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 Definition of management
• Management is the process of designing and
maintaining an environment in which
individuals working together in groups,
effectively accomplish selected aims.

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 Concept of Management
• Different people have conceived and defined
management in different ways. Probably the
one that is most simple, popular and often
quoted by many in general is "getting things
done through other people."

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PRINCIPLES OF MANAGEMENT
• Division of work • Centralization of
• Authority and authority
responsibility • Stability
• Discipline • Initiative
• Unity of command/ • Equity of treatment
direction
• Remuneration

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 Levels of Management
& Functions

• Top Management.
• Middle Management.
• Low level Management(Operating force)

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FUNCTIONS OF MANAGEMENT
• Forecasting
• Planning
• Organizing
• Staffing
• Directing
• Controlling
• Decision making

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 Forecasting
• Forecasting lays a ground for reducing the risk
in all decision making because many of the
decisions need to be made under uncertainty.
• In business applications, forecasting serves as
a starting point of major decisions in finance,
marketing, productions, and purchasing

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 Forecasting in Management
• Predicting demands of new and existing
products
• Predicting results of new product research and
development
• Anticipating customer’s needs
• Predicting cost of materials

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 Planning
• It is the basic function of management. It deals with sorting
out a future course of action & deciding in advance the most
appropriate course of actions for achievement of pre-
determined goals.
• Deciding in advance :
• What to do
• How to do
• When to do
• Who is going to do it
• Bridges a gap between where we are today and where we
want to reach.
• Sets the goal of an organization.
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 Organizing

• It is the process of bringing together physical,

financial ,human resources etc and developing
productive relationship amongst them for
achievement of organizational goals.
• According to Henry Fayol, “To organize a business is
to provide it with everything useful for its
functioning (i.e material, machine, money and
manpower). To organize a business involves
determining & providing human and non-human
resources to the organizational structure.
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• Establishing the framework of working:
– How many units or sub-units or departments are
needed.
– How many posts or designations are needed in
each department.
– How to distribute authority and responsibility
among employees
• Once these decisions are taken, organizational
structure gets set up.

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 Staffing
• Recruiting, selecting, appointing the
employees, assigning duties, maintaining
cordial relationship and taking care of
grievances of employees.
• Training and Development of employees,
deciding their remuneration, promotion and
increments.
• Evaluating their performance.

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• Staffing involves:
– Manpower Planning (estimating man power in
terms of searching, choose the person and
giving the right place).
– Recruitment, selection & placement.
– Training & development.
– Remuneration.
– Performance appraisal.
– Promotions & transfer.

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 Directing
• Giving direction or instruction to employees to
get the job done.
• Leadership qualities are required.
• Motivating employees by providing monitory
and non-monitory incentives.
• Communicating with them at regular intervals.

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Directing involves:

• Supervision- implies overseeing the work of subordinates by

their superiors. It is the act of watching & directing work &
workers.
• Motivation- means inspiring, stimulating or encouraging the
sub-ordinates with zeal to work. Positive, negative, monetary,
non-monetary incentives may be used for this purpose.
• Leadership- may be defined as a process by which manager
guides and influences the work of subordinates in desired
direction.
• Communications- is the process of passing information,
experience, opinion etc from one person to another. It is a
bridge of understanding
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 Controlling
• Matching actual performance with the planed
goal.
• If problem, tries to find out the reasons of
deviation.
• Suggesting corrective measures come on the
path of plan

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Controlling has following steps:
– Establishment of standard performance.
– Measurement of actual performance.
– Comparison of actual performance with the
standards and finding out deviation if any.
– Corrective action.

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Decision making
• Decision-making involves the selection of a
course of action from among two or more
possible alternatives in order to arrive at a
solution for a given problem”.
• Decision making: the process by which
managers respond to opportunities and
threats by analyzing options, and making
decisions about goals and courses of action

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Steps in decision making

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Characteristics of good companies
• Oriented towards action
• Learned about the need of customer
• Promoted managerial autonomy and entrepreneurship
• Achieving productivity by paying close attention to the
needs of the workers
• Driven by a philosophy based on the values of leaders
• Focused on business
• Simple organization structure
• Were centralized as well as decentralized

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 Management as a Science

Management Science is a body of systemized

knowledge accumulated and accepted with
reference to the understanding of truths
concerning management. Management science
is nether so comprehensive nor accurate as a
physical science such as maths or chemistry.

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 Management as an Art

• The art of management is a personal creative

power plus skill in performance.
• The problems, events and possibilities develops
personal creative power, while experience,
observation and study of results contribute to
skilled performance.
• It is the "art of arts" because it organizes and
uses human talent.

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 Science and Art of Management
• If science teaches one to know, art teaches
one to do
• Managers to be successful have to know and
do things efficiently and effectively, so they
are indeed a unique scientific and artistic
combination in practice.
• "knowledge is power" is true only in its
application.

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 Management as a Profession
• Since the emergence of separation of
management from ownership, the
management is being taken as a profession.
• Actually, it satisfies all the conditions of a
profession
• It has a well defined body of knowledge.
It requires formal training and it is being
provided to new entrants

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 Management is a Universal Process
• The principles and the techniques of
management are not applicable to only
business but they have universal application.
• They can be applied to social, religious,
charitable and non-profit organization
• Management is integration of human and
other resources in a manner that it leads to
effective performance. And, this aim and
process is universal.
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 Role of Manager
• Manager is a person who is elected by the Top
Management and given a designation/post in
the Organization to the fulfill the goal and
Objective of the Organization. He is instructed
by the top management to manage the
activities (every activities of the Organization)

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 Role of Manager

Interpersonal Informational Decisional Roles

Roles Roles
Entrepreneur
Figurehead Recipient Disturbance
Leader Disseminator Handler
Resources
Liaison Spokesman
Allocator
Negotiator

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 Interpersonal Roles
 Figurehead
Performs symbolic duties like signing legal
documents, welcome to visitors.
 Leader
Motivation and direction to subordinates,
training, counseling and communication
with subordinates.
 Liaison
Interaction with people both inside and
outside the Organization, use phones
calls, email and meetings.
 Informational Roles
 Recipient
Receive information about changes,
opportunities and problems that the
Organization may face.
 Disseminator
Forward information to subordinates,
send memos and reports.
 Spokesman
Represent the Organization in public
through speeches and reports.
 Decisional Roles
Entrepreneur
Identify new ideas and seek innovative methods to
improve the performance of the Organizations.
Disturbance handler
Take corrective action in case of disputes. Resolve
conflicts among subordinates.
Resource Allocator
Allocation of various resources like money,
material, time, scheduling, budgeting.
Negotiator
Negotiate with other parties like customers,
suppliers and government.
 5 Differences
Worker
Manager
• Works with
aloneothers
• Develops people/customers
Does the work
• Like a coach
player and a counsel;
in the team Pitches in as player when needed.
• Is the
leadLeader/Manager
and Managed according to the condition
• Responsibility
Responsibility:: Single
Various
 Key Responsibilities of a manager
 Planning of work  Decision Making
 Proper and effective  Focus on Brands / New
communication Products
 Getting co-operation of
Employees  Distribution Channel
 Encourages a team spirit Management
 Better utilization of  Timely Reporting and
Resources Feedback
 Selecting the Procedure  Developing Team
 Maintaining good human Members
relations  Market Development
 Solve the Problems
 Arrange  Market Intelligence
training and
development facilities  Strong Customer Focus
APPROACHES TO MANAGEMENT THEORY:

• Classical Approach to Management Theory

• Neo-classical management theories

• Modern Approaches to Management Theory

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Classical Approach to Management Theory
• Scientific Management (Frederick W. Taylor)
• Administrative Theory (Henry Fayol )
• Bureaucratic Management (Max Weber )
• Classical theorists formulated principles
for setting up and managing
organizations.
• These views are labeled "Classical"
because they form the foundation for the
field of management thought.
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Scientific
Management
 Scientific Management
• Scientific management has been defined as "that kind
of management which conducts a business or affairs
by standards established, by facts or truths gained
through systematic observation, experiment or
researching".
• Emphasizes the scientific study of work methods to
improve the efficiency of the workers.

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 Definitions

• Its development began with Frederick Winslow Taylor

in the 1880s and 1890s within the manufacturing
industries.
• Scientific Management(Taylorism), was a theory of
management that analyze and synthesize workflows.
• Its main objective was improving economic efficiency,
especially labor productivity by analyzing and
establishing workflow processes.
• Scientific Management’s themes include analysis,
synthesis, logic, rationality, empiricism, work ethic,
efficiency and elimination of waste, standardization of
best practices and others.
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Basic Elements of Scientific Management
‘DUTIES OF
MANAGEMENT’

‘PAY PER PIECE’

Select the
‘FIRST CLASS MEN’
to do each job

Determine the
‘ONE BEST WAY’
to do each job
Features of Scientific Management
• Consider the motivation and capacity of every worker
• Objective: to yield higher production per resource
• Monitoring work and offering appropriate
instructions and supervision.
• Planning, training workers for effective results.
• Improved economic and work efficiency
• Increased labor productivity
• Reduced waste
 Effects of Scientific Management
• Rationality at work place improved as logic in how to
work and measure production.
• Effective work ethics yield more respect, morals, and
values in relationship towards working personnel,
administration, community and company rules and
regulations.
• Has standardized best practices
• Made knowledge transfer possible between workers
and between workers and tools.
Advantages of Scientific Management
• Enhanced teamwork – cooperation between
managers and workers
• Management based on observation and experiment
for context-specific solutions
• Better planning and decision-making
• Improved democracy in workplace
• Improved physical working conditions for employees.
• Increased opportunities for workers to acquire
scientific training
Disadvantages of Scientific Management

• Suitable for small organizations only;

unsuitable in big firms
• Managerial decisions may involve strictness
and stress for managers due to need for
complete control over the work place
• Influences feelings of pressure among workers
• May de-motivate workers
Steps Involved in Scientific Management

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 Piece-rate incentive system:
• Piece-rate incentive system: Taylor felt that the wage
system was one of the major reasons for soldiering. To
resolve this problem, he advocated the use of a piece-
rate incentive system. The aim of this system was to
reward the workers who produced the maximum out-
put.

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 Time and motion Study:
• Taylor tried to determine the best way to perform
each and every job. To do so, he introduced a method
called ''time'-and-Motion" study in which jobs are
broken down into various small tasks or motions and
unnecessary motions are removed to find out the best
way of doing a job

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 Limitations of Scientific Management
• The principles of scientific management revolve round
the problems at the operational level and do not focus
on the management of an organization from a
mangers point of view.
• These principles focus on the solutions of problems
from an engineering point of view.
• Scientific Management theorists also ignored the
human desire for job satisfaction.

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 Administrative Theory
• While the proponents of scientific management
developed principles that could help the individual
workers perform their tasks more efficiently, the
administrative theory focused on principles that
could be used by managers to coordinate the internal
activities of organizations.
• Fayol believed that with, satisfactory results were in
scientific forecasting and proper methods of
management .

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According to Fayol the business operations of an
organization could be divided into six broad activities

• Technical: Producing and manufacturing products.

• Commercial: Buying, selling and exchange.
• financial: Search for and optimal use of capital
• Security: Protecting employees and property.
• Accounting: Recording and taking stock of costs,
profits, liabilities, Maintaining balance sheets and
compiling statistics.
• Managerial: Planning, organizing, commending,
coordinating and controlling.

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Fayol focused on the last activity
Managerial activity.
• Within this, he identified Five major functions:
planning, organizing, commanding, coordinating and
controlling.
• Fayol's concept of management forms the
cornerstone of contemporary management

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 Fayol outlined the following fourteen
principles of management
• Division of work • Remuneration
• Authority and • Centralization
responsibility • Scalar chain
• Discipline • Order
• Unity of command • Equity
• Unity of Direction • Stability of tenure of
• Subordination of the personnel
individual interest to • Initiative
the general interest • Sense of union

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 Bureaucratic Management
• Bureaucratic management as one of the schools of
classical management emphasizes the need for
organizations to function on a national basis.
• "a bureaucracy is a highly structured, formalized and
impersonal organization. In other words, it is a formal
organization structure with a set of rules and
regulations
• He observed that nepotism (hiring of relatives
regardless of their competence) was grossly unjust and
hindered the progress of individuals
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 Neo-classical management theories
• Behavioral Approach to Management Theory
• Quantitative Approaches to Management Theory

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 Behavioral Approach to Management Theory

• The behavioral school of management emphasized

what the classical theorists ignored i.e. the human
element.
• While classical theorists viewed the organization from
a production point of view, the behavioral theorists
viewed it from the individuals point of view -their
attitudes, behaviors and group process in the
workplace.

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• The behavioral approach emerged primarily as an
outcome of the Howthrone studies. Many Parke
Follet, Eltom Mayo and his associates, Abraham
Maslow,
• Donglas MCgradgor and Chris Angyris were the major
contributors to this school.
• They emphasized the importance of the human
element.
• Abraham H Maslow (1908-1970), psychologist,
theorized that people were motivated by a hierarchy
of needs. Maslow (1943) focused on human needs.

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 Hawthorne Experiment:
• His main contribution between 1924-1927
• It consist of four stage experiment.
» Illumination Experiment.
» Relay Assembly Test Room Experiment.
» Mass Interview Programme.
» Bank Wiring Test Room Experiment.
 Illumination Experiment:
 This experiment was conducted to establish
relationship between output and illumination.
 When the intensity of light was increased, the
output also increased.
 The output showed an upward trend even
when the illumination was gradually brought
down to the normal level.
 CONCLUSION:
o It was concluded that there is no consistent
relationship between output of workers and
illumination in the factory. There must be
some other factor which affected productivity.
 Relay Assembly Test Room
Experiment:
 This phase aimed at knowing not only the
impact of illumination on production but also
other factors.
 Length of the working days, rest hours, and
other physical conditions.
 In this experiment, a small homogeneous
work-group of six girls was constituted.
 These girls were friendly to each other
and were asked to work in a very informal
atmosphere under the supervision of a
researcher.
 Productivity and morale increased
considerably during the period of the
experiment.
 Productivity went on increasing and
stabilized at a high level even when all the
improvements were taken away and the
pre-test conditions were reintroduced.
 CONCLUSION:
o The researchers concluded that socio-
psychological factors such as feeling of being
important, recognition, attention and
participation, held the key for higher
productivity.
 Interview Programme:
• 21000 people were interviewed between 1928-
1930
• To determine employee attitude towards the
company and their jobs.
• 21,000 employees were interviewed over a
period of three years to find out reasons for
increased productivity. It was concluded that
productivity can be increased if workers are
allowed to talk freely about matters that are
important to them.
Initially, a direct approach was used whereby
interviews asked questions considered
important by managers and researchers.
The researchers observed that the replies of
the workmen were safe guarded.
Therefore, this approach was replaced by an
indirect technique, where the interviewer
simply listened to what the workmen had to
say.

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 CONCLUSION:
o The findings confirmed the importance of
social factors at work in the total work
environment.
Bank Wiring
.
Test Room Experiment:
 The experiment was conducted to study a
group of workers under conditions which were
as close as possible to normal.
 This group comprised of 14 workers.
 After the experiment, the production records
of this group were compared with their earlier
production records.
 It was observed that the group evolved its
own production norms for each individual
worker, which was made lower than
those set by the management.
 Because of this, workers would produce
only that much, thereby defeating the
incentive system.
 Those workers who tried to produce
more than the group norms were
isolated, harassed or punished by the
group.
 CONCLUSION:
o Each individual was restricting output.
o The group had its own “unofficial” standards
of performance.
o Individual output remained fairly constant
over a period of time.
o Informal groups play an important role in the
working of an organization.
 Maslow’s Hierarchy of Needs
Theory
• Physiological needs
– “living wage” to purchase food and clothing
• Safety needs
– Free from danger-wages to procure shelter
• Affiliation needs
– Need to belong in social relationships with co-workers
• Esteem needs
– Sense of achievement and accomplishment
– Compensation and reward
• Self-Actualization needs
– Job that allows growth and creativity

Lippert-COM329 72
Maslow’s Hierarchy of Needs Theory

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Quantitative Approaches to Management
Theory
• The quantitative approach to management
includes the application of statistics,
optimization models, information models and
computer simulation.
• More specifically, this approach focuses on
achieving organizational effectiveness through
the application of mathematical and statistical
concepts.

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• The three main branches of the quantitative
approach are:
i) management science,
ii) operations management, and
iii) management information system

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 Management science:
• The management science approach stresses the use of
mathematical models and statistical methods for
decision-making.
• It visualizes management as a logical entity, the action
of which can be expressed in terms of mathematical
symbols, relationships and measurement data.
• Another name commonly used for management science
is operations research. Recent advances in computers
have made it possible to use complex mathematical and
statistical models in the management of organizations.

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Management science techniques are widely
used in the following areas
• Capital budgeting and cash flow management:
It includes the following.
– Production scheduling.
– Developing product strategies.
– Planning for human resources
development programs.
– Maintenance of optimal inventory
levels.
– Aircraft scheduling.
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• Various mathematical tools like
» the waiting-line theory or queering theory,
» linear programming,
» the Program Evaluation Review Technique (PERT),
» the critical path method (CPM),
» the decision theory, the stimulation theory,
» the probability theory, sampling , time series analysis, etc., have
increased
» the effectiveness of managerial decision-making .

• To apply a quantitative approach to decision-making, individuals with

mathematical, statistical, engineering, economics and business
background and skills are required.
• Since one person cannot have all these skills the quantitative method
requires a team approach to decision-making.
• This approach has been criticized for its overemphasis on mathematical
tools. Many managerial activities cannot be quantified because they
involve human beings who are governed by many irrational elements
as well.

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 ii) Operations Management:
• Operations management is an applied form of management science.
It deals with the effective management of the production process and
the timely delivery of an organization's products and services.
• Operations management is concerned with:
• i) inventory management,
• ii) work scheduling,
• iii) production planning,
• iv) facilities location and design, and
• v) quality assurance.
• The tools used by operations managers are forecasting, inventory
analysis, materials requirement, planning systems, networking
models, statistical quality control methods, and project planning and
control techniques. 79
Management information systems (MIS):

• Management information system focuses on

designing and implementing computer-based
information systems for business
organizations.
• In simpler term, the MIS converts raw data
into information and provides the needful
information to each manager at the right time
in the needed form.

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 Modern Approaches to Management
Theory
• Systems Theory
• Contingency Theory

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 SYSTEM APPROCH TO MANAGEMENT

• According to this theory, an organizational system has

four major components
• Inputs - money, materials, men, machines and market other
informational sources - are required to produce goods and
services.
• Transformation processes or throughputs, managerial and
technical abilities are used to convert inputs into outputs.
• Outputs are the products, services, profits and other results
produced by the organization.
• Feedback refers to information about the out comes and the
position of the organization relative to the environment in
which it operates.
• .
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Mckinsey 7-S Framework

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SEVEN ELEMENTS

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 Contingency Theory
• This theory is also known as the situational theory.
• According to this theory, there is no one best way to manage all
situations. In other words, there is no best way to manage.
• The contingency approach to management was developed by managers,
consultants, and researchers who tried to apply the concepts of the
major schools for management through real life situations.
• Managers, who follow this approach, make business decisions or adopt
a particular management style only after carefully considering all
situational factors.
• According to the contingency approach, "The task of managers is to
identify which technique will, in a particular situation or under
particular circumstances and at a particular time, best contribute to
the attainment of management goals" (Fredrick, 19 15).

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