Winter 2023-24

BMGT101L

Dr. ARJUN SINGH K

 Lecture 1

Module: 1 Management Basics 6 hours

Management - nature and purpose, evolution of management concept, approaches to
management process, functions and roles of management, influence of external and
internal environment on decision making, factors affecting social responsibility and
sustainability, and ethical business management.

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MANAGEMENT
According to Harold Koontz, "Management is the
process of designing and maintaining an
environment in which individuals, working
together in groups, efficiently accomplish
selected aims".

According to Henry Fayol, "To manage is to

forecast and to plan, to organise, to command,
Easy to
to coordinate and to control". Understand,
According to Peter Drucker, "Management is a
hard to do
multi-purpose organ that manages business and
manages managers and manages workers and
work".
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ACTIVITY

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NEED FOR MANAGEMENT
for planning business activities
for guiding employees in the right direction
for coordinating their efforts
to achieve the objectives of business activity in an orderly and quick manner
for effective communication within and outside the Organisation
for success, stability and prosperity of a business enterprise
for survival and growth

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FEATURES OF MANAGEMENT
• Management is Goal-Oriented
• Management integrates Human, Physical and Financial Resources
• Management is Continuous
• Management is all Pervasive
Goal Oriented Integrates human, Continuous
• Management is a Group Activity physical and
financial resources

Pervasive Group activity

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MANAGEMENT LEVELS
Organizations generally have three levels of
management, represented by
• Top managers
• Middle managers and
• First-line managers
Regardless of level, managers are also usually
associated with a specific area within the
organization, such as
• Marketing
• Finance
• Operations
• Human resources
• Administration and some other area
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MANAGEMENT LEVELS
Top managers make up the relatively small group of executives who manage the overall organization.
Titles found in this group include president, vice president, and chief executive officer (CEO). Top
managers create the organization’s goals, overall strategy, and operating policies. They also officially
represent the organization to the external environment by meeting with government officials,
executives of other organizations, and so forth.

Middle management is probably the largest group of managers in most organizations. Common
middle-management titles include plant manager, operations manager, and division head. Middle
managers are primarily responsible for implementing the policies and plans developed by top
managers and for supervising and coordinating the activities of lower-level managers.

First-line managers supervise and coordinate the activities of operating employees. Common titles for
first-line managers are supervisor, coordinator, and office manager. Positions like these are often the
first held by employees who enter management from the ranks of operating personnel.

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FUNCTIONAL AREAS OF MANAGEMENT
Marketing management includes distribution, market research, price-determination, taking market risk
and advertising, publicity and sales promotion.
Financial management includes accounting, budgetary control, Capex control, financial planning and
managing the overall finances of an organization.
Operations management includes production planning, production and inventory control techniques,
quality control and inspection and time and motion studies. It also includes,
• Maintenance management involves proper care and maintenance of the buildings, plant and
machinery.
• Transport management includes packing, warehousing and transportation by rail, road and air.
• Purchasing management includes inviting tenders for raw materials, placing orders, entering into
contracts and materials control.
Human resource management includes recruitment, training, transfer, promotion, demotion, Retirement,
termination, labor-welfare and social security industrial relations
Office Management includes activities to properly manage the layout, staffing, security and equipment of
the office.
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MANAGERS
 People who carry out the managerial functions of
planning, organizing, staffing, leading, and
controlling.
 Managers are charged with the responsibility of
taking actions that will enable individuals to make Planning Organizing Staffing
their best contributions to group objectives.
 It applies to managers at all organizational levels.
 The aim of all managers is the same: to create a
surplus.
 Managing is concerned with productivity, which Leading Controlling
implies effectiveness and efficiency.

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No job is more vital to
our society than that of
the manager

HENRY MINTZBERG, 1975

“Arrogance comes from detachment.”
Sources of Fear
Arrogance

Being surrounded by indulgent “yes” people

Being an talker not a doer

Prior success “Connect.”

One word advice
Fear of saying, “ I don’t know”

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FUNCTIONS OF MANAGERS
1. Planning
• basic function of management
• determination of courses of action to achieve desired goals
Management
• systematic thinking about ways & means for accomplishment of goals Resources
• needed to ensure proper utilization of human & non-human resources 6 M’s
• an intellectual activity Men
• helps in avoiding confusion, uncertainties, risks, wastages etc. Money
Materials
Machines
Methods
Markets

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FUNCTIONS OF MANAGERS (CONT.)
2. Organising
• process of bringing together physical, financial and human resources
and developing productive relationship amongst them for achievement According to
of organizational goals. Henry Fayol,
“To organize a
• Organizing as a process involves:
business is to
• Identification of activities. provide it with
• Classification of grouping of activities. everything
useful for its
• Assignment of duties.
functioning.
• Delegation of authority and creation of responsibility. i.e. raw
• Coordinating authority and responsibility relationships. material, tools,
capital and
personnel’s”

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FUNCTIONS OF MANAGERS (CONT.)
3. Staffing
• to put right man on right job.
• Staffing involves:
• Manpower Planning According to Kootz & O’Donell,
• Recruitment, Selection & Placement “Managerial function of staffing
involves manning the
• Training & Development organization structure through
• Remuneration proper and effective selection,
appraisal & development of
• Performance Appraisal
personnel to fill the roles
• Promotions & Transfer designed un the structure”.

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FUNCTIONS OF MANAGERS (CONT.)
4. Leading
• actuates the organizational methods to work efficiently for the
achievement of organizational purposes.
• deals directly with influencing, guiding, supervising, motivating
sub-ordinate for the achievement of organizational goals
• Leading has following elements:
• Supervision
• Motivation
• Leadership
• Communication

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FUNCTIONS OF MANAGERS (CONT.)
5. Controlling
• measurement of accomplishment against the standards
and correction of deviation if any to ensure achievement
of organizational goals.
• to ensure that everything occurs in conformities with the According to Kootz & O’Donell,
“Controlling is the measurement
standards. An efficient system of control helps to predict
& correction of performance
deviations before they actually occur.
activities of subordinates in
• Controlling has following steps: order to make sure that the
• Establishment of standard performance enterprise objectives and plans
desired to obtain them as being
• Measurement of actual performance
accomplished”
• Comparison of actual performance with the
standards and finding out deviation if any
• Corrective action.
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 MANAGEMENT: SCIENCE OR ART?
Features of Science Management as Science
Systematized body of knowledge: Science is a Management is a systematized body of knowledge in
systematic body of knowledge. Its principles are based the form of basic principles and concepts.
on a cause-and-effect relationship.

Observation and Experiments: All scientific The knowledge of management has been built up
principles are first developed through observations and through endless observation and experiments.
then tested through repeated experimentation under
controlled conditions.

Causes and Effect Relationship: Science is based Principles of management establish a cause-and-
on causes and their effects. For example, if a person effect relationship between various factors. If there is a
eats lots of fast food without any physical activity, he cause or an action, there will be an effect due to that
will put on extra weight. cause.

Universal Validity: Scientific principles have Principle of management is not applicable universally
universal validity and can be applied in all situations as they are not exactly like the principles of science,
and times. only the fundamental principles of management are
universally applicable.

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 MANAGEMENT: SCIENCE OR ART? (CONT.)
Features of Art Management as Art
Theoretical knowledge: Art comprises the application There are many texts available in forms of theoretical
of theoretical knowledge. A particular art has its basic knowledge for different areas of management, like
principles and theory. marketing, finance, and human resources.

Personal skills: Every artist has his way of working. Every manager has his unique method of working. He
The use of basic knowledge varies from individual to tackles various problems based on his own opinion
individual. and understanding of the situation.

Creativity: Art consists of lots of creativity. The Management is creative, as it converts inputs into
theoretical knowledge should be practised and applied outputs.
differently to become more creative and achieve the
ultimate goal.

Perfection through Practice: As arts require nonstop Management also involves regular practice. An
practice to gain mastery. efficient manager can convert a challenge into an
opportunity through unceasing decision-making and
leadership.

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PRODUCTIVITY, EFFICIENCY AND EFFECTIVENESS

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MANAGERIAL FUNCTIONS
All managers carry out managerial functions. However, the time spent for each function
may differ.

Managerial levels vs time spent on each functions

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MANAGERIAL SKILLS
In the model proposed by Katz in the Harvard Bussiness Review, titled "Skills of an
Effective Administrator" from 1955, he recognizes three different abilities that a leader
should have. These are:
1. Technical Skills: knowledge about and competency and proficiency in a specific
work or activity.
2. Human Skills: abilities help us to get along with people and to communicate and
work within teams.
3. Conceptual Skills: abilities to work with ideas and concepts.

To these, may be added a fourth

4. Design Skills: abilities to design solutions.

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MANAGERIAL SKILLS
Top Conceptual &
Management Design

Middle
Human
Management

First-line
Management Technical

Skills and Management Levels

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IMPORTANCE OF MANAGEMENT
 It helps in Achieving Group Goals
 Optimum Utilization of Resources
 Reduces Costs
 Establishes Sound Organization
 Establishes Equilibrium
 Essential for Prosperity of Society

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IMPORTANCE OF MANAGEMENT
It helps in Achieving Group Goals: It arranges the factors of production, assembles and organizes
the resources, integrates the resources in effective manner to achieve goals. It directs group efforts
towards achievement of pre-determined goals.
Optimum Utilization of Resources: Management utilizes all the physical & human resources
productively. This leads to efficacy in management. Management provides maximum utilization of
scarce resources by selecting its best possible alternate use in industry from out of various uses. It
makes use of experts, professional and these services leads to use of their skills, knowledge, and
proper utilization and avoids wastage.
Reduces Costs: It gets maximum results through minimum input by proper planning and by using
minimum input & getting maximum output. Management uses physical, human and financial resources
in such a manner which results in best combination. This helps in cost reduction.
Establishes Sound Organization: No overlapping of efforts (smooth and coordinated functions). To
establish sound organizational structure is one of the objective of management which is in tune with
objective of organization and for fulfillment of this, it establishes effective authority & responsibility
relationship i.e. who is accountable to whom, who can give instructions to whom, who are superiors &
who are subordinates.

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IMPORTANCE OF MANAGEMENT
Establishes Equilibrium: It enables the organization to survive in changing environment. It keeps in
touch with the changing environment. With the change is external environment, the initial co-ordination
of organization must be changed. So it adapts organization to changing demand of market/ changing
needs of societies. It is responsible for growth and survival of organization.
Essentials for Prosperity of Society: Efficient management leads to better economical production
which helps in turn to increase the welfare of people. Good management makes a difficult task easier
by avoiding wastage of scarce resource. It improves standard of living. It increases the profit which is
beneficial to business and society will get maximum output at minimum cost by creating employment
opportunities which generate income in hands. Organization comes with new products and researches
beneficial for society.

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EVOLUTION OF MANAGEMENT
THOUGHT
Evolution of
Management
thought

Neo-classical
Pre-scientific Modern theory
theory or
management Classical theory or Systems
Behaviour
period Approach
Approach

Scientific Administrative Bureaucratic

Management of Management of Model of Max
Taylor Fayol Weber

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 FREDERICK W. TAYLOR
(FATHER OF SCIENTIFIC MANAGEMENT)

Received degree
Taylor was born in Joined as in mechanical
Pennsylvania, U.S machine shop engineering from
labour at Midvale
Steel company
Stevens Institute Retired 1856 -
of Technology
1915

1856 1875 1878 1881 1883 1890 1901 1906 1915

Positions at Midvale
Machine shop labour
Shop clerk
Machinist
Apprenticed to Introduced Joined as Elected as
Gang boss
learn the trades time study at General Manager President of Foreman
of pattern maker Midvale plant at Manufacturing ASME Maintenance Foreman
and machinist Engineering Head of the drawing
office
company Chief engineer

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HENRI FAYOL (FATHER OF MODERN MANAGEMENT THEORY)
Henri Fayol was Henri Fayol present
He published his first
born in a suburb of a report on the self-
book, introducing the
Istanbul, Turkey ignition of coal
term fayolism.
exposed to air.

1841 - 1925
1841 1847 1878 1888 1916 1918 1925

His family He became Henri Fayol was very

returned to the Managing successful in this
France Director position for over 30
years.

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HENRY FAYOL’S 14 PRINCIPLES OF MANAGEMENT

1. Division of Work
2. Authority
3. Discipline
4. Unity of Command
5. Unity of Direction
6. Collective Interest Over Individual Interest
7. Remuneration
8. Centralization
9. Scalar Chain
10. Order
11. Equity
12. Stability of Tenure of Personnel
13. Initiative
14. Esprit de Corps

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CHARACTERISTICS OF EXCELLENT AND MOST
ADMIRED COMPANIES (THOMAS PETERS AND ROBERT WATERMAN)

These firms
1. were oriented toward action
2. learned about the needs of their customers
3. promoted managerial autonomy and entrepreneurship
4. achieved productivity by paying close attention to the needs of their people
5. were driven by a company philosophy often based on the values of their leaders
6. focused on the business they knew best
7. had a simple organization structure with a lean staff
8. were centralized as well as decentralized, depending on appropriateness

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MANAGERIAL ROLES APPROACH
(MINTZBERG)

Interpersonal Informational Decisional

Figurehead Monitor Entrepreneur

Disturbance
Handler
Leader Disseminator
Resource
Allocator
Liaison Spokesperson Negotiator

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MANAGERIAL ROLE (MINTZBERG) (CONT.)

Interpersonal Management Roles

Figurehead
As a manager, you have social, ceremonial and legal responsibilities. You're expected to be a source of
inspiration. People look up to you as a person with authority, and as a figurehead.

Leader
This is where you provide leadership for your team, your department or perhaps your entire
organization; and it's where you manage the performance and responsibilities of everyone in the group.

Liaison
Managers must communicate with internal and external contacts. You need to be able to network
effectively on behalf of your organization.

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MANAGERIAL ROLE (MINTZBERG)

Informational Management Roles

Monitor
In this role, you regularly seek out information related to your organization and industry, looking for
relevant changes in the environment. You also monitor your team, in terms of both their productivity, and
their well-being.

Disseminator
This is where you communicate potentially useful information to your colleagues and your team.

Spokesperson
Managers represent and speak for their organization. In this role, you're responsible for transmitting
information about your organization and its goals to the people outside it.

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 MANAGERIAL ROLE (MINTZBERG)
Decisional Management Roles

Entrepreneur
As a manager, you create and control change within the organization. This means solving problems,
generating new ideas, and implementing them.

Disturbance Handler
When an organization or team hits an unexpected roadblock, it's the manager who must take charge.
You also need to help mediate disputes within it.

Resource Allocator
You'll also need to determine where organizational resources are best applied. This involves allocating
funding, as well as assigning staff and other organizational resources.

Negotiator
You may be needed to take part in, and direct, important negotiations within your team, department, or
organization.
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OPERATIONAL APPROACH
Operational management
involves the oversight of all
tasks related to achieving
the highest possible level
of operational efficiency.

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SYSTEMS APPROACH
Reenergizing
the system

It is the task of managers

to transform the inputs,
in an effective and
efficient manner, into
outputs
Transformation
Inputs Outputs
Process

External
Environment

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 SYSTEMS MODEL
Reenergizing the system
Environment

Environment
Organizing

Controlling
Managerial

Planning
External

External
Leading
Staffing
knowledge, goals
To produce output
of claimants and
use of inputs

Facilitated by communication that also links the

organization with the external environment

External
Environment
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THREE MANAGEMENT PERSPECTIVES

Global Innovative Entrepreneurial

Perspective Perspective Perspective

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OPERATING IN A PLURALISTIC SOCIETY

Pluralistic society is a society where many organized groups represent various interests.

Working within a pluralistic society has several implications for business.

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THE TECHNOLOGICAL AND INNOVATIVE
ENVIRONMENTS

Technology the sum total of the knowledge we have of ways to do things.

• Invention
Invention is the development or discovery of something new.
• Innovation
Innovation is the enhancement, adaptation, or commercialization of new products, services, or
processes.

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PRODUCT, SERVICE, AND PROCESS INNOVATION

Disruptive or breakthrough innovations

Incremental innovation the application of
apply technology to develop and
technology to adapt, enhance, or
commercialize new categories of
commercialize existing products,
products, services, or processes that
services, or processes.
serve new market segments

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THE ECOLOGICAL ENVIRONMENT

Managers must take into account the ecological factors in

their decision-making.

Here, ecology is the relationship of people and other living

things with their environment, such as soil, water, and air,
land, water, and air pollution is of great concern to all
people

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THE SOCIAL RESPONSIBILITY OF MANAGERS

Corporate social responsibility is the serious consideration of the impact of the

company’s actions on society.

Social responsiveness is the ability of a corporation to relate its operations and policies to
the social environment in ways that are mutually beneficial to the company and to society.

Social entrepreneurship is the process of developing an organization to address a societal

need with less focus on the associated goal of creating economic benefit for the entrepreneur.

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ARGUMENTS FOR BUSINESS INVOLVEMENT IN
SOCIAL ACTIONS
1. Public needs have changed, leading to changed expectations.
2. The creation of a better social environment benefits both society and business.
3. Social involvement discourages government regulation and intervention.
4. Business has a great deal of power that, it is reasoned, should be accompanied by an equal
amount of responsibility.
5. Modern society is an interdependent system, and the internal activities of the enterprise have
an impact on the external environment.
6. Social involvement may be in the interests of stockholders.
7. Problems can become profits.
8. Social involvement creates a favourable public image.
9. Business should try to solve the problems that other institutions have not been able to solve.
10. Business has the resources.
11. It is better to prevent social problems through business involvement than to cure them.

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ARGUMENTS AGAINST SOCIAL INVOLVEMENT OF
BUSINESS
1. The primary task of business is to maximize profit by focusing strictly on economic activities.
Social involvement could reduce economic efficiency.
2. In the final analysis, society must pay for the social involvement of business through higher
prices.
3. Social involvement can create a weakened international balance-of-payment situation.
4. Business-people lack the social skills to deal with the problems of society. Their training and
experience are with economic matters, and their skills may not be pertinent to social
problems.
5. There is a lack of accountability of business to society. Unless accountability can be
established, business should not get involved.
6. There is no full support for involvement in social actions. Consequently, disagreements among
groups with different viewpoints will cause friction.

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ETHICS IN MANAGING: AN INTEGRATIVE APPROACH

Ethics is the discipline dealing with what is good and bad and with moral duty and obligation.

Business ethics is concerned with truth and justice in the context of commercial enterprise.

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ETHICAL THEORIES

Utilitarian theory
Plans and actions should be evaluated by their consequences.
Theory based on rights
Theory based on rights holds that all people have basic rights.
Theory of justice
The theory of justice demands that decision makers be guided by fairness and equity, as well as
impartiality.

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Institutionalizing Ethics

A code is a statement of policies, principles, or rules that guide behaviour.

Certainly, codes of ethics do not apply only to business enterprises; they should guide the behaviour
of persons in all organizations and in everyday life.

Factors that Raise Ethical Standards

Public disclosure and publicity
The increased concern of a well-informed public

Whistle-Blowing

Whistleblowing means making known to outside agencies unethical company practices.

Differing Ethical Standards between Societies

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ETHICAL AND UNETHICAL LEADER BEHAVIOUR
Ethical Leadership Behaviour Unethical Leadership Behaviour
Using power to serve the good of the followers Using power to serve self-interest
Respecting followers and colleagues Lack of respect for others
Pursuing a vision and goals through ethical means Pursuing goals at any cost with disregard to ethical
considerations
Listening to feedback and criticism from followers Rejecting criticism from anyone
Encouraging participation Leading in a autocratic manner
Communicating vertically and crosswise Communicating top-down
Creating a flexible, situation-adaptable organization Having a rigid, bureaucratic organization structure
structure
Adapting leadership style to the culture of the Leading autocratically with disregard of the culture of
enterprise and the country the enterprise and the country
Teaching and coaching followers to become ethical Not teaching or coaching followers for fear of losing
leaders power
Controlling by persuasion Controlling by punishing
Leading by a good example Leading by ignoring ethics and customs

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TRUST AS THE BASIS FOR CHANGE MANAGEMENT

Managers are bombarded with new managerial concepts, and old ones often are disguised by
new terminology—all designed for coping with managerial change demanded by global
competition, customer expectations, and the need to respond quickly to environmental changes.

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THE DIGITAL REVOLUTION AFFECTS THE
TECHNOLOGICAL, ECONOMICAL, ECOLOGICAL,
SOCIAL, AND ETHICAL ENVIRONMENTS

The change from analogue to digital technology affects all people in all environments, domestic and
global.

New digital technologies impact on governments and international relations.

Digital technology is already extensively used in developed nations, but the impact on developing
countries can be dramatic as the price of the technology is continuously dropping.

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Thank
you