slides are useful for the management students both BBA & MBA

1. Lalit Mohan Pant
Asst . Prof.
Pal College of Technology & Management
Haldwani
lalit_pant82@rediffmail.com
1
MANAGEMENT PRINCIPLES AND PRACTICES
5/10/2016

2. About Management
2
 The verb manage comes from the Italian maneggiare (means to handle especially tools), which
in turn derives from the Latin manus(hand). The French word mesnagement (later ménagement)
influenced the development in meaning of the English word management in the 17th and 18th
centuries.
 Management : Manage – M – Tactfully
Here M= men ( management called HRM)
M= money( Financial Management)
M= market (Marketing Management)
M= machine ( Production & Operation Management)
M= material (Material Management)
M= minute ( Time Management)
 When it comes to manage people, it is said that “people are enigmatic.” Thus, Management is
enigmatic.
 Harold Koontz described the present state of management theory as a “jungle.” There can be
lots of ambiguity and there will be no recipe book
5/10/2016

3. Definition of Management”
3
 According to Peter F. Drucker(Father of Modern Management)“
Management is an organ, organs can be described and defined only through
their functions”
 According to Koontz and Weihrich “Management is the process of designing
and maintaining an environment in which individuals working together in
groups, efficiently accomplish selected aims.”
 According to Griffin “Management is a set of functions directed at the efficient
and effective utilization of resources in the pursuit of organization goals.”
 The Art of Japanese Management by R. Pascale & A. Athos “Management is
not an absolute; rather it is socially and culturally determined. Across all
cultures and in all societies, people coming together to perform certain
collective acts encounter common problems having to do with establishing
direction, coordination and motivation. Culture affects how these problems are
perceived and resolved.”
 According to Terry & Franklin “Management is a distinct process consisting of
activities of planning, organizing, actuating, and controlling, performed to
determine and accomplish stated objectives with the use of human beings and
other resources.”
5/10/2016

4. Natures of Management
4
 Social process
 Integrating process
 Continuous process
 Universal process
 Organized activities
 Existence of objectives
 Relationship among resources
 Working with, for & by the people
 Decision making at both- short term & long term
5/10/2016

5. Management as an Art , Science or both
5
The stream of management reveals characteristics of art and
science, the two not mutually elite but complementary.
Every discipline of science is complete only when it is
applied for solving various kinds of problems faced by human
beings in an organisation or in other fields. Management is the
art of making people work more effectively to maximize their
output. By the use of effective management skills people in an
organisation work more efficiently as they are guided by the
scientific principles and practices laid down by various
researchers of management
5/10/2016

6. Characteristics of Arts
6
Management may be understood as an art on the following counts:
 The knowledge of management like other art forms is completely application based. It is functional in
certain situations resulting in improved results. In every situation, managers exert to deliver quality solutions
and make quality decisions to attain the objectives of the organisation and they meet the target with minimum
efforts and optimum utilization of resources. Management knowledge can be personalized from manager
to manger, he/she can modify it to make it his/her own, and hence application of this knowledge will also
depend on individual discretion. However, the basic concepts, principles, theories and generalizations of
management continue to be the same.
 With continued application of management knowledge to realistic, everyday situations, the manager
will gain experience. With time, the manager gathers more and more experience. This becomes his personal
possession and it is non-transferrable. Consequently, managers who have more experience in applying the
principles of management to everyday activities become more efficient in time and become an asset to
the organisation. This is how they develop more skills and abilities by translating management
knowledge into practice and procedure.
 Application of management knowledge calls for innovativeness and creativity. Based on fundamentals of
managerial knowledge, analytical abilities and farsightedness, the manager discovers innovative ideas,
associations and efficient ways of undertaking tasks. This is aided by rigorous research and analysis, creative
approach and scientific outlook on the part of managers.
 One more reason for considering management as an art is that in many situations, theoretical
knowledge of management may not be adequate or relevant for solving the problem. It may be due to
the intricacy and complexity of the problem or size of the problem or may be its unique nature. In such
a situation, the manager has to rely more
5/10/2016

7. 7
 Specific problem
 Causes & effect relationship
 Laboratory
 Specific principles
 Universality of principles
 Reliability of data
 Hypothesis
5/10/2016
Characteristics of Science

8. Is Management a Profession or not???????
8
A profession is a vocation founded upon
specialised educational training, the purpose of
which is to supply unbiased counsel and service to
others for a direct and definite compensation, wholly
apart from expectation of other business gain.
The essentials of a profession are that it provides
specialised knowledge, formal education and
training; it creates sense of social desire to serve
society and teaches code of conduct etc. Over the
last few decades, factors such as growing size of
business unit, separation of ownership from
management, growing competition etc have led to an
increased demand for professionally qualified
managers. The task of manager has been quite
definite and calls for people trained in handling such
situations.
5/10/2016

9. Features of a Profession
9
 It does not restrict the entry in managerial jobs for account of one
standard or other.
 No minimum qualifications have been prescribed for managers.
 No management association has the authority to grant a certificate of
practice to various managers.
 All managers are supposed to abide by the code formulated by AIMA.
 Managers are responsible to many groups such as shareholders,
employees and society.
 A regulatory code is necessary to keep a check and create boundaries,
which cannot be flouted.
 Managers are known by their performance and not just their educational
qualifications or university degrees.
 The ultimate goal of business is to maximise profit and not just social
welfare. That is why Haymes has rightly remarked, “The slogan for
management is becoming – 'He who serves best, also profits most'.

10. 5/10/201610
SN Administration Management
1 Administration is concerned with the
determination of major policies
management is concerned with the execution
of these policies.
2 Administration is the thinking and the
determination of functions
management is the doing of these functions.
3 Administration makes major decisions
of the business
management executes these decisions within
the framework that is set by administration.
4 Administration is a top-level activity
of any business
management is a middle level activity of any
business.
5 Administration is made up of the
owners of the business who have
invested their capital in it and
receive profits as a reward
management is a group of persons who
render their skilled services to the business
and get payments in form of salaries. This
group of persons is termed as employees
6 Administration is a term that is
common in governments, military,
education and religious organisations
management is a term that is common in
business organisations
7 In Administration, planning and
organisation functions are involved
management motivation and control functions
are involved.

11.  Technical Skills:
Application of specialized knowledge or expertise acquired though formal
training & its use.
 Human Skills:
Ability to work with people, understand and motivate groups & individuals.
 Conceptual Skills:
Mental ability to recognize, analyze, diagnose and think through complex
situations.
Management: roles & skills
11 5/10/2016

12. 12
Top level
Middle level
Supervisory
level/entry
level
CONCEPTUAL SKILLS
H
U
M
A
N
S
K
ILL
S
TE
CH
NI
CAL
SKI
LLS
Skill Required in Management
5/10/2016

13. Henry Mintzberg’s Managerial Roles
Role Description Examples
Interpersonal
•Figurehead symbolic head; required to show Ceremonial,
‘face’ in social & legal conditions. Civic etc.
•Leader Motivating & directing subordinates project plan
•Liaison Networking outside for information Industry -
& favours group meets
Informational
•Monitor nerve centre and interpretator Reports
•Disseminator networking within the organization Meetings etc.
•Spokesperson Transmit intent to outsiders; expert Board Meets
Decisional
•Entrepreneur Opportunity finding& reacting Strategy Plan
•Trouble shooter Handling unexpected disturbance Contingency
•Resource allocator Initiating/approving changes Budgeting
•Negotiator Getting best deal for Organization Contracts13 5/10/2016

14. Interpersonal Roles
14
 A manager serves as a figurehead – a symbol; as
a leader, ie., hires, trains, encourages, fires,
remunerates, judges; and as a liaison between
outside contacts and the organizational)
5/10/2016

15. Informational roles
15
 A manager serves as a monitor by gathering
information;
 As a disseminator of information
 As a spokesperson of the organization
5/10/2016

16. Principles of Management
22 5/10/2016

17. Principles of Management
23
 A principle refers to a fundamental truth. It establishes cause and effect
relationship between two or more variables under given situation. They
serve as a guide to thought & actions. Therefore, management
principles are the statements of fundamental truth based on logic which
provides guidelines for managerial decision making and actions. These
principles are derived: -
 On the basis of observation and analysis i.e. practical experience of
managers.
 By conducting experimental studies.
5/10/2016

18. Features of managerial principles
24
 Principles of Management are Universal
 Principles of Management are Flexible
 Principles of Management have a Cause & Effect Relationship
 Principles of Management - Aims at Influencing Human Behavior
 Principles of Management are of Equal Importance
5/10/2016

19. Importance of the Principles of Management
25
 Improves Understanding - From the knowledge of principles managers get indication
on how to manage an organization. The principles enable managers to decide what
should be done to accomplish given tasks and to handle situations which may arise in
management. These principles make managers more efficient.
 Direction for Training of Managers - Principles of management provide understanding
of management process what managers would do to accomplish what. Thus, these are
helpful in identifying the areas of management in which existing & future managers
should be trained.
 Role of Management - Management principles makes the role of managers concrete.
Therefore these principles act as ready reference to the managers to check whether their
decisions are appropriate. Besides these principles define managerial activities in
practical terms. They tell what a manager is expected to do in specific situation.
 Guide to Research in Management - The body of management principles indicate lines
along which research should be undertaken to make management practical and more
effective. The principles guide managers in decision making and action. The researchers
can examine whether the guidelines are useful or not. Anything which makes
management research more exact & pointed will help improve management practice
5/10/2016

20. Scientific Management by Taylor
26
 Fredrick Winslow Taylor (March 20, 1856 - March 21, 1915)
commonly known as ’Father of Scientific Management’ started
his career as an operator and rose to the position of chief engineer.
He conducted various experiments during this process which forms
the basis of scientific management. It implies application of
scientific principles for studying & identifying management
problems.
 According to Taylor, “Scientific Management is an art of knowing
exactly what you want your men to do and seeing that they do it in
the best and cheapest way”. In Taylors view, if a work is analyzed
scientifically it will be possible to find one best way to do it.
 According to Drucker, “The cost of scientific management is the
organized study of work, the analysis of work into simplest element
& systematic management of worker’s performance of each
element”. 5/10/2016

21. Principle of Scientific Management
27
 Development of Science for each part of men’s job
(replacement of rule of thumb)
 Scientific Selection, Training & Development of Workers
 Co-operation between Management & workers or
Harmony not discord
 Division of Responsibility
 Mental Revolution
 Maximum Prosperity for Employer & Employees
5/10/2016

22. Techniques of Scientific Management
28
 Time Study
 Standard Time × Working Hours = Fair Day’s Work
 Motion Study
 Functional Foremanship
 Standardization
 Differential Piece Wage Plan
5/10/2016

23. Criticism of Scientific Management(Workers Viewpoint)
29
Unemployment - Workers feel that management reduces employment opportunities
from them through replacement of men by machines and by increasing human
productivity less workers are needed to do work leading to chucking out from their
jobs.
 Exploitation - Workers feel they are exploited as they are not given due share in
increasing profits which is due to their increased productivity. Wages do not rise in
proportion as rise in production. Wage payment creates uncertainty & insecurity
(beyond a standard output, there is no increase in wage rate).
 Monotony - Due to excessive specialization the workers are not able to take
initiative on their own. Their status is reduced to being mere cogs in wheel. Jobs
become dull. Workers loose interest in jobs and derive little pleasure from work.
 Weakening of Trade Union - To everything is fixed & predetermined by
management. So it leaves no room for trade unions to bargain as everything is
standardized, standard output, standard working conditions, standard time etc. This
further weakens trade unions, creates a rift between efficient & in efficient workers
according to their wages.
 Over speeding - the scientific management lays standard output, time so they have
to rush up and finish the work in time. These have adverse effect on health of
workers. The workers speed up to that standard output, so scientific management
drives the workers to rush towards output and finish work in standard time.
5/10/2016

24. Criticism of Scientific Management(employer’s Viewpoint)
30
 Expensive - Scientific management is a costly system and a
huge investment is required in establishment of planning
dept., standardization, work study, training of workers. It may
be beyond reach of small firms. Heavy food investment leads
to increase in overhead costs.
 Time Consuming - Scientific management requires mental
revision and complete reorganizing of organization. A lot of
time is required for work, study, standardization &
specialization. During this overhauling of organization, the
work suffers.
 Deterioration of Quality
5/10/2016

25. 31
Basis Taylor Feyol
Human Aspect Taylor disregards human
elements and there is
more stress on
improving men,
materials and methods
Fayol pays due regards
on human element. E.g.
Principle of initiative,
Espirit De’ Corps and
Equity recognizes a
need for human
relations
Status Father of scientific
management
Father of management
principles
Efficiency &
administration
Stressed on efficiency Stressed on general
administration
Approach It has micro-approach
because it is restricted
to factory only
It has macro-approach
and discuses general
principles of
management which are
applicable in every field
of management.
Scope of principles These principles are
restricted to production
activities
These are applicable in
all kinds of organization
regarding their5/10/2016

26. Administrative Approach of Management ( Henri Feyol)
32
 Division of labor
 Authority and Responsibility
 Discipline
 Unity of command (one boss---subordinate)
 Unity of Direction (one head and one plan)
 Subordination of Individual Interests to General Interest
(FIRM, FAST AND FAIR)
 Remuneration of Personnel (Pay by Results;
motivational – ESOPS, etc)
5/10/2016

27. Conti……….
33
 Centralization (optimization between centralization and
decentralization; as the human body – brain is the centralized
organ)
 Scalar Chain – This is “the chain of superiors” ranging from the
ultimate authority to the lowest ranks. THE ORGANOGRAM
 Order: Right man in the right place; competency specific; man
should fit the job and not the other way round; or else this will be
like A SQUARE PEG IN A ROUND HOLE.
 Stability of tenure of personnel – retention of talent; attrition;
turnover of people
 Initiative – encourage initiative among subordinates
 Esprit-de-Corps : UNION IS STRENGTH; team work;
cohesiveness among the members
5/10/2016

28. Systems approach to Management
Organization as a System receives Input, transforms it
through a Process for Output and Operates in an
Environment (economic, regulatory and other forces)
Transformation
process
input output
Feedback (Reenergizing the system)
ENVIRONMENT
System Boundary
5/10/201634

29. Systems approach to Management …ctd.
 System Boundaries and Subsystems
> Systems often consist of numerous subsystems.
> Each subsystem has elements, interactions with other
subsystems, and objectives.
> Subsystems perform specialized tasks for the
overall system.
 Subsystem Interfaces and Interface Problems
Sub-System 2 Sub-System 3Sub-System 1
5/10/201635

30. Systems approach to Management …ctd.
Outputs and Inputs
 Systems produce Outputs from Inputs – i.e. the Inputs are
converted to Outputs.
 Outputs of one subsystem become inputs to another
subsystem.
 Outputs must adhere to standards to be useful or acceptable
to the next subsystem.
System Environment
 Environment consists of people, organizations and other
systems that supply data to or that receive data from the
system
 Managers at different levels perceive ‘Environment”
differently
5/10/201636

31. Systems approach to Management …ctd.
“Inputs”: 5 Ms of Management
 Inputs or the resources managers deal with are:
 Man: human resources, both inside and connected with an
organization;
 Materials: goods (hard & software, processed or semi-
finished) and services required to create the sellable end
product;
 Machines: technology and expertise deployed towards the
transformation process;
 Methods: systems, procedures and processes seamlessly put
together for the transformation;
 Measurement: score-keeping and in-process monitoring
continuously with due feedback to keep on-course on time.
 “Money” is required for generating all theses Ms – managers
need to acquire, deploy, generate and distribute money as a
primary need for business!
5/10/201637

32. Inputs
(Goal
Oriented)
Outputs
(External
To
Orgnzn.)
Planning
Organizing
Staffing
Leading
Controlling
Product/Services,
Profits, Customer &
Societal satisfaction,
Other Long-term Goals
Man, Machine
Material,
Method,
Measurement
Stake holder Feedback (reenergizing the system)
EXTERNAL ENVIRONMENT(Opportunities, Constraints)
Stakeholders
Shareholders;
Society; Customers;
Employees; Suppliers
Systems approach to Management …
5/10/201638

33. The Human Relations Approach of Management
Managers face many problems because employees do not
follow predetermined and balanced patterns of behaviour.
Thus, there is an increase in interest to help managers deal
more effectively with the ‘people side’ of their organisations.
The original inspiration for the movement, however, came
from the Hawthorne experiments, which were done by
Prof. Elton Mayo and his colleagues at the Western
Electric Company’s plant in Cicero, Illinois from 1927 to
1932. The experiments are described below:
1. Illumination experiments
2. Relay assembly test room
3. Interviewing programme
4. Bank wiring test room
5/10/201639

34. BehaviouralApproach of Management
This approach is an enhanced and more developed version of the
human relations approach to management. Douglas McGregor,
Abraham Maslow, Kurt Lewin, Chester Barnard, Mary Parker
Follett, George Romans, Rensis Likert, Chris Argyris and Warren
Bennis are some of the foremost behavioural scientists who made
significant contributions to the development of the behavioural
approach to management. These scientists were more rigorously
trained in various social sciences (such as psychology, sociology
and anthropology). They use more sophisticated research methods.
Behavioural scientists consider organisations as groups of individuals
with objectives. They have, conducted extensive studies of human
groups- large and small. They have studied the problems relating to
groups, process, and group cohesiveness and so on.
5/10/201640

35. The Functions of Management
Managers
Planning
activities to
achieve the
organization's
objectives
Organizing
resources and
activities to
achieve the
organization’s
objectives
Staffing
the
organization
with qualified
people
Directing
employees’
activities
toward
achievement
of objectives
Controlling
the
organization’s
activities
to keep it
on course
5/10/201641

36. Planning Defined
 Planning is a systematic process of reaching a desired
state by establishing goals and formulating strategies to
achieve them
 Planning involves selecting missions and objectives and the
actions to achieve them.
 Planning precedes any other managerial function
 Plans need to be made utilizing the least of the resources.
 Planning is required in each and every job
5/10/201642

37. Determining
planning premises
Establish objectives
Develop Strategies
Establish policies
Develop program
for
accomplishments
Establish schedules
and budgets
Establish
procedures
Identify potential
problems
Develop preventive
&/or contingent
action
Coordinate
throughout the
planning
How does a manager Plan?
5/10/201643

38. Types of Plans
Operational
Plans
Tactical
Plans
Strategic
Plans
Specify actions to
achieve tactical plans
(very short-term)
Designed to implement
strategic objectives
(usually one year or less)
Establish long-range
objectives
5/10/201644

39. Advantages of Planning
 Better coordination
 More efficient control of operation
 Easier delegation
 More economical use
 Better decision making
 Anticipates the future, sets goals and objectives and identifies the
actions necessary for the organization to attain these goals and
objectives
 Determining where you want to go and how and when you’re
going to get there
 It involves specifying a target, a path or route to be followed and
a time schedule for achieving that target
5/10/201645

40. What is organising and it’s importance ?
5/10/201646

41. Organising Defined
 The process of structuring and coordinating an
organization’s resources to carry out the strategies
formulated in the planning phase effectively and
efficiently
 Stated simply, determining what needs to be done
and who is to do it
5/10/201647

42. Organising Process
Step:1
Division
Step: 4
Flow of
information
Step: 2
Coordination
Step: 3
Control of
tasks
5/10/201648

43. Within Organising we have…
 Division of work
 Line and staff
 Levels of authority
 Organisation charts
 Decentralization
 Job description
5/10/201649

44. Management By Objectives
5/10/201650

45. What is MBO?
 Management by objectives (MBO) is a systematic and organized
approach that allows management to focus on achievable goals
and to attain the best possible results from available resources. It
aims to increase organizational performance by aligning goals and
subordinate objectives throughout the organization. Ideally, employees
get strong input to identify their objectives, time lines for completion,
etc. MBO includes ongoing tracking and feedback in the process to
reach objectives.
 Management by Objectives (MBO) was first outlined by Peter
Drucker in 1954 in his book 'The Practice of Management'. In the
90s, Peter Drucker himself decreased the significance of this
organization management method, when he said: "It's just another tool.
It is not the great cure for management inefficiency... Management by
Objectives works if you know the objectives, 90% of the time you
don't."
5/10/201651

46. Concepts of MBO
 According to Drucker managers should "avoid the activity trap",
getting so involved in their day to day activities that they forget their
main purpose or objective. Instead of just a few top-managers, all
managers should:
 participate in the strategic planning process, in order to improve the
implement ability of the plan, and
 implement a range of performance systems, designed to help the
organization stay on the right track.
 In MBO, managers focus on the result, not the activity. They delegate
tasks by "negotiating a contract of goals" with their subordinates
without dictating a detailed roadmap for implementation.
 Management by Objectives (MBO) is about setting yourself objectives
and then breaking these down into more specific goals or key results.
5/10/201652

47. Concepts of MBO conti…..
 The principle behind Management by Objectives (MBO) is to make
sure that everybody within the organization has a clear understanding
of the aims, or objectives, of that organization, as well as awareness of
their own roles and responsibilities in achieving those aims.
 The complete MBO system is to get managers and empowered
employees acting to implement and achieve their plans, which
automatically achieve those of the organization.
 The MBO style is appropriate for knowledge-based enterprises when
your staff is competent. It is appropriate in situations where you wish to
build employees' management and self-leadership skills and tap their
creativity, tacit knowledge and initiative.
 Management by Objectives (MBO) is also used by chief executives of
multinational corporations (MNCs) for their country managers abroad.
5/10/201653

48. Setting Objectives
 In Management by Objectives (MBO) systems, objectives are written
down for each level of the organization, and individuals are given
specific aims and targets. "The principle behind this is to ensure that
people know what the organization is trying to achieve, what their part
of the organization must do to meet those aims, and how, as individuals,
they are expected to help. This presupposes that organization's
programs and methods have been fully considered. If they have not,
start by constructing team objectives and ask team members to share in
the process."
 "The one thing an MBO system should provide is focus", says Andy
Grove who ardently practiced MBO at Intel. So, have your objectives
precise and keep their number small. Most people disobey this rule, try
to focus on everything, and end up with no focus at all.
5/10/201654

49. Setting Objectives
 For Management by Objectives (MBO) to be effective, individual
managers must understand the specific objectives of their job and how
those objectives fit in with the overall company objectives set by the
board of directors. "A manager's job should be based on a task to be
performed in order to attain the company's objectives... the manager
should be directed and controlled by the objectives of performance rather
than by his boss."
 The review mechanism enables leaders to measure the performance of
their managers, especially in the key result areas: marketing; innovation;
human organization; financial resources; physical resources; productivity;
social responsibility; and profit requirements.
5/10/201655

50. Balance Between Management and Employee Empowerment
 The balance between management and employee
empowerment has to be struck, not by thinkers, but by
practicing managers. Turning their aims into successful
actions, forces managers to master five basic operations:
 setting objectives,
 organizing the group,
 motivating and communicating,
 measuring performance, and
 developing people, including yourself.
5/10/201656

51. Individual Responsibility
 MBO creates a link between top management's strategic thinking and the
strategy's implementation lower down. Responsibility for objectives is
passed from the organization to its individual members. It is especially
important for knowledge-based organizations where all members have to
be able to control their own work by feeding back from their results to
their objectives.
 Management by objectives is achieved through self-control, the tool of
effectiveness. Today the worker is a self-manager, whose decisions are of
decisive importance for results.
 In such an organization, management has to ask each employee three
questions:
 What should we hold you accountable for?
 What information do you need?
 What information do you owe the rest of us?
5/10/201657

52. The Five-Step MBO Process
5/10/201658

53. Types of Objectives
 Routine objectives
 Innovation objectives
 Improvement objectives
 The objectives must be:
 focused on a result, not an activity
 consistent
 specific
 measurable
 related to time
 attainable
5/10/201659

54. Six MBO Stages
 Define corporate objectives at board level
 Analyze management tasks and devise formal job
specifications, which allocate responsibilities and decisions to
individual managers
 Set performance standards
 Agree and set specific objectives
 Align individual targets with corporate objectives
 Establish a management information system to monitor
achievements against objectives
5/10/201660

55. Six MBO Stages
 Define corporate objectives at board level
 Analyze management tasks and devise formal job
specifications, which allocate responsibilities and decisions to
individual managers
 Set performance standards
 Agree and set specific objectives
 Align individual targets with corporate objectives
 Establish a management information system to monitor
achievements against objectives
5/10/201661

56. MBO Advantages & Disadvantages
Advantages
 MBO programs continually emphasize what should be done in
an organization to achieve organizational goals.
 MBO process secures employee commitment to attaining
organizational goals.
Disadvantages
 The development of objectives can be time consuming, leaving
both managers and employees less time in which to do their
actual work.
 The elaborate written goals, careful communication of goals,
and detailed performance evaluation required in an MBO
program increase the volume of paperwork in an organization.
5/10/201662