MG- 2351PRINCIPLES OF MANAGEMENT

UNIT-I

R.HARIHARANAP/EEE

Management- the process of designing and maintaining an environment in which individuals working together in groups, achieve their objectives.

Nature – universal, activity based, purposeful, integrative process, involves decision making, emphasis people, is a process, aims at productivity

INTRODUCTION

The Management process…..

Planning

Organizing Coordinating

Staffing

Directing Controlling

Evaluating

Changes in

procedures

Revisio

n in

plans

MANAGEMENT SCIENCE OR ART

ART: Because it depends on the skills, aptitude & creativity of the manager

SCIENCE: Because there is considerable knowledge in the field of management with basic principles for guidance of basic activities.

MANAGEMENT

MAN + AGE (EXPERIENCE)

FOR AND BY PEOPLE

ART SCIENCE

Organizes and uses human talent using

motivation, leadership etc.,

Accumulated knowledge such as

clear concepts, theory etc.,

By using optimal resources to produce optimal results

MANAGEMENT AND ADMINISTRATION Administration refers to management

functions of planning & control

Administrative mgt Management Operative Mgt Administrative management is basically a

thinking function that is largely performed by top management. It is concerned with determining goals and laying down policies.

Operative management is basically a doing function that is largely performed by lower levels of management. It is concerned with execution of policies for the attainment of goals.

Administration is a determinative function and management is a executive function

Contd…

Contd…ADMINISTRATION

MANAGEMENT

ORGANIZATION

LISTS OUT THE REQUIRED POLICES

BRINGS THE POLICIES TO

EFFECT

COORDINATION BETWEEN

ADMINISTRATION AND

MANAGEMENT

ATTAINMENT OF PREDETERMINED ORGANIZATIONAL

GOALS

Planning Planning is deciding in advance who will do

what at a certain time and how it is to be achieved.◦ Assessing the future.◦ Determining objectives and goals in the light of

the future.◦ Developing alternative courses of action to

achieve such objectives.◦ Selecting the best course of action among the

available alternatives.

FUNCTIONS OF MANAGEMENT

Organizing◦ Administration brings out the required policies

and management brings these policies into effect.◦ Basic materials like Men, Material and machinery

are to be organized.◦ It involves

Identifying and grouping of activities for achieving objective.

Assigning responsibilities with authority Follow up to ensure completion of assigned duties.

Contd…

Staffing◦ It deals with selection and efficient management

of people.◦ It is a continuous process as existing employees

may leave the organization and new employee join it.

◦ Establishing job specifications and job descriptions

◦ Determining the sources◦ Recruiting, selection and placement◦ Training, educating and developing employees.

Contd…

Directing◦ It means “management in action”

Contd…

DIRECTING IMPLIES

PROVIDING GUIDANCE AND INSPIRATION TO

PEOPLE AT WORK IN ORDER TO

CARRYOUT THEIR

ASSIGNED DUTIES

Supervision – act of supervisor who involves in expert overseeing of sub ordinates at work

Leadership – influencing the activities of a team for achieving goals.

Communication – to share thoughts, opinions by the way of speech, writing or signs

Coordinating – task of integrating harmoniously the efforts of people working together to produce without confusion in order to achieve goals.

Contd…

Controlling◦ Measuring actual performance with the planned

performance.◦ Process of reviewing performance and initiating

corrective action is called as controlling.

Contd…

SET STANDARDS

OF PERFORMANC

E

MEASURE ACTUAL

PERFORMANCE

COMPARES ACTUAL

PERFORMANCE WITH

PLANNED PERFORMANC

E

NOTE VARIATIONS AND TAKE

CORRECTIVE ACTION

RE-EVALUATE AND

REFORMULATE GOALS AND STANDARDS

Stage – I – The classical theory of management.◦ Bureaucracy of Weber◦ Scientific management of Fedrick.W.Taylor◦ Management process of Henry Fayol

Stage – II – Neo classical theory◦ Human relations of Elton Mayo◦ Behavioral sciences approach of Maslow

DEVELOPMENT OF MANAGEMENT THOUGHT

Stage – III – Modern theory◦ Technical and quantitative sciences◦ System approach to management and

organization◦ Contingency approach to management and

organization

Contd…

Father of modern theory He had given overall concepts of mgt. Advocated the organizational charts. Concept of selection and training of workers

and managers. Identified the key problem of delegation and

decentralization Emphasized planning function of higher

mgt.

HENRY FAYOL CONTRIBUTION

Division of work◦ Entire work is to be divided into groups.◦ To be carried out with experts.◦ Increase in productivity◦ Better performance of human factor

Authority and responsibility◦ Right to command.◦ Accountability for performing job.◦ Official and personal authority. Official – position

held. Personal- derived from managers own intelligence, experience an personality

14 PRINCIPLES OF FAYOL

Discipline◦ Obedience and respect shown by the sub

ordinates to their superiors is discipline◦ According to Fayol, it happens due to good

leadership and indiscipline is due to lack of leadership.

◦ Good supervision at all levels◦ Clear and fair agreement with reference to

disciplinary matters.◦ Legal application of penalties.

Contd…

Unity of command◦ An employee should receive orders only from one

superior.◦ If it is of two or more then it will be a source of

conflict. Unity of direction

◦ There should be one head and one plan for each group of activity with same objectives.

◦ It is concerned with personnel, whereas, the principle of unity of direction is concerned with the body corporate as a whole.

Contd…

Subordination of individual interest to general interest◦ Each employee should give more importance to

organization interest than individual interest.◦ If there is a conflict in these management should

reconcile them. Remuneration to personnel

◦ Method of payment are to be fair and should give maximum possible satisfaction to employees and employer.

Contd…

Centralization◦ It deals with authority◦ All the power with one person is centralization.◦ Distributed powers to sub ordinates is

decentralization.◦ Fayol emphasis the need to strike a balance

between centralization of authority and dispersal in an organization.

◦ A certain degree of decentralization is necessary to enable people to take quick decisions on important problems.

Contd…

Scalar chain◦ Communication - Top to bottom. There should not

be by-passing.◦ There should be direct communication between

intermediate levels of authority.◦ Supreme authority must encourage his

subordinates to use gang plank – proper routes to communicate information

Contd…

Order◦ It is related to the arrangement of things and

people in an organization.◦ Social order- place for everyone and everyone in

its place. It is ensured by proper selection of employees.

◦ Material order- place for everything and everything for its place. Material should be chosen carefully to avoid losses and to easily identify and take them for use when needed.

Contd…

Equity◦ All employees are to be treated equally.◦ Equality is a combination of fairness, kindness and

justice.◦ Experience, good sense and fair judgement are

required by the manager in order to do equity. Stability of personnel

◦ High employee turnover is due to bad management◦ This will make organization instable.◦ This is because reasonable time is necessary for

people to settle down and get adopted to their new work.

Contd…

Initiative◦ It is the liberty to propose plan and getting it

executed.◦ The managers should sacrifice personal vanity

inorder to permit subordinate to plan and execute.

Esprit de corps◦ Union is strength.◦ It emphasis unity and harmony among employees

for promoting employee morale, team work and communication.

Contd…

Father of scientific management. Scientific management as the art of

knowing what exactly is to be done and the best method of doing it.

Principles of Taylor◦ Separation of planning and execution based on

specialization◦ Scientific task setting based on time, motion and

fatigue study◦ Fitting right person for the right job by proper

selection, training and placement of personnel

CONTRIBUTION OF F.W.TAYLOR

◦ Improvement in work by standardization of tools and equipment and improvement in work environment.

◦ Mental revolution, that is, creating a feeling that neither the employees nor the employers are exploiting each other.

◦ Distinguishing efficient workers from inefficient workers with the use of differential piece rate system

◦ Scientific study of each unit of the business.

Contd…

According to him observation, measurement, experimentation, inference and conclusion are the elements for directing human efforts.

He contributed the principle of finding the best way of doing any job and training.

Developed the principle of breaking the job into elements in order to find the standard time of each job.

Using time study, he experimented and found the losses of efficiency in industry and their causes.

Contd…

Fair days work- note of fatigue incurred by workers in doing a job and time taken to complete it.

Concept on increasing production rate. To be planned in advance by worker.

Main contribution by him is functional organization in which foreman was made in charge of each function

Contd…

Sole proprietorship◦ Business unit 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 of sole proprietorship

◦ One man ownership and control◦ Unlimited liability◦ Enjoyment of entire profit◦ No separate legal entity◦ Simplicity◦ Self employment◦ secrecy

TYPES OF BUSINESS ORGANIZATION

Advantages◦ Easy to form and close◦ Easy for decision making◦ Full control of business activities◦ Liberal legal formalities

Disadvantages◦ Limited resources◦ Short life◦ Risk of entire loss◦ uncertainty

Contd…

Partnership◦ A partnership firm as it is often called a group of

men who have joined capital or serves for the prosecution of some enterprise

◦ The relation between person who have agreed to share profits of a business carried on by all of them acting for all.

Contd…

Features◦ Agreement◦ Multiplicity of person- 10-banking / 20- non banking◦ Lawful business◦ Sharing of profits◦ Contractual relations◦ Mutual agency◦ Unlimited liability◦ Registration◦ Common management◦ Utmost good faith

Contd…

Kinds of partner◦ Active◦ Sleeping◦ Normal◦ Partner in profit only◦ Partner by estoppel◦ Sub partner◦ Secret partner◦ Minor as a partner

Contd…

Rights of a partner◦ Right to express his option◦ Right of participation◦ Right of access to books◦ Right to share profits◦ Right to get interest on the capital◦ Right of indemnity

Contd…

Joint stock company◦ Private limited company◦ Public limited company

Contd…

Joint stock company Governed by Indian companies act 1956 Members are called as shareholders Contributed capital by shareholder is called

as share Total capital is called as share capital It has more legal formalities to start

Contd… Characteristics

◦ Separate legal entity◦ Common seal◦ Perpetual existence◦ Limited liability◦ Transferability of share◦ Membership◦ Formation◦ management

Contd… Advantages:

◦ Large scale operation◦ Professional management

Disadvantages:◦ Formation is not easy◦ Control by groups

Co-operative organization◦ Characteristics

Voluntary association Equal voting rights Service motive Separate legal activity Open membership State control Liability No share transfer Statutory audit Cash trading

Contd…

Public enterprises◦ Public enterprises autonomous or semi

autonomous corporations and companies established owned and controlled by the state and engaged in industrial and commercial activities.

Characteristics◦ Financed by government◦ Government management◦ Public services◦ Legislative control◦ Monopoly enterprise

Contd…

CLASSIFICATION OF ENVIRONMENTAL FACTORS

Contd…