Code 101: PPM Unit-I

1. MHRM
COURSE 101 : PRINCIPLES AND PRACTICES OF MANAGEMENT
UNIT-I
What is Management
Meaning
Definition
Funtions
Levels of Management
Management Vs Administration
Management is Science / Art or a Profession
Roles of Managers
Managerial skills
Modern Management Approaches
Henri Fayol proposed 14 principles of management
Dr.M.Rama Satyanarayana
Faculty of HRM,ANU

2. What is Management
M A N - MANAGER
A G E - KNOWLEDGE
M E N - PEOPLE
T - TECHNOLOGY

3. MAN refers to the Manager who leads the groups and
organization and is responsible for the performance of
other activities.
AGE does not mean chronological age, it refers to the
knowledge to be possessed by a manager to operate the
organization successfully. Knowledge can be secured
through experience , study and exposure.
MEN stands for the term people i.e., the team of
subordinates working under the supervision and control
of the manager. Manager never work in a vacuum, they
work with people. They achieve the objectives with
assistance of subordinates.
T means technology, it means know-how manager
should also possess skills, techniques and tactics to win
the game to achieve the objectives.

4. Meaning
 Louis Allen stated that "management is what a
manager does", Management is the brain of an
enterprise. Management is an essential part of any
group activity. Management plans, organizes, co-
ordinates, directs, motivates and controls the
activities of the enterprise, It brings the human and
material resources together and motivates the people for
the achievement of the objectives of the organisation.
Without management, resources of production will
remain as mere resources and never become
production. Management is the dynamic life-giving
element in every organisation.

5. Definitions
 "Management is the art of getting things done through
others and with formally organised groups.“ Harold
Koontz (1909-1984)
 "Management is the art of knowing what you want to do
and then seeing that they do it in the best and the
cheapest way.“ Frederick Winslow Taylor (March 20,
1856 – March 21, 1915)
 A ”Management is a distinct process consisting of
planning, organising, actuating and controlling; utilising
in each both science and art, and followed in order to
accomplish pre-determined objectives.“ George R Terry
(1877 - 1955)

6. Peter Ferdinand Drucker (November 19, 1909 –
November 11, 2005)
 "Management may be defined as the process by means of which
the purpose and objectives of a particular human group are
determined, clarified and effectuated“
 Management is a multipurpose organ that manage a business and
manages Managers and manages Workers and work.
 One popular definition is by Mary Parker Follett. Management, she
says, is the "art of getting things done through people.“
Mary Parker Follett (3 September 1868 – 18 December 1933)

7. FUNCTIONS OF MANAGEMENT
 According to Henry Fayol, “To manage is to forecast
and plan, to organize, to command, to coordinate & to
control”.
 Whereas Luther Gullick has given a keyword
’POSDCORB’ where P stands for Planning, O for
Organizing, S for Staffing, D for Directing, Co for Co-
ordination, R for reporting & B for Budgeting.
 But the most widely accepted are functions of
management given by KOONTZ and O’DONNEL i.e.
Planning, Organizing, Staffing, Directing and Controlling.

8. Management plays a crucial role in any organization or
business, from strategic planning to efficient operation,
coordination and successful execution of tasks. Various
functions fall under the realm of management, which are
fundamental for the organization's optimal functioning.

9. 1. Planning
Planning is the most basic managerial
function. It is a process which involves,
“thinking before doing". It is looking ahead
and preparing for the future. It is deciding in
advance what to do, how to do. when to do it
and who is to do it. Planning consists of
selecting the various organizational objectives,
policies, programmes, procedures and other
means of achieving the objectives. The
primary object of planning is to achieve
results.

10. The process of planning consists of :
 Determination of objectives.
 Forecasting and examining alternative
courses of action.
 Formulation of policies, programmes,
budgets etc. to achieve the objectives, and
 Laying down of procedures and standards
of performance.

11. 2. Organizing
 Organising refers to the process of arranging
resources and tasks to achieve specific goals. This
involves structuring work, dividing tasks, coordinating
various job roles and responsibilities, and ensuring
the workforce is effectively utilised.
 For example, a project manager might organise a team
by assigning specific roles and responsibilities to each
team member, scheduling deadlines for tasks,
coordinating communication and decision-making
processes, and allocating necessary resources such as
time, budget and equipment. This way, the project
manager ensures that the project can progress
smoothly and efficiently, meeting the established goals
and objectives.

12. 3. Staffing
Staffing refers to the function of hiring and retaining a
suitable work force for the enterprise both at managerial
as well as non-managerial levels. It involves the process
of recruitment, training, development, compensation
and performance appraisal of the employees.
For example, if a company wants to expand its
operations, it will require more personnel. The
management will identify the job roles needed, recruit
suitable candidates, train them for their roles, develop
their skills, provide them appropriate compensation,
and appraise their performance periodically. All these
tasks constitute the staffing function of management.

13. 4. Directing
Directing refers to the process of guiding,
supervising, motivating, and leading employees or
team members to accomplish organizational goals
effectively. It involves the act of providing
instructions, clarity, and support to individuals or
groups to ensure that they understand what is
expected of them and how to achieve desired
outcomes.
For instance, a sales manager leading their team to
meet the monthly sales target by offering direction,
inspiration, and guidance.

14. 5. Controlling
Controlling involves monitoring and
assessing the progress of the work to ensure it
aligns with the predetermined objectives and
making necessary adjustments.
For example, a quality control manager
examining the company's products for defects
and implementing corrective measures to
enhance product quality.

15. LEVELS OF MANAGEMENT
 In a typical organizational structure, there are three main levels of
management:
 Top management
 Middle management and
 Lower level management.

16. Top-Level or Strategic Management
 Role: Top-level managers are responsible for setting the overall
direction, objectives, and policies of the organization.
 Titles: They often hold titles such as Chief Executive Officer
(CEO), President, Vice President, or Chief Operating Officer
(COO).
 Responsibilities: Their focus is on long-term strategic planning,
making major decisions, setting organizational goals, and
representing the company to external stakeholders like
shareholders, government bodies, and the public.
 Decision-Making: They make strategic decisions that affect the
entire organization and set the tone for the rest of the
management hierarchy.

17. Middle-Level or Tactical Management
 Role: Middle managers act as a bridge between top
management and frontline employees, translating top-level
strategies into operational plans.
 Titles: Titles for middle managers might include General
Manager, Regional Manager, or Department Head.
 Responsibilities: They oversee specific departments or
units within the organization, implementing the strategies
and policies formulated by top management.
 Decision-Making: Middle managers make decisions
regarding resource allocation, goal setting for their
departments, and ensuring that activities align with the
organization's objectives.

18. Lower Level or Frontline Management
(Operational Management)
 Role: Frontline managers are directly involved in
overseeing the day-to-day operations and the workforce.
 Titles: Titles might include Supervisor, Foreman, Clerk or
Shift In-charge.
 Responsibilities: They focus on coordinating and
supervising the activities of non-managerial employees,
ensuring that tasks are performed efficiently to meet
organizational objectives.
 Decision-Making: Frontline managers make operational
decisions, manage work schedules, handle immediate
problems, and provide guidance to employees.

19.  These three levels of management create a
hierarchy that maintains the efficiency and
effectiveness of the business operations from
planning to execution, allowing different
management levels to focus on different
organizational scopes from the whole business
to individual work tasks.

20. Management Vs Administration
 The terms 'management' and 'administration'
are often interpreted in a loose manner. Some
take management and administration as one.
Some consider administration broader than
management and some hold that administration
is part of management. To avoid confusion,
people like Drucker suggested that, management
is applicable in business units while
administration is applicable in government
offices, military outfits and social and cultural
institutions.

21. Differences between
Management and Administration
1. Nature of Work:
Management primarily involves dealing with
employees and aligning them towards
achieving business goals. It encompasses
functions like planning, organizing, staffing,
directing, and controlling.
Administration mainly deals with setting up
company policies and objectives. It also
oversees legal and governmental aspects of the
business.

22. 2. Decision Making
In Management, decisions are more often
about the day-to-day operations of the
company.
In Administration, decisions tend to be more
strategic and high-level, concerning the overall
direction and policy of the company.

23. 3. Hierarchical Level
Administrators typically form the top layer of
the organizational structure, such as the board
of directors, president or CEO.
Managers are middle-level employees who are
tasked with implementing the policies and
strategies set by administrators.

24. 4. Skills
Managers require technical and people
management skills since they need to
coordinate teams, handle conflicts, motivate
employees, etc.
Administrators require critical thinking,
decision-making and strategic planning skills,
as they are responsible for the overall vision
and direction of the company.

25. 5. Focus
Management focuses on the execution part of
the policies using resources effectively and
efficiently to achieve organizational goals.
Administration emphasizes on framing the
policies and setting the objectives of the
organization.

26. Management is
Science / Art or
a Profession

27. Is Management a Science?
 The word “Science” literally means “Knowledge” it is systematized
body of knowledge acquired by mankind through observation and
experimentation and contains some general truths explaining past
events or phenomena".
 In the words of Keynes “science is a systematized body of knowledge
which establishes relationship between cause and effect”.
 The above definition contains three important characteristics of
science. They are:
1. It is a systematized body of knowledge and uses scientific methods
for observation,
2. Its principles are evolved on the basis of continued observation
and experiment, and
3. Its principles are exact and have universal applicability without
any limitation.

28.  Judging from the above characteristics of science, it
may be observed that:
1. Management is a systematized body of knowledge and
its principles have evolved on the basis of observation.
2 The kind of experimentation (as in natural sciences)
cannot be accompanied in the area of management
since management deals with the human element.
3 In management, it is not possible to define, analyse
and measure phenomena by repeating the same
conditions over and over again to obtain a proof.
 The above observation puts a limitation on
management as a science. Management like other
social sciences can be called as "inexact science".

29. Is Management an Art?
 Art involves the practical application of skills and knowledge to
achieve concrete results. It is the practical way of doing specific
things. The function of the art is to effect change and to achieve
desired results. In the words of Terry "Art is bringing about of a
desired result through application of skill“. Art is practice-based
and perfection in it requires continuous practice over a long period
of time.
 The following are thus the essential features of art:
1. Personal skill
2. Practical knowledge
3. Result-orientation
4. Regular practice aimed at perfection
5. Creativity.

30. Judging from the above characteristics of art, it may be observed
that:
1. Management while performing the activities of getting things done
by others is required to apply the knowledge of certain underlying
principles which are necessary for every art.
2. Management gets perfection in the art of managing only through
continuous practice.
3. Management implies capacity to apply accurately the knowledge to
solve the problems, to face the situation and to realize the objectives
fully and timely.
The above observation makes management an art and that to a fine
art.

31. Management is both
a Science as well as an Art
 Management is both a science as well as an art. The science of
management provides certain general principles which can
guide the managers in their professional effort. The art of
management consists in tackling every situation in an
effective manner. As a matter of fact, neither science should
be over-emphasised nor should be the art discounted; the
science and the art of management go together and are both
mutually interdependent and complimentary.
 Management is thus a science as well as an art. It can be said
that "the art of management is as old as human history, but
the science of management is an event of the recent past."

32. Is Management a Profession
 The term Profession is used both in a restricted as well
as in broader sense. In a restricted sense, profession
refers to any occupation or vacation pursued to make a
living. Pottery, carpentry, tailoring etc.,
 In a broader sense, profession refers to any occupation
involving the use of specialized skills and talents
acquired through extensive education and training and
pursued to serve the large interests of the society.
 “Profession is an occupation, especially one requiring
advanced education and special training”.

33.  Any occupation to be called a profession
should satisfy the following:
i. Body of Knowledge
ii. Development and updating the knowledge
iii. Professional journals
iv. Professional Associations
v. Code of conduct
vi. Specialized educational qualifications

34. ROLES OF MANAGERS
 Henry Mintzberg, a prominent management
theorist, proposed ten managerial roles that are
grouped into three categories: interpersonal,
informational, and decisional roles. These roles
outline the various responsibilities that
managers often perform:

36. 1. Interpersonal Roles
a. Figurehead: Managers act as symbolic leaders,
representing the organization in formal and
ceremonial duties.
b. Leader: They motivate, guide, and facilitate
the work of employees, fostering a cohesive and
productive team environment.
c. Liaison: Managers establish and maintain
networks both within and outside the
organization, building relationships and
connections that can benefit the company.

37. 2. Informational Roles
a.Monitor: Managers continually gather information
from various sources, staying informed about internal
and external factors that may affect the organization.
b.Disseminator: They share information obtained
from external and internal sources within the
organization, ensuring that employees have the
necessary knowledge to perform their tasks effectively.
c.Spokesperson: Managers represent the organization
to external stakeholders, communicating its vision,
goals, and achievements.

38. 3. Decisional Roles
a. Entrepreneur: Managers seek and explore
opportunities for innovation and improvement within
the organization, initiating changes when necessary.
b. Disturbance Handler: When faced with crises or
conflicts, managers take charge, making decisions to
resolve issues and restore stability.
c. Resource Allocator: They make decisions about the
allocation of resources, such as budget, time, and
human capital, to various projects or departments.
d. Negotiator: Managers engage in negotiations both
within and outside the organization to secure
resources, deals, contracts, or resolve conflicts.

39. Managerial skills
Managerial skills often vary across different levels of management
within an organization. Here's an explanation of how conceptual
skills, human relations skills, and technical skills are typically
emphasized at various management levels:

40. Conceptual Skills
 These skills involve the ability to think
strategically, analyze complex situations, and
make sound decisions. Managers with conceptual
skills excel in understanding the organization as a
whole, recognizing patterns, identifying problems,
and formulating long-term plans or strategies.
They have a broader perspective and can envision
how various parts of the organization interrelate.
Conceptual skills are essential for setting goals,
devising strategies, and adapting to changes in the
business environment.

41. Human Relations Skills
Human Relations Skills also known as
Interpersonal or People Skills. These skills
involve the ability to work well with others,
communicate effectively, motivate, lead, and
manage conflicts within a team or organization.
Human relations skills are vital for creating a
positive work environment, fostering teamwork,
resolving conflicts, and building strong
relationships with employees, customers, and
other stakeholders. Managers with strong human
relations skills can effectively lead and inspire
their teams, promoting collaboration and
productivity.

42. Technical Skills
These are the specialized skills and knowledge
required to perform specific tasks or activities within a
particular field or industry. For instance, in a software
company, technical skills might involve programming
languages, understanding software development
processes, or proficiency in using specific tools. In
healthcare, technical skills could encompass
knowledge of medical procedures or expertise in using
medical equipment. These skills are crucial for
managers to understand the work their team
members are doing and to provide guidance and
support effectively.

43. Effective managers often possess a blend of
these three skill sets. While the importance of
each skill may vary depending on the
managerial level and the nature of the
organization, a successful manager typically
combines technical expertise with strong
interpersonal skills and the ability to think
strategically to navigate challenges and drive
the organization toward its goals.

44. Modern Management
Theories/Approaches

45. 1.Behavioral Approach
 Theorists:
 Elton Mayo: Mayo was a key figure in the Human
Relations Movement. His Hawthorne experiments at the
Western Electric Company (1920s-1930s) demonstrated
the impact of social factors, such as group dynamics and
managerial attention, on worker productivity and
motivation. This laid the foundation for understanding the
importance of human relationships at work.
 Douglas McGregor: McGregor introduced Theory X and
Theory Y in his book "The Human Side of Enterprise."
Theory X assumes that employees are inherently lazy and
require close supervision, while Theory Y proposes that
employees are motivated and can be self-directed if given
the chance. These theories shaped views on management
attitudes toward employees.

46.  Abraham Maslow: Maslow's Hierarchy of Needs
proposed that individuals have a hierarchy of needs—
physiological, safety, social, esteem, and self-
actualization—which, when fulfilled, motivate behavior.
His theory highlighted the significance of understanding
and satisfying employee needs for motivation.
 Frederick Herzberg: Herzberg developed the Two-
Factor Theory (also known as Herzberg's Motivation-
Hygiene Theory). He identified factors leading to job
satisfaction (motivators) and dissatisfaction (hygiene
factors), emphasizing the importance of intrinsic factors
like achievement and recognition for motivation.

47. 2.Quantitative Approach
 Theorists:
 Operations Researchers (Various): This field involves
contributions from numerous researchers and
practitioners like George Dantzig, John von Neumann, and
Norbert Wiener. Operations Research (OR) emerged
during World War II and encompasses mathematical
models, optimization techniques, and decision-making
tools used to solve complex problems in logistics, resource
allocation, and scheduling.
 Peter Drucker: Drucker, known as the father of modern
management, emphasized the importance of quantitative
analysis in management decisions. He advocated for the
use of management by objectives (MBO) and stressed the
need for systematic decision-making based on data and
analysis.

48.  Herbert Simon: Simon, a Nobel laureate,
contributed to decision-making theory. He introduced
the concept of "bounded rationality," suggesting that
individuals make decisions based on limited
information and cognitive capabilities. Simon's work
influenced decision-making models in management
science.
 Jay Forrester: Forrester pioneered system
dynamics and introduced concepts like feedback loops
and causal relationships in dynamic systems. His
work in system dynamics became crucial for
understanding complex organizational systems and
their behaviors.

49. 3.Systems Approach
The systems approach views an organization as an
interconnected and interdependent entity, where
various parts or subsystems work together to achieve
common goals. Key components include:
 Theorists:
 Ludwig von Bertalanffy: Bertalanffy is considered the
father of the general systems theory. He proposed the idea
that systems exist across various disciplines and levels of
complexity, and they can be understood through common
principles, regardless of their specific nature. His work laid
the groundwork for applying systems thinking in
management.

50.  Kenneth Boulding: Boulding expanded on general
systems theory in the context of organizations. He
emphasized that organizations are open systems that
interact with their environments, taking inputs, processing
them, and producing outputs. His work highlighted the
importance of understanding the interactions between an
organization and its environment.
 Peter Senge: Senge, in his book "The Fifth Discipline,"
popularized the idea of the learning organization as a
system that continuously adapts and learns. He
emphasized the importance of systems thinking, personal
mastery, mental models, shared vision, team learning, and
systems dynamics in creating successful organizations.

51.  The systems approach encourages managers to
view organizations as complex entities,
analyzing how different parts of the
organization interact and influence each other,
and considering the broader environment in
decision-making processes.

52. 4.Contingency Approach
 The contingency approach suggests that there is no
one-size-fits-all solution to management problems.
Instead, the most effective management style or
organizational structure depends on the specific
situation or context. Key aspects include:
 Theorists:
 Joan Woodward: Woodward conducted research on the
relationship between technology and organizational
structure. Her work highlighted that different technologies
require different organizational structures. For instance,
some technologies are best suited for a more organic,
flexible structure, while others may fit better with a more
hierarchical structure.

53.  Fred Fiedler: Fiedler developed the Contingency Model of
Leadership, which proposes that the effectiveness of a leader
depends on the match between their leadership style and the
favorableness of the situation. He categorized leaders as either
task-oriented or relationship-oriented and suggested that
different situations require different leadership styles for optimal
performance.
 Paul Lawrence and Jay Lorsch: Lawrence and Lorsch
conducted studies on organizational environments and proposed
the contingency theory of organizational structure. They argued
that organizations must adapt their structures to fit the demands
of their environments, whether stable or dynamic.

54.  The contingency approach emphasizes the need
for flexibility and adaptation in managerial
practices, suggesting that managers should
tailor their approaches based on the specific
circumstances, such as the organization's
environment, technology, or the nature of tasks
or challenges it faces.

55. Administrative Management Theory
 This theory focuses on principles that could be used by
managers to coordinate the internal activities of
organizations.
 Henry Fayol, (1841-1925) also known as the ‘father of
modern management theory’ gave a new perception of
the concept of management.
 He introduced a general theory that can be applied to
all levels of management and every department.
 The Fayol theory is practised by the managers to
organize and regulate the internal activities of an
organization.
 He concentrated on accomplishing managerial
efficiency.

56. Henri Fayol developed theory of management.
According to him, the business operations of an
organization could be divided into 6 activities.
 Technical – producing & manufacturing products.
 Commercial – buying, selling & exchange.
 Financial – search for & optimal use of capital.
 Security – protecting employees & property.
 Accounting – recording & taking stack of costs,
profits & liabilities, maintaining balance sheets &
compiling statistics.
 Managerial – planning, organizing, commanding,
coordinating & controlling.

57.  Henri Fayol proposed 14 principles of management that he
believed could guide managers in effectively managing their organizations.
These principles were outlined in his book "General and Industrial
Management" published in 1916. The 14 principles of management by
Henri Fayol are:
1.Division of Work: Work should be divided among individuals and groups
to ensure that tasks are handled by specialists, leading to increased
productivity.
2.Authority and Responsibility: Managers must have the authority to give
orders, but they should also be willing to take responsibility for the
consequences of those orders.
3.Discipline: There should be a clear set of rules and guidelines for
employees to follow. Discipline ensures that tasks are carried out according
to the established norms.
4.Unity of Command: Each employee should receive orders from only one
superior to avoid confusion and conflict.

58. 5.Unity of Direction: The organization should have a single
plan of action to achieve its common goals. All activities
should be aligned towards these objectives.
6.Subordination of Individual Interest to the General
Interest: The interests of the organization as a whole should
take precedence over individual interests.
7.Remuneration: Compensation and remuneration for
employees should be fair and equitable to both the employees
and the organization.
8.Centralization: The degree to which decision-making
authority is concentrated in higher levels of the organization
should depend on the situation and the capabilities of the
employees.

59. 9.Scalar Chain (Line of Authority): A clear line of
authority should exist from the top management to
the lowest ranks of the organization.
10.Order: There should be an orderly arrangement of
materials, people, and processes for maximum
efficiency and effectiveness.
11.Equity: Fairness and impartiality should be
demonstrated by managers in dealing with employees.
12.Stability of Tenure of Personnel: Employees
should have job security, reducing employee turnover
and promoting loyalty.

60. 13.Initiative: Employees should be encouraged to
take initiative and be innovative within the
framework of the organization's objectives.
14.Esprit de Corps (Team Spirit): Promoting
team spirit and unity among employees enhances
harmony and unity within the organization.
 Fayol's principles of management serve as a
foundation for understanding the fundamental
aspects of managing organizations and are often
studied and referenced in management literature
and educational programs.

61. Limitations of Administrative
Management
 Classical theory ignored important aspects of
organizational behaviour.
 Does not deal with problems of leadership,
motivation, power or informal relations.
 Failed to consider impact of external & internal
environment upon employee behaviour in
organizations.