MODULE III Basics of Management PDF

MODULE III BASICS OF MANAGEMENT CONCEPT AND DEFINITION OF MANAGEMENT “Management is the art of getting things done through and with the people in formally organized groups”. “Management is defined for conceptual, theoretical and analytical purposes as that process by which Managers create direct,...

MODULE III BASICS OF MANAGEMENT CONCEPT AND DEFINITION OF MANAGEMENT “Management is the art of getting things done through and with the people in formally organized groups”. “Management is defined for conceptual, theoretical and analytical purposes as that process by which Managers create direct, maintain and operate purposive organization through systematic co-ordinated co-operative human effort.” NATURE AND SCOPE OF MANAGEMENT 1. Multi disciplinary Management integrates the ideas and concepts taken from disciplines such as psychology, sociology, anthropology, economics, ecology, statistics, operation research, history etc. and presents newer concepts which can be put in practice for managing the organizations. 2. Dynamic Nature of Principles Principles are a fundamental truth which establish cause and effect relationship of a function. Based on practical evidences, management has framed certain principles, but these principles are flexible in nature and change with the changes in the environment in which an organization exists. 3. Relative, Not Absolute Principles Management Principles are relative, not absolute and they should be applied according to the need of the organization. Each organization may be different from others. The difference may exist because of time, place, socio-cultural factors etc. A particular management Principles has different strength in different conditions and therefore Principles of Management should be applied in the light of the prevailing conditions. 4. Management, Science or Art Science is based on logical consistency, systematic explanation, critical evaluation and experimental analysis. It is a systematized body of knowledge. Management, being a social science may be called as an inexact or pseudo science. The meaning of art is related with the bringing of desired result through the application of skills. It has to do with applying of knowledge or science or of expertness in performance. Management can be considered as an art and a better manager is one who knows how to apply the knowledge in solving a particular problem. 5. Management as a Profession The word profession may perhaps be defined as an occupation based upon specialized intellectual study and training, the purpose of which is to supply skilled service or advice to others for a definite fee or salary. Management possesses certain characteristics of profession, while others are missing. Therefore, it cannot be said to be a profession, though it is emerging as a profession and the move is towards management as a profession. 6. Universality of Management There are arguments in favour and against the concept of universality. The arguments in favour of universality are:- [a]management as a process and the various process of management are universal for all organizations [b]distinction between management fundamentals and techniques [c]distinction between management fundamentals and practices. CLASSICAL THEORIES OF MANAGEMENT Classical theories of management are the oldest and most traditional theories of management. These theories were generated in late 1800’s and early 1900’s. They revolve around the basic assumption that people are motivated by economic incentives. The classical theory can be further categorized into three theories  Scientific Management Theory  Administrative Principles  Bureaucracy Scientific Management This theory was propounded by Frederick W. Taylor. 1. Every job should be broken into its element and a scientific way of performing it should be established. 2. Workers should be scientifically selected with the right attitude and ability and be properly trained. 3. Scientific Distribution of work between workers and management. A mental revolution is needed which means creation of mutual trust between workers and management. 4. Maximum output in place of restricted output should be produced as it is beneficial for both management and workers. Techniques of Scientific Management 1. Time Study: This study emphasizes that the ideal time to complete a job should be identified so that the efficiency of workers can be increased. 2. Motion Study: This study studies the ideal type and number of movements to complete a task so that workers can be trained accordingly and generate maximum output. 3. Standardization and Simplification: Every output should be of a specified standard and in order to do that simplification of tasks is must. 4. Scientific task planning: Each job should be planned in a systematic manner with step by step approach. 5. Differential piece rate system: Different piece rates should be advocated for efficient and inefficient employees. 6. Functional Foremanship: Each job should have 4 office supervisors and 4 shop supervisors. Office supervisors are the ones who take care of the administrative and written documentation while shop supervisors are the ones who help in implementation on the shop floor. Administrative Theory This theory was given by Henri Fayol. Fayol found that the activities of an industrial organisation could be divided into six groups: 1. Technical [relating to production] 2. Commercial [buying, selling and exchange] 3. Financial [search for capital and its optimum use] 4. Security [protection of property and person] 5. Accounting [including statistics] and 6. Managerial [planning, organisation, command, coordination, and control] Fayol evolved 14 general principles of management which are still considered important in management.  Henri Fayol's 14 Principles of Management Henry Fayol, also known as the Father of Modern Management Theory, gave a new perception on the concept of management. He introduced a general theory that can be applied to all levels of management and every department. He envisioned maximising managerial efficiency. 1. Division of Work Henri believed that segregating work in the workforce amongst the workers will enhance the quality of the product. Similarly, he also concluded that the division of work improves the productivity, efficiency, accuracy and speed of the workers. This principle is appropriate for both the managerial as well as a technical work level. 2. Authority and Responsibility 3. Discipline These are the two key aspects of Without discipline, nothing can be management. Authority facilitates the accomplished. It is the core value for any management to work efficiently, and project or any management. Good responsibility makes them responsible for performance and sensible interrelation the work done under their guidance or make the management job easy and leadership. comprehensive. Employees’ good behaviour also helps them smoothly build and progress in their professional careers. 4. Unity of Command 5. Unity of Direction This means an employee should have only Whoever is engaged in the same activity one boss and follow his command. If an should have a unified goal. This means all the employee has to follow more than one boss, people working in a company should have there begins a conflict of interest and can one goal and motive which will make the create confusion. work easier and achieve the set goal easily.  6. Subordination of Individual Interest 7. Remuneration This indicates a company should work This plays an important role in motivating unitedly towards the interest of a company the workers of a company. Remuneration rather than personal interest. Be can be monetary or non-monetary. Ideally, it subordinate to the purposes of an should be according to an individual’s efforts organisation. This refers to the whole chain they have put forth. of command in a company. 8. Centralization 9. Scalar Chain In any company, the management or any Fayol, on this principle, highlights that the authority responsible for the decision- hierarchy steps should be from the top to making process should be neutral. However, the lowest. This is necessary so that every this depends on the size of an organisation. employee knows their immediate senior Henri Fayol stressed on the point that there also they should be able to contact any, if should be a balance between the hierarchy needed. and division of power. 10. Order 11. Equity A company should maintain a well-defined All employees should be treated equally and work order to have a favourable work respectfully. It’s the responsibility of a culture. The positive atmosphere in the manager that no employees face workplace will boost more positive discrimination. productivity. 12. Stability 13. Initiative An employee delivers the best if they feel The management should support and secure in their job. It is the duty of the encourage the employees to take initiatives management to offer job security to their in an organisation. It will help them to employees. increase their motivation and morale. 14. Esprit de Corps It is the responsibility of the management to motivate their employees and be supportive of each other regularly. Developing trust and mutual understanding will lead to a positive outcome and work environment.  Bureaucracy Max Weber has introduced the concept of Bureaucracy. Features of Bureaucracy 1. Division of Labor: Work isdivided according to ability and hence leads to specialization.If a person does the same type of work again and again he/she automatically gains specializes in that work and it takes less time to complete the task. 2. Technical Competence: Selection of employees is based on technical competence.Only those candidates should be selected who are technically sound for the job thus selection should be fair and unbiased. 3. Hierarchy of authority: A well defined hierarchy is maintained. Each employee is aware about who his/ her boss is and from who he/ she is suppose to take orders and whom to report. 4. Record keeping: All the records are kept in written form. Keeping records in written form helps in keeping track of all the activities. 5. Rules & Regulations: Organizations work according to pre set rules. Every organization should define rules and regulations for better productivity adhering to those should be compulsory. 6. Impersonal Conduct: No informal or blood relations are promoted. Nepotism and brotherhood is strongly avoided to ensure only the right talent gets selected and hence, the productivity also increases. Merits 1. Predictable: Since the rules are clearly defined the employees behavior is predictable, making the management process easier to implement. 2. Specialization: Division of work leads to specialization of labor. As all employeesknow what they are supposed to do. 3. Structure: A well defined hierarchy gives a structure to the organization. Every employees is aware that who his/ her superior is and also who his/ her subordinate is. 4. Rationality: As impersonal conduct is promoted it leads to ration decision making. Decision is based on facts and logic rather than emotions and gut feeling Demerits 1. There is too much paper work and red tape. 2. Excessive rules and regulations make it difficult for the employees to be creative and innovative. 3. Employees become so used to the routines that they resist new ideas and hence promote rigidity. 4. In the wake of following the rules somewhere the goal of the organization is displaced. 5. Each department works like a water tight compartment giving rise to the problem of compartmentalization. NEOCLASSICAL APPROACH Neo-Classical theory is called human relations and behavioural science approach. It is built on the base of classical theory. It modified, improved and extended the classical theory. Classical theory concentrated on job content and management of physical resources. Neo Classical theory gave greater emphasis to man behind the machine and stressed the importance of individual as well as group relationship in the plant or workplace. Neo-Classical approach may be analysed in three parts, namely — 1. Hawthorne Experiment 2. Human Relation Movement 3. Behavioural Approach. MANAGER A Manager is the person responsible for planning and directing the work of a group of individuals, monitoring their work, and taking corrective action when necessary. For many people, this is their first step into a management career. Qualities of a Good Manager Basic roles and skills of manager PROCESS/ SCOPE /FUNCTIONS OF MANAGEMENT 1. Planning The first management function in scope of management functions that managers must perform is planning. Within this function plan is created to accomplish the mission and vision of the business entity. Under the mission is considered the reason for the establishment, while under the vision is considered where business entity is aiming. The plan must define the time component and to plan necessary resources to fulfill the plan. 2. Organizing Organizing is the second function manager, where he had previously prepared plan, establish an appropriate organizational structure in business organization. In part, it determines the ranges of management, type of organizational structure, authority in the organization, types and ways of delegating and developing lines of communication. The organization and its subsystems are placed under the plan, which was created as part of functions, i.e, planning. Organizing basically involves analysis of activities to be performed for achieving organizational objectives, grouping them into various departments and sections so that these can be assigned to various individuals and delegating them appropriate authority.  3. Staffing The task of this management function is to set rules related to employment and personnel policies. Staffing basically involves matching jobs and individuals. This may require a number of functions like manpower planning, recruitment, selection, training and development, performance appraisal, promotion transfer, etc. The responsibility for staffing rests on all managers at all levels of the organization. 4. Directing Direction is an important managerial function through which management initiates actions in the organization. It is a function of management which is related with instructing, guiding and inspiring human factor in the organization to achieve organization objectives. It is a function to be performed at every level of management. 5. Controlling Control process tries to find out deviations between planed performance and actual performance and to suggest corrective actions wherever these are needed. Controlling is a forward looking function as one can control the future happenings and not the past. Every manager has to perform the control function in the organization. It is a continuous process and control system is a co-ordinate integrated system. LEVELS OF MANAGEMENT 1. Top level / Administrative level 2. Middle level / Executory 3. Low level / Supervisory / Operative / First-line managers 1. Top Level of Management It consists of board of directors, chief executive or managing director. The top management is the ultimate source of authority and it manages goals and policies for an enterprise. It devotes more time on planning and coordinating functions. The role of the top management can be summarized as follows – a. Top management lays down the objectives and broad policies of the enterprise. b. It issues necessary instructions for preparation of department budgets, procedures, schedules etc. c. It prepares strategic plans & policies for the enterprise. d. It appoints the executive for middle level i.e. departmental managers. e. It controls & coordinates the activities of all the departments. f. It is also responsible for maintaining a contact with the outside world. g. It provides guidance and direction. h. The top management is also responsible towards the shareholders for the performance of the enterprise. 2. Middle Level of Management The branch managers and departmental managers constitute middle level. They are responsible to the top management for the functioning of their department. They devote more time to organizational and directional functions. Their role can be emphasized as a. They execute the plans of the organization in accordance with the policies and directives of the top management. b. They make plans for the sub-units of the organization. c. They participate in employment & training of lower-level management. d. They interpret and explain policies from top level management to lower level.  e. They are responsible for coordinating the activities within the division or department. f. It also sends important reports and other important data to top level management. g. They evaluate performance of junior managers. h. They are also responsible for inspiring lower-level managers towards better performance. 3. Lower Level of Management Lower level is also known as supervisory / operative level of management. It consists of supervisors, foreman, section officers, superintendent etc. Their activities include – a. Assigning of jobs and tasks to various workers. b. They guide and instruct workers for day-to-day activities. c. They are responsible for the quality as well as quantity of production. d. They are also entrusted with the responsibility of maintaining good relation in the organization. e. They communicate workers problems, suggestions, and recommendatory appeals etc to the higher level and higher-level goals and objectives to the workers. f. They help to solve the grievances of the workers. g. They supervise & guide the sub-ordinates. h. They are responsible for providing training to the workers. i. They arrange necessary materials, machines, tools etc for getting the things done. j. They prepare periodical reports about the performance of the workers. k. They ensure discipline in the enterprise. l. They motivate workers. m. They are the image builders of the enterprise because they are in direct contact with the workers.