Principles of Management.pdf

CHAPTER 1 NATURE OF MANAGEMENT INTROBLETION MEANING OF MANAGEMENT DEFINITION OF MANAGEMENT FEATURES OR CHARACTERISTICS OF MANAGEMENT FUNCTIONS OF MANAGEMENY IMPORTANCE OF MANAGEMENT ADMINISTRATION AND MANAGEMENT DIFFERENCE BETWEEN ADKINISTRATIΟΝ ΑΝΕ ΜΑΝΑΟΣΗΕΝΤ THE MANAGER FUNCTIONS OF A MA...

CHAPTER 1 NATURE OF MANAGEMENT INTROBLETION MEANING OF MANAGEMENT DEFINITION OF MANAGEMENT FEATURES OR CHARACTERISTICS OF MANAGEMENT FUNCTIONS OF MANAGEMENY IMPORTANCE OF MANAGEMENT ADMINISTRATION AND MANAGEMENT DIFFERENCE BETWEEN ADKINISTRATIΟΝ ΑΝΕ ΜΑΝΑΟΣΗΕΝΤ THE MANAGER FUNCTIONS OF A MANAGER ROLE OF A MANAGER RESPONSIBILITIES OF A PROFESSIONAL MANAUEK ENTREPRENEUR AND MANAGER MANALEMENT AS PROFESSION, MEANING OF PROFESSION, JEFINITION OF PROFESSION CHARACTERISTICS DE PROFESSION, OBSTACLES OF MANAGEMENT REING A PROFESSION PROFESSIONAL MANAGEMEN", NEED OF EFFICIENT PROFESSIONAL MANAGEMENT, PROFESSIONALISATION OF MANAGEMENT IN INDIA YARDSTICKS OF PROFESSIONALISATION OF MANAGEMENT, ARGUMENTS FOR PADFESSIONALISATION OF MANAGEMENT, ARGUMENTS AGAINST PROFESSIONALISATION OF MANAGEMENT MODEL QUESTIONS _____________________________________________ Nature of Management Stanley Vance, "In essence, management is simply the prouess of decision making and control over the action of human beings for the express purpose of attaining pre-determined gοals." Donald J. Clough, "Management is the art and science of decision making and leadership" Kimbell and Kimball, "Management embraces all dutine 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." Sir Charles Reynold, "Management is the process of getting things done through the agency of a community. The functions of management are the handling of a community witha view to fulfilling the purposes for which it exists. Joseph L. Massie, "Management is the process by whith a co-operative group directs actions towards common goals." Riznoze Peterson and R.G. Plowman, "Management is a teclinique by means of which the purposes and objectives of a particular human group are determined, darified and effectuated." E.PL. Brech, "Management is concerised with seeing that the job gets duae, its tasks ali centro on planning and guiding the operations that are going on in the enterprise." Mary Cushing Niles, "Good maangement or acientuin management, achievesencial objective with the best use of human and material energy and time and with satisfaction for the participanis and the public." S. George, "Management consists of gutting things done through others. Manager is one who accomplishes the objectives by directing the efforts of others." James D. Mooney and Alan C. Helley, "Management is the art of directing and inspiring people." F.W. Taylor, "Management is the art of knowing what you want to do and then seeing that it is done in the best and cheapest way." Lawrence A. Appley, "Managerment is the art of getting things done through the efforts of otiser people. It concerns itself with guiding human and physienl resources into a dynamic, hard-hitting organisation unit that attains its objectives to the satisfaction of those served and with a high degree of morale and sense of sitainment in the part of these randering the services". R.M. Currie, "The organisation and control of human activity are directed towards specific ends." John F. Mee, "Management is the ort of securing maximum results with a minim of efforts so as to secure maximum prosperity for the employer and employee and give the public the best possible service." The American Management Association, "The art of getting things done through other people." Knootz and Donnel, "Management is the creation and maintenance of an internal environment in an enterprise where individuals, working in groapa, ena perform efficiently and effectively towards the attainment of group goals. It is the art of getting the work done through and with people in formally organised groupe." Dr. James Lundy, "Management is principally a task of planning, co-ordinating, motivating and controlling the efforts of others towards a specific objective. It involves the combining of the traditional factors of production (land, labour and capital) in an optimum manner, paying due attention, of course, to the particular goals of the organisation." Wheeler, "Management is centred in the administrators or managers of the firm whe integrate men, material and money into an effective operating limit." J.N. Schulze, "Management is the force which leads, guides and directs an organisation in the accomplishment of a pre-determined object." Oliver Scheldon, "Management proper is the function in industry concerned in the execution of policy, within the limits set up by the administration and the employment the organisation for the particular objectives set before it." Keith and Gubellini, "Management is the force that integrates men and physical plan into an effective operating unit." Newman, Summer and Warren, "The job of Management is to make co-operativ endeavour to function properly. A manager is one who gets things done by working with people and other resources in order to reach an objective." G.E. Milward, "Management is the process and the agency through which the executio of policy is planned and supervised." Ordway Tead, "Management is the process and agency which directs and guides the operations of an organisation in the realising of established aims." Management is the group of activities which drafts plans, prepares policies an arranges men, money, machine and materials required to achieve the objectives. The abov definitions reveal that management is the activity of man who struggles for better living in the complex and competitive world. Besides, the management gives satisfaction to and rewards those who are engaged in the operation and ensuring an excellent performance. Ir other words, management is the process consisting of the functions of planning, organising staffing, directing and controlling the operations to achieve specified objectives. FEATURES OR CHARACTERISTICS OF MANAGEMENT From a critical analysis of the above definitions, the following features or characteristics of management evolve: 1. Art as well as science: Management is both an art and a science. It is an art in the sense of possessing of managing skill by a person. In another sense, management is the science because of developing certain principles or laws which are applicable in a place where a group of activities are co-ordinated. 2. Management is an activity: Management is the process of activity relating to the effective utilisation of available resources for production. The term 'resources' includes men, money, materials and machine in the organisation. 3. Management is a continuous process: The process of management mainly consists of planning, organising, directing and controlling the resources. The resources (men and money) of an organisation should be used to the best advantages of the organisation and the objectives to be achieved. The management function of any one alone cannot produce any results in the absence of any other basic functions of Management. So, management is a continuous process. 4. Management achieving pre-determined objectives: The objectives of an organisation are clearly laid down. Every managerial setivity results objectives fixed well in advance. in the achievement of 5. Organised activities: Management is a group of organised activities. A group in formed in a public limited company but sorg have their own objectives. These objectives will be achieved only by a group of persons. These bovals activities should be organised in a systematic way to achieve the objectives. The objectives cannot be achieved without any organised uctivities. 6. Management is a factor of production: The factors of production includes land, labour, capital and entrepreneurs. Hure, land refers to a place where production is curried on. Labour refers to the paid employees of the organisation who are working in differunt levels as skilled, unskilled, semi-skilled, manager, supervisar and the like. Capitul refers to the werking capital as in the form of cush, raw materials and finishod goods and fixml canital as in the form of plant facilities and production facilities. These land, labour and capital could not reulise the organisation's goals. The organisation goals are achieved only when thees ure effectively co-ordinated by the entrepreneur. An individual can de such type of job as in the case of small businesses. In the case of hig sized business unita, co-ordination jobs done by the management. So, management is also treated as one of the factors of production According to Peter F. Drucker, "Whatever rapid economic and social development took place after World War II, it occured as a result of systematic and purposeful week of developing managers and management. Development is a matter of human energies rather than of economic wealth and the goneration of human energies is the task of management Management is the mover and development is a consequence". 7. Management as a system of activity: A system may he defined set of componunt parts working as a whole. Authority may be defined as a right to commend thers for getting a particular course of organisational work done. Individuals are the foundation stones of the management. An individual has some goals as a member of the organisation. There may be a conflict betwoon his own goals and the management's expectations from that individual. Such conflict is resolved by the management by ensuring balance between individual gouls and organisutional expectations. Authority is vested with many persons to take decisions and influence the behaviour of the sub-ordinates. The very purpose of using the authority is to check and control the behaviour of the sub-ordinates. The sources of authority rest with superiors as given in the organisation chart and social norms. The utilisation of authority is hased on the personality factors of the user and the behaviour of a person over whom it is used. 8. Management is a discipline: The boundaries of management are not exact as those of any other physical sciences. It may be inervased by the continuous discovery of many more aspects of husiness enterprise. So, the management status as a discipline is also increased in the same manner. 9. Management is a purposeful activity: Management is concerned with achievement organisation. These objectives are achieved through the functions of of objectives of an planning, organising, staffing, directing controling and drinking. The organisational objectives are clearly defined and explained to every empl 10. Management is a distinct entity: Management is distinet from ita functional activities. The functions have the nature of "to do" but themanagement has the nature of"how to get things done". A manager requires some amount of skill and knowledge to ge work done. 11. Management aims at maximising profit: The available resources are properly utilised to get desired results. The results should be the maximising profit or increasing prof by the economic function of a manager. 12. Decision-making: There are a number of decisions taken by the management everyday. Decision making arises only when there is availability of alternative courses of uction. If there is only one course of action, need for decision-making does not arise. The quality of decision taken by the manager determines the organisations' performance. The success or failure of an organisation depends upon the degree of right decision taken by tàu manager. 13. Management is a profession: Management is a profession because it possesses the qualities of a profession. A fund of knowledge is imparted and transferred in this profession and the same is followed by management. The established principles management are applied in practice. 14. Universal application: The principles and practices of management are applicable not to any particular industry alone hut applicable to every type of industry. The practies of management is different from one organisation to another according to their nature. 15. Managment is getting thing done: A manager does not actually perform the work but he gets things done by others. According to Kncotz and O'Donnel, "management is the art of getting things done through and with people in formally organised groups." 16. Management as a class or a team: A class may be defined as a group of peopl having homogenous characteristics to achieve common objectives. Engineers and doctors are grouped as a class in a society. Each and every doctor has the same objectives in life. Just like engineers and doctors, the management people have got similar aspirations to achieve corporate objectives. 17. Management as a career: Now-a-days, management is developed as a career focussed on certuin specialisation. Financial Management, Cash Management, Portfolio Management, Marketing Management, Personnel Management, Industrial Management and Business Management are some of the specialisations of management. Specialists are appointed in the key posts of top management. 18. Direction and control: A manager can direct his sub-ordinates in the performanco of a work and control them whenever necessary. If the available resources are not utilised properly by him, he fails to achieve the corporate objectives in the absence of direction and control. Generally, the direction and control deals with the activities of human effort. 19. Dynamic: The management is not static. In the fast developing business world, new techniques are developed and adopted by the manage-ment. Management is changed according to the social change. The social change is the result of the changing business world. 20. Management is noeded at all levels: The functions of management are common to all levels of organisation. The top executives perform the functions of planning, organising. directing, controlling and decision making. The same functions are also performed by the lower level supervisor. 21. Leadership quality: Leadership quality is developed in the persons who are working in the top level management. According to R.C. Davis, "Management is the function. IMPORTANCE OF MANAGEMENT Management is a must for every enterprise. The existence of management ensures proper functioning and running of an enterprise. Management can plan the activities to achieve the objectives and utilise the available resources at minimum cost. Every business needs a direction. This direction is given by the management. The resources of production are converted into production. The resources will remain as rosources in the absence of management. The conversion process is performed through the co-.ordination of management The significance or importance of management is briefly explained below: 1. Management meet the challenge of change: In the modern business world, there are frequent changes. The changes place the business in a dangerous position. Only an efficient management can save the business from the dangers brought in by the challenges. 2. Accomplishment of group goals: The achievement of objectives of a business depends upon three factors. The proper planning of available resources, adjusting possibility of business unit with existing business environment and the quality of decision taken and control made by the business unit are the factors responsible for achieving objectives. 3. Effective utilisation of business: There are eight M's in the business. These are said to be man, money, materials, machines, methods, motivation, markets and management. Management is the topmost of all other 'M's. Management has control over other remaining "M's. 4. Effective functioning of business: Ability, experience, mutual understanding, co- ordination, motivation and supervision are some of the factors responsible for the effective functioning of business. Management makes sure that the abilities of workers are properly used and co-operation is obtained with the help of mutual understanding. Besides, management can know the expectation of workers and the expectation is fulfilled through motivation techniques. 5. Resource development: Efficient management is the life boat of any developed business. The resources of the business may be identified and developed by the management. The term 'resources' includes men, money, material and machines. 6. Sound organisation structure: Management lays down the foundation for sound organisation structure. Sound organisation structure clearly defines the authority and responsibility relationship who is responsible to whom, who will command whom and who is responsible for what. Care is taken in appointing qualified persons to the right job by the management. 7. Management directs the organisation: The human mind directs and controls the functioning of human body. Similarly, the management directs and controls the functioning of an organisation. 8. Integrates various interests: Each person has his own interests. These interests are different in nature. Management takes steps to integrate various interests to achieve the objectives of an organisation. 9. Stability: The fluctuations of business are stablised by the management. The fluctuations of business are caused by the changing policy of the government, pressures on the part of competitors and changing preferences of customers. The efficient management can run the business as per the policy framed by the government, face the competitors in the market and produce the articles as per the preferences of customers. 10. Innovation: New ideas are developed by the management and implemented in the organisation. Better performance is achieved through new ideas. 11. Co-ordination and team-spirit: All the activities of business are grouped department-wise. Management co-ordinates the activities of different departments and establishes team-spirit to achieve the objectives. 12. Tackling problems: Goog Management acts as a friend or a guide of workers while tackling problems. When workers get over confidence of solving the problems for effective performance of a job, they fail in tackling the problems efficiently. 13. A tool for personality development: Management gives direction to workers for effective performance of a job. Besides, new methods or techniques are taught to workers. The training facilities are arranged by the management. In this way, management is a tool to develop the personality of workers to raise their efficiency and productivity ability. MANAGEMENT AS PROFESSION Management is regarded as profession due to the development of business in size and nature. Besides, there is a difference between the ownership and management. Hence, there is a social recognition to the management as a profession. MEANING OF PROFESSION Profession means an occupation by which apply the intelligence and efforts for the purpose of providing skilled service or advice to others for an agreed amount DEFINITION The dictionary defines profession as "calling in which on professes to have acquired a specialised knowledge which is used either in instructing, guiding or advising others." According to Carr Saunders "profession may perhaps be defined as an occupation based upon specialised intellectual study and training, the purpose of which is to supply skilled service or advice to others for a definite fee or salary" Cogan defines profession as "a vocation whose practice is founded upon an understanding of a theoretical structure of soma department of learning of science." According to L.M.Prasad "profession is an occupation for which specialised knowledge, skills and training are required and use of these skills is not meant for self-satisfaction but these are used for larger interests of the society and the success of these skills is measured not in terms of money alone." It is understood that all professions are occupation. The reason is that they provide means of livelihood. But at the same time, all occupations are not professions because some of them lack certain characteristics of a profession. CHAPTER 2 DEVELOPMENT OF MANAGEMENT THOUGHT INTRODUCTION HENRY FAYOL CLASSIFICATION OF BUSINESS ACTIVITIES ELEMENTS OF MANAGEMENT QUALITIES OF A MANAGER PRINCIPLES OF MANAGEMENT FREDERICK WINSLOW TAYLOR SCIENTIFIC MANAGEMENT PRINCIPLES OF SCIENTIFIC MANAGEMENT ELEMENTS OR FEATURES OF SCIENTIFIC MANAGEMENT CONTRIBUTIONS OF F.W. TAYLOR CRITICISM OF SCIENTIFIC MANAGEMENT PETER F. DRUCKER CONTRIBUTIONS OF PETER F. DRUCKER FRUNK BUNKAR GILBERTH MRS. LILLIAN MOLLER GILBERTH MAX WEBER MARY PARKER FOLLETT HENRY L. GANTT GEORGE ELTON MAYO HAWTHORNE EXPERIMENTS FINDINGS AND CRITICISM OF HAWTHORNE EXPERIMENTS MODEL QUESTIONS _____________________________________ PRINCIPLES OF MANAGEMENT Henry Fayol has set forth the principles of management on the basis of his own experience in the mining company: 1. Division of work: Division of work makes a man a specialist. The reason is that division of work helps to specialise in an activity which increases the output with perfection. Besides, it avoids waste of time. According to Henry Fayol, division of work is applied to both technical and managerial kinds of work. 2. Authority and responsibility: Management is getting things done by others. A superior gives direction to his sub-ordinates to perform the job. Then the super-visor may exercise his authority. The post he holds invests him with this authority. Authority is closely connected with responsibility. Responsibility is shouldered whenever authority is exercised. Responsibility is essential to perform a job correctly. 3. Discipline: According to Koontz and O'Donnell, "Discipline is the respect for agreements which are directed at achieving obedience, application, energy and the outward marks of respect. According to Henry Fayol, discipline is essential in all levels of management people. Discipline is obtained through judicial application of penalties. 4. Unity of command: A subordinate has only one superior. If not so, the sub-ordinate does not perform any job perfectly. In other words, each subordinate is responsible to only one superior. 5. Unity of direction: The business activities are grouped on anyone of the bases, normally on functional basis. The activities of a group are assigned to a person who is said to be a manager. This manager is expected to look after all the activities of a particular group. 6. Subordination of individual interest to group interest: An individual has his own interest. At the same time, the organisation has its own interest. Here, the interest of an organi-sation is termed as group interest. Henry Fayol expected the reconcili ation of the individual interest with group interest. In no way, the individual interest should dominate the group interest. 7. Remuneration of personnel: According to Henry Fayol, employees should be given fair and reliable remuneration. The employees should get satisfaction out of their wages. The wages are determined on the basis of the work done by the employee and the wages payable are similar to those of other companies. Besides, the payment of wages should be made without any delay. 8. Centralization: Everything increases the importance of superior's role in centralization, while everything decreases the importance of superior's role in decentralization. In small firms, authority is centralized. In large firms, authority is decentralized. But, the centralization or decentralization of authority depends upon the personal character of the superior, his morality, reliability of resourcefulness and the like. 9. Selar chain: According to Henry Fayol, "Scalar chain is the chain of superiors ranging from the ultimate authority to the lowest ranks." The communication flows from top to bottom. For example, A is the superior and has three subordinates in the order B. Cand D. If A wants to communicate anything to D, it should be passed via B and C. Likewise, If D wants to communicate anything to A, it should be passed via C and B. This is called scalar chain. 10. Order: The principle of right place for everything and for everyone should be followed by the management. It is applied to both material and men. The material should be kept in order in the place where it is necessary. The personnel are selected scientifically and assigned duties according to their qualifications and ability. 11. Equity: Equity refers to a combination of fairness, kindness and justice. All the employees of the organisation are treated equally by the managers. The application of equity requires goodness and experience of managers. Besides, it requires loyalty and devotion from subordinates. 12. Stability of tenure of personnel: The security of job is an essential one. Insecurity of job results in the higher labour turnover. It increases the administration expenses. Unless and otherwise an employee has committed a mistake, no employee should be removed from service. The develop-ment of any organisation depends solely on the sincerity of labouerers. 13. Initiative: A manager should have the conceiving and executing initiative. It will have psychological effect over the subordinates. The subordinates are free to express their views or opinions in the execution of the work. Henry Fayol suggests that managers can take decisions after getting suggestions from the subordinates. Initiative is the keenest satisfaction of an intelligent man with experience. 14. Esprit De Corps: This means union is strength or team spirit. All the employees of the organisation are put together as a team in order to achieve the objectives of the organisation. If there is any misunderstanding or difference of opinions or distrust on other employees, the management should take corrective steps to remove them. The management should not follow the policy of divide rule.