P R IN C IPA L O F

M A N A G EM EN T A N D
B U S IN ESS ETH IC S

Characteristics ofM anagem ent

Management is a process.
Management is a Science as well as an art.
Management is Universal Activity.
Management is a profession
Management is a Group activity
It involves decision making
It is Goal oriented
Dynamic Nature of Principles
Relative not Absolute Principles
Multidisciplinary

Management as a process
Stakeholders
Shareholders;
Society; Customers;
Employees; Suppliers

Man, Money
Machine
Material,
Method,
Measureme
nt

Controlling

Leading

Stafng

Organizing

(Goal
Oriented)

Planning

Inputs

Product/Services,
Profits, Customer &
Societal satisfaction,
Other Long-term Goals

Outputs
(External
To
Orgnzn.)

Stake holder Feedback (reenergizing the system)

EXTERNAL ENVIRONMENT(Opportunities, Constraints)

Inputs: 6 Ms of Management

Inputs or the resources managers deal with

are:

Man: human resources, both inside and connected

with an organization;
Materials: goods (hard & software, processed or
semi-finished) and services required to create the
sellable end product;
Machines: technology and expertise deployed
towards the transformation process;
Methods: systems, procedures and processes
seamlessly put together for the transformation;
Measurement: score-keeping and in-process
monitoring continuously with due feedback to keep
on-course on time.

Money is required for generating all above

W ho Are M anagers?
Manager
Someone who works with and through other

people by coordinating and integrating their

work activities in order to accomplish
organizational goals.

ole

Managerial Roles (Mintzbergs Role)

Description

Examples

nterpersonal
Figurehead
symbolic head; required to showCeremonial,
face in social & legal conditions. Civic etc.
Leader
Motivating & directing subordinates project plan
Liaison
Networking outside for information Industry & favours
group meets
nformational
Monitor
nerve centre and interpretator
Reports
Disseminator
networking within the organization Meetings et
Spokesperson Transmit intent to outsiders; expert
Board Meets

ecisional
Entrepreneur
Opportunity finding& reacting
Strategy Pla
Trouble shooter Handling unexpected disturbance Contingency
Resource allocator Initiating/approving changes
Budgeting
Negotiator
Getting best deal for Organization Contracts

Classifying M anagers
Lower Level Manager /First-line Managers
Are at the lowest level of management and

manage the work of non-managerial

employees.

Middle Level Managers

Manage the work of first-line managers.

Top Level Managers/Upper Management

Are responsible for making organization-wide

decisions and establishing plans and goals

that affect the entire organization.

Managerial Skills

Technical Skills:
Application of specialized
knowledge or expertise
acquired though formal
training & its use.

Human Skills:
Ability to work with people,
understand and
motivate groups &
individuals.

Conceptual Skills:
Mental ability to recognize,
analyze, diagnose and
think through complex
situations.

M AN AG EM EN T VS.
AD M IN ISTRATIO N :TERM IN O LG ICAL
CO N FLICT

M anagem ent vs.Adm inistration

In 1923 Oliver Sheldon in his book The

Philosophy of Management defines

Administration as decision making
function and management as execution
function
After that terminological conflict arises
and led to the emergence of three
approaches:
Management is Above Administration
Administration is a part of Management
Management and Administration are the same

Adm inistration is above

M anagem ent
According to this

approach
Administration
relates to policy
formulation
and
management
relates to policy
execution
and
these
two
activities are not
the same.

Basis of difference

Administration

Management

Level in Organization

Top Level

Middle and Lower Level

Major focus
Nature of Functions

Policy formulation and objective

determination
Determinative

Policy execution for objective

achievement
Executive

Scope of Functions

Broad and Conceptual

Narrow and Operational

Factors affecting decisions

Mostly external

Mostly internal

Employer Employee relation

Entrepreneur and Owner

Employees

Main functions

Planning and organizing functions

are involved in it.

Motivating and controlling functions

are involved in it.

Abilities/Skill required

It needs administrative rather than

technical abilities.

It requires technical activities.

Adm inistration is a part of

m anagem ent
According to the European School of thought,

management is a wider term including

administration and organization.
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 progress of activities is
regulated and checked against plans.

M AN AG EM EN T AN D AD M IN ISTRATIO N
ARE TH E SAM E
Many writers like Henri Fayol, William Newman, Chester Barnard,

George Terry, Louis. A. Allen, Koontz and O Donnell 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 organisations while the word management is more
commonly used in the business world, where economic
performance is of primary importance.

U niversality ofM anagem ent

Arguments for Universality
Management as a process is Universal. It is process

found in all organization irrespective of country,

culture, or size.
Whereas management techniques may differ from
country to country but management fundamental
remains the same.

Arguments against Universality

Management is culture bound.
Differences in philosophies of various organizations
Difference in skills and competency required in

different types of organization.

Im portance ofM anagem ent

Effective Utilization of Resources.
Development of Resources.
To incorporate innovations.
Integrating Various interest groups.
Stability in the society .