ORGANIZATION AND MANAGEMENT

1. CHAPTER 3
THEORY OF
MANAGEMENT IN
BUSINESS AND
INDUSTRY

2. Sound practices and fundamentals principles
The Meaning of Management- the word management is derived from the Italian word, Maneggiare,
which means “to train horses” or literally “to handle”, from the French words, Menager, meaning “to direct a
household”, “to economize” and Menager, “an act of guiding .”
Attributes of the Term Management- In the same way that the word organization may be defined
to mean either a group of individuals and factors and their relationships or to the process itself, the term
management can also assume varying shades of meaning.
In the light of the foregoing considerations ascribed to the word management, the following definitions
may be arrived at:
First- “Management is the art and science of organizing, preparing, and directing human efforts applied to
control the forces and to utilize the materials of nature for the benefit of man.”
Second- Management is the development of people and not the direction of things.
Third- Management is the scientific utilization of men, money, and materials to accompish a desired
purpose.
Fourth- Management is simply stated and defined as “the getting of things done through the efforts of other
people.”

3. Relationship between Management and Organization: In the previous chapter and in the
preceding discussion, we mentioned the different and varying definitions of Organization and
Management. However, in actual usage, say in the operation of business concerns, they are
generally interchanged or jointly and inseparably applied.
Organization for instance is considered as the relationships of the structural elements in
business including the individuals to carry on the work to accomplish the desired purpose;
and Management as the planning, directing, controlling, and coordinating of those elements.
FIVE M’S:
1)Men
2)Materials
3)Machines
4)Methods
5)Money

4. Who is Management?
Traditionally, management means one individual or a small group of key people who
make the significant decisions. In the sole proprietorship, it would be the owner. In a big
company, it would be the directors or key executives.
What is a Good Management?
A management is considered good when competent men are placed as heads of the
departments, when these men are responsible for and are in control of all activities and
when they are work as a team under the leadership of a strong executive.
When is Management Considered Successful?
Management is said to be successful when it makes industry efficient, and this
efficiency is measured concretely in terms of quality and quantity of products produced with
the minimum efforts at the least possible cost.

5. Functions of Management : The functions of management are said to be the weaving
together of the various parts so that all factors will cooperate for the common purpose.
Specifically, management has the following functions :
1)Planning
2)Coordinating
3)Directing
4)Controlling

6. 1)PLANNING- is a methodic technique of looking ahead in order to meet
work requirements and to reduce the amount of mental efforts required while
the work is being done.
2)COORDINATING- implies the smooth working together of the different
composing elements. It aims toward a perfect meshing of, or a harmonious
adjustment among, the elements employed.
3)DIRECTING- means the pointing of all efforts toward the known objective;
management directs the basic elements so that they have a bearing straight
upon the objective, and the lines of action along which the enterprise is to
move are set up.
4)CONTROL- includes the restraining, checking, and motivating influences
exercised by the management.

7. System, A Fundamental in Operating a Business- in business, planned
methods of procedure are called system.
Advantages of Proper Use of System:
1)System is the introduction of order and method wherever it is applied.
2)Everyday work becomes routine through a system.
3)System permits those in authority to devote their time and effort to more
important work, such as planning, attending to major problems, searching for
new markets and products.
4)System aids in the control and reduction of costs.

8. Rules for Applying System
The following are a few simple rules that may be used for guidance, always having in
mind that system is a mechanism or an aid of management, a means toward an end, but not
the end in itself.
1)System used in a particular concern should reflect a basic general plan.
2)A system must represent a definite and useful purpose.
3)Maintaining a system must prove worth its cost.
4)A system should be clear, simple, easily understood, and adequate to fit the need, but
involving the least expenditure of time and effort.
5)There should be frequent periodic checking.

9. Basic Principle of Management
Frederick W. Taylor was one of the pioneers, if not the first authority to formulate
principles of management.
1)The Principle of Policy Making- definite, clear-cut policies are essential to effective
management.
2)The Principle of Improvement and Adjustment- to be successful, a business must
advance; it cannot remain dormant.
3)The Principle of Balance- to secure proper development of business and efficiency in
operation, a company must be internally well-balanced.
4)The Principle of Relationship of Task and Accomplishment- a person works best and
accomplishes most when he is given a definite job to be completed in a given time, the work
being of a nature for which he is mentally and physically suited.
5)The Principle of Individual Effectiveness- individual effectiveness is increased through
training and improved working conditions.

10. 6)The Principle of Simplicity- all elements which are not essential to successful operation
should be eliminated and all those retained should be applied in the simplest way.
7)The Principle of Specialization- scientific distribution of work results in specialization of
effort and task.
8)The Principle of Standardization- whenever practicable, best practices should be
determined, expressed in terms of definite units or standards and adopted as a pattern for use
in operation or performance and in planning and control.
Standardization of Product- this has to do with the selection of items, types and sizes
of products in greatest demand, and by concentrating the manufacturing, distribution and
other operations on those which are so selected.
Administration Standard- this has to with standards or performance which give
management definite measures by which to gauge efficiency, to evaluate and control current
performance and to estimate and plan for the future.
9)The Principle of Financial Incentive- remuneration should be in direct proportion to the
value of accomplishment.

11. 10)The Principle of Human Relations- management succeeds or fails as human relations in
business are intelligently or otherwise handled.
11)The Principle of Planning- in order to satisfactorily accomplish anything of importance,
there must be planning in advance of doing.
12)The Principle of Control- planning is of little value unless there is subsequent control to
make certain that the plans are carried out.
13)The Principle of Cooperation- the efforts of two or more individuals working as a unit
toward a common goal are greater than the sum of the efforts of the individuals working as
individuals.
14)The Principle of Leadership- wise leadership is the most important single factor in
successful operation.
15)The Principle of Delegation of Authority and Responsibility- decisions should be
made at the lowest practicable organization level.
Delegation- means giving power to do certain things to subordinates and pointing out
how that power is to be used.

12. 17)The Principle of Utilization of Executive Ability- executive ability can be utilized fully by freeing it of the
need to attend to all routine matters.
The Role of Leadership
Executive leadership is the galvanizing factor, the dynamic element which integrates the various interests in the
organization into a harmonious, inspired. And smoothly functioning unity.
Organization principles and management techniques are of the mind—methods, system, time tables, and standards.
Leadership is of the spirit; a psychological process that provides guidance through personality, character, intelligence,
and other intangible characteristics.
The executive or manager, whether at the top or at slightly lower levels, should have certain attributes of a leader- in
addition to the technical competence required by the nature of his position. Thus the executive should have:

13. 1)Physical and mental health- vitality, strength and endurance are required
of executives.
2)Intellect- clear thinking and intelligence is either creative or judicial.
3)Personality- the executive should have maturity, social orientation,
personal magnetism that commands consent, cooperation, enthusiasm, the
ability to inspire, persuasiveness and tact.
4)Character- the good executive, as a leader has integrity and other excellent
character traits.
5)Language facility- the leader should not only know but he should also
have the ability to teach and communicate what he knows.

14. Thank You!!!