opportunities
For effective cost control, most organizations
use standard cost systems, in which the actual
costs are compared against standard cost for
performance evaluation and the deviations are
investigated for remedial actions.
 Steps involved in cost
control
• Investigate procedures to detect variance of actual costs from
budgeted costs
• Diagnostic procedures to ascertain the causes of variance
• Corrective procedures to effect realignment between actual
and budgeted costs
 Purchase Control
• It provides link between inventory control system
and the accounts payable system
• It provides a means of recording purchase orders
placed with the vendors and tracking the orders
through the different phases of the receiving the
product, back ordering and invoicing
 Quality Control
• It is concerned with checking and reviewing work that
has been done
• The basic goal of quality control is to ensure that the
products, services or processes provided meet
specific requirements and are dependable,
satisfactory and fiscally sound.
 QC system is designed to

• Provide routine and consistent checks

to ensure data integrity, correctness
and completeness
• Identify and address errors and
omissions
• Document and archive inventory
material and record all QC activities
QC Tools
 QC Tools
• To improve the quality of the product
a. Check Sheet : It is used to easily collect data. Decision making
and actions are taken from the data
b. Pareto Chart : It is used to define problems, to set their priority,
to illustrate the problems detected and determine their frequency in
process
c. Cause & Effect Diagram : (Fishbone diagram) is used to figure
out any possible causes of a problem. After the major causes are
known, we can solve the problem accurately.
d) Histogram :
Shows a bar chart of accumulated data and
provides the easiest way to evaluate the distribution of
data
e) Scatter Diagram :
Is a graphical tool that plots many data points and
shows a pattern of correlation between two variables
f) Flow Chart :
shows the process step by step and
can sometimes identify an unnecessary
procedure
g) Control Chart :
provides control limits which are
generally three standard deviations above and
below average, whether or not our process is
in control
 International
Management
• International business engage in transactions
across national boundaries
• These transactions include transfer of goods,
services, technology, managerial knowledge and
capital to other countries
• [Exportation, Licensing Agreement, Management
Contracts, Joint Ventures and strategic alliances &
subsidiaries]
 Advantages of MNC
• Advantages of business opportunities in many countries
• Raise money for its operations, throughout the world
• Better access to national resources and materials may not
be available to domestic firms
• Recruit managers & other personnel from a world wide
labor pool.
 Challenges in
Multinationals
• Increasing nationalism in many countries
• Years ago, developing countries lacked managerial
marketing & technical skills. Now people in developing
countries acquiring those skills
• Government frequently change & corporations must deal
with and adapt to these changes
 France
• Government planning on a national scale i.e helps
coordinate the plans of individual industries and
companies
• The government aim is to utilize most effectively the
country’s resources and to avoid expansion in
uneconomic areas
• At times, the plan becomes a global strategy helping
specific industries(Electronic)
 Germany (Authority &
Codetermination)
• In the past  benevolent authoritarianism
• Codetermination  which require labor membership in the
supervisory board and the executive committee of certain
large corporations
• Labor director is elected as a member of the executive
committee
 Korean Management
• It is simply an extension of Japanese Management
• Korean Organizations are quite hierarchical, with family members occupying
key positions
• Beyond blood relationships the factors affecting hiring decisions often include
the school attended it being from the same geographic region as the top
person
• The lead ship style can best be described as top-down, or autocratic/
Paternalistic
• So the firm adjust quickly to the demands in the environment
• Life time employment does not prevail
• Labor turnover rates are high
 Japanese Management
• Life time Employment
• Consensus decision making
(Change & new ideas come primarily from below)
• Theory X
• Emphasis on interpersonal skills needed for group interaction
• Emphasis on group decision making, responsibility remains with the
individual
• Emphasis on informal and democratic relationships based on trust.
• (Now IBM, HP, Dayton – Hudon followed this)
 Porter’s competitive
advantages of Nations
• He suggests four sets of factors that contribute to a nation’s well
being
First Set :
Nation’s resources, its labor costs & the skills and education of
its people
Second set :
Demand conditions of a nation
• Market size, the way product may be advertized
• Degree of consumer sophistication
Third Set :
• Concern for suppliers
• A company prospers when supporting companies
are located in the same area
Fourth Set :
• Firm’s
strategy and structure as well as rivalry
among the competitors
 Australia
 Country’s moralistic stance and its
emphasis on political and social values,
achievement & risk taking Italians
Italians
• In the environment of low tolerance for risks
• Very competitive & group decision making
 Austria
• Self realization and leadership
• Independence & competitiveness are valued
• Tolerance for risk taking is low

Britain
 Security, resourcefulness, adaptability and logic
 Control of overall
Performance
• Profit and loss control
• Control through ROI

Direct Control
To compare the actual output of goods or services in terms of
quantity, quality, time & cost with plans
 Cause of Negative
Deviations from standards
• Uncertainty
• Lack of knowledge, experience or judgment
Preventive Control
The higher the quality of managers and their
subordinates, the less will be the need for direct
controls
 Developing Excellent
Managers
 Instilling a willingness to learn
 Accelerating Management Development
 Planning for Innovation
 Measuring and Rewarding Management
 Tailoring Information
 Expanding Research & Development in
Tools & Techniques
 Developing more Managerial Inventions
 Creating strong Intellectual leadership