Principles of Management


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Principles of Management

  2. 2. Introduction A business develops in course of time with complexities. Management is not only essential to business concerns but also essential to Banks, Schools, Colleges, Hospitals, Hotels, Religious bodies etc. Every business unit has objectives of its won. These objectives can be achieved with the co-operative efforts of several personnel. As E. Demock has rightly said “ the management is not a matter of pressing a button, pulling a lever, issuing orders, scanning P & L statement, promulgating rules and regulations. Rather it is the power to determine what shall happen to the personalities and happiness of entire people, the power to shape the destiny of a nation and of all the nations which make up the world”14 May 2007 PRINCIPLES OF MANAGEMENT 2
  3. 3. Principle of Management14 May 2007 PRINCIPLES OF MANAGEMENT 3
  4. 4. Meaning of Management Management is the art of getting things done by a group of people with the effective utilization of available resources. There are various definitions given by various management gurus but simply management is the process consisting of the functions of planning, organizing, staffing, directing and controlling the operations to achieve specified objectives14 May 2007 PRINCIPLES OF MANAGEMENT 4
  5. 5. Features or Characteristics of Management Art as well as science Management is an activity Management is a continuous process Management achieving pre-determined objectives: Organized Activities Management is a factor of production Management as a system of activity Management is a discipline Management is a purposeful activity Management is a distinct entity14 May 2007 PRINCIPLES OF MANAGEMENT 5
  6. 6. Features or Characteristics of Management Management aims at maximizing profit Decision – making Management is a profession Universal application Management is getting things done Management as a class or a team Management as a career Direction and control Dynamic Management is needed at all levels Leadership quality14 May 2007 PRINCIPLES OF MANAGEMENT 6
  7. 7. Characteristics of Management Art as well as science: Management is both an art of possessing of managing skill by a person and a science because of developing certain principles or laws applicable in a place where a group of activities are co-coordinated. Management is an activity: It is a process of activity relating to the effective utilization of available resources.14 May 2007 PRINCIPLES OF MANAGEMENT 7
  8. 8. Characteristics of Management Management is a continuous process: The process of management mainly consists of planning, organizing, directing and controlling the resources. The resources (men and money) of an organization should be used to the best advantages of the organization to achieve the objectives. Management achieving pre-determined objectives: The objectives of an organization are clearly laid down. Every managerial activity results in the achievement of objectives fixed well in advance.14 May 2007 PRINCIPLES OF MANAGEMENT 8
  9. 9. Characteristics of Management Organized Activities : Management is a group of organized activities. It can be in the form of limited company or a small club. All the organizations have an objectives and these objectives is achieved through systematic way of organized activities. Management is a factor of production : The factors of production includes land, labor, capital and entrepreneurs. Land means a place where production is carried on. Labour refers to paid employees either skilled, unskilled, semi-skilled, manager, supervisor and the like. Capital refers to the working capital in the form of cash, raw material and finished goods and fixed capital as in the form of plant facilities and production facilities. These land, labour and capital can not achieve the organizations goals. It can be achieved only by an entrepreneur in case of small organization and by management in case of large organizations.14 May 2007 PRINCIPLES OF MANAGEMENT 9
  10. 10. Characteristics of Management Management as a system of activity : Individuals are foundation of the management. Management ensures the goal congruence between individuals and organization objectives. Management is a discipline: The boundaries of management are not exact like other physical science. It may be increased by continuous discovery of more aspects of business enterprise. Management is a purposeful activity: Management is concerned with objective achievement through planning, organizing, staffing, directing, controlling and decision making.14 May 2007 PRINCIPLES OF MANAGEMENT 10
  11. 11. Characteristics of Management Management is a distinct entity: Management is distinct from its functional activity. As function is “to do” while management is to “ how to get things done” Management aims at maximizing profit: The available resources are properly utilized to get desired results. Decision – making: Decision making arises because there is availability courses of actions. The quality of decision taken determines the organization performance14 May 2007 PRINCIPLES OF MANAGEMENT 11
  12. 12. Characteristics of Management Management is a profession: It posses the qualities of a profession. Universal application: The same principles of management are applicable in every type of industry only the practice differs from one to another. Management is getting things done: Manager gets things done by others. Management as a class or a team: Class means group of people having homogeneous characteristics to achieve common objectives.14 May 2007 PRINCIPLES OF MANAGEMENT 12
  13. 13. Characteristics of Management Management as a career: Now a day’s management is developed as a career focused on specialization like Finance, Marketing, Systems, Personal etc and they are appointed in the key posts of the management. Direction and control: Manager directs his subordinates in the performance whenever necessary. Direction & control deals with the activities of human effort. Dynamic: The management is not static in the ever changing fast developing business world as new techniques are developed and adopted by the management14 May 2007 PRINCIPLES OF MANAGEMENT 13
  14. 14. Characteristics of Management Management is needed at all levels: The functions of planning, organizing, directing, controlling and decision making is performed by all the level of organization. Leadership quality: Leadership quality is developed in the persons who are working in the top level management.14 May 2007 PRINCIPLES OF MANAGEMENT 14
  15. 15. Functions of ManagementThe important functions of management are as below Planning Organizing Staffing Directing Co-coordinating Motivating or actuating Controlling Innovation Representation Decision Making Communication14 May 2007 PRINCIPLES OF MANAGEMENT 15
  16. 16. Importance of Management Management meets the challenge of change Accomplishment of group goals Effective utilization of business Effective functioning of business Resource development Sound organization structure Management directs the organization Integrates various interests Stability Innovation Co-ordination and team spirit Tackling problems A tool for personality OF MANAGEMENT14 May 2007 PRINCIPLES development 16
  17. 17. Luther Gullik classifies the functions of management as POSDCORB: Planning, Organising, Staffing, Directing, Co-ordinating, Reporting and Budgeting.14 May 2007 PRINCIPLES OF MANAGEMENT 17
  18. 18. Importance of Management Management meets the challenge of change: In this ever changing business world, an efficient management saves the business brought by the challenges. Accomplishment of group goals: The achievement of objectives depends upon proper planning of available resources and quality of decision taken and control made by the unit. Effective utilization of business: In eight M’s man, money, materials, machines, methods, motivation, markets and management, management has control over remaining M’s. Effective functioning of business: Ability, experience, mutual understanding, co-ordination, motivation and supervision are the factors for effective functioning of business. Management utilizes the abilities of workers and fulfills their executions through motivation techniques.14 May 2007 PRINCIPLES OF MANAGEMENT 18
  19. 19. Importance of Management Resource development: Resources like men, material, money and machines are identified and developed by the management. Sound organization structure: Sound organization structure clearly defines the authority and responsibility. Management directs the organization: Management directs and controls the org. Integrates various interests: Management takes steps to integrate various interests to achieve the objectives of an organization. Stability: The fluctuations caused by changing policy of the government, pressures from competitors and changing preferences by customers in the business are stabilized by the management.14 May 2007 PRINCIPLES OF MANAGEMENT 19
  20. 20. Importance of Management Innovation: New ideas are developed by management and implemented in the organization. Co-ordination and team spirit: Management coordinates the activities of different departments and establishes team spirit to achieve the objectives. Tackling problems: Good management acts as a friend of workers while tackling problems. A tool for personality development: Management gives direction and training to the workers that help them to raise their efficiency and productivity14 May 2007 PRINCIPLES OF MANAGEMENT 20
  21. 21. Administration and Management There are various opinions of writers for the meaning of administration and management. In general, administration is distinguished as a top level function while management as a lower level functions14 May 2007 PRINCIPLES OF MANAGEMENT 21
  22. 22. Difference between Administration and ManagementSr. No. Basis of Distinction Administration Management1 Policy and Objectives Determines policy to be followed and decide Implements the policy and achieve the objectives to be achieved. the objectives.2 Directing of human efforts Not directly involves in the execution of plan Directly involves in the execution and achievement of objectives. of plan and achieving objectives.3 Main functions Planning, organizing and staffing. Direction, motivation and control.4 Levels of executives Top level executives (owners or board of Lower level executives( Manager, directors) supervisor and workers)5 Position Acts as a principal Acts as an agency6 Knowledge Requires administrative ability more than Requires technical ability more technical ability than administrative ability. 14 May 2007 PRINCIPLES OF MANAGEMENT 22