Principles of management

“The art of getting things done through people.”
- Mary Parker Follet
“Management is the process of planning, organising,
leading and controlling the efforts of organisation
members and of other organisational resources to
achieve slated organisational goals.”
- James A.F. Stoner

Science:
Any branch of knowledge to be considered a science (like – physics,
chemistry, biology etc.) should fulfill the following conditions:
 The existence of a systematic body of knowledge encompassing a wide array
of principles;
 The principle must explain a phenomenon by establishing cause – effect
relationship;
Over the years, thanks to the contributions of many thinkers and
practitioners, management, with its own principles has emerged as a
systematic body of knowledge.

Management may be considered as inexact
science because,
 Management involves getting things done through people
 The behavior of human beings cannot be accurately predicted
 The output also varies

An Art:
refers to the ‘know-how’ – the ways of doing things to accomplish a
desired result.
 As the saying goes ‘practice makes a man perfect; constant practice
of the theoretical aspects (knowledge base) contributes for the
formation and sharpening of the theory and practice. Therefore,
what is required is the right blend of the theory and practice.

 Effective practice of any art requires a thorough understanding of
the science underlying it. The executives who attempt to manage
without the conceptual understanding of management principles
and techniques have to depend on luck or intuition.
Therefore, management is both a science and an art.

As a Profession:
 These are the days where we are hearing a lot about
professional managers and their contribution to the
economic development of the nation.
 Therefore, it is appropriate to know the other dimension
of management – whether it is a profession.
 Since professionals are getting involved, it can be referred
to as a profession.

Environment: The environment of the business consists of two components
– internal and external environment.
Internal environment: refers to the various systems inside the
organization such as, technology, structure and people.
External environment: may be divided into two categories
1. Direct action environment: consisting of those factors
directly affecting the organization’s operations like suppliers, laws,
customers and competitors.
2. Indirect action environment: consists of those factors
that may not have an immediate direct effect like technology,
economic conditions, socio-cultural factors and political environment.

1. Top level management:
Example: Chairman, CEO, MD, GM
2. Middle level management:
Example: Functional managers, Branch Managers
etc , Project Managers.
3. First-level management:
Example: Foreman, supervisor, inspector etc.

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Middle
Managers
First-Line
Managers
Operative Employees
Top
Managers
Supervise
Others
Work
on Jobs
Levels of
Management

 We can categorize organizational members in two ways:
Operatives work directly on a job or task and have no
responsibility for overseeing the work of others.
 Managers direct the activities of other people in the
organization. Usually classified as top, middle, or first-line,
managers supervise both operative and lower-level managers.
1. First-line managers supervise the day-to-day activities of
operative employees.
2. Middle managers represent the level of management
between first-line managers and top management. These
managers translate the goals of top management into
specific details that lower-level managers can perform.
3. Top managers make decisions about the direction of the
organization and set policies that affect all organizational
members.

 Conceptual skills for the top management
 Human skills for the middle management
 Technical skill for the lower management

 “Business skills”
 Using methods and techniques to perform a
task
 Keeping up with the latest technology in your
job
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 “People skills”
 Your relationships with all individuals and
groups
 Understanding
 Communicating
 Motivating
 Resolving conflict
 Working as a team member
 “It’s not what you know, it’s who you
know.”
 Ethics
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 Select alternatives to solve problems
 Take advantage of opportunities
 Be able to conceptualize, diagnose and
analyze
 Use math skills
 Manage time
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InformationalInformational
DecisionalDecisional
InterpersonalInterpersonal
The Roles ofThe Roles of
ManagementManagement
The MintzbergThe Mintzberg
StudiesStudies

In the 1960s, Henry Mintzberg concluded that managers perform ten roles that can be
grouped around three themes: interpersonal relationships, information transfer,
and decision making.
 Managers perform three types of interpersonal roles:
 Figureheads perform ceremonial or symbolic roles.
 Leaders train, motivate, and discipline employees.
 Liaisons contact external information sources.
 Managers perform three types of informational roles:
 Monitors collect marketplace information from outside sources.
 Disseminators transmit information to organizational members.
 Spokespersons represent their organizations to outsiders.
 Managers perform four types of decisional roles:
 Entrepreneurs initiate and oversee new projects to improve organizational
performance.
 Disturbance handlers take action to respond to unforeseen problems.
 Resource allocators control human, mechanical, and monetary resources.
 Negotiators bargain with others to gain advantage for their own units.

 Planning
 Organising
 Staffing
 Directing
 Controlling

ManagementManagement FunctionsFunctions
P - O - S - D - C

Planning –
Process of determining
the organization’s
objectives and deciding
how to accomplish them.

Organizing –
Structuring of resources
& activities to
accomplish objectives
efficiently & effectively.

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Importance :
– Creates synergy
– Establishes lines of authority
– Improves communication
– Improves competitiveness

Staffing –
Hiring people to carry out
the work of the
organization.

Staffing
Importance –
– Recruiting
– Determine skills
– Motivate & train
– Compensation levels
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Downsizing
Elimination of significant
numbers of employees
(rightsizing, trimming the fat)

Directing –
Motivating and leading
employees to achieve
organizational objectives.

Motivation
•Incentives (raise,
promotion)
•Employee involvement
(cost reduction, customer
service, new products)
•Recognition and
appreciation

Controlling –
Process of evaluating and
correcting activities to keep
organization on course.

Controlling
Five Activities –
– Measuring performance
– Comparing performance
against standards
– Identifying deviations from
standards
– Investigating causes of
deviations
– Taking corrective action

Adam Smith (18th century economist)
Observed that firms manufactured pins
in one of two different ways:
- Craft-style—each worker did all steps.
- Production—each worker specialized in
one step.
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Adam Smith (18th century economist)
Realized that job specialization resulted in
much higher efficiency and productivity
 Breaking down the total job allowed for the division of
labor in which workers became very skilled
at their specific tasks.
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Scientific Management
The systematic study of the relationships between
people and tasks for the purpose of redesigning the
work process for higher efficiency.
33

 Defined by Frederick Taylor in the late
1800’s
 Wanted to replace “rule of thumb”
 Sought to reduce the time a worker spent on
each task by optimizing the way the task
was done.
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1) Study the ways jobs are performed now and
determine new ways to do them.
 Gather detailed time and motion information.
 Try different methods to see which is best.
2) Codify the new methods into rules.
 Teach to all workers the new method.
3) Select workers whose skills match the rules.
4) Establish fair levels of performance and pay a
premium for higher performance.
 Workers should benefit from higher output
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 Studied fatigue caused by lighting, heating, and
the design of tools and machines.
 Time and motion studies
 Breaking up each job action into its components.
 Finding better ways to perform the action.
 Reorganizing each job action to be more efficient.
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Administrative Management
The study of how to create an organizational
structure that leads
to high efficiency and effectiveness.
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 Rules – formal written instructions that specify
actions to be taken under different circumstances
 Standard Operating Procedures (SOPs) – specific
sets of written instructions about how to perform
a certain aspect of a task
 Norms – unwritten, informal codes of conduct
that prescribe how people should act in particular
situations

 Division of Labor: allows for job specialization.
 jobs can have too much specialization leading to poor
quality and worker dissatisfaction.
 Authority and Responsibility
both formal and informal authority resulting from
special expertise.
 Unity of Command
Employees should have only one boss.
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 Line of Authority
 A clear chain of command from top to bottom of the
firm.
 Centralization
 The degree to which authority rests at the top of the
organization.
 Unity of Direction
 A single plan of action to guide the organization.
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 Equity - The provision of justice and the fair and
impartial treatment of all employees.
 Order - The arrangement of employees where
they will be of the most value to the
organization and to provide career
opportunities.
 Initiative - The fostering of creativity and
innovation by encouraging employees to act on
their own.
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 Discipline
 Obedient, applied, respectful employees are
necessary for the organization to function.
 Remuneration of Personnel
 An equitable uniform payment system that motivates
contributes to organizational success.
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Stability of Tenure of Personnel
Long-term employment is important for the development of
skills that improve the organization’s performance.
Subordination of Individual Interest to the Common
Interest
The interest of the organization takes precedence over that of
the individual employee.
Esprit de corps
Comradeship, shared enthusiasm foster devotion to the common
cause (organization).
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INTRODUCTION
The Hawthorne studies were conducted in
order to find out the role of human resource in
increasing the production of an organization.
The Hawthorne studies included the following
experiments..

 Illumination Experiment
 Relay Assembly Test Experiments
 Plant Interview Group
 Bank Wiring Observation Group

Research on productivity at massive manufacturing complexes like
the Hawthorne Works was made possible through partnerships
among industries, universities, and government. In the 1920s, with
support from the National Research Council, the Rockefeller
Foundation, and eventually Harvard Business School, Western
Electric undertook a series of behavioral experiments. The first, a
sequence of illumination tests from 1924 to 1927, set out to
determine the effects of lighting on worker efficiency in three
separate manufacturing departments. Accounts of the study
revealed no significant correlation between productivity and light
levels. The results prompted researchers to investigate other factors
affecting worker output.

Hawthorne Experiment
The Hawthorne experiment were first conducted in
November, 1924 at Western Electric Company’s Hawthorne
plant in Chicago
The initial tests were sponsored by The National Research
Council (NRC) of the National Academy of Sciences
In 1927, a research team from Harvard Business School
was invited to join the studies after the illumination test drew
unanticipated results
A team of researchers led by George Elton Mayo from the
Harvard Business School carried out the studies
(General Electric originally contributed funding, but they
withdrew after the first trial was completed)

• 1924-1927
• Funded by General Electric
• Conducted by The National Research Council (NRC) of the National
Academy of Sciences with engineers from MIT
• Measured Light Intensity vs. Worker Output
• Result :
– Higher worker productivity and satisfaction at all light levels
– Worker productivity was stopped with the light levels reached moonlight
intensity.
• Conclusions:
– Light intensity has no conclusive effect on output
– Productivity has a psychological component
• Concept of “Hawthorne Effect” was created

The next experiments beginning in 1927 focused on the
relay assembly department, where the electromagnetic
switches that made telephone connections possible were
produced. The manufacture of relays required the repetitive
assembly of pins, springs, insulators, coils, and screws.
Western Electric produced over 7 million relays annually.
As the speed of individual workers determined overall
production levels, the effects of factors like rest periods and
work hours in this department were of particular interest to
the company.

 1927-1929
 Experiments were conducted by Elton Mayo
 Manipulated factors of production to measure effect on output:
 Pay Incentives (Each Girls pay was based on the other 5 in the group)
 Length of Work Day & Work Week (5pm, 4:30 pm, 4pm)
 Use of Rest Periods (Two 5 minutes break)
 Company Sponsored Meals (Morning Coffee & soup along with sandwich)
 Results:
 Higher output and greater employee satisfaction
 Conclusions:
 Positive effects even with negative influences – workers’ output will increase
as a response to attention
 Strong social bonds were created within the test group. Workers are
influenced by need for recognition, security and sense of belonging

• Conducted 20,000 interviews.
• Objective was to explore information, which could be used to improve
supervisory training.
• Initially used the method of Direct Questioning and changed to Non Directive.
• Results
- Giving an opportunity to talk and express grievances would increase the
morale.
- Complaints were symptoms of deep-rooted disturbances.
-Workers are governed by experience obtained from both inside and outside the
company.

- The workers were satisfied or dissatisfied depending upon how they
regarded their social status in the company.
- Social groups created big impact on work.
- Production was restricted by workers regardless all financial incentives
offered as group pressure are on individual workers.

 1931-1932
 Limited changes to work conditions
 Segregated work area
 No Management Visits
 Supervision would remain the same
 Observer would record data only – no interaction with workers
 Small group pay incentive
 Result:
 No appreciable changes in output
 Conclusions:
 Preexisting performance norms
 Group dictated production standards –
 Work Group protection from management changes.

CONCLUSION
•The Hawthorne studies have had a remarkable impact on
management in organizations and how workers react to various
situations.
•The research carried out at the Western Electrics Hawthorne plant
during the 1920’s and early 1930’s helped to initiate a whole new
approach to human behaviour studies.
•The final result was “the organization of teamwork-that is, of
sustained cooperation leads to success”.

Abraham Maslow's hierarchy of needs theory.
Maslow proposed that motivation is the result of a person's attempt at fulfilling
five basic needs: physiological, safety, social, esteem and self-actualization.
According to Maslow, these needs can create internal pressures that can
influence a person's behavior.
Physiological needs are those needs required for human survival such as air,
food, water, shelter, clothing and sleep. As a manager, you can account for
physiological needs of your employees by providing comfortable working
conditions, reasonable work hours and the necessary breaks to use the
bathroom and eat and/or drink.
Safety needs include those needs that provide a person with a sense of
security and well-being. Personal security, financial security, good health and
protection from accidents, harm and their adverse affects are all included in
safety needs. As a manager, you can account for the safety needs of your
employees by providing safe working conditions, secure compensation (such as
a salary) and job security, which is especially important in a bad economy.

Social needs, also called love and belonging, refer to the need to feel a sense
of belonging and acceptance. Social needs are important to humans so that they
do not feel alone, isolated and depressed. Friendships, family and intimacy all
work to fulfill social needs. As a manager, you can account for the social needs of
your employees by making sure each of your employees know one another,
encouraging cooperative teamwork, being an accessible and kind supervisor and
promoting a good work-life balance.
Esteem needs refer to the need for self-esteem and respect, with self-respect
being slightly more important than gaining respect and admiration from others. As
a manager, you can account for the esteem needs of your employees by offering
praise and recognition when the employee does well, and offering promotions and
additional responsibility to reflect your belief that they are a valued employee.
Self-actualization needs describe a person's need to reach his or her full
potential. The need to become what one is capable of is something that is highly
personal. While I might have the need to be a good parent, you might have the
need to hold an executive-level position within your organization. Because this
need is individualized, as a manager, you can account for this need by providing
challenging work, inviting employees to participate in decision-making and giving
them flexibility and autonomy in their jobs.

1. Businesses typically do well satisfying lower
order needs.
2. Model stipulates that there are 5 needs and that
the order is “fixed”. Research indicates some
may only have 2-3 need hierarchy; others 5-6.
The order may also be inverted and meeting
needs outside of work not accounted for.
3. Model not developed from average employees
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Douglas McGregor proposed the two different sets of assumptions
about workers.
Theory X
 Assumes the average worker is lazy, dislikes work and
will do as little as possible.
 Managers must closely supervise and control through
reward and punishment.
Theory Y
 Assumes workers are not lazy, want to do a good job
and the job itself will determine if the worker likes the
work.
 Managers should allow workers greater latitude, and
create an organization to stimulate the workers.
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