Principles of Management PDF

SYLLABUS Principles and Practices of Management Objectives: To acquaint students with the terms, concepts, and points of view used in management and its historical evolution, ethics, social responsibility and environmental issues. Some other objectives of the cours...

SYLLABUS Principles and Practices of Management Objectives: To acquaint students with the terms, concepts, and points of view used in management and its historical evolution, ethics, social responsibility and environmental issues. Some other objectives of the course are: Provide students with a working knowledge of the skills and functions necessary to be an effective, efficient manager. Provide an introduction to the theory and practice of managing organizations. Examine the management functions (planning, organizing, leading or influencing, and controlling) and the impact of those functions on the business organization. DCOM102 Sr. No. Desription 1 Management: Definition, nature, purpose and scope of management, Skills and roles of a Manager, functions, principles; Evolution of Management Thought, Scientific Management. 2 Planning: Types of plans, planning process, Characteristics of planning, Traditional objective setting, Strategic Management, premising and forecasting. in e. 3 Decision-Making: Process, Simon’s model of decision making, creative problem re 4f es solving, group decision making. ot.n 4 Management by Objectives: Management by exception; Styles of management: w w //w (American, Japanese and Indian), McKinsey’s 7-S Approach, Self Management. s: tp 5 Organizing: Organizational design and structure, Coordination, differentiation ht and integration. 6 Span of management, centralization and de-centralization Delegation, Authority & power - concept & distinction, Line and staff organizations. 7 Staffing: Human Resource Management and Selection, Performance appraisal and Career strategy, Coordination- Concepts, issues and techniques. 8 Organizational Change: Introduction, Resistance to Change, Behavioural Reactions to Change, Approaches Or Models to Managing Organisational Change. 9 Leading: Human Factors and Motivation, Leadership, Communication, Teams and Team Work. 10 Controlling: Concept, planning-control relationship, process of control, Types of Control, Control Techniques.  DMGT101 Sr. No. DESCRIPTION 1. Management: Definition, nature, purpose and scope of management, Skills and roles of a Manager, functions, principles; Evolution of Management Thought, Scientific Management. 2. Planning: Types of plans, planning process, Characteristics of planning, Traditional objective setting, Strategic Management, premising and forecasting. 3. Decision-Making: Process, Simon’s model of decision making, creative problem solving, group decision making. 4. Management by Objectives: Management by exception; Styles of management: (American, Japanese and Indian), McKinsey’s 7-S Approach, Self Management. 5. Organizing: Organizational design and structure, Coordination, differentiation and integration. in e. 6. Span of management, centralization and de-centralization Delegation, Authority & power - re 4f concept & distinction, Line and staff organizations. Coordination: Concepts, issues and es techniques. ot.n 7. Staffing: Human Resource Management and Selection, Performance appraisal and Career w w strategy, Managing Change. //w 8. Leading: Human Factors and Motivation, Leadership, Communication, Teams and Team s: tp Work. ht 9. Controlling: Concept, planning-control relationship, process of control, Types of Control, Control Techniques.  CONTENTS Unit 1: Introduction to Management 1 Unit 2: Evolution of Management Thought 21 Unit 3: Planning 50 Unit 4: Forecasting and Premising 68 Unit 5: Decision-making 79 Unit 6: Management by Objectives and Styles of Management 91 Unit 7: Organising 107 Unit 8: Span of Management 135 Unit 9: Delegation, Authority and Power 147 Unit 10: Staffing and Coordination 161 Unit 11: Performance Appraisal and Career Strategy in 183 e. Unit 12: Organisational Change 203 re 4f Unit 13: Motivation and Leadership 226 es ot Unit 14: Communication 254.n w Unit 15: Team and Team Work 264 w //w Unit 16: Controlling 278 s: tp ht Corporate and Business Law in e. re 4f es ot.n w w //w s: tp ht 6 LOVELY PROFESSIONAL UNIVERSITY  Unit 1: Introduction to Management Unit 1: Introduction to Management Notes CONTENTS Objectives Introduction 1.1 Definition of Management 1.2 Nature of Management 1.3 Scope of Management 1.4 Purpose of Management 1.5 Characteristics of Management 1.6 Management – An Emerging Profession 1.7 Who is a Manager? in e. 1.8 Roles of a Manager re 4f 1.9 Skills of an Effective Manager es ot 1.10 Functions of a Manager.n w 1.11 Summary w //w 1.12 Keywords s: tp 1.13 Self Assessment ht 1.14 Review Questions 1.15 Further Readings Objectives After studying this unit, you will be able to: Define management State the nature, purpose and scope of management Identify roles and skills of a manager Explain the functions of a manager Discuss Henry Fayol’s Principles of Management Introduction Management is a vital aspect of the economic life of man, which is an organised group activity. A central directing and controlling agency is indispensable for a business concern. The productive resources - material, labour, capital etc. are entrusted to the organising skill, administrative ability and enterprising initiative of the management. Thus, management provides leadership to a business enterprise. Without able managers and effective managerial leadership the resources of production remain merely resources and never become production. Under competitive economy and ever-changing environment the quality and performance of managers determine both the survival as well as success of any business enterprise. Management occupies such an LOVELY PROFESSIONAL UNIVERSITY 1 Principles and Practices of Management Notes important place in the modern world that the welfare of the people and the destiny of the country are very much influenced by it. 1.1 Definition of Management Management may be defined in many different ways. Many eminent authors on the subject have defined the term “management”, some of these definitions are reproduced below: According to Lawrence A Appley, “Management is the development of people and not the direction of things”. According to Joseph Massie, “Management is defined as the process by which a co-operative group directs action towards common goals”. In the words of George R Terry, “Management is a distinct process consisting of planning, organising, actuating and controlling performed to determine and accomplish the objectives by the use of people and resources”. According to James L Lundy, “Management is principally the task of planning, co-ordinating, in motivating and controlling the efforts of others towards a specific objective”. e. re In the words of Henry Fayol, “To manage is to forecast and to plan, to organise, to command, to 4f co-ordinate and to control”. es ot According to Peter F Drucker, “Management is a multi-purpose organ that manages a business.n w and manages managers and manages worker and work”. w //w In the words of J.N. Schulze, “Management is the force which leads, guides and directs an s: organisation in the accomplishment of a pre-determined object”. tp ht In the words of Koontz and O’Donnel, “Management is defined as the creation and maintenance of an internal environment in an enterprise where individuals working together in groups can perform efficiently and effectively towards the attainment of group goals”. According to Ordway Tead, “Management is the process and agency which directs and guides the operations of an organisation in realising of established aims”. According to Stanley Vance, “Management is simply the process of decision-making and control over the actions of human beings for the express purpose of attaining pre-determined goals”. According to Wheeler, “Business management is a human activity which directs and controls the organisation and operation of a business enterprise. Management is centred in the administrators of managers of the firm who integrate men, material and money into an effective operating limit”. In the words of William Spriegel, “Management is that function of an enterprise which concerns itself with the direction and control of the various activities to attain the business objectives”. In the words of S. George, “Management consists of getting things done through others. Manager is one who accomplishes the objectives by directing the efforts of others”. In the words of Keith and Gubellini, “Management is the force that integrates men and physical plant into an effective operating unit”. According to Newman, Summer and Warren, “The job of management is to make cooperative endeavour to function properly. A manager is one who gets things done by working with people and other resources”. According to John F M, “Management may be defined as the art of securing maximum results with a minimum of effort so as to secure maximum results with a minimum of effort so as to 2 LOVELY PROFESSIONAL UNIVERSITY  Unit 1: Introduction to Management secure maximum prosperity and happiness for both employer and employee and give the Notes public the best possible service”. In the words of Kimball and Kimball, “Management embraces all duties and functions that pertain to the 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 management”. In the words of E.F.L. Brech, “Management is a social process entailing responsibility for the effective and economical planning and regulation of the operations of an enterprise, in fulfilment of a given purpose or task, such responsibility involving: 1. judgement and decision in determining plans and in using data to control performance, and progress against plans; and 2. the guidance, integration, motivation and supervision of the personnel composing the enterprise and carrying out its operations”. According to E. Peterson and E.G Plowman, Management is “a technique by means of which the purpose and objectives of a particular human group are determined, classified and effectuated”. in e. re According to Mary Cushing Niles, “Good management or scientific management achieves a 4f social objective with the best use of human and material energy and time and with satisfaction es for the participants and the public”. ot.n From the definitions quoted above, it is clear the “management” is a technique of extracting w w work from others in an integrated and co-ordinated manner for realising the specific objectives //w through productive use of material resources. Mobilising the physical, human and financial s: resources and planning their utilisation for business operations in such a manner as to reach the tp ht defined goals can be referred to as “management”. If the views of the various authorities are combined, management could be defined as “a distinct ongoing process of allocating inputs of an organisation (human and economic resources) by typical managerial functions (planning, organising, directing and controlling) for the purpose of achieving stated objectives namely – output of goods and services desired by its customers (environment). In the process, work is preformed with and through personnel of the organisation in an ever-changing business environment”. Management is a universal process in all organised social and economic activities. It is not merely restricted to factory, shop or office. It is an operative force in all complex organisations trying to achieve some stated objectives. Management is necessary for a business firm, government enterprises, education and health services, military organisations, trade associations and so on. 1.2 Nature of Management An analysis of the various definitions of management indicates that management has certain characteristics. The following are the salient characteristics of management. 1. Management aims at reaping rich results in economic terms: Manager’s primary task is to secure the productive performance through planning, direction and control. It is expected of the management to bring into being the desired results. Rational utilisation of available resources to maximise the profit is the economic function of a manager. Professional manager can prove his administrative talent only by economising the resources and enhancing profit. According to Kimball, “management is the art of applying the economic principles that underlie the control of men and materials in the enterprise under consideration”. LOVELY PROFESSIONAL UNIVERSITY 3 Principles and Practices of Management Notes 2. Management also implies skill and experience in getting things done through people: Management involves doing the job through people. The economic function of earning profitable return cannot be performed without enlisting co-operation and securing positive response from “people”. Getting the suitable type of people to execute the operations is the significant aspect of management. In the words of Koontz and O’Donnell, “Management is the art of getting things done through people in formally organised groups”. 3. Management is a process: Management is a process, function or activity. This process continues till the objectives set by administration are actually achieved. “Management is a social process involving co-ordination of human and material resources through the functions of planning, organising, staffing, leading and controlling in order to accomplish stated objectives”. 4. Management is a universal activity: Management is not applicable to business undertakings only. It is applicable to political, social, religious and educational institutions also. Management is necessary when group effort is required. 5. Management is a science as well as an art: Management is an art because there are definite principles of management. It is also a science because by the application of these principles in predetermined objectives can be achieved. e. re 6. Management is a profession: Management is gradually becoming a profession because 4f there are established principles of management which are being applied in practice, and it es involves specialised training and is governed by ethical code arising out of its social ot.n obligations. w w 7. Management is an endeavour to achieve pre-determined objectives: Management is //w concerned with directing and controlling of the various activities of the organisation to s: tp attain the pre-determined objectives. Every managerial activity has certain objectives. In ht fact, management deals particularly with the actual directing of human efforts. 8. Management is a group activity: Management comes into existence only when there is an group activity towards a common objective. Management is always concerned with group efforts and not individual efforts. To achieve the goals of an organisation management plans, organises, co-ordinates, directs and controls the group effort. 9. Management is a system of authority: Authority means power to make others act in a predetermined manner. Management formalises a standard set of rules and procedure to be followed by the subordinates and ensures their compliance with the rules and regulations. Since management is a process of directing men to perform a task, authority to extract the work from others is implied in the very concept of management. 10. Management involves decision-making: Management implies making decisions regarding the organisation and operation of business in its different dimensions. The success or failure of an organisation can be judged by the quality of decisions taken by the managers. Therefore, decisions are the key to the performance of a manager. 11. Management implies good leadership: A manager must have the ability to lead and get the desired course of action from the subordinates. According to R. C. Davis, “management is the function of executive leadership everywhere”. Management of the high order implies the capacity of managers to influence the behaviour of their subordinates. 12. Management is dynamic and not static: The principles of management are dynamic and not static. It has to adopt itself according to social changes. 13. Management draws ideas and concepts from various disciplines: Management is an interdisciplinary study. It draws ideas and concepts from various disciplines like economics, statistics, mathematics, psychology, sociology, anthropology etc. 4 LOVELY PROFESSIONAL UNIVERSITY  Unit 1: Introduction to Management 14. Management is goal oriented: Management is a purposeful activity. It is concerned with Notes the achievement of pre-determined objectives of an organisation. 15. Different levels of management: Management is needed at different levels of an organisation namely top level, middle level and lower level. 16. Need of organisation: There is the need of an organisation for the success of management. Management uses the organisation for achieving pre-determined objectives. 17. Management need not be owners: It is not necessary that managers are owners of the enterprise. In joint stock companies, management and owners (capital) are different entities. 18. Management is intangible: It cannot be seen with the eyes. It is evidenced only by the quality of the organisation and the results, i.e., profits, increased productivity etc. Is Management a Science or an Art? A question often arises whether management is a science or art. It is said that “management is the oldest of arts and the youngest of sciences”. This explains the changing nature of management but does not exactly answer what management is? To have an exact answer to the question it is in e. necessary to know the meanings of the terms “Science” and “Art”. re 4f es What is “Science”? ot.n Science may be described, “as a systematic body of knowledge pertaining to an area of study and w w contains some general truths explaining past events or phenomena”. //w s: The above definition contains three important characteristics of science. They are: tp ht 1. It is a systematized body of knowledge and uses scientific methods for observation, 2. Its principles are evolved on the basis of continued observation and experiment, and 3. Its principles are exact and have universal applicability without any limitation. Judging from the above characteristics of science, it may be observed that: 1. Management is a systematized body of knowledge and its principles have evolved on the basis of observation. 2. The kind of experimentation (as in natural sciences) cannot be accompanied in the area of management since management deals with the human element. 3. In management, it is not possible to define, analyse and measure phenomena by repeating the same conditions over and over again to obtain a proof. The above observation puts a limitation on management as a science. Management like other social sciences can be called as “inexact science”. What is “Art”? ‘Art’ refers to “the way of doing specific things; it indicates how an objective is to be achieved.” Management like any other operational activity has to be an art. Most of the managerial acts have to be cultivated as arts of attaining mastery to secure action and results. The above definition contains three important characteristics of art. They are: 1. Art is the application of science. It is putting principle into practice. LOVELY PROFESSIONAL UNIVERSITY 5 Principles and Practices of Management Notes 2. After knowing a particular art, practice is needed to reach the level of perfection. 3. It is undertaken for accomplishing an end through deliberate efforts. Judging from the above characteristics of art, it may be observed that: 1. Management while performing the activities of getting things done by others is required to apply the knowledge of certain underlying principles which are necessary for every art. 2. Management gets perfection in the art of managing only through continuous practice. 3. Management implies capacity to apply accurately the knowledge to solve the problems, to face the situation and to realise the objectives fully and timely. The above observation makes management an art and that to a fine art. Management is both a Science as well as an Art Management is both a science as well as an art. The science of management provides certain general principles which can guide the managers in their professional effort. The art of management consists in tackling every situation in an effective manner. As a matter of fact, in e. neither science should be over-emphasised nor should be the art discounted; the science and the re art of management go together and are both mutually interdependent and complimentary. 4f es Management is thus a science as well as an art. It can be said that-”the art of management is as old ot.n as human history, but the science of management is an event of the recent past.” w w //w 1.3 Scope of Management s: tp The scope of management is too wide to be covered in a few pages. Herbison and Myres have yet ht tried to restrict it under three broad groups, viz. 1. Economic Resource 2. System of Authority 3. Class or Elite Let us understand each of them one by one. 1. Economic Resource: Business Economics classifies the factors of production into four basic inputs, viz. land, labour, capital and entrepreneur. By the use of all these four, basic production can be done. But to turn that into a profitable venture, an effective utilization of man, money, material, machinery and methods of production has to be ensured. This is guaranteed by application of management fundamentals and practices. The better is the management of an enterprise, the higher is its growth rate in terms of profit, sales, production and distribution. Thus management itself serves as an economic resource. 2. System of Authority: As already discussed, management is a system of authority. It formalises a standard set of rules and procedure to be followed by the subordinates and ensures their compliance with the rules and regulations. Since management is a process of directing men to perform a task, authority to extract the work from others is implied in the very concept of management. 3. Class or Elite: Management is considered to be a distinct class that has its own value system. Managerial class, often referred to as a collective group of those individuals that perform managerial activities is essential component of each organisation. The importance the class has become so huge that the entire group of mangers is known as “management” in every organisation. 6 LOVELY PROFESSIONAL UNIVERSITY  Unit 1: Introduction to Management 1.4 Purpose of Management Notes The purpose of management can be understood as following: 1. Reducing ambiguity in methods of working, 2. Keeping costs down, and motivating others to do the same. 3. Taking calculated risks 4. Managing prospective risk 5. Exercise good judgement Task Illustrate an example of managerial activities you ever involved in and enlist the purposes of each of them. 1.5 Characteristics of Management in e. re Management is a distinct activity having the following salient features or characteristics: 4f es 1. Economic Resource: Management is an important economic resource together with land, ot labour and capital. As industrialization grows, the need for managers increases. Efficient.n w management is the most critical input in the success of any organised group activity as it w is the force which assembles and integrates other factors of production, namely, labour, //w capital and materials. s: tp ht 2. Goal Oriented: Management is a purposeful activity. It coordinates the efforts of workers to achieve the goals of the organisation. The success of management is measured by the extent to which the organisational goals are achieved. 3. Distinct Process: Management is a distinct process consisting of such functions as planning, organising, staffing, directing, and controlling. These functions are so interwoven that it is not possible to lay down exactly the sequence of various functions or their relative significance. 4. Integrative Force: The essence of management is integration of human and other resources to achieve the desired objectives. Managers seek to harmonize the individuals goals with the organisational goals for the smooth working of the organisation. 5. Intangible Force: Management has been called an unseen force. Its presence is evidenced by the result of its efforts – orderliness, informed employees, buoyant spirit and adequate work output. Thus, feeling of management is result-oriented. 6. Results through Others: The managers cannot do everything themselves. They must have the necessary ability and skills to get work accomplished through the efforts of others. They must motivate the subordinates for the accomplishment of the tasks assigned to them. 7. A Science and an Art: Management has an organised body of knowledge consisting of well defined concepts, principles and techniques which have wide applications. So it is treated as a science. The application of these concepts, principles and techniques requires specialized knowledge and skills on the part of the manager. Since the skills acquired by a manager are his personal possession, management is viewed as an art. LOVELY PROFESSIONAL UNIVERSITY 7 Principles and Practices of Management Notes 1.6 Management – An Emerging Profession The professionals enjoy high status in every society. Individuals desire to join a profession like medicine, chartered accountant, engineering and law. There has been a growing trend towards professionalisation of management, primarily, because of the desire of business leaders for social status and recognition. A profession may be defined as an occupation backed by specialized knowledge and training, whose code of conduct is regulated by a professional body and which is duly recognized by the society. The basic requirements of a profession are as follows: 1. Knowledge: A substantial and expanding body of knowledge and information in the concerned field. 2. Competent Application: Skilled and judicious utilization of knowledge in the solution of complex and important problems. This requires education and training in the specified field. 3. Professional Body: Regulation of entry into the profession and conduct of members by the representative body. in e. re 4. Self Control: An established code of conduct enforced by the profession’s membership. 4f es 5. Social Responsibility: Primarily motivated by the desire to serve others and the community. ot.n 6. Community Approval: Recognition of professional status by the society. w w Does management satisfy the tests of a profession? The application of the above tests or criteria //w to management is examined below: s: tp 1. Specialized Knowledge: There exists a rapid expanding body of knowledge underlying ht the field of management. Since the beginning of this century, many thinkers on management have contributed to the field of management. Now we have systematic body of knowledge that can be used for the development of managers. Management is widely taught in the universities and other educational institutions as a discipline. 2. Competent Application-Education and Training: MBAs are generally preferred for managerial jobs, though MBA degree is not necessary to enter this profession. Persons with degree in psychology, engineering, etc., can also take up managerial jobs. Thus, there are no standard qualifications for managers. 3. Managerial Skills can’t be Learnt by Trial and Error Method: To be a successful manager, it is essential to acquire management skills through formal education and training. Many institutes of management have been functioning in India and other countries which offer MBA and other courses in management. 4. Professional Body: For the regulation of any profession, the existence of a representative body is a must. Example: The Institute of Chartered Accountants of India lays down the standards of education and training for those who want to enter the accounting profession. Some organisations such as the Indian Management Association and the All India Management Association have been set up in India. But none of these have any legal authority to prescribe minimum qualifications for taking up managerial posts or to regulate the conduct of managers as is the case with the Medical Council of India and Bar Council of India. Management Association has prescribed a code for managers, but it has no power to take action against any manager who does not follow this code. 8 LOVELY PROFESSIONAL UNIVERSITY  Unit 1: Introduction to Management 5. Social Responsibility: Managers of today recognize their social responsibilities towards Notes customers, workers and other groups. Their actions are influenced by social norms and values. That is why, managers enjoy a respectable position in the society as is the case with doctors, chartered accountants, etc. 6. Society’s Approval: The managers of modern organisations enjoy respect in the society. There is typically a positive correlation between a manager’s rank and his status in the organisation where he is working. This status tends to affect the manager’s status outside the organisation. Thus, community approves management as a profession. It seems presumptuous to classify management as a profession. By all the bench marks, the professionalisation of management is still far from complete. It meets the above criteria of a profession only partially as discussed below: 1. Though management has a well defined body of knowledge, it is difficult to say whether management meets the criterion of competent application. It is not obligatory to possess specific qualifications for being appointed as a manager. But to practice law one has to be a graduate in the Laws. Similar is the position with the medical profession. Education and training in management are also getting importance day by day in the industrial world. in e. 2. There is no professional body to regulate the educational and training standards of the re managers. For instance, there is Bar Council of India to regulate the legal profession. It is 4f es encouraging to note that management associations are growing fast throughout the world. ot It is expected that they will be able to develop norms of behaviour for the practicing.n managers. w w //w 3. Management does not satisfy the test of self-controls as there is no central body to lay s: down and enforce professional standards and code of conduct for the managers. Thus, it tp may be concluded that management does not fulfill all the requirements of a profession. ht Therefore, it can’t be fully recognized as a profession. However, it is moving in that direction because: (a) The field of management is supported by a well-defined body of knowledge that can be taught and learnt. (b) Management of modern organisations requires competent application of management principles, techniques and skills. Thus, there is a great need of formal education and training in management. That is why, the demand for management degrees is increasing rapidly. (c) Managers are aware of their social responsibilities towards various groups of the society. In their actions, they are guided by their social obligations rather than their personal interests. Case Study Is Management Really a Profession? –by Jena McGregor D octors must take the Hippocratic Oath and earn continuing education credits for years. Lawyers must pass the bar and adhere to strict codes about attorney-client privileges. But although managers have long been known colloquially as “professionals,” the graduate schools many of them attended have long drifted away from their founding charters, which wanted to create a profession of management. Contd... LOVELY PROFESSIONAL UNIVERSITY 9 Principles and Practices of Management Notes That’s the argument made by Rakesh Khurana, a Harvard Business School professor, in his book, From Higher Aims to Hired Hands: The Social Transformation of American Business Schools and the Unfulfilled Promise of Management as a Profession. Khurana, who made a name for himself with his 2004 book, Searching for a Corporate Savior: The Irrational Quest for Charismatic CEOs, is a star at HBS, and builds a fascinating argument for why business school education is in need of reform. For an interesting discussion between him and Yale School of Management Dean Joel M. Podolny, click here. I had the opportunity to hear Khurana speak about his book on Monday at a luncheon at the Princeton Club. Khurana defines a profession as one in which its practitioners have to master a certain body of knowledge, in which that knowledge is used to help others, and in which there’s a governance system that’s both ethical and self-policing in nature. None of those really describe management: Anyone can become a manager, whether or not they have an MBA; it’s not really done to aid a client; and there is no self-policing body making sure ethical standards are met. Khurana argues that while the founders of today’s elite business schools tried to legitimize business education by calling it a profession (no self- respecting elite institution at the time wanted to have anything to do with something so tied to making money), today, it’s become anything but. in e. Khurana believes we’re at an “inflection point of what the role of business should be,” and re 4f as pressures build to create corporations more attuned to benefiting society, we also need es to educate future managers to do the same. He suggests that business schools could have ot some way of proving their students have mastered the curriculum (a board exam for.n w MBAs?) and that there should be some “evergreen” aspect to the MBA (continuing education w requirements, for instance). He adds that in “Rakesh’s normative world,” there might //w even be an equivalent of the Hippocratic Oath for business students. He even has a s: tp suggestion for the first sentence: “First, I will not lie.” ht Question What do you think? Should management be more of a profession? Source: Business Week 1.7 Who is a 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. Managers may direct workers directly or they may direct several supervisors who direct the workers. They are the individuals charged with examining the workflow, coordinating efforts, meeting goals and providing leadership. Thus a manager must be familiar with the work of all the groups he/she supervises, but need not be the best in any or all of the areas. It is more important for a manager to know how to manage the workers than to know how to do their work well. A manager’s title reflects what he/she is responsible for. Examples: 1. An Accounting Manager supervises the Accounting function. 2. The Production Manager developed a staffing plan for the factory. 3. The Manager of Design Engineering supervises engineers and support staff engaged in design of a product or service. 10 LOVELY PROFESSIONAL UNIVERSITY  Unit 1: Introduction to Management 1.8 Roles of a Manager Notes To achieve results, they shift gears and restructure and reorganise things continually. The diverse roles played by managers in discharging their duties have been summarised by Henry Mintzberg in the late 1960s, under three broad headings: interpersonal roles, informational roles and decisional roles. Let us understand them one by one. Figure 1.1: Managerial Roles in e. re 4f es ot.n w w //w s: tp ht Source: www. static.flatworldknowledge.com 1. Interpersonal roles: Three interpersonal roles help the manager keep the organisation running smoothly. Managers play the figurehead role when they perform duties that are ceremonial and symbolic in nature. These include greeting the visitors, attending social functions involving their subordinates (like weddings, funerals), handing out merit certificates to workers showing promise etc. The leadership role includes hiring, training, motivating and disciplining employees. Managers play the liaison role when they serve as a connecting link between their organisation and others or between their units and other organisational units. Mintzberg described this activity as contacting outsiders who provide the manager with information. Such activities like acknowledgements of mail, external board work, etc., are included in this category. 2. Informational roles: Mintzberg mentioned that receiving and communicating information are perhaps the most important aspects of a manager’s job. In order to make the right decisions, managers need information from various sources. Typically, this activity is done through reading magazines and talking with others to learn about changes in the customers’ tastes, competitors’ moves and the like. Mintzberg called this the monitor role. In the disseminator role, the manager distributes important information to subordinates that would otherwise be inaccessible to them. Managers also perform the spokesperson role when they represent the organisation to outsiders. 3. Decisional roles: There are four decision roles that the manager adopts. In the role of entrepreneur, the manager tries to improve the unit. He initiates planned changes to adapt to environmental challenges. As disturbance handlers, managers respond to situations that are beyond their control such as strikes, shortages of materials, complaints, LOVELY PROFESSIONAL UNIVERSITY 11 Principles and Practices of Management Notes grievances, etc. In the role of a resource allocator, managers are responsible for allocating human, physical and monetary resources. As negotiators, managers not only mediate in internal conflicts but also carry out negotiations with other units to gain advantages for their own unit. Task Analyse your performance in different roles of managers that you have to play in day to day activities. 1.9 Skills of an Effective Manager An effective manager must possess certain skills in the areas of planning, organising, leading, controlling and decision-making in order to process activities that are presented to him from time to time. In order to be effective, a manager must possess and continuously develop several essential skills. Robert L. Katz has identified three basic types of skills - technical, human and in conceptual - which he says are needed by all managers. e. re 1. Technical skill: It is the ability to use the tools, procedures or techniques of a specialised 4f es field. Technical skill is considered to be very crucial to the effectiveness of lower level ot managers because they are in direct contact with employees performing work activities.n within the firm. For instance, the success of a drilling supervisor of an oil rig depends a w w great deal on his technical knowledge of drilling. However, as one moves to higher levels //w of management within the organisation, the importance of technical skill diminishes s: tp because the manager has less direct contact with day-to-day problems and activities. Thus, ht the president of an oil company does not need to know much of the technical details of drilling for oil or how to refine it. 2. Human skill: It is the ability to work with, understand and motivate other people. This skill is essential at every level of management within the organisation, but it is particularly important at lower levels of management where the supervisor has frequent contact with operating personnel. 3. Conceptual skill: It is the mental ability to coordinate and integrate the organisation’s interests and activities. It refers to the ability to see the ‘big picture’, to understand how a change in any given part can affect the whole organisation. The relationship between management levels and managerial skills is shown in Figure 1.2. Figure 1.2: Katz-managerial Skills and Level of Management Top Conceptual Level Middle Technical Skills Human Level Lower Skills Skills Level Managerial Skills 12 LOVELY PROFESSIONAL UNIVERSITY  Unit 1: Introduction to Management Technical skill is the most important at the lower levels of management; it becomes less Notes important as we move up the chain of a command. Example: A production supervisor in a manufacturing plant, for example, is likely to need more technical skill than the company president, because he or she will have to deal with the day-to-day manufacturing problems that arise. On the other hand, the importance of conceptual skill increases as we rise in the ranks of management. The higher the manager is in the hierarchy, the more he or she will be involved in the broad, long-term decisions that affect large parts of the organisation. For top management which is charged with the responsibility for overall performance, conceptual skill is probably the most important skill of all. Human skill is very important at every level of the organisation. One reason this is so is because to get the work done through others; high technical or conceptual skills are not very valuable if they cannot be used to inspire and influence other organisation members. Supporting Katz’s contention that specific skills are more important at some levels than at others is a study of managerial roles and behaviour by Jerdee and Caroll. More than four in hundred managers from all levels of management and a variety of types and sizes of e. re business are asked to estimate how much time they spent on eight management tasks: 4f planning, investigating, coordinating, evaluating, supervising, staffing, negotiating and es representing. Lower and middle-level managers replied that supervising was their ot.n dominant activity, while top managers claimed to spend proportionately more time on w planning. w //w 4. Design skill: Koontz and Weihrich added one more skill to the above list. Design skill is the s: tp ability to solve problems in ways that will help the organisation. At higher levels, managers ht should be able to do more than see a problem, to design a workable solution to a problem in the light of realities they face. If managers merely see a problem and become problem watchers they will fail. 5. Institution building skills: According to Prof. Pareek (1981), top level executives perform eight key roles while building institutions of lasting value, as indicated below: (a) Identity creating role: Top level executives must create an identity for their organisations in the market place. Such an impact can be created by serving employees through excellent welfare measures, developing enviable marketing skills or fostering technological innovations. In short, they must ‘carve out a niche’ for themselves in the market place. (b) Enabling role: Top level executives must develop their resources (men, materials, equipment and other facilities) in the service of an organisation. A good work atmosphere must be created where employees would feel like contributing their best to the organisation. (c) Synergising role: Synergy means that the whole is greater than the sum of the parts. In organisational terms, synergy means that as separate departments within an organisation cooperate and interact, they become more productive than if each had acted in isolation. Example: It is more efficient for each department in a small firm to deal with one financing department than for each department to have a separate financing department of its own. Top executives must try to combine their human as well as non-human resources in such a way that the goals of the organisation are met in an effective and efficient manner. LOVELY PROFESSIONAL UNIVERSITY 13 Principles and Practices of Management Notes (d) Balancing role: The top executive must be able to strike a harmonious balance between conformity and creativity within the organisation. Conformity to rules when carried out in a rigid and scrupulous manner, may affect employee behaviour in a negative way and destroy the creative potential of employees. (e) Linkage building role: The chief executive must be able to develop appropriate linkages between the organisation and outside constituencies such as government, financial institutions, community and society at large. (f) Futuristic role: The chief executive must prepare the organisation for future challenges. (g) Creating an impact: This means making an impact of one’s organisation on others, by way of superior technology, marketing skills, innovative abilities, etc. (h) Provide superordination: The chief executive must be able to create a sense of pride and importance in the subordinates – making them feel that they are working in a very important field of work which is very useful for the society. 1.10 Functions of a Manager in e. As we have seen above, there are many management functions in business and, therefore, many re 4f manager titles. Regardless of title, the manager is responsible for planning, directing, monitoring es and controlling the people and their work. ot.n 1. An Operations Manager is responsible for the operations of the company. w w 2. A Night Manager is responsible for the activities that take place at night. //w s: According to Reitz, Managers generally work for long hours, their days are broken up into a tp large number of brief and varied activities, they interact with large number of different people, ht they do little reflective planning and spend most of their time engaged in oral communication. They spend a lot of time getting, giving and processing information. According to Stoner, managerial work is characterised by the following things: 1. Managers work with and through other people: Managers work with internal (subordinates, supervisors, peers) as well as external groups (customers, clients, suppliers, union representatives etc.) in order to achieve corporate goals. They integrate individual efforts into teamwork. They plan things, create a structure, motivate people and achieve goals. 2. Managers are mediators: People working in an organisation do not always agree on certain things, say, the establishment of goals and the means to achieve them. At the corporate headquarters of a large bank, managers may think about expanding into merchant banking, leasing, credit card business, whereas at the branch level, people may focus on expanding deposits by venturing deep into rural areas. Unless such differences are resolved quickly, employees find it difficult to think and act like a well-knit group. Their morale, too, may suffer. Managers often step in to put things in order, clear the paths to goals, clarify things to people, put out fires and meet goals. 3. Managers are politicians: Managers must develop healthy relationships with various groups in order to achieve the goals smoothly. They may have to nurture groups and join certain coalitions within a company. They often draw upon such relationships to win support for their proposals and decisions. 4. Managers are diplomats: Managers serve as official representatives of their work units at organisational meetings. They may represent the entire organisation as well as a particular unit in dealing with external groups (clients, customers, government officials, etc.). 14 LOVELY PROFESSIONAL UNIVERSITY  Unit 1: Introduction to Management 5. Managers are symbols: Managers are symbols of corporate success or failure. They get Notes applause when they succeed and get depreciated and attacked when they fail. In short, they represent corporate as well as employee aspirations. They are shown the door when these aspirations do not materialise. Managers, obviously, are there to utilise corporate resources in the best possible way. More popular and widely accepted is the classification given by Henry Fayol. According to him, the managerial functions may be broadly classified into five categories: planning, organising, directing, staffing and controlling. Managers perform these functions within the limits established by the external environment and must consider the interests of such diverse groups as government, employees, unions, customers, shareholders, competitors and the public. For theoretical purposes, it may be convenient to separate the management functions and study them independently but practically speaking, they defy such categorisations. They are highly inseparable. Each function blends into the other and each can be performed in any order or sequence, not necessarily in the order shown above, but tend to be performed (normally) in the planning, organising, leading and controlling sequence. A brief discussion of the five basic functions is presented under: in e. re 4f Figure 1.3: Henry Fayol—Functions of a Manager es ot.n Planning w Commanding w //w s: tp Organising ht Controlling Coordinating 1. Planning: Planning is the process of making decisions about future. It is the process of determining enterprise objectives and selecting future courses of actions necessary for their accomplishment. It is the process of deciding in advance what is to be done, when and where it is to be done, how it is to be done and by whom. Planning provides direction to enterprise activities. It helps managers cope with change. It enables managers to measure progress toward the objectives so that corrective action can be taken if progress is not satisfactory. Planning is a fundamental function of management and all other functions of management are influenced by the planning process. 2. Organising: Organising is concerned with the arrangement of an organisation’s resources - people, materials, technology and finance in order to achieve enterprise objectives. It involves decisions about the division of work, allocation of authority and responsibility and the coordination of tasks. The function increases in importance as a firm grows. A structure is created to cope with problems created by growth. Through this formal structure, the various work activities are defined, classified, arranged and coordinated. Thus, organising refers to certain dynamic aspects: What tasks are to be done? Who is to do them? How the tasks are to be grouped? Who is to report to whom? Where the decisions have to be made? 3. Staffing: Staffing is the function of employing suitable persons for the enterprise. It may be defined as an activity where people are recruited, selected, trained, developed, motivated LOVELY PROFESSIONAL UNIVERSITY 15 Principles and Practices of Management Notes and compensated for manning various positions. It includes not only the movement of individuals into an organisation, but also their movement through (promotion, job rotation, transfer) and out (termination, retirement) of the organisation. Notes Staffing involves selection of the right man for the right job. It has four important elements: 1. Recruitment may be defined as the process of attracting the maximum number of applications for a particular job. 2. Selection is the process of screening the candidates and choosing the best ones out of them. 3. Training involves imparting the necessary knowledge and skills required for the performance of a particular job. 4. Compensation is the price paid to the workers for the services rendered to the organisation. 4. in Directing: The function of guiding and supervising the activities of the subordinates is e. re known as directing. Acquiring physical and human assets and suitably placing them on 4f jobs does not suffice; what is more important is that people must be directed towards es organisational goals. This work involves four important elements: ot.n w (a) Leadership: Leadership is the process of influencing the actions of a person or a group w to attain desired objectives. A manager has to get the work done with and through //w people. The success of an organisation depends upon the quality of leadership shown s: tp by its managers. ht (b) Motivation: Motivation is the work a manager performs to inspire, encourage and impel people to take required action. It is the process of stimulating people to take desired courses of action. In order to motivate employees, manager must provide a congenial working atmosphere coupled with attractive incentives. (c) Communication: Communication is the transfer of information and understanding from one person to another. It is a way of reaching others with ideas, facts, and thoughts. Significantly, communication always involves two people: a sender and a receiver. Effective communication is important in organisations because managers can accomplish very little without it. (d) Supervision: In getting the work done it is not enough for managers to tell the subordinates what they are required to do. They have also to watch and control the activities of the subordinates. Supervision is seeing that subordinates do their work and do it as directed. It involves overseeing employees at work. 5. Controlling: The objective of controlling is to ensure that actions contribute to goal accomplishment. It helps in keeping the organisational activities on the right path and aligned with plans and goals. In controlling, performances are observed, measured and compared with what had been planned. If the measured performance is found wanting, the manager must find reasons and take corrective actions. If the performance is not found wanting, some planning decisions must be made, altering the original plans. If the controlling function is to be effective, it must be preceded by proper planning. Thus, controlling includes four things: (a) Setting standards of performance, (b) Measuring actual performance, 16 LOVELY PROFESSIONAL UNIVERSITY  Unit 1: Introduction to Management (c) Comparing actual performance against the standard and Notes (d) Taking corrective actions to ensure goal accomplishment. Successful management involves active participation by managers in the above basic managerial functions. These functions are interrelated and most managers use a combination of the all of them simultaneously to solve the problems facing their companies. Caselet Managing a Supermarket Chain M r. Vincent, the Manager of a large supermarket, was taking a management course in the evening programme at the local college. The Professor had given an interesting but disturbing lecture the previous night on the various approaches to management. Vincent had always thought that management involved just planning, organising and controlling. Now this Professor was saying that management could also be thought of as quantitative models, systems theory and analysis, and even in something called contingency relationships. Vincent had always considered himself a e. re good manager, and his record with the supermarket chain had proved it. He thought of 4f himself, “I have never used operations research models, thought of my store as an open es system, or developed or utilised any contingency relationship. By doing a little planning ot.n ahead, organising the store, and making some things got done, I have been a successful w manager. That other stuff just does not make sense. All the professor was trying to do was w //w complicate things. I guess I will have to know it for the test, but I am sticking with my old s: plan, organise and control approach to managing my store.” tp ht Source: Dr. Parag Diwan, Management Principles and Practices, Excel Books 1.11 Summary It is very important to understand the systems framework in which an organisation operates. It is very useful concept for the understanding of business operations by identifying the critical sub-systems, their inter-linkages and inter-dependence for the achievement of common objectives. Management is the main aspect of working involved in a system & its involvement as art, science, profession leads an effective role. Management occupies such an important place in the modern world that the welfare of the people and the destiny of the country are very much influenced by it. Managers play a very significant role in the business world. They usually do not directly perform any of the workflow activities, but coordinate, motivate and control the operations of employees while meeting the day-to-day challenges. To deliver results, they work for painfully long hours, sift through bundles of data, handle endless meetings, talk to people at various levels, plan proactively, meet the problems head-on and get ahead of others using their knowledge, skills and experience to good effect. The various roles played by them in this regard are broadly grouped into three categories: inter-personal roles, informational roles and decisional roles. LOVELY PROFESSIONAL UNIVERSITY 17 Principles and Practices of Management Notes According to Fayol, managers perform five basic functions in order to achieve results viz. planning, staffing, organising, directing and controlling. 1.12 Keywords Art: It is the bringing about a desired result through the application of skills. Administration: It is a higher-level function concerned with the determination of policies. Code of conduct: It prescribed the norms of professional ethics for its members. Economic Resource: Management, land, labour and capital. Goal-oriented: Purposeful activity towards achieving the goals of the organisation. Management: The art of getting things done. Process: A series of functions that lead to the achievement of certain objectives. Professionalisation: It means defining the duties and responsibilities of the managers to improve the quality of management education and training. in e. Science: A systematically organised body of knowledge including concepts, principles and re 4f theories. es Top management: Managers who are higher up in the hierarchy devoting more time on ot.n administrative functions. w w //w 1.13 Self Assessment s: tp ht Fill in the blanks: 1. A profession may be defined as an occupation backed by.................. and................... 2. We can classify management into.................. management, and.................. management. 3. There is.................. professional body to regulate the educational and training standards of the managers. 4. To be a successful manager, it is essential to acquire management skills through.................. education and training. 5. Administrative management is primarily concerned with.................. and................... 6. Operative management is concerned with the.................. of the policies for the achievement of goals. 7. Controlling includes four things, viz...................,.................., measuring actual performance and................... 8................... is concerned with the arrangement of an organisation’s resources. 9................... pay with.................. rewards can act as the best incentive or motivator for good performance. 10. The function of.................. and.................. the activities of the subordinates is known as directing. 11..................................... provides direction to enterprise activities. 18 LOVELY PROFESSIONAL UNIVERSITY  Unit 1: Introduction to Management 1.14 Review Questions Notes 1. “Management is getting things done through other people”. Is this definition adequate for the present day concept of management? Discuss fully. 2. “Management is the force which leads, guides and directs an organisation in the accomplishment of pre-determined objectives”. Discuss and give suitable definition of management. 3. Explain the features that determine the nature of management. 4. There are may definitions of management which emphasise one or the other important aspect of management. Discuss and give various characteristics of management. 5. “Management is the effective utilization of human and material resources to achieve the enterprise’s objectives”. Comment. 6. Is management a profession? Give arguments for your answer. 7. Clearly explain the concept and significance of management. Distinguish between management and administration. in e. re 8. If managerial work is characterised by variety, fragmentation, and brevity, how do 4f managers perform basic management functions, such as planning which would seem to es require reflection and analysis? ot.n w 9. Mr Kunal Gandhi is Manager Operations at ABX Corporations that deals in online training w courses. Once a trainer comes to Mr Gandhi complaining that his computer is neither //w connected with LAN, nor is having its key board functioning well. As an action, Mr s: tp Gandhi calls a hardware specialist to fix the problem. The specialist being busy, asks for a ht 24 hr duration to come to the office. Mr Gandhi then tells the person to see if the cables are fitted correctly. The trainer replies in affirmation. Mr Gandhi then helplessly asked him to wait till the specialist came. The next afternoon, when the specialist came to rectify the things, the project that the trainer was working on, had already got 10 hours late. Fuming at the trainer, he came back to the manger shouting tat the data cables were fitted in wrong sockets so as to result in the problem. 10. What do you think were the key functions where the Operations Manger failed to perform? 11. In the case given in Qs 9, do you think that the Operations Manager was doing justice to his role? Explain your answer with reasons. 12. What do you analyse were the main skills where the following lacked in managing the situation well in the case discussed in Qs 9. (a) Operations Manager (b) Trainer (c) Hardware Specialist 13. What type of job-related rewards – both monetary and otherwise – hold the most meaning for you? Which do not motivate you at all? Why? 14. What qualities do you think should a supervisor have to get the best work out of his subordinates? Why was this person able to motivate you better than any other? 15. Discuss about a situation when you had to be very careful in communicating delicate information. What was the possible risk involved and how did you go about it? LOVELY PROFESSIONAL UNIVERSITY 19 Principles and Practices of Management Notes 16. What tactics will you adopt to put your point across in a meeting to which most of the people are reluctant to hear? Answers: Self Assessment 1. specialized knowledge, training 2. administrative, operative 3. no 4. formal 5. laying downs policies, determination of goals 6. implementation 7. setting performance standards, measuring actual performance, taking corrective actions 8. Organising 9. Fair, non-financial 10. guiding, supervising 11. Planning 1.15 Further Readings in e. re 4f es Books Brech, E.F.L., Management: Its Nature and Significance. Sir Isaac Pitman & Sons, Ltd. ot.n Farmer, R.N. and Richman, B.M., Comparative Management and Economic Progress, w Richard D. Irwin Inc., Homewood, Illinois. w //w Harold Koontz and Cyril O’Donnell, Management, McGraw-Hill Kogakusha Ltd. s: tp Henri Fayol, General and Industrial Administration, Sir Isaac Pitman & Sons. ht Marshall E. Dimock, A Philosophy of Administration, Harper and Row. McFarland, Dalton E., Management Foundations and Practices, The Macmillan Co. Paul E. Torgersen and Irwin T. Weinstock, Management - An Integrated Approach. Peter F. Drucker, Management: Tasks, Responsibilities and Practices, Heinemann. Sheldon Oliver, The Philosophy of Management, Sir Isaac Pitman and Sons Ltd. Spriegel, William R., Principles of Business Organisation and Operation, Prentice-Hall. Terry, George R., Principles of Management, Richard, D. Irwin, Inc., Homewood, Illinois. Online links managementhelp.org/mng_thry/mng_thry.htm www.managementheaven.com/.../introduction-to-management http://www.businessihub.com/nature-of-management/ http://www.differencebetween.net/business/difference-between-management- and-administration/ 20 LOVELY PROFESSIONAL UNIVERSITY  Unit 2: Evolution of Management Thought Unit 2: Evolution of Management Thought Notes CON