The document discusses key concepts in management including the importance of organizations in modern societies, the difference between efficiency and effectiveness, the generic functions of management (planning, organizing, leading, controlling), managerial roles and skills. It provides an overview of management principles and processes.

1. Management: Principles, Processes & Practices
© Oxford University Press 2008 All rights reserved
Chapter 1
ESSENTIALS OF
MANAGEMENT

2. Management: Principles, Processes & Practices
© Oxford University Press 2008 All rights reserved
Learning Objectives
 To understand the role of organizations in
modern societies
 To appreciate the importance of
management for organizations
 To understand difference between
efficiency and effectiveness
 To comprehend generic functions of
management
 To learn about different managerial roles
 To appreciate different types of managerial
skills and their importance at different
levels of organization

3. Management: Principles, Processes & Practices
© Oxford University Press 2008 All rights reserved
Role of Organizations in Modern
Societies
 In Modern times it is appropriate that
Term“Market Economy” be replaced by term
“Organizational Economy”- Herbert Simon
 Positive association between prosperity of an
Economy and Role of Companies- Sumantra
Ghoshal
 Companies engender Value-Creation through
Resource Combination and Exchange that
markets alone can not do
 Companies have Distinct capability to Share,
Transfer, Synthesize and Create Knowledge over
Markets

4. Management: Principles, Processes & Practices
© Oxford University Press 2008 All rights reserved
Efficiency and Effectiveness
 Efficiency refers to “ Doing Things Right”
 Effectiveness refers to “Doing the Right
Thing”- Peter Drucker
 Efficiency is concerned with getting most
output out of scarce resources (Capital,
Human Resource, Raw Material etc.)
 Effectiveness is achieved by setting right
organizational goals. No amount of
efficiency can make up for lack of
effectiveness.

5. Management: Principles, Processes & Practices
© Oxford University Press 2008 All rights reserved
“MANAGEMENT" Variously
Understood………
 Specific Organ Of an Organization that
has the responsibility to deliver results
consistently
 Process that drives an Organization
towards its Performance
 People who have authority to Plan,
Organize, Lead and Control different
Organizational activities
 Applied Discipline
 Profession or a career

6. Management: Principles, Processes & Practices
© Oxford University Press 2008 All rights reserved
Generic Functions of Management
 Managerial Jobs are characterized by
Variety, Fragmentation, Brevity and
Oral communication with several
people.
 First written about by Henri Fayol and
later elaborated by Lyndall Urwick,
Classical Management functions are:-
 PLANNING
 ORGANIZING
 LEADING
 CONTROLLING

7. Management: Principles, Processes & Practices
© Oxford University Press 2008 All rights reserved
Management Functions
 Henri Mintzberg called these functions as
“folklore”. He forwarded Role theory of
Managerial work.
 Harold Koontz defends Fayol’s approach
 As managerial work is largely cerebral and
not directly observable.
 Further it allows us to look at universal
aspects of management across different
contexts.
 Managerial functions approach also helps in
classification of management knowledge

8. Management: Principles, Processes & Practices
© Oxford University Press 2008 All rights reserved
PLANNING
 Setting Objectives
 Formulating Strategies
 Policies
 Procedures
 Methods

9. Management: Principles, Processes & Practices
© Oxford University Press 2008 All rights reserved
Steps Involved in Planning
Situational Analysis
Desired Goals, Objectives and Result from System
Goal and Plan Evaluation
Establish Goals and Plans
Chalk out Strategies to Reach Goals and
Implementation
Acknowledge Completion and Celebrate Success

10. Management: Principles, Processes & Practices
© Oxford University Press 2008 All rights reserved
ORGANIZING
 An Intentional Structure of Roles
 Organizational Structure
 Responsibility & Authority for
achieving objectives
 Departmentation
 Span of Control
 Line & Staff Relationships

11. Management: Principles, Processes & Practices
© Oxford University Press 2008 All rights reserved
LEADING
 Leadership Skills
 Motivation
 Team Work
 Communication
 Negotiation
 Conflict Resolution

12. Management: Principles, Processes & Practices
© Oxford University Press 2008 All rights reserved
CONTROLLING
 Anticipate, Monitor & Respond to changing
Environment.
 Measurement of Actual Performance
 Comparison against the Standard
 Managerial Action to correct Deviation
 Traditional Financial Controls are based on
 LIQUIDITY
 ACTIVITY
 PROFITABILITY
 LEVERAGE
 BALANCE SCORECARD

13. Management: Principles, Processes & Practices
© Oxford University Press 2008 All rights reserved
Managerial Roles
 INTERPERSONAL
 Figurehead
 Leader
 Liaison
 INFORMATIONAL
 Monitor
 Disseminator
 Spokesperson
 DECISION
 Entrepreneur
 Disturbance Handler
 Resource Allocator
 Negotiator

14. Management: Principles, Processes & Practices
© Oxford University Press 2008 All rights reserved
Management Skills
 TECHNICAL SKILLS
 CONCEPTUAL SKILLS
 HUMAN SKILLS
 Managers at Top Level need
Conceptual Skills the most and First-
Line Managers Technical Skills the
most