Unit i Fundamenatals of Management and Information System Arnav Chowdhury PIMR, Indore

1. UNIT I

2.  Management is the process of reaching organizational goals by working with and through
people and other organizational resources.
Management has the following 3 characteristics:
 It is a process or series of continuing and related activities.
 It involves and concentrates on reaching organizational goals.
 It reaches these goals by working with and through people and other organizational
resources.

3.  Henri Fayol (1841–1925) is often described as the ‘father’ of modern management.
He had been managing director of a large French mining company, and was
concerned with efficiency at an organizational level rather than at the level of the
task. Drawing on his experience of what worked well in an organization, he
developed a general theory of business administration.
 He first broke management down into five distinct elements:
 forecasting and planning – looking into the future and drawing up action plans
 organizing – building up the material and human structure of the undertaking
 commanding – maintaining activity amount personnel
 coordinating – unifying and harmonising activity and effort
 controlling – ensuring that things conform to rules and instructions

4.  1. Management as a continuous process:
 Management can be considered as a process because it consists of planning, organizing,
activating and controlling the resources (personnel and capital) of an organization. So
they are used to the best advantage in achieving the objectives of the organization.
 2. Management as a discipline:
 Since the boundaries of management are not exact as that of any other physical sciences,
it may not fit in very well for being addressed as discipline. However its status as a
discipline increases because it continuously discovers many aspects of business
enterprises and also passes on the verified knowledge to the practitioners of the
managerial process.

5.  3. Management as a career:
 As a career or occupation, management is a broad concept- Management itself can be
regarded as a career, but it also presents a variety of interesting and challenging careers
focused on specialized occupations in the fields such as marketing, finance and
personnel.
 4. Management as an Applied Science:
 Even though management is a science so far as it possesses a systematized body of
knowledge and uses scientific methods of research, it is not an exact science, like natural
sciences which deal with living phenomena such as botany and medicine.
 5. Universal Application:
 Management is a universal activity, applied to any form of activity, economic or
otherwise.

6.  7. Guidance:
 The main task of the management is guidance in the utilization of material and human
resources in the best possible way. Through optimum utilization of resources it has to
ensure that the objectives are attained. The essential element of management is that it
gets the work done by coordinating the performance of those who actually perform
diverse and specific jobs.
 8. Divorced from proprietorship:
 Management does not signify proprietorship. In earlier days, management and
enterprise were lumped into the same factor. It now refers to a specialized group of
people who have acquired the ability to carry out a project.

7.  9. An activating factor:
 Management is the factor which activates other factors of production. A manager's skill
lies in motivating his workers through guidance, training, incentives, rewards, status,
security, control, etc. So a mangers' ability lies in the fact that he is able to motivate
others to apply their skill to the best advantage of the enterprise in the accomplishment
of its objectives.
 10. Management is a human activity:
 Management functions are discharged only by individuals. No corporate body or an
artificial being can perform the work of a management. Although it is an activity which
may be performed by an individual it cannot be seen. It can only be felt.

8.  11. Management signifies authority:
 Since the essence of management is to direct, guide and control, it has to have authority.
Authority is the power to compel others to work and behave in a particular manner.
Management cannot discharge its function without authority. It is the foundation of
management. Since management has authority it stands at a higher pedestal.
 12. Leadership:
 The management has to lead a team of workers. It must be capable of inspiring,
motivating and winning their confidence.

9.  One of the earliest of these theorists was Frederick Winslow Taylor. He started the
Scientific Management movement, and he and his associates were the first people to
study the work process scientifically. They studied how work was performed, and they
looked at how this affected worker productivity. Taylor's philosophy focused on the
belief that making people work as hard as they could was not as efficient as optimizing
the way the work was done.
 Four Principles of Scientific Management
 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.

10. 1. DIVISION OF WORK: Work should be divided among individuals and groups to ensure that
effort and attention are focused on special portions of the task. Fayol presented work
specialization as the best way to use the human resources of the organization.
2. AUTHORITY: The concepts of Authority and responsibility are closely related. Authority was
defined by Fayol as the right to give orders and the power to exact obedience. Responsibility
involves being accountable, and is therefore naturally associated with authority. Whoever
assumes authority also assumes responsibility.
3. DISCIPLINE: A successful organization requires the common effort of workers. Penalties
should be applied judiciously to encourage this common effort.
4. UNITY OF COMMAND: Workers should receive orders from only one manager.
5. UNITY OF DIRECTION: The entire organization should be moving towards a common
objective in a common direction

11. 6.SUBORDINATION OF INDIVIDUAL INTERESTS TO THE GENERAL INTERESTS: The
interests of one person should not take priority over the interests of the organization as a whole.
7.REMUNERATION: Many variables, such as cost of living, supply of qualified personnel, general
business conditions, and success of the business, should be considered in determining a worker’s
rate of pay.
8.CENTRALIZATION: Fayol defined centralization as lowering the importance of the subordinate
role. Decentralization is increasing the importance. The degree to which centralization or
decentralization should be adopted depends on the specific organization in which the manager is
working.
9.SCALAR CHAIN: Managers in hierarchies are part of a chain like authority scale. Each
manager, from the first line supervisor to the president, possess certain amounts of authority. The
President possesses the most authority; the first line supervisor the least. Lower level managers
should always keep upper level managers informed of their work activities. The existence of a
scalar chain and adherence to it are necessary if the organization is to be successful.

12. 10.ORDER: For the sake of efficiency and coordination, all materials and people related
to a specific kind of work should be treated as equally as possible.
11.EQUITY: All employees should be treated as equally as possible.
12.STABILITY OF TENURE OF PERSONNEL: Retaining productive employees should
always be a high priority of management. Recruitment and Selection Costs, as well as
increased product-reject rates are usually associated with hiring new workers.
13.INITIATIVE: Management should take steps to encourage worker initiative, which is
defined as new or additional work activity undertaken through self direction.
14.ESPIRIT DE CORPS: Management should encourage harmony and general good
feelings among employees.

13.  Interpersonal Category
The managerial roles in this category involve providing information and ideas.
 Figurehead – As a manager, you have social, ceremonial and legal responsibilities.
You're expected to be a source of inspiration. People look up to you as a person
with authority, and as a figurehead.
 Leader – This is where you provide leadership for your team, your department or
perhaps your entire organization; and it's where you manage the performance and
responsibilities of everyone in the group.
 Liaison – Managers must communicate with internal and external contacts. You
need to be able to network effectively on behalf of your organization.

14. Informational Category
The managerial roles in this category involve processing information.
 Monitor – In this role, you regularly seek out information related to your
organization and industry, looking for relevant changes in the environment. You
also monitor your team, in terms of both their productivity, and their well-being.
 Disseminator – This is where you communicate potentially useful information to
your colleagues and your team.
 Spokesperson – Managers represent and speak for their organization. In this role
you're responsible for transmitting information about your organization and its
goals to the people outside it.

15. Decisional Category
The managerial roles in this category involve using information.
 Entrepreneur – As a manager, you create and control change within the
organization. This means solving problems, generating new ideas, and
implementing them.
 Disturbance Handler – When an organization or team hits an unexpected
roadblock, it's the manager who must take charge. You also need to help mediate
disputes within it.
 Resource Allocator – You'll also need to determine where organizational resources
are best applied. This involves allocating funding, as well as assigning staff and
other organizational resources.
 Negotiator – You may be needed to take part in, and direct, important negotiations
within your team, department, or organization.

16.  1. Planning: This essentially refers to establishing a broad sketch of the work to be completed and the procedures
incorporated to implement them.
 2. Organizing: Organizing involves formally classifying, defining and synchronizing the various sub-processes or
subdivisions of the work to be done.
 3. Staffing: This involves recruiting and selecting the right candidates for the job and facilitating their orientation
and training while maintaining a favorable work environment.
 4. Directing: This entails decision making and delegating structured instructions and orders to execute them.
 5. Coordinating: This basically refers to orchestrating and interlinking the various components of the work.
 6. Reporting: Reporting involves regularly updating the superior about the progress or the work related activities.
The information dissemination can be through records or inspection.
 7. Budgeting: Budgeting involves all the activities that under Auditing, Accounting, Fiscal Planning and Control.

18.  Planning is the hallmark of intelligent behavior. An organization, in order to reach
its goals, must first set them and set them right. It is deciding the direction in
which all the efforts and all the manpower of the organization will be directed over
a fixed tenure of time in order to strive for a predetermined outcome. This
outcome must be challenging enough to motivate but not daunting so as to scare
and frustrate the workforce.

19.  Here, the manager has been advised to arrange for all the necessary resources i.e.
raw materials, monetary resources, human resources, and technology as well as
the managerial expertise to help achieve the goals set under planning process.

20.  This principle signifies the importance of human resource for any organization. It
outlines the procedures such as recruitment, training and retaining the right kind
of employees for the specific jobs. It also involves preparing them for their roles in
the organization.

21.  Here, after the plans have been laid out; necessary materials been sorted and
employees hired to perform the jobs; the manager has to direct their efforts
towards the ultimate goals of the organization by dividing those ultimate strategic
goals into small, workable, time-bound targets. He has to perform the role of
mentor and motivator as in telling them how to do their jobs in the best possible
manner and encouraging them to perform better by overcoming the challenges.

22.  Here, the Chief Manager would have to take steps to coordinate the efforts by
various departments so as to ensure that they are moving in tandem with each
other. If one department moves out of sync, the efforts of all the departments will
collapse.

23.  Reporting refers to keeping the channels of communication open both the ways
throughout the organization. This helps in reporting the progress of the work to
the superior authorities and lets them make modifications to the plan if required.
Similarly, all the essential exchange of information such as problems of employees,
new regulations, appreciation etc. can be easily shared with the concerned parties
thin very less time and minimal distortions.

24.  Finance is the lifeblood of any organization. Appropriate and consistent account of
every penny spent is crucial for the survival and prosperity of any organization.
Resources – man, money, material and time – should be allocated to each and
every work center or project in advance and the employees responsible should be
held accountable for their stipulated usage. This is necessary to gauge the
estimates for any such future requirements and also to investigate any source of
mistake or fraud.

25.  Social responsibility is defined as the obligation and commitment of managers to
take steps for protecting and improving society’s welfare along with protecting
their own interest. The managers must have social responsibility because of the
following reasons:
 Organizational Resources - An organization has a diverse pool of resources in form
of men, money, competencies and functional expertise. When an organization has
these resources in hand, it is in better position to work for societal goals.
 Precautionary measure - if an organization lingers on dealing with the social
issues now, it would land up putting out social fires so that no time is left for
realizing its goal of producing goods and services. Practically, it is more cost-
efficient to deal with the social issues before they turn into disaster consuming a
large part if managements time.

26.  Moral Obligation - The acceptance of managers’ social responsibility has been
identified as a morally appropriate position. It is the moral responsibility of the
organization to assist solving or removing the social problems.
 Efficient and Effective Employees - Recruiting employees becomes easier for
socially responsible organization. Employees are attracted to contribute for more
socially responsible organizations. For instance - Tobacco companies have
difficulty recruiting employees with best skills and competencies.
 Better Organizational Environment - The organization that is most responsive to
the betterment of social quality of life will consequently have a better society in
which it can perform its business operations. Employee hiring would be easier and
employee would of a superior quality. There would be low rate of employee
turnover and absenteeism. Because of all the social improvements, there will be
low crime rate consequently less money would be spent in form of taxes and for
protection of land. Thus, an improved society will create a better business
environment.

27.  Management Ethics’ is related to social responsiveness of a firm. It is “the
discipline dealing with what is good and bad, or right and wrong, or with moral
duty and obligation. It is a standard of behaviour that guides individual managers
in their works”.
 “It is the set of moral principles that governs the actions of an individual or a
group.”
 Business ethics is application of ethical principles to business relationships and
activities. When managers assume social responsibility, it is believed they will do
it ethically, that is, they know what is right and wrong

28.  Though every individual and group has a set of ethical values, the following
guidelines are prescribed by James O’Toole in this regard:
 1. Obey the law: Obeying legal practices of the country is conforming to ethical
values.
 2. Tell the truth: Disclosing fair accounting results to concerned parties and telling
the truth is ethical behaviour of managers.
 3. Respect for people: Ethics requires managers to respect people who contact
them.
 4. The golden rule: The golden business principle is ‘Treat others as you would
want to be treated’. This will always result in ethical behaviour

29.  5. Above all, do no harm: Even if law does not prohibit use of chemicals in
producing certain products, managers should avoid them if they are environment
pollutants.
 6. Practice participation – not paternalism: Managers should not decide on their
own what is good or bad for the stakeholders. They should assess their needs,
analyse them in the light of business needs and integrate the two by allowing the
stakeholders to participate in the decision¬-making processes.
 7. Act when you have responsibility: Actions which cannot be delegated and have
to be taken by managers only (given their competence and skill) must be
responsibly taken by them for the benefit of the organisation and the stakeholders