Principles of Management · Management by Different Authors 3 F.W. Taylor - “Art of knowing what you want to do and then seeing that it is done the best and cheapest way”. Henry

Principles of Management

Unit 1 - Introduction

Management by Different Authors

3

F.W. Taylor - “Art of knowing what you want to do and then seeing that it is done the best and cheapest way”.

Henry Fayol – “To Manage is to forecast, to plan, to organize, to command, to co-ordinate and to control”.

Peter F.Drucker – ”Management is work and as such it has its own skills, its own tools and its own techniques”.

Mary Parker Follet - “Management is the art of getting things done through and with people”.

George R.Terry – “Consisting of planning, organizing, actuating and controlling”.

Management Contd….

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Management – Process of designing and maintaining an

environment in which individuals, working together in

groups, effectively accomplish selected aims.

Business organizations

Non – Business organizations

Characteristics of Management

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Is a Process /a function.

Is a Social Process.

Involves Group Effort.

Aims at achieving predetermined objectives.

Required at all levels of management.

Is a profession.

Is an art and science.

Management functions/The process of

Management

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Newman and Summer – organizing, planning, leading and

controlling.

Henri Fayol and Koontz and O’Donnell – Planning,

organising, commanding, coordinating and controlling.

Gulick – POSDCORB

Warren Haynes and Joseph Massie – Decision making and

communicating.

“External element affect the operation”

Functions Of Management

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Planning

Look ahead and chart out future course of operation

Formulation of Objectives, Policies, Procedure, Rules, Programmes and

Budgets

Organizing

Bringing people together and tying them together in the pursuit of

common objectives.

Enumeration of activities, classification of activities, fitting individuals

into functions, assignment of authority for action.

Human organisation and Material Organisation.

Functions Of Management

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Directing

Act of guiding, overseeing and leading people.

Motivation, leadership, decision making.

Financial and Non-financial.

Controlling

Laying standards, comparing actuals and correcting deviation-achieve

objectives according to plans.

Co-ordination

Synchronizing and unifying the actions of a group of people.

Functions of Management

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Innovation

Finding new uses for old ones.

Representation

Various outside groups.

“Blend into each other”

Functions@different Organisational

levels

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Skills and Management levels

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Roles of a Manager

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Achieve objectives through and with people.

Identify and Utilize resources – optimum.

Types

Interpersonal Roles

Figurehead, leader and Liaison

Informational Roles

Monitor, Disseminator, Spokesman

Decisional Roles

Entrepreneur, Disturbance Handler, Resource allocator and

Negotiator

Management – A Science or an ART?

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Art

Practical know how

Technical skills

Concrete results

Creativity

Personalized nature

Science

Empirically Derived

Critically tested

General principles

Cause and effect relationship

Universal applicability

“MANAGEMENT AS A SCIENCE PROVIDES PRINCIPLES AND AS AN ART HELPS IN

TACKLING SITUATIONS”.

Development of Management Thought

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Early Management Approaches

Scientific Management

Administrative Management Theory

Human Relations Movement

Modern Management Approaches

Behavioral Approach

Quantitative/Management Science Approach

Systems Approach

Contingency Approach

Early Management Approaches

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Scientific Management

“F.W.Taylor(1856-1915) – Father of scientific Management”

His Contributions are

1. Time and Motion study

2. Differential Payment

3. Drastic Reorganization of Supervision

4. Scientific recruitment and training

5. Intimate friendly cooperation between management and workers

“Gantt introduced new features in Taylor’s scheme”

Early Management Approaches contd…

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Administrative Management

“Henri Fayol(1841-1925) – Father of scientific Management”

He laid down 14 Principles

Division of work

Authority and Responsibility

Discipline

Unity of Command

Unity of Direction

Subordination of Individuals Interest to general Interest

Remuneration

Early Management Approaches contd….

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Principles Contd….

Centralization

Scalar Chain

Order

Equity

Stability

Initiative

Esprit de corps

Early Management Approaches contd…

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Human Relations Movement

“Prof, Elton Mayo(1927-1932) – Father of Human Relations”

His Contributions are

1. Social System

2. No Correlation

3. Not by Time and Motion study

4. Employee Centered

5. Non-financial rewards

6. Informal group

Modern Management Approaches

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1. Empirical or Case Approach

2. Managerial Roles Approach

3. Contingency or Situational Approach

4. Mathematical or Management Science Approach

5. Decision theory Approach

6. Re-Engineering Approach

7. Systems Approach

Modern Management Approaches contd…

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8. Socio-technical Systems

9. Co-operative social Systems

10. Group Behavior Approach

11. Interpersonal Behavior Approach

12. McKinsey’s 7-S Frame work

13. TQM Approach

14. Management Process or Operational Approach


Empirical Managerial Roles

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Contingency Mathematical

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Decision Theory Re-Engineering

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Systems Operational

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25

26


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Socio-Technical Systems Co-Operative Social Systems

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Group Behavior Interpersonal behavior

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McKinsey’s 7-S Framework TQM Approach

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Management and Administration

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Business Organization

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Definition

Process of identifying and grouping the work to be performed,

defining and delegating responsibility and authority and establishing

relationship for the purpose of enabling people to work most

effectively together in accomplishing objectives

Types of Business organizations

Individualistic Institutions – Sole traders, Joint stock company,

Co – operative and Multinational companies

Government Institutions – Departmental undertaking, Public

corporation, Government company and Board organization

Individualistic Institutions

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Sole Trading

Sole proprietorship is that form of business organization which is

owned and controlled by a single individual. He receives all the profits

and risks all of his property in the success or failure of the enterprise

Characteristics

One man ownership and control, Unlimited liability, Enjoyment of

entire profit, No separate legal entity, Simplicity, Self employment and

Secrecy

Advantages

Easy to form the business, Take decision making, full control and so on

Disadvantages

Short life, Risks and Uncertainity

Individualistic Institutions Contd…

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Partnership

Group of men who have joined capital or serves for the prosecution

of some enterprise

Features of Partnership

Agreement, Multiplicity of person, Lawful business, sharing of profits,

Contractual relations, Mutual agency, Unlimited liability, Registration,

Common management, Utmost good faith

Kinds of partners

Active partner, Sleeping partner, Normal partner, Partner in profit only,

Sub partner, Secret partner and Minor as a partner

Rights of a partner

Rights to express his option, participation, Share profits, Get interest

on the capital etc.,


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Partnership Contd…

Advantages

Easy to form

Registration is not compulsory

Larger financial resources

Promptness in decision making

Growth and expansion of business

Disadvantages

Unlimited liability increases

Lack of harmony

Limited resources

Difficulties in expansion


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Joint Stock Company

Association of many persons who contribute money to a common

stock and employ it in some trade or business and also share the

profit and loss as the case may be arising there from. Two types are

Private Limited Company

Has a minimum paid up capital as may be prescribed

It restricts the rights to transfer the shares

Can work with only two directors

Public Limited Company

Capital is collected from the public by issuing shares

No restriction on the transfer of shares

Maximum number of members is unlimited


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Joint Stock Company Contd….

Advantages

More stable

Limited liability

Shares are freely transferable

Company can easily expand

Large financial resources

Disadvantages

Time consuming

Lack of motivation

Difficult to maintain secrets

Delayed decision and actions


38

Co – operative Organization

Voluntary association of persons for mutual benefit and its aims are

accomplished through self help and collective effort

Mutual help i.e., one for all and all for one

Characteristics of Co – operatives

Voluntary association, Equal voting rights, service motive, separate

legal activity, open membership, state control, liability, No share

transfer, Statuary audit and cash trading

Merits

Easy formation, Low operation cost, exempts from income tax

Demerits

Lack of motivation, Lack of secrecy and non – transferability of shares

Government Institutions

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Public Enterprises or State Enterprises

Autonomous or semi autonomous corporations controlled by the

state and engaged in industrial and commercial activities

Characteristics

Financed by government, Government management, Public services,

Legislative control and monopoly enterprises

Merits

Complete government control

Proper use of funds

Demerits

Inefficiency

Tax burden to public

Government Institutions Contd…

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Public Corporation Autonomous body corporate created by a special statue of a state or

central government

It has separate legal entities created for specific purpose

Merits Finance from government

Internal autonomy

Protect public welfare

Flexibility

Demerits Limited autonomy

Inefficient operation

Misuse of power

Documents

Principles of Management · Management by Different Authors 3 F.W. Taylor - “Art of knowing what you want to do and then seeing that it is done the best and cheapest way”. Henry