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  • 1. Lecture Notes prepared by Meet Bakotia Unit 4 - Management Process Objectives: After studying this unit, student shall be able to: 1) explain the concept of management and its importance; 2) identify the various levels of management; 3) describe the functions of management; and 4) explain the principles of management; 5) understand the evolution theory of management. Management Management is art of getting things done. Management is an activity: get things done through others. Management is the process which by planning, organizing, staffing, leading and controlling, a human group makes possible the maximum and efficient use of physical resources and helps in realizing the pre-determined objectives of any organization. American society of mechanical engineers also defines management as: “Management is the art and science of organizing and directing human efforts applied to control the forces and utilize the material of nature for the benefit of man.” William gives stress on functional concept and defines management as: “management is what a manager performs.” J.D Mooney and A.C Railey give importance to human relations concept. According to them: “Management is the art of directing and inspiring people.” Importance of management: Man cannot do anything alone and there is always the necessity of a group effort. Hence human needs are fulfilled by collective group efforts. By planning, proper distribution of work, proper co- ordination among people, directing and controlling their activities, success is achieved. This is possible through managing men tactfully. Hence management fulfills all the demands of organisation and reaches towards success. Without proper management, organisation does not receive success. No management in the activities of a human group is like a ship without a captain. Manager ensures the success of different activities by the process of management. Difference between Management, Administration and Organisation: Management Administration 1. It implements the policies framed by administration. 1. It does not implement the policy, it just frames the policies. 2. It is art of getting things done by group effort. 2. It is not directly concerned with direction of human efforts to get things done. 3. It is the middle or lower level management. 3. It is top level management. 4. Management is servant of administration. 4. It is master of industries. 5. Following are usually designated as managers: General Manager, Managing director of company etc. 5.Following are designated as administrators: collectors, Commissioners, vice-chancellors, Registrar, Chief Justice. Management Organisation 1. Management is art of getting things done. 1. Organisation structure is systematic arrangement of people in any company/industry. 2. Planning, Organising, Staffing, Direction, Coordination and control are the functions 2. Organising is one of the functions of management.
  • 2. Lecture Notes prepared by Meet Bakotia of management. 3. It is done by bringing people into a group or team and doing things through complete group effort. 3. people at various levels are systematically arranged and their group efforts performs the management function. 4. It is like entire body of human being. 4. It is like nervous system of human body 5. Management uses organisation to fullfill its work with the help of administration. 5. Organisation has to fullfill the work of art of getting things done and the work is to implement the policies framed by administration. Functions of management: 1. Planning: Planning is preparing for future. Planning is today's projection for tomorrow's activity. It is a process of thinking before doing and that to for the future. It involves determinations of goals and the activities required to be performed to achieve the goals. Planning is making things happen that would not otherwise occur. It consists: (a) What is to be done?, (b) How it is to be done?, (c) Where it is to be done?, (d) When it is to be done?, (e) By whom it is to be done? It is a course of action to achieve specific results. Once the plan is formulated, he has to indicate the objectives of the plan and steps to be taken by his subordinates. 2. Organising: Organizing is arranging group of people and distributed the work among the group members to achieve the objectives of an organisation. Bringing together human and non-human resources that is the work to be done and its distribution in human resources. Organising is like providing oxygen to the plan by bringing together men, materials and machines in proper relationship. This needs to be done according time table previously decided. Organising involves defining and establishing authority responsibility relationship for the achievement of goals. It involves dividing jobs equally amongst the workers without overburden to anyone. It refers to distribution of work to the superiors and sub- ordinates and fixing there authorities and responsibilities. 3. Staffing: Staffing is the process of recruiting the manpower which meets the company’s objectives. It involves filling the position needed in the organisation by appointing qualified person for the jobs. The top management is ultimately responsible for all staffing activities. It is not just simply recruiting people but it is about attracting, acquiring, developing and maintaining the human resources required to achieve the organisation objective efficiently. Staffing improves skills of the staff so that they give higher performance. Personnel department of an organisation looks after the function of staffing. 4. Directing or Leading: Directing involves instructing, guiding and inspiring people at work so that they carry out their assigned duties and responsibilities in perfect manner. Tell people what to do and seeing that they do it to the in the better manner. Directing includes getting work done by people, explaining them how manager wants it to be done, giving them authority, guiding, instructing and inspiring them with confidence in their ability to achieve the company's goals. Directing uses communication for passing information, making the subordinates understand what the management expects of them. Directing uses leadership to get the cooperation of employees. Directing uses motivation for getting voluntary cooperation of the subordinates. Different types of rewards motivate different people. 5. Controlling:
  • 3. Lecture Notes prepared by Meet Bakotia Control is the process of comparing the results that organisation achieved with those which were planned. Then it becomes important to find out the reason for deviations of actual results from desired results and taking corrective action when necessary. It involves comparison of actual performance with the planned performance as to quality, quantity, time taken etc. and then analyse the deviations and to take corrective measures to correct the deviations. Control means checking that plans have been carried out and manager has to attend if there are any deviation which can be corrected or rectified in time control ensures qualitative and quantitative performance of the work in organisation for executing plans and plans without control means no achievements. Levels of management (managerial hierarchy) The management levels may be classified as follows: (i) Top management (ii) Intermediate management (iii) Middle management (iv) Supervisory or operating management Top or executive management: Top management provides overall direction and leadership to the company. Top management represents the company to the outside world Top management is concerned with managing at the highest level in the management hierarchy. It is responsibility of this management for the success or failure of the organization. It consists of the board of directors and the managing director. They establish long-term goals of the organization. They maintain coordination among different departments of the company. They also keep the organization in harmony with its external environment. These people coordinate and integrate the activities of different departments and divisions of the company. Also these people have firm control of the financial and operating results of the company. Intermediate management: Intermediate or upper middle management also known as departmental or functional management comprises departmental or divisional heads e.g. works manager, marketing manager, finance manager etc. Divisional head performs the usual managerial functions of planning, organizing, staffing, directing and controlling in relation to one department. He is the overall incharge of one particular division or department. He is accountable for the performance of his division or department to the chief executive. He coordinates and controls the activities of all personal working in different branches of his department. Middle management: Middle management comprises all sectional heads e.g. plant manager, area sales manager, branch manager, office manager etc cooperate among themselves so as to integrate the various activities of department. Middle management executives serve as a link between intermediate or top management and the operating management. These sectional heads interpret and explain the plans and policies formulated by top management. They control the operating performance. They train, motivate and develop supervisory personal. Middle management lay down rules and regulations to be followed by supervisory personnel. Low level/Supervisory/operating/first-line management: Supervisory management is the lowest level of management which consists of supervisors, foremen, sales officers, and purchase officers etc. supervisors and operating managers maintain close contacts with rank and file workers and supervise day-to-day operations. They are concerned with the mechanics of jobs. Low level management plans day-to-day production with is the goals laid down by higher authorities. Supervisors assign jobs to workers. Supervisors provide training and development to the workers. Supervisors issue orders and instructions. Supervisors arrange material and tools. They advise and assist workers by explaining work procedures, solving problems etc. Supervisors maintain discipline and good human relations among workers. Supervisor report feedback information and workers problems to the higher authorities.
  • 4. Lecture Notes prepared by Meet Bakotia Principles of management: Administrative theory of management was initiated by Henry Fayol, a French engineer cum Manager in Europe and in his book General and industrial management he mentioned 14 important principles. They are: (1) Division of work: Work and responsibility should be equally divided between workers and employees. Everyone should be given equal amount of work. Uneven division of work should be avoided. E.g. planning is the work of management and so managers should be responsible for the proper planning where as execution of plan is the work of workers and so worker should be responsible for proper execution of planning. (2) Authority and responsibility: Authority is the right of a superior to give orders to subordinates and to take decisions on specified matter. Responsibility on the other hand, means obligation with respect to the performance of functions and achieving goals. There must be equality between authority and responsibility. (3) Discipline: Discipline in management means obedience related with rules and regulations of the organisation. Everyone should maintain discipline so that work environment should be cool and calm. (4) Unity of command: Command of orders that a subordinate receives that should be only from one supervisor. No employees therefore, should be asked to receive orders and instructions from more than one Superior. (5) Unity of Direction: Every members of the organisation should work towards common goals. This principle ensures “unity of action, and coordination”. (6) Emphasis on Subordination of personal interest to general or common interest: The interest of the organisation must precedence over the interest of individuals. In other words, individuals should give up their personal interest in the interest of the enterprise. (7) Adequate remuneration to personnel: Wage/Salary of employees should be fair. Reasonable wages should be determined on the basis work assigned cost of living, and financial position of the business. (8) Centralisation: When only the top management has most of the decision making authority it is called centralisation, sharing authority downwards leads to decentralization. (9) Scalar chain or line of authority: it includes the chain of superiors from the top to the lowest rank in management. Each manager is superior to the manager below him but he is also subordinate to his own superior. According to this principle each superior is to provide direction or instruction to immediate subordinate and subordinate to suggest or to complain to his immediate superior. (10) Order: The principle is concerned with arrangement of things, which is called material orders, and placement of people called social order. (11) Equity: Everyone in organisation should receive similar treatment. workers performing similar jobs should be paid the same wage rate. (12) Stability of workers: Employee should remain stable and not leave the job due to dissatisfaction in an organisation. Employees should not be moved from their positions frequently. Fair wages recognition of work, incentives and dimensions provided to the employees help in reduction of absenteeism and leaving organisation, and provides efficiency teamwork and loyalty. (13) Initiative: The employees at all levels should be given some freedom to adopt techniques and methods to accomplish their tasks. This will create initiative and enforce efficiency. It increases zeal and belongingness
  • 5. Lecture Notes prepared by Meet Bakotia (14) Espirit de Corps (Team spirit): These French words in English mean “union is strength”. Group efforts are more effective than the total of individual’s efforts. Therefore everyone should work as a team. Evolution of management thought: 1. Classical (Traditional) approach: (a) Bureaucracy (Webel’s model) (b) Scientific management (Taylor’s theory) (c) Management process school (Fayol’s Administrative theory) 2. Neo-classical approach (a) Human relations approach (Elton mayo’s approach): It helps in loving and caring the employees, it held the stress on social aspects only): (b) Behavioural science approach 3. Modern approach (a) Systems approach (There should harmony among the sub-systems and among different departments of organisation): (b) Contingency approach: (different theories needed for different situations): (c) Quantitative approach Classical theory: In the classical organisation theory which is also called the traditional theory the idea of several contributors such as Taylor, Fayol, Luther Gulick, and Max Weber is included. Classical theorists see organisation as a closed system which means organisation has no interaction with the environment. This assumption is totally unrealistic. A modern organisation is an open dynamic system, which has interaction with the environment. Classical theory writers made the assumption that people at work can be motivated only through economic rewards and this is wrong. Non-monetary factors like better status and job enrichment can also motivate the workers. Classical theorists think that the same principles can be applied in: (i) different organisations, (ii) different management levels in the same organisation, and (iii) different functions of the same organisation. Some practical researches, however, suggest that none of the principles has such characteristics. Moreover, there are many of the principles, which are actually contradictory with other principles. For example, principle of specialization is quite in conflict with the principles of unity of command. Peter Drucker, Ernest Dale, etc. have also criticized universality concept. Bureaucracy approach: According to the name bureaucracy theory was evolved by the German sociologist Max Weber (1864-1920). Weber hoped that his theory would be used to understand how and why organisations were structured as they were. He thought his theory would be used as the standard against which other organisations would be compared. But like most “ideal” theories this was also very extreme and overstated theory. In this theory stress is given on unfriendly relationships between employees. Here the recruitment of managers on the basis of ability and technical knowledge. Theory states that promotions in real life are not given on technical ability. Competent people don’t really get promotion. Every superior tries to increase the number of his subordinates as if this number is considered a symbol of power and prestige. It is hard to destroy bureaucracy even if it has outlived its utility.