Principles and Practices of Management

Definition of Management
Management is define as the process by which a
co-operative group directs action towards common
goal.(Joseph Massie)
Management is principally the task of planning
coordinating motivating and controlling the efforts
of others towards a specific goal.(James L. Lundy)
Management is an art of getting things done by
others.

Nature of Management
Universality
Purposeful
social Process
Coordinating Force
Intangible
Continuous Process
Composite Process
Creative Organ

Importance of
Management

Improves Understanding
Direction for Training and Development
Role of Management
Guide to Research in Management

Management as Science

Universally accepted Principle

Experimentation and Observation
Cause and Effect Relationship
test of Validity and Predictability

Management as Art
Practical Knowledge
Personal Skill
Creativity
Perfection through Practice
Goal Oriented

Basic Levels of Management

Top
Top
Managers
Managers
MiddleManagers
Managers
Middle
First-LineManagers
Managers
First-Line

Levels of Management

First-line Managers: have direct responsibility for producing

goods or services Foreman, supervisors, clerical supervisors

Middle Managers:

Coordinate employee activities

Determine which goods or services to provide
Decide how to market goods or services to customers
Assistant Manager, Manager (Section Head)
Top Managers: provide the overall direction of an organization
Chief Executive Officer, President, Vice President

First-line Managers
Directly responsible for production of goods or services
Employees who report to first-line managers do the
organizations work
Spend little time with top managers in large organizations
Technical expertise is important
Rely on planning and administration, self-management,
teamwork, and communication competencies to get work
done

Middle Managers
Responsible for setting objectives that are consistent with
top managements goals and translating them into specific
goals and plans for first-line managers to implement
Responsible for coordinating activities of first-line
managers
Establish target dates for products/services to be delivered
Need to coordinate with others for resources
Ability to develop others is important
Rely on communication, teamwork, and planning and
administration competencies to achieve goals

Top Managers
Responsible for providing the overall direction of an
organization
Develop goals and strategies for entire organization
Spend most of their time planning and leading
Communicate with key stakeholdersstockholders,
unions, governmental agencies, etc., company
policies
Use of multicultural and strategic action
competencies to lead firm is crucial

Management Level and Skills

Basic Management Skills

Technical skills:- (deals with things) concern
with what is to be done?
Human skills:- (deals with people) how to work
effectively with one another.
Conceptual skills:- (deals with idea) concern
with why the thing is done?

Qualities of a Successful
Manager
1.
2.
3.
4.
5.

Demonstrates integrity
Deals honestly and diplomatically
Demonstrates flexibility
Shows commitment and reliability
Listens effectively

Qualities of a Successful Manager

(cont..)
6.
7.
8.
9.

10.

A good negotiator
A thorough planner
Is fair
Knows how to have fun and has a good
sense of humor
Seeks to understand their workers

Responsibilities of Managers
1. Supervise and manage the overall
performance of staff in his department.
2. Achieve business and organization goals,
visions and objectives.
3. Analyzing, reporting, giving
recommendations and developing
strategies on how to improve quality and
quantity

Responsibilities of Managers
(cont..)

4. Involved in employee selection, career

development, succession planning and periodic
training.

5. Working out compensations and rewards

6. Responsible for the growth and increase in the

organizations' finances and earnings.

7. Identifying problems, creating choices and

providing alternatives courses of actions

Concept of Management

Management as a Discipline
Management as a Group of People
Management as a process

The Principles of Scientific

Management
1. Development of Science for each part of
mens job (replacement of rule of thumb)
2. Scientific Selection, Training &
Development of Workers
3. Co-operation between Management &
workers or Harmony not discord
4. Division of Responsibility

The Principles of Scientific

Management(cont..)

5. Mental Revolution
6. Maximum Prosperity for Employer &
Employees

Criticism of Scientific
Management


Workers Viewpoint
1.
2.
3.
4.
5.

Unemployment
Exploitation
Monotony
Weakening of Trade Union
Over speeding

Employers Viewpoint
1.
2.

Expensive
Time Consuming

Henri Fayols 14
Principles Of
Management

1. Division Of Work
Specialization allows the individual to build
up experience, and to continuously
improve his skills. Thereby he can be more
productive.

2. Authority
Authority means the right of a superior to
give order to his subordinates;
Responsibility means obligation (duties)
for performance.
The right to issue commands, along with
which must go the balanced responsibility
for its function.

3. Discipline
Discipline refers to obedience, proper
conduct in relation to others, respect of
authority, etc
Employees must obey, but this is twosided: employees will only obey orders if
management play their part by providing
good leadership.

4. Unity Of Command
Each worker should have only one boss with
no other conflicting lines of command.
If an employee receives orders from more
than one superior, it is likely to create
confusion and conflict

5. Unity of Direction
People engaged in the same kind of
activities must have the same objectives
in a single plan. This is essential to ensure
unity and coordination in the enterprise.
Unity of command does not exist without
unity of direction.

6. Subordination of individual
interest
Management must see that the goals of
the firms are always paramount.
The management must put aside personal
considerations and put company
objectives first.
Therefore the interests of goals of the
organization must prevail over the
personal interests of individuals

7. Remuneration
Payment is an important motivator although
by analyzing a number of possibilities, Fayol
points out that there is no such thing as a
perfect system

8. Centralization (Or
Decentralization)
This is a matter of degree depending on
the condition of the business and the
quality of its personnel.
Centralization implies the concentration of
decision making authority at the top
management.

9. Scalar chain (Line of

Authority)
A hierarchy is necessary for unity of
direction. But lateral communication is also
fundamental, as long as superiors know that
such communication is taking place. Scalar
chain refers to the number of levels in the
hierarchy from the ultimate authority to the
lowest level in the organization. It should
not be over-stretched and consist of toomany levels

10. Order
Both material order and social order are
necessary. The former minimizes lost time
and useless handling of materials. The latter
is achieved through organization and
selection.

11. Equity
In running a business a combination of
kindliness and justice is needed. Treating
employees well is important to achieve
equity.

12. Stability of Tenure of

Personnel
Employees work better if job security and
career progress are assured to them. An
insecure tenure and a high rate of
employee turnover will affect the
organization adversely.

13. Initiative
Allowing all personnel to show their
initiative in some way is a source of
strength for the organization. Even though
it may well involve a sacrifice of personal
vanity on the part of many managers.

14. Esprit de Corps

Management must foster the morale of its
employees. He further suggests that: real
talent is needed to coordinate effort,
encourage keenness, use each persons
abilities, and reward each ones merit
without arousing possible jealousies and
disturbing harmonious relations.

What Is Management?
(According To Fayol)
Fayol's definition of management roles and actions
distinguishes between Five Elements:

Prevoyance. (Forecast & Plan). Examining the future and

drawing up a plan of action. The elements of strategy.

To organize. Build up the structure, both material and

human, of the undertaking.

To command. Maintain the activity among the personnel.

To coordinate. Binding together, unifying and harmonizing all

activity and effort.

To control. Seeing that everything occurs in conformity with

established rule and expressed command.

Application Of Fayols Principles

Change and Organization.
Decision-making.
Skills. Can be used to improve the basic
effectiveness of a manager.
Understand that management can be seen
as a variety of activities, which can be listed
and grouped.


MODERN MANAGEMENT THEORY

System

Approach
Contingency Approach

System Approach
A system in simple terms is a set of
interrelated parts.
It is a group of interrelated but separate
elements working towards a common
purpose.
The arrangement of elements must be
orderly, there must be proper
communication facilitating interaction
between the elements and finally the
interaction should lead to achieve a
common goal.

Characteristics of System
Approach
(a) Dynamic: - Within the organization the process
of interaction between subsystems is dynamic.
(b) Multilevel and Multidimensional: - It is
micro within the nations industrial network and it
is macro with respect to its internal units. The
modern manager is forced to recognize the
importance of parts as well as the whole.
(c) Multi motivated:- Motivation is an extremely
complex process and drawing simplistic equation
is a futile exercise.

Characteristics of System
Approach (cont..)
(d) Probabilistic: - Modern theory tends to
probabilistic. Statement in modern theory tends to be
qualified with phrases such as may be, in general
and usually because modern theory recognizes that
few predictive statement can be made with certainty.
(e) Multidisciplinary: - Modern theory of management
is enriched by contribution from disciplines like
sociology, psychology, economics, anthropology,
ecology mathematics, operations research and so on.
(f) Descriptive: - Individual are free to select the
objectives and the methods to improve organizational
effectiveness.

Characteristics of System
Approach (cont..)
(g) Multivariable: - There is no simple cause
effect phenomenon in organizational activities.
An event may be the product of many factors
that are in turn interrelated and interdependent.
(h) Adaptive: - An organization and its
environment are expected to rearrange their
parts. Organization tries to cope with
environment changes through the feed back
mechanism. An organization must produce
output acceptable to components in
environment.

Contingency approach

The contingency approach believes that it is

impossible to select one way of managing the
work, best in all situations like promoted by
Taylor
Contingency refers to the immediate
circumstances.

contingency

approach stresses the need for

managers to examine the relationship
between the internal and external
environment of an organization.

Bureaucratic Management
(Max Weber )
The term bureaucracy is use by Weber to
explain the specific king of administrative
organization.
There are three types of legitimate
authority.
a. Rational legal authority
b. Traditional authority
c. Charismatic authority

Characteristics of Bureaucracy

Division of work
Hierarchy of positions
Rules and regulations
Impersonal conduct
Staffing
Technical competence
Official records

Business ethics and social

Responsibility
Responsibility
Responsibility
Responsibility
Responsibility
Responsibility
Responsibility
Responsibility
Responsibility

towards
towards
towards
towards
towards
towards
towards
towards

Itself:
Shareholders/Owners
Customers
Employees
Suppliers
Competitors
Government
Environment

Responsibility towards Itself

To operate the business efficiently and

effectively
To ensure the production and distribution of
goods and services at a profit. This is
necessary for its survival, growth and
socially responsible behavior.
To make policies that ensures achievement
of economic and social objectives of the
business simultaneously.

Responsibility towards Itself

(cont..)

To innovate and expand business by

producing new products/ services, by
entering into new markets, by using new
raw materials etc.
To make every effort to remain competitive
at all times.
To make every effort to perform all the
activities full proof. Every defect or fault
should be corrected without being told or
pointed out by others.

Responsibility towards Itself

(cont..)

To ensure protection of natural

environment for sustainable economic
development for future growth and
development
To maintain wealth- producing resources
intact by making profits to offset risk of
business activities.

Responsibility towards
Shareholders/Owners
To ensure payment of fair and consistent
return on their investment.
To make proper use of their funds within
their authority.
To ensure safety and growth of their
investments.
To make full and proper discloser of all the
facts within the framework of law and
regulations

Responsibility towards
Shareholders/Owners (cont..)
To hold meetings from time to time and
give proper notice of them to all the
shareholders.
To conduct all the meeting as per the law
To send copies of annual reports and other
documents as required any the law.
To ensure compliance of code of corporate
governance framed by the SEBI/ Ministry of
corporate affairs.

Responsibility towards Customers

To ensure supply of goods/ services of right

quality, at right time, at right place and
right price.
To ensure supply of goods/ services to meet
the needs of different classes/ categories of
customers.
To enhance product safety.
To reduce polluting potential of products.

Responsibility towards Customers (cont..)

To improve packaging and labeling through

eco- friendly measures
To innovate and produce energy efficient
products
To adopt fair and ethical practices and not
indulge in adulteration, hoarding and black
marketing, profiteering practices.

Responsibility towards Employees

To employ all the employees at the right job

To pay fair wages/salaries, bonus etc.

To ensure healthy and safe working
conditions/ work environment
To provide adequate benefits such as
housing, medical facilities, insurance cover,
retirement benefits etc
To provide reasonable job security

Responsibility towards Employees (cont..)

To provide opportunities of training,

promotions, career development and job
satisfaction
To provide day care facilities for working
parents.
To ensure equal opportunity to all without
any discrimination of caste, creed, gender
etc.
To ensure compliance of work place ethics

Responsibility towards Suppliers

To ensure timely payment of all the bills

due.
To bargain for a win- win situation for both
To make every effort to ensure long-term
sound business relations.
To ensure proper performance of terms of
contract.
To retrain from taking undue advantages of
legal loop-holes in the supply contract.

Responsibility towards Suppliers (cont..)

To ensure adequate secrecy of contract

terms.
To provide opportunities to new suppliers.
To inform about the market trends and other
facts to suppliers


Responsibility towards Competitors

To play fair game in competition for

encouraging healthy competition
Not to indulge in monopolistic and
restrictive practices that restrains the free
and fair competition.
Avoid misleading advertisements, false or
unreasonable product guarantee, tricky
pricing that create the barriers to healthy
competition.


Responsibility towards Competitors (cont..)

Not to indulge in brand assassination

activities
Not to mislead or misrepresent the
customers about competitors.
To ensure free entry of competitors for the
healthy growth of trade and economy.

Responsibility towards
Government
To comply with the laws and regulations of
the land
To pay the taxes and duties honestly within
the time
To actively contribute to the economic
development of the country

Responsibility towards
Government (cont..)
To contribute to the implementation of socioeconomic plans and programs or the government
such as family welfare, poverty alleviation etc.
To respond positively to the government
appeals and instructions.
To restrain from sacking undue favors from
government officials and deny bribes and other
corrupt practices.
To donate funds and provide other helps in the
times of national calamity.

Responsibility towards
Environment

To help develop local infrastructure like foot

ways, roads, water supply, parks and sanitation
facilities, educational institutions, hospitals etc.
To provide employment opportunities to local
people.
To impart job oriented education and training to
unemployed persons.
Top contribute to the upliftment of weaker
sections of the community.
To support minority owned businesses.

Responsibility towards
Environment (cont..)
To encourage local trade
To make efforts to recycle the products to
save environment
To refrain from all kinds of anti social, unfair
and unethical activities.