Unit-I - PM

251/ 553/ 552MG103 Principles of Management
PRINCIPLES OF MANAGEMENT
UNIT I
Management – Importance- Definition- Nature and scope of management

process- Role and functions of Manager- Levels of management, functions
and roles, management as art or science- Management as a profession-
Management approaches- Development of management thought- classical,
neo-classical, behavioural, systems and contingency approaches.
Management: “Management is the process of getting activities completed efficiently

and effectively with and through other people.”
What is Management?
Simply speaking, management is what managers do. However, this simple statement doesn’t tell
us much.
We define management as the process of coordinating and integrating work activities so that
they are completed efficiently and effectively with and through other people. Let’s look at some
specific parts of this definition.
The process represents the on going functions of primary activities engaged in by managers.
These functions are typically labeled planning, organizing, leading, and controlling. Let us
remember it by POLCA.
Management is a basic integrating process of the organisational activity that surrounds our daily
life. The need for management arises out of the scarcity of resources that go to satisfy human
wants and out of the diversity and complexity of human activities. The success of man’s quest
for better living depends heavily upon our understanding of how to develop and apply the skills
of management. Management is a universal process in all organised living. Thus viewed, it is
not confined to the factory, store or office, families, clubs, churches, ball teams, schools and
one’s personal affairs all need skillful management. Primarily, however, management is an
operative force in all complex, purposive organisations such as business enterprises, hospitals,
schools or government units. Management is a discursive subject and much has been written
about it. The study of organisations and their management has, therefore, to proceed on a broad
front. No single approach to organisation and management provides all the answers. A study of
different approaches to organizational design, their structure and management that yield benefits
is important for the manager. Identification of major trends in management and organisational
behaviour and the work of leading writers, provide a perspective on concepts and ideas.
Meaning of management: the word is a generic term subject to many interpretations. A

number of different ideas are attributed to the meaning of management and to the work of a
manager. In certain aspects, everyone could be regarded as a manager to some extent. Everyone
has some choice whether or not to do something, and some control, however, light over the
planning and organisation of their work. However, we are concerned with management as
involving people looking beyond themselves and exercising some formal authority over the
activity and performance of other people. The complexity of management is such that the word
inevitably carries a number of acceptable meanings, depending on the user’s purpose. The term
Prepared by A. Jayakumar.BBM, M.B.A, M.Com 1
management, therefore, is applied in many different ways with its meaning discernible only by
considering its context.
There is no single universally accepted standard definition of management. Moreover,

management as a discipline is so new that many o9f its related terms and concepts have not yet
been standardised. However, we can carefully state some conceptual definitions of management
that permit consistent and systematic thoughts about it. The fact that the word management has
multiple uses need not deter us from using the utmost care in terminology. The loose usage of
the word as a synonym for business administration, for example, will be avoided in this paper.
For our purpose we can, therefore, regard management as taking place within a structured
organisational setting and with prescribed roles and directed towards the attainment of aims and
objectives achieved through the efforts of other people and using systems and procedures. Peter
Drucker, who is widely regarded as the Guru of management gurus, has written about the
significance of management as an essential, distinct and leading institution which is a pivotal
event in social history.
Rarely, if ever, has a new basic institution, a new leading group emerged as fast as has
management since the turn of the (twentieth) century. Rarely also in human history has a new
institution proven indispensable so quickly and even less often has a new institution arrived with
so little opposition, so little disturbance and so little controversy. Drucker sees management as
denoting a function as well as people who discharge it, a social position and authority, a
discipline and field of study. He also states that, management is tasks and every achievement of
management is the achievement of the manager. Every failure is a failure of a manager. Other
writers, however, take the view that management is not a separate discipline. The problem is
identifying a single discipline which encompasses the work of a manager or agreeing with the
disciplines that a manager needs to effectively carry out this work. As a process management
involves what a manager does that is planning, organising, staffing, directing, co-ordinating and
controlling.
To co-ordinate involves material and human resources - men and women, machinery, money and
methods, all in order to achieve the desired goals and common objectives such as production,
services, profits, satisfaction and others. As a noun management refers to all those persons who
manage like the board of directors, managing directors, chief executives, general managers,
production managers, functional managers and supervisors, etc. As a discipline management is a
body of knowledge and its practice through the art of getting things done through others based on
the scientific principles of management. As a science, that is the art and service of decision
making and leadership. As a term management is used not to mean an activity or the people that
perform it, but as a body of knowledge, a practice and a discipline. In this sense then
management refers to the principles and practices of management as a subject of study.
Definition of management: different authors, that is to say, people who write about
management have defined the term in many different ways. The Functional concept classifies
management as what managers do.
Simply stated, “Management is the art of getting things done through others”. This is a very
popular definition. It is very simple to understand.
Some of the important definitions of management on this basis of their concepts are given here.
Louis Allen, “Management is what a manager does”.
F.W. Taylor, “Management is the art of knowing what do you want to do and then seeing
that it is done in the best and cheapest way”.
According to Drucker’ “management is a multipurpose organ that manages a business and
manages managers and manages worker and work”.
Koontz and O’Donnel, Management is the “creation and maintenance of an internal environment
in an enterprise where individuals, working in groups, can perform efficiently and effectively
toward the attainment of group goals. It is the art of getting the work done through and with people
in formally organised groups.”
Koontz and Weihrich, “Management is the process of designing and maintaining of an
environment in which individuals working together in groups, efficiently accomplish selected
aims.”
Kimball and Kimball, “Management embraces all duties and functions that pertain to initiation
of an enterprise, its financing, the establishment of all major policies, the provision of all
necessary equipment, the outlining of the general form of organisation under which the
enterprise is to operate and the selection of the principal officers. The group of officials in
primary control of an enterprise is referred to as the management”.
Importances of Management:
♣ Attainment of group goals
♣ Effective functioning of business
♣ Resource development
♣ Management control the organisation
♣ Sound organisation structure
♣ Integrates individual efforts
♣ Motivation
♣ Communication
♣ Coordination
♣ Decision- making
♣ Leadership quality
♣ Management is needed at all levels
• Attainment of group goals:
The achievement of objectives of business depends upon various factors. The

management theory gives direction of achievement of goals.

• Effective functioning of business:
Ability, understanding, communication, motivation, coordination and supervision are

some of the factors responsible for the effective functioning of business. Management is vital
tool to help for effective functioning of business.
• Resource development:
The resources of any enterprises may be identified and developed by the management.
Generally the term resources are men, money, material and machines.
• Management control the organisation:
The management controls the activities of enterprises, Control process is used to

eliminate the unnecessary activities.
• Sound organisation structure:
Sound organisation structure clearly defines the authority and responsibility of

relationship. It helps to take corrective actions where ever and when ever necessary.
• Integrates individual efforts:
Management takes necessary steps to integrate various efforts to attain the objectives of
an organisation.
• Motivation:
Motivation is vital tool to achieve organisation goal. Properly motivate the workers
increasing the speed of performance of a work Motivation is in the form of monetary or non
monetary incentive.
• Communication:
Communication is important role for effective management Effective communication

leads to efficient management
• Coordination:
All the activities of enterprises are department- wise. Management coordinates the
activities of different departments to attain the objectives of the organisation.
• Decision- making:
There are a number of decisions taken by the management every day, The management
gives guides the managers to take correct decisions.

• Leadership quality:
Leadership quality is developed in the persons who are working in the top management.
• Management is needed at all levels:
The functions of management are common to all levels of organisations. The

management is very essential for top management, middle management and lower management.
The Management Process:
Nature and characteristics of management, the salient features are as

follows:
• Management is universal and required in every form of group activity whether it is a
family, club, a government, an army or a business enterprise. The approach or style of
management may differ from one organization to another, but in each case it involves
marshalling of human and physical resources towards the attainment of common
objectives. The fundamental principles of management are applicable in all areas of
organized effort. Managers at all levels perform the same basic functions
• Management is purposeful and exists for the achievement of specific objectives. It is a

means for the accomplishment of pre-determined goals. All activities of management are
goal-oriented. The success of management is measured by the extent to which the desired
objectives are attained. Management has no justification to exist in the absence of
objectives. Management is creative and a process of achieving results. It makes things
happen.
• Management is an integrating force whose essence lies in the coordination of individual

efforts into a team. Management reconciles the individual goals with organizational goals.
As a unifying force, management creates a whole that is more than the sum of individual
parts. It integrates human and other resources.
• Management is a social process done by people, through people and for people. It is a
social process because it is concerned with interpersonal relation. Human factor is the most
important element in management. According to Appley, “Management is the
development of people not the direction of things. A good manger is a leader not a boss. It
is the pervasiveness of the human element which gives management its special character as
a social process.”
• Management is multidisciplinary and has to deal with human behaviour under dynamic
conditions. Therefore, it depends upon wide knowledge derived from several disciplines
like engineering, sociology, psychology, economics, anthropology, etc. The vast body of
knowledge in management draws heavily upon other fields of study.
• Management is a continuous process, a dynamic and an on-going process. The cycle of

management continues to operate so long as there is organized action for the achievement
of group goals.
• Management is Intangible, an unseen or invisible force, it cannot be seen, but its presence
can be felt everywhere in the form of results. However, the managers who perform the
functions of management are very much tangible and visible.
Management Vs Administration, there has been controversy on the use of the two terms
management and administration. Different authorities on the subject have expressed
conflicting opinions, but many experts make no distinction between management and
administration while others consider them as two separate functions.
A few authors treat administration as part of management, the three viewpoints are explained
thus:
Administration is different from management; according to this view-point administration

is of a higher level activity while management is of a lower function. Here administration is a
determinative function concerned with the determination of objectives and policies while
management is an executive function involving the implementation of policies and direction of
efforts for the achievement of objectives. This view is held mostly by American experts on
management. Oliver Sheldon was perhaps the first person to make a distinction between
management and administration. According to him, “Administration” is the function in
industry concerned with the determination of corporate policy, the co-ordination of finance,
production and distribution, the settlement of the compass (structure), of the organization, and
the ultimate control of the executive.
Management, on the other hand, is the function in industry concerned with the execution of
policy within the limits set up by administration, and the employment of the organization for
the particular objectives set before it. Administration defines the goal, management strives
towards it.” Other American experts such as Florence, Lansburg, Haimann, Milward,
McFarland, Spriegel, Schulze and Tead also are of the same view that administration involves
decision-making and policy formulation while management is concerned with the execution of
policies and supervision of work. According to them, administration is superior to

management as the later has only peripheral role in the administration of objectives and
policies.
Administration is part of management. According to the European school of thought

management is a wider term including administration and organization. This viewpoint has
been propounded by Brech. According to him, “Management” is the generic term for the total
process of executive control involving responsibility for effective planning and guidance of
operations of an enterprise. Administration is that part of management which is concerned
with the installation and carrying out of the procedures by which the programme is laid down
and communicated and the process of activities is regulated and checked against plans”.
Kimball and Kimball, Richman and Copen also hold similar views. According to them,
“Administration” is only an implementing agency while management is the determinative”.
Thus, the European viewpoint is exactly the opposite of the American opinion.
Administration and management as one, many writers like Henry Fayol, William Newman,
Chester Barnard, George Terry, Louis A. Allen, Koontz and O’Donnel make no distinction
between management and administration. According to Newman, management or
administration is the guidance, leadership and control of the efforts of a group of individuals
towards some common goals. According to Fayol, all undertakings require the same functions
and all must observe the same principles. There is one common science which can be applied
equally well to public and private affairs. Therefore, the distinction between administration and
management is superfluous or academic.
In actual practice the two terms are used interchangeably. The term administration is more
popular in government and other public organizations while the word management is more
commonly used in the business world, where economic performance is of primary importance.
In general terms both terms are based upon the same set of principles and functions. It may,
therefore, be possible to make theoretical or conceptual distinction between the two, but in
practice such distinction is misleading.
Managerial Roles:

The roles of a manager, a role is an organised set of observable behaviour that is attributed to a
specific position and can be studied in at least three perspectives:
1. As a set of behaviour or roles that a manager has to play.
2. As a set of skills that a manager requires.
3. As a set of managerial functions.
As applied to the manager’s job, a role would be viewed at the capacity in which a manager acts.
For example, a manager may act as a leader of subordinates, spokesman of the organisation, a
source of information, or as a decision-maker. Thus, a manager plays multiple roles while
performing his/her job.
1. Inter- personal role:

• Figure head role:
 In this role a manager performs symbolic duties required by the status of his office
 His activities include to greet the visitors, signing legal documents attends the employee
family functions
 E.g. Greeting visitors: signing legal documents
• Leader:
 Responsible for the motivation and activation of subordinates

 Responsible for staffing, training and associated duties
• Liaison:
 It describes a manager’s relationship with the outsiders and inside the organisation

 A manager maintains smooth relation with other organisation and in the organisation by
use of mails, phone calls, meetings etc.
2. Informational roles:
• Monitor - Seeks and receives information concerning internal and external events so as to
gain an understanding of the organisation and its environment. Reading periodicals and reports
about internal and external events so as to gain an understanding of the organisation and its
environment, changes in consumer’s attitudes, competitors, plans, etc.
• Disseminator – Transmits information to subordinates, peers and superiors within the

organisation. Calling staff meetings after business trip, sending memo or reports and making
phone calls
• Spokesperson – Speaking on behalf of the organisation and transmitting information on the

organisation’s plans, policies and actions to outsiders. Giving statements in the Press,
conversations with suppliers, making speeches to local groups.
3. Decision role:
• Entrepreneur – Initiating changes or improvements in the activities of the organisation.

Realigning subordinates’ jobs, launching new projects or products.
• Disturbance handler – Taking charge and corrective action when an organisation faces
unexpected crisis. Resolving conflicts between employees, reacting to an insolvent customer,
adjusting to strike at suppliers.
• Resource allocator – Distributing organisation’s resources like money, time, equipment and
labour. Approving budget, scheduling time for projects, awarding bonuses, etc.
• Negotiator – Representing the organisation in bargaining and negotiations with outsiders and
insiders. Bargaining with trade unions, negotiating with an important supplier, entering into a
lease agreement with the local authority, etc.
Functions of Managers / Management:

The functions of managers provide a useful framework for organizing management knowledge.
The functions are as follows;
• Planning
• Organising
• Staffing
• Directing
• Motivating
• Controlling
• Co-ordinating and
• Communicating.
The following figure explains the functions of Manager.

Planning: In simple it means looking ahead. It is preparing for the future. Effective planning
leads to efficient management. It involves selecting missions and objectives and the actions to
achieve them, formulating policies, rules, procedures etc, it requires decision making that is,
choosing future course of action from among alternatives. There are various types of plans,
ranging from overall purposes and objectives to the most detailed actions to be taken.
Organising:
It establishes harmonious relationship among all the workers of an organisation by
providing them with suitable authority and responsibility. It involves the activities like the
Identification and analysis of activities required, assignment of duties to the individuals
concerned, follow-up the activities, for the attainment of objectives. It is the part of managing
that involves establishing an intentional structure of roles for people to fill in the organisation,
assigned to people who can do those best by designing an effective organisation structure.
Staffing:
It involves filling and keeping filled, the positions in the organisation structure. Providing
the right job for the right person. This is done by identifying work-force requirement,
inventorying the people available, recruiting, selecting, placing, promoting, appraising,
compensating, training, etc.
Leading or Directing:
It is the influencing of people so that they will contribute to organisation and group goals;
it has to do predominantly with the interpersonal aspect of managing.
Motivating:
Motivation is a managerial function to inspire and encourage people to take required
action. Motivation is the key to successful management of any enterprise. Motivation can set into
motion a person to carry out certain activity.

Controlling:
It is the measuring and correcting of activities of subordinates to ensure that events
conform to plans. It is generally relate to the measurement of achievement, like the budget for
expense, inspection records, record of labour- hours lost, etc.
Coordination:
It is the essence of manager ship for achieving harmony among individual efforts towards
the accomplishment of group goals. Each of the managerial functions is an exercise contributing
to coordination.
Communication:
It means transfer of information and under-standing from person to person.
Communication also leads to sharing of information, ideas and knowledge. It enables group to
think together and act together.
Levels of Management:
Management Levels:
The three levels of managements that are commonly found in any organisation are
 Top Level Management
 Middle Level Management
 Lower or First- line Management
1. Top Level Management:
It is the function of top management to watch, interpret, exploit of where necessary, and
counter external influences with appropriate decisions and plans and to initiate the appropriate
adjustment in the functional authority and status structures of the organization. It is the top
management’s duty to protect the integrity of the organization, so that it can survive for its own
employee’s, the shareholder’s, supplier’s and customer’s interests and for the general good of
the social and economic system within which it operates.

The top level management is made up of Board of directors; the task is generally entrusted to
the Directors, Managing Directors, General Managers, Managers, Managing Agents, Deputy
General Managers. They are called as Chief executives and they are responsible to carry out
the broad policies formulated. They are policy making body for overall direction and success
of all the activities of the company.
Functions of Top level Management:
• To formulate goals and policies of the company

• To formulate budgets
• To appoint top executives
• To provide overall direction and leadership of the company
• To decide the distribution of profits etc.
Intermediate management or upper middle management comprises of departmental or

divisional heads, e.g. works manager, marketing manager, personnel manager, finance manger,
etc. Each one of these mangers is responsible for the efficient and coordinated functioning of
own department in accordance with the basic objectives and policies laid down by the top
management. Intermediate managers are concerned with priorities and specific results. At upper
middle management departmental operational plans are established and targets of achievement
are laid down. Departmental heads exercise the usual functions of management in respect of
their own departments. They plan operations, issue instructions, assemble the required
resources, evaluate results of their respective departments, and control the work of people in the
departments.
2. Middle Level Management:
The middle management level generally consists of divisional and departmental heads such as
plant manager, production manager, marketing manager, personal directors etc. their job is to
interpret policies and directions set by the top level management into specific plans and
guidelines for action. Their responsibility is to coordinate the working of their departments so
that the set objectives can be achieved. They are concerned with short term goals and specific
results. They spend more time on operational planning, information processing and day-to–day
monitoring of their divisional activities.
It is concern with the execution of the policies and plans evolved by the top management.
Therefore, the middle level management comprises of departmental heads and other
executives. They actually take part in the execution of the plans and experience the difficulties
involved in it. They are like Heads of Departments, Superintendents, etc
Functions of Middle Level Management:
• Interpretation of the policies of the company

• Preparing the organisational set up in their department
• Issuing orders to the subordinates and in their department

• Motivating the personnel for higher productivity
• Collecting reports and other information about the work taken over
• Providing information and assisting the top management in revising the plans to secure
better performance.
3. Lower Level Management:
♠ This term is applied to subordinate departmental heads, foremen, office superintendents,

supervisors, etc. Being placed at the bottom of the hierarchy of management they are directly in
touch with rank and file of workers. The workers look to them for guidance and direction and
they have the important job of interpreting the mind of the middle management to the workers.
They have a direct responsibility for maintaining high morale among the workers.
Functions of Low level management:
◊ To train and develop the efficiency of the workers

◊ To assign jobs to workers
◊ To give orders and instructions
◊ To maintain discipline and good human relations among workers
◊ To report feedback information about workers.
Management as an Art:
What is an art?
Art means application of skill in finding a desired result. Art is the way of doing things
skillfully.
Management as an Art involves the practical application of personal skills and knowledge to
achieve concrete results it is the practical way of doing things. The function of the art is to effect
change and to achieve desired results. Art represents how of human behaviour or the know-how
to do work. Art is a personalised process and every artist has his own style. Art is essentially
creative and the success of an Artist is measured by the results he achieves. Art is practice-based
and perfection in it requires continuous practice over a very long time. Thus, the main elements
of an art are:
1. Personal skills.
2. Practical know-how.
3. Result-Orientation.
4. Creativity.
5. Constant Practice aimed at perfection.
Management is basically an art because of the following reasons:

1. Like any other artist, a manager applies his knowledge and skills to co-ordinate the
efforts of his people.
2. Management seeks to achieve concrete practical results, e.g. profits, growth, social
services, in a given situation.
3. Like any other art, management is creative and it brings out new situations and converts
resources into output.
4. Management is a personalised process. Every manager adopts his own approach towards
problems depending upon his perception and environmental conditions.
5. Effective management leads to the realization of organisational and other goals. The
success of a manager is measured by the results he achieves. It is very much like the saying that
the proof of the pudding lies in eating. Mastery in management requires a sufficiently long
period of experience in managing. The managerial art can be refined through continuous
practice.
Management as a Science:
What is a science?
¤ Science may be defined as “representing knowledge gathered by observation and
experiment, critically tested, systematised and brought under general principles.”
¤ Management as a discipline fulfills the science criterion. The application of these
principles helps any practicing manager to achieve the desired goals.
¤ Management is a dynamic subject in that it has heavily from economics, psychology,
sociology, mathematics and engineering. Management is multi disciplinary in nature.
¤ Science classified in to two types. They are exact science and inexact science. Exact
science where the results are accurate. In the case of Management it is an inexact science.
Management is inexact science because;
• Every organisations human resources are different attitudes, aspirations and perceptions.
So standard results may not be obtained.
• Readymade and standard solutions cannot be obtained.
• Management is complex and unpredictable
• Every organisation decisions are influenced by the environment. The environment is so
complexes and unexpected changes.
Management is both - a science and an art:
• Management may be said to be a unique combination of science and art,

• It requires knowledge of the science of management i.e., the theory or principles of

management which have been developed by thinkers and practitioners of management after years
of experimentation.
• Knowledge of the science of management will enable the manager to correctly identify
the issues and problems facing him, and to determine the source of action which will best meet
the situation.
• The management should now apply his knowledge in the given situation. Needless to say
that such application cannot be without taking into consideration the limitations of the situation.
This may necessitate modification of the theory and principles learnt by him. It is at this that art
of management takes over. The manager can successfully perform a job only if he is able to
identify and diagnose the problems correctly and apply his knowledge to solve them in a manner
which is the best under the given circumstances.
Management as a Profession:
Management as a profession, the development of management theory, separation of ownership
from management in large corporations and growing complexities have led to the demand for
giving management the status of a distinct profession. An occupation must satisfy certain
criteria in order to claim the status of a profession. These criteria refer to the essential attributes
of a profession as given below.
• A well-defined and organised body of knowledge. There is an organised body of

specialised knowledge pertaining to a particular field. Such a systematised body of theoretical
knowledge contains principles, theories and techniques. These principles establish cause and
effect relationships and are capable of universal application. They must be evolved through
scientific methods of observation, experiment and experience
• Learning and experience. There must be satisfactory formalized arrangements for

impacting theoretical knowledge and practical training for those desiring to enter the profession.
A professional is a person who has undergone certain vigorous training to acquire certain
knowledge and skills. The knowledge must be transferable through the medium of formal
teaching, training and practice. There must be competent application of knowledge to problems
• Entry restricted by qualifications. Any body who wants to enter the profession must pass
the prescribed examinations and obtain the degree or diploma. Maximum educational
qualifications and training are laid down to ensure that a professional is proficient in the
specialised body of knowledge. No body can enter the profession without acquiring the
prescribed qualifications. For example, nobody can become a lawyer without being a law
graduate
• Recoganised national body. There must be an institute, association or a similar well-

accepted authority. Such a representative body is needed to prescribe minimum qualification for
entry, to impart education and training, to conduct examinations, to award diplomas and degrees
and to enforce discipline among the professionals. It regulates and develops the professional
activities and enjoys legal powers as a statutory body.
• Ethical code of conduct. There must be a suitable code of conduct or ethics. Such a code
lays down the norms which members must observe while dealing with their clients. It must be
fairly homogeneous over all members of the profession wherever they function. Every member
of the profession is expected to observe the ethical standards laid down for that profession. The
code requires self-control. Members who violate the code can be derecognised and disqualified
from the profession. Professionals derive their social status from success in their work not from
birth or political power.
• Dominance of service motive. A professional is expected to give priority to service in

preference to selfish gain. Financial gain is subsidiary. A profession and its aim must be in tune
with the objectives and changing needs of society. A profession, however, provides full-time
occupation and means of livelihood with reasonable remuneration (fee) for its members.
Judged in these criteria management can not at present be described as a full-fledged profession
though it satisfies many of the essentials of a profession. There exists now a systematised and
reasonably well-defined body of knowledge in the form of theories and principles of
management. This body of knowledge is transferable and is being expanded through research
and practice. Formal education and training are becoming increasingly popular among
managers. Several national institutes have been established for imparting specialised knowledge
and skills in management. Specialised courses in management are being sought after by would
be managers. Persons with formal education and training in management are given preference
for filing managerial positions in industry and business.
Management Approaches:
Classical Theory:
Prof. Charles Babbage, James Watt Junior and Mathew Robinson Boulton, Robert Owen, Henry
Robinson Towne and Rowntree were, no doubt, pioneers of management thought. But, the impact of
their contributions on the industry as a whole was meager. The real beginning of the science of
management did not occur until the last decade of the 19 th century. During this period, stalwarts like
F.W. Taylor, H.L. Gantt, Emerson, Frank and Lillian Gilberth etc., laid the foundation of management,
which in due course, came to be known as scientific management. This epoch in the history of
management will be remembered as an era in which traditional ways of managing were challenged, past
management experience was scientifically systematized and principles of management were
distilled and propagated. The contributions of the pioneers of this age have had a profound
impact in furthering the management know-how and enriching the store of management
principles. F.W. Taylor and Henry Fayol are generally regarded as the founders of scientific
management and administrative management and both provided the bases for science and art of
management.

Features of Management in the Classical Period:

1. It was closely associated with the industrial revolution and the rise of large-scale enterprise.
2. Classical organization and management theory is based on contributions from a number of
sources. They are scientific management, Administrative management theory, bureaucratic
model, and micro-economics and public administration.
3. Management thought focused on job content division of labour, standardization, simplification
and specialization and scientific approach towards organization.
NEO-CLASSICAL APPROACH:
Theories resulted in work behavior and the researches tried to investigate the reasons for
human behavior at work. They discovered that the real cause of human behavior is somewhat
more than- the physiological variable. These findings generated a new phenomenon about the
organizational functioning and focused attention, on human beings in the organizations. These
exercises were given new names such as ‘behavioral theory of an organization’, human view of
an organization' or 'human relations approach in an organization.'
The neoclassical approach was developed as a reaction to the classical approach, which
attracted so many behaviorists to make further researches into the human behavior at work.
‘Mayo’ and his associates at Hawthorne Plant of the Eastern Electric Company, Chicago
started this movement in the late twenties, gained momentum and continued to dominate till
the sixties. Douglas M. McGregor has given an impressive account of thinking of human
relations in his book entitled 'The Human Side of Enterprise.'
The classical theory was the product of the time and the following reasons were responsible for
its development:
(i) The management thinking was showing signs of change because of the improved standards
of living and education level. The technological changes were forcing the management to
expand the size of the organization and complexities were increasing. This also led to the fact
that the management be somewhat more sympathetic and considerate towards their workers.
(ii) The trade union movement got momentum and made the workers conscious of their rights.
It was no longer possible for the management to treat the human beings at work as 'givens'.
These were two main reasons, which were responsible for the change of management behavior
from autocratic to the custodial approach, which was based on offer of fringe benefits apart
from wages to meet their security needs.
Though neoclassical approach was developed as a reaction to the classical principles, it did not
abandon the classical approach altogether, rather it pointed to the limitations of the classical
approach and attempted to fill in the deficiencies through highlighting certain points which
were not given due place in the classical approach. In this regard, there were two schools of
thought-one schools of thought with writers as Simon, Smith burg, and Thompson, pointed out
the limitations of the classical approach to structural aspect only and the analysts called this
group as 'neoclassicists'. This school of thought suggested modifications to the classical
principles but did not abandon the basic principles.

The other school of thought who consisted of large number of writers focused on the human
aspect neglected by the classicists. This group was called as human relationists or behaviorists.
Both these schools were reactions -to the classical theory but failed to suggest or develop any
new theory except providing some points of criticism on varying counts. Both of them could be
referred as neoclassicists.
Neoclassicists endeavored to identify the weaknesses of classicists through empirical research

and most of the criticisms of classical theory have emerged through researches. Hawthorne
studies were the beginning of the series. The other contributors are Roethlisberger, Dickson,
Whitehead, Lippitt and White, Coach and French Jr., etc.
BEHAVIOURAL SCIENCES APPROACH:
Under behavioral science approach, the knowledge drawn from behavioral sciences, namely,
psychology, sociology and anthropology, is applied to explain and predict human behavior. It
focuses on human behavior in organizations and seeks to promote verifiable propositions for
scientific understanding of human behavior in organizations. It lays emphasis on the study of
motivation, leadership, communication, group dynamics, participative management, etc.
The essential characteristics of behavioral science approach are as under:
(1) Data must be objectively collected and analyzed.
(2) Findings must be presented so that the distinction between cause and effect, as opposed to
chance occurrences, is clear.
(3) Facts must be systematically related to one another within a systematic framework. Data
collection alone does not constitute a science.
(4) The findings of a study must always be open to further examination and question.
The proponents of behavioral science approach made the following propositions:

(i) An organization is a socio-technical system.
(ii) Individuals differ with regard to attitudes, perceptions and value systems. As a result, they
behave differently to different stimuli under different conditions.
(iii) People working in the organization have their needs and goals, which may differ, from the
organizational goals. Attempts should be made to achieve fusion between organizational goals
and human needs.
(iv) A wide range of factors influence inter-personal and group behavior of people in
organizations.
Systems Approach:
Organizations are open systems that constantly interact with the external environment:
inputs (resources and information) -------> transformation process -------> outputs

(products, services, information) -------> feedback
The systems concepts have broad applicability. Organizations are open systems i.e. systems
have boundaries, but they also interact with the external environment. This approach
recognizes the importance of studying interrelatedness of planning, organizing and controlling
in an organization as well as the many subsystems.
The systems approach to management indicates the fourth major theory of management thought
called modern theory. Modern theory considers an organization as an adaptive system which has
to adjust to changes in its environment. An organization is now defined as a structured process in
which individuals interact for attaining objectives.
Meaning of "System": The word system is derived from the Greek word meaning to bring
together or to combine. A system is a set of interconnected and inter-related elements or
component parts to achieve certain goals. A system has three significant parts:
1. Every system is goal-oriented and it must have a purpose or objective to be attained.

2. In designing the system we must establish the necessary arrangement of components.
3. Inputs of information, material and energy are allocated for processing as per plan so that the
outputs can achieve the objective of the system.
Systems Approach Applied to an Organization:

When systems approach is applied to organization, we have the following features of an
organization as an open adaptive system:-
1. It is a sub-system of its broader environment.
2. It is a goal-oriented – people with a purpose.
3. It is a technical subsystem – using knowledge, techniques, equipment and facilities.
4. It is a structural subsystem – people working together on interrelated activities.
5. It is a psychosocial system – people in social relationships.
6. It is co-ordinate by a managerial sub system, creating, planning, organizing, motivating,
communicating and controlling the overall efforts directed towards set goals.
The systems approach focused attention on the following aspects:

(i) It integrates all elements for the proper and smooth functioning of the organization.

(ii) The organization overall goals can be achieved successfully because it considers all the
aspects of the problems deeply and maintains a harmonious relationship between various
elements so that they work untidily to achieve goals.
(iii) The approach helps in acquisition and maintenance of various resources, i.e., man,
material, money, and machinery, etc. for pertaining the smooth functioning of the organization.
(iv) It allows adaptation to internal - requirements and environmental changes in order to
survive and grow
The executives should encourage informal organizations to serve as a means of communication
and group cohesiveness
Contingency Approach:
Appropriate management approach depends on situational factors faced by an organization.
According to this approach, managerial practice depends on circumstances a contingency or a

situation. Contingency theory recognizes the influence of given solutions or organizational
behavior patterns. Managers have long realized that there is no one best way to do things, but it
can be very complex and difficult to determine all relevant contingency factors and show their
relationships.
Examples of contingency variables: Organization size, task complexity, environmental

uncertainty, individual differences.
Systems approach emphasizes that all subsystems of an organization along with the super
system of environment are interconnected and interrelated. Contingency approach analysis and
understands these interrelationship so that managerial actions can be adjusted to demands of
specific situations or circumstances.
Thus the contingency approach enables us to evolve practical answers to problems demanding
solutions. Organization design and managerial actions most appropriate to specific situations will
have to be adopted to achieve the best possible result under the given situation. There is no one
best way (as advocated by Taylor) to organize and manage. Thus, Contingency Approach to
management emphasizes the fact that management is a highly practice-oriented discipline. It is
the basic function of managers to analyse and understand the environments in which they
function before adopting their techniques, processes and practices. The application of
management principles and practices should therefore be continent upon the existing
circumstances.
Contingency approach guides the manager to be adaptive to environment. It tells the manager to
be pragmatic and open minded. The contingency approach is an improvement over the systems
approach. It not only examines the relationships between sub-systems of the organization, but
also the relationship between the organization and its environment.
However, the contingency approach suffers from two limitations:-
1. It does not recognize the influence of management concepts and techniques on environment.
2. Literature on contingency management is yet not adequate.

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251/ 553/ 552MG103 Principles of Management

Management – Importance- Definition- Nature and scope of management

Management: “Management is the process of getting activities completed efficiently

Meaning of management: the word is a generic term subject to many interpretations. A

There is no single universally accepted standard definition of management. Moreover,

Louis Allen, “Management is what a manager does”.

• Attainment of group goals:

The achievement of objectives of business depends upon various factors. The

Prepared by A. Jayakumar.BBM, M.B.A, M.Com 3

• Effective functioning of business:

Ability, understanding, communication, motivation, coordination and supervision are

• Management control the organisation:

The management controls the activities of enterprises, Control process is used to

• Sound organisation structure:

Sound organisation structure clearly defines the authority and responsibility of

• Integrates individual efforts:

Communication is important role for effective management Effective communication

Prepared by A. Jayakumar.BBM, M.B.A, M.Com 4

• Management is needed at all levels:

The functions of management are common to all levels of organisations. The

The Management Process:

Nature and characteristics of management, the salient features are as

• Management is purposeful and exists for the achievement of specific objectives. It is a

• Management is an integrating force whose essence lies in the coordination of individual

• Management is a continuous process, a dynamic and an on-going process. The cycle of

Administration is different from management; according to this view-point administration

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Administration is part of management. According to the European school of thought

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1. As a set of behaviour or roles that a manager has to play.

2. As a set of skills that a manager requires.

3. As a set of managerial functions.

1. Inter- personal role:

 Responsible for the motivation and activation of subordinates

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• Disseminator – Transmits information to subordinates, peers and superiors within the

• Spokesperson – Speaking on behalf of the organisation and transmitting information on the

• Entrepreneur – Initiating changes or improvements in the activities of the organisation.

Functions of Managers / Management:

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1. Top Level Management:

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Functions of Top level Management:

• To formulate goals and policies of the company

Intermediate management or upper middle management comprises of departmental or

2. Middle Level Management:

Functions of Middle Level Management:

• Interpretation of the policies of the company

• Issuing orders to the subordinates and in their department

3. Lower Level Management:

♠ This term is applied to subordinate departmental heads, foremen, office superintendents,

Functions of Low level management:

◊ To train and develop the efficiency of the workers

Management is basically an art because of the following reasons:

Management is inexact science because;

Management is both - a science and an art:

• Management may be said to be a unique combination of science and art,

Prepared by A. Jayakumar.BBM, M.B.A, M.Com 14

• It requires knowledge of the science of management i.e., the theory or principles of

• A well-defined and organised body of knowledge. There is an organised body of

• Learning and experience. There must be satisfactory formalized arrangements for

• Recoganised national body. There must be an institute, association or a similar well-

• Dominance of service motive. A professional is expected to give priority to service in