PRINCIPLES AND

PRACTICES OF MANAGEMENT

Meaning:• Management is an art of getting

things done by others.

Management science or art

Art• Practical know-how• Technical skills• Concrete results• Creativity• Personalised nature

science• Empirically derived• Critically tested• General principals• Cause & effect relationship• Universal applicability

5 M’S of mngt.• Money• Manpower • Materials• Machinery• Methods

NATURE/CHARACTERISTICS OF

MNGT.• Universal process• Purposeful• Social process• Creative• Continuous process• Multidisciplinary• Intangible• Both science and art

WHY MANAGEMENT- Effective utilisation of resources- Development of resources- Incorporate innovations-Integrating varied interest groups- Stability in the society

DEFINITIONS

• PRODUCTION ORIENTED• DECISION ORIENTED• PEOPLE ORIENTED• FUNCTION ORIENTED

PRODUCTION ORIENTED DEFINITION

• 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”

PRODUCTION ORIENTED DEFINITION

• Features– Aim/Goal– Results– EfficiencyShortcomings: It does not specify

how these objectives can be achieved.

DECISION ORIENTED DEFINITION

• Stanley Vance : “Management is simply the process of decision-making and control over the action of human-beings for the expressed purpose of attaining pre-determined goals”.

DECISION ORIENTED DEFINITION

• It implies:– Main activity of a manager is decision

making– Control– GoalsShortcoming: The process or activities

where decision-making is involved is not provided

PEOPLE ORIENTED DEFINITION

• L.Apply :“Management is accomplishment of results through the efforts of other people”

• Koontz : “It is the art of getting things done through and with people in formally organised groups”

PEOPLE ORIENTED DEFINITION

• Features– Existence of objectives– Working with and through people

Shortcomings: It does not specify the functions or activities involved in the process of getting things done by or with the cooperation of other people

FUNCTION ORIENTED DEFINITION

• Mac Farland :“Management is a process by which managers create, direct, maintain and operate purposive organisations through systematic, coordinated, cooperative human efforts”

FUNCTION ORIENTED DEFINITION

• Features– Existence of objectives– Organised activities– Relation among resources– Working with and through people– Decision making

““Management is the process of Management is the process of designing and maintaining an designing and maintaining an

environment in which environment in which individuals, working together in individuals, working together in groups, accomplish their aims groups, accomplish their aims

effectively and efficiently.”effectively and efficiently.”

Functions

This definition implies the following:

• A process• Universal application• Applicable to all managerial levels• Common aim- creating profits• Effectiveness and efficiency

HISTORY OF MANAGEMENT

THOUGHT• No attention paid before 20th

century– Lowly profession compared to bankers

and lawyers– Treatment of management as an art or

science confused people– Belief that managers are born and not

made

EVOLUTION OF MANAGEMENT

THOUGHTS

• Growing competition and complexity of managing large business organisations gave a push to the development of management concepts and principles.

EVOLUTION OF MANAGEMENT

THOUGHTS• Competion gave rise to factors like

– Technology innovations – Obsolescence– Increase in capital investment– Freedom at national and international

markets

EVOLUTION OF MANAGEMENT THOUGHTS -

contd…..

• Complexity came because of– Increase in the size of business

organisations– High degree of division of labour and

specialisation– Pressure of various conflicting groups– Socially oriented business controls by

government

• EVOLUTION OF MANAGEMENT THOUGHTS - contd…..

• All these have demanded the efficiency in management process which cannot come by trial and error methods but by developing and applying sound management concepts and principles

• Economists, sociologist, psychologists ,anthropologists, mathematicians and management practitioners—studied organisations and its processes

EMERGENCE OF MANAGEMENT

THOUGHTS• This all led to the emergence of a

variety of orientations or approaches in management.

• One approach or thought was an extention /improvement over the previous one.

DIFFERENT APPROACHES TO DIFFERENT APPROACHES TO MANAGEMENTMANAGEMENT

CLASSIFICATION OF MANAGEMENT THEORIES

1. CLASSICAL2. NEO-CLASSICAL3. MODERN

CLASSICAL APPROACH

• SCIENTIFIC • ADMINISTRATIVE/OPERATIONAL• BUREAUCRATIC

SCIENTIFIC MANAGEMENTF.W TAYLOR- Father of the Scientific Management.- emphasised on shop-floor level efficiency in a scientific manner.- conducted various experiments to find out how human beings could be made to work more efficiently by standardising the work and better method of doing the work.

Principles of Scientific Management

1. Replacing Rule of thumb with science

2. Harmony in group action3. Cooperation 4. Maximum output 5. Development of workers

• Taylor's four principles are as follows:• Replace working by "rule of thumb," or simple habit

and common sense, and instead use the scientific method to study work and determine the most efficient way to perform specific tasks.

• Rather than simply assign workers to just any job, match workers to their jobs based on capability and motivation, and train them to work at maximum efficiency.

• Monitor worker performance, and provide instructions and supervision to ensure that they're using the most efficient ways of working.

• Allocate the work between managers and workers so that the managers spend their time planning and training, allowing the workers to perform their tasks efficiently.

Elements of Scientific Management

• Separation of planning and doing• Funtional foremanship-specialisation of

functions• Job analysis- find out the best way of doing

the things through Time-Motion and fatigue studies

• Standardisation • Scientific selection and Training of workers• Financial incentives• Economy• Mental revolution

Other contributors of Scientific Management

• Carl Berth – developed mathematical techniques and formulae

• Henry Gantt - developed graphic methods of depicting plans. Developed GANTT chart which led to PERT.

• F. and W. Gilbreth – looked at workers problems from social and psychological point of view

Critical Analysis of Scientific Management

• Concerned with problems related to operating levels

• More relevant from engineering point of view rather than management point of view

• More relevant to mechanisation and automation than the broader aspects of management

Critical Analysis of Scientific Management …

cont

• Taylor’s SM was opposed by trade unions, industrialists and general public:-aggressive mechanical view of production-close and strict supervision-exploitation by industrialists

Operational /Administrative Management

• HENRY FAYOL: - looked at the problems of the management from top management point of view- used the word Administration rather than management

3.Administrative Management, Fayol’s Principles

3.Administrative Management, Fayol’s Principles

• Henri Fayol, developed a set of 14 principles:1. Division of Labor: allows for job specialization.

• Fayol noted firms can have too much specialization leading to poor quality and worker involvement.

2. Authority and Responsibility: Fayol included both formal and informal authority resulting from special expertise.

3. Unity of Command: Employees should have only one boss.

4. Line of Authority: a clear chain from top to bottom of the firm.

5. Centralization: the degree to which authority rests at the very top.

Fayol’s PrinciplesFayol’s Principles 6. Unity of Direction: One plan of action to

guide the organization.

7. Equity: Treat all employees fairly in justice and respect.

8. Order: Each employee is put where they have the most value.

9. Initiative: Encourage innovation.

10. Discipline: obedient, applied, respectful employees needed.

Fayol’s PrinciplesFayol’s Principles

11. Remuneration of Personnel: The payment system contributes to success.

12. Stability of Tenure: Long-term employment is important.

13. General interest over individual interest: The organization takes precedence over the individual.

14. Esprit de corps: Share enthusiasm or devotion to the organization.

Behavioral ManagementBehavioral Management• Focuses on the way a manager should

personally manage to motivate employees.

• Mary Parker Follett: an influential leader in early managerial theory.– Suggested workers help in analyzing their

jobs for improvements.– The worker knows the best way to

improve the job.– If workers have the knowledge of the

task, then they should control the task.

Managerial qualities 1. Physical –health, vigor2. Mental –learning ability, judgment,

mental vigor and capability3. Educational –general awareness4. Technical –peculiar to the function 5. Experience –arising from work

FAYOL’S MANAGEMENT

ACTIVITIES1. Technical – related to production2. Commercial –buying,selling, exchange3. Financial – searching for capital and its

use4. Security –protection of property and

person5. Managerial –planning, organising,

coordinating, controlling

2.Bureaucracy2.Bureaucracy• Seeks to create an organization that

leads to both efficiency and

effectiveness.

• Max Weber developed the concept of

bureaucracy.

– A formal system of organization and

administration to ensure effectiveness

and efficiency.

Bureaucratic PrinciplesBureaucratic Principles

A BureaucracyA Bureaucracyshould haveshould have

Written rulesWritten rules

System of taskSystem of taskrelationshipsrelationships

Hierarchy ofHierarchy ofauthorityauthority

Fair evaluationFair evaluation and rewardand reward

Key points of BureaucracyKey points of BureaucracyAuthority is the power to hold people

accountable for their actions.Positions in the firm should be held based on

performance not social contacts.Position duties are clearly identified.

People should know what is expected of them.

Lines of authority should be clearly identified. Workers know who reports to who.

Rules, Standard Operating Procedures (SOPs), & Norms used to determine how the firm operates.

• Sometimes, these lead to “red-tape” and other problems.

Features of bureaucracy

– Administrative class– Hierarchy – Division of work– Official rules– Impersonal relations– Official record

Bureaucratic approach

Max Weber: believed that bureaucratic structure was the most efficient structure.

- It was designed to accomplish large administrative jobs

- Features- Administrative class- Hierarchy

Criticism of Bureaucratic model

1. Inhuman organisation– Too much emphasis on rules– Rigid organisational hierarchy – Total impersonal approach

2. Goal displacement3. Closed system perspective