NATIONAL INSTITUTE OF TECHNOLOGY SIKKIM

Ravangla Campus
Barfung Block, Ravangla Sub Division, South Sikkim-737139
Department of Mechanical Engineering
Principles of Management (HS16101)

Module: 1 Lecture No: 1

Learning Objectives

 To describe the nature of management, define management and managers.

 To identify and explain various types of resources and their importance in managing
organisations.
 To identify and explain the four basic management functions in organisations.
 To distinguish industrial management and production management.
 To discuss the characteristics of management system in organisations.

Important & Relevant Questions

 Contrast efficiency and effectiveness. Give an example of a time when an organisation

was effective but not efficient, efficient but not effective, both efficient and effective,
and neither efficient nor effective.
 What are the four basic activities that comprise the management process? How are they
related to one another?
 Identify the inputs from the external environment and show how they are transformed
through the management functions to produce the outputs to the external environment.

Evaluation Questions

 How would you define management and what are the managerial functions?
 What are the differences between productivity, effectiveness, and efficiency?
 What is the difference between production management and industrial management?
 What are the characteristics of management system in organisations?

References

 Koontz H. and Weihrich H., Essentials of Management: An International, Innovation,

and Leadership Perspective, Ed. 3, McGraw Hill Education Private Limited, India.
 Griffin R. W., Management: Principles and Practices, Ed. 11, Cengage Learnng Private
Limited, India.
 NATIONAL INSTITUTE OF TECHNOLOGY SIKKIM
Ravangla Campus
Barfung Block, Ravangla Sub Division, South Sikkim-737139
Department of Mechanical Engineering
Principles of Management (HS16101)

Management is a set of activities (including planning and decision making, organising,

leading, and controlling) directed at an organisation’s resources (human, financial, physical,
and information), with the aim of achieving organisational goals in an efficient and effective
manner. Management controls the various activities in an orgainisation efficiently and
effectively. Efficient refers to the achievement of the ends with the least amount of resources
or in other words, using resources wisely and in a cost-effective way, while Effectiveness
refers to making the right decisions and successfully implementing them.

Harold Koontz defined management as “the process of designing and maintaining an

environment in which individuals, working together in groups efficiently to accomplish selected
aims”, and a manager is someone whose primary responsibility is to carry out the management
process.
All organisations use four basic kinds of resources from the environment: human, financial,
physical and information. Human resources include manegarial talent and labor. Financial
resources are the capital used by the organisation to finance both ongoing and long-term
operations. Physical resources include raw materials, office and production facilities, and
equipment. Information resources are usable data needed to make effective decision.

 Human resource – manegarial talent

 Financial resources – capital
 Physical resource – raw materials, machines, equipment
 Information resource – data for decision making
All organisations, regardless of whether they are large or small, profit-seeking or not-for-profit,
domestic or multinational, use some combination of human, financial, physical, and
information resources to achieve their goals. These resources are generally obtained from the
organisation’s environment. Examples of resources used in four very different kinds of
organisations are shown below:

Table 1: Examples of resources used by organisations

Human Financial Physical Information

Organisation
resources resources resources resources
Royal Drlling workers; Profits; Refineries; Office Sales forecast
Dutch/Shell Corporate Stockholder buildings
group executives investments
NIT Sikkim Faculty; Alumni Computers; Research
Administrative contributions; Campus facilities reports; Govt.
staff Govt. grants publications
Sikkim state Police officers; Tax revenue; Municipal Economic
Municipal Govt. grants buildings forecasts;
employees Crime
statistics
 NATIONAL INSTITUTE OF TECHNOLOGY SIKKIM
Ravangla Campus
Barfung Block, Ravangla Sub Division, South Sikkim-737139
Department of Mechanical Engineering
Principles of Management (HS16101)

Human Financial Physical Information

Organisation
resources resources resources resources
Grocery store Grocery clerks Profits; Owner Building; Display Price lists
investment shelving from
suppliers;
Newspaper
ads for
competitors

Managers are responsible for combining and coordinating these various resources to achieve
the organisation’s golas. A manager of Royal Dutch/Shell Group, for example, uses the talents
of executives and drilling platform workers, profits earmarked for reinvestment, existing
refineries and office facilities and sales forecasts to make decision regarding the amount of
petroleum to be refined and distributed during the next quarter. Similarly, the Sikkim govt.
authority (manager) may use police officers, govt. grants, existing police stations and detailed
crime statistics to launch a major crime prevention program in the state.

 Management in organisations

The basic managerial activities include Planning and decision making, Organising,
Leading, and Controlling. Managers engage in these activities to combine human, financial,
physical, and information resources efficiently and effectively and to work toward acieveing
the goals of the organisation.

Figure 1: The management process

 NATIONAL INSTITUTE OF TECHNOLOGY SIKKIM
Ravangla Campus
Barfung Block, Ravangla Sub Division, South Sikkim-737139
Department of Mechanical Engineering
Principles of Management (HS16101)

 Planning and decision making:

A process of seeting an organisation’s goals and deciding how best to achieve them,
and decision making is a part of the planning process that involves selecting a course
of action from a set of alternatives.
 Organising:
A process of determining how best to group activities and resources in order to use
efficiently and effectively.
 Leading:
It is the set of processes used to get members of the organisation to work together in a
group or team to further the interests of the organisation.
 Controlling:
It is the process of monitoring and correcting the ongoing activities to facilitate goal
attainment.
 Industrial management vs Production management
Industrial management deals with the analysis, design and control of a productive system,
whereas production management deals with the concepts and techniques specific to the analysis
and management of a production activity.
 Characteristics of management
The following are the characteristic of a management system.
I. Management is universal.
II. Management is dynamic.
III. Management is a group of managers.
IV. Management is purposeful.
V. Management is goal oriented.
VI. Management is integrative function.
VII. Management is multi-faceted discipline.
VIII. Management is continuous process.
IX. Management is a system of authority.
X. Management is a resource.
XI. Management is intangible.
 NATIONAL INSTITUTE OF TECHNOLOGY SIKKIM
Ravangla Campus
Barfung Block, Ravangla Sub Division, South Sikkim-737139
Department of Mechanical Engineering
Principles of Management (HS16101)

Module: 1 Lecture No: 2

Learning Objectives

 To understand the art and scientific aspects of the managerial functions.

 To illustrate the techniques of scientific management.
 To identify the major areas of management process.
 To distinguish the levels of management system in organisations.

Important & Relevant Questions

 What are the techniques used in scientific management process and how these
techniques can lead to achievement of the goals of an organisation?
 Discuss the roles of managers at different levels in an organisation.

Evaluation Questions

 How is the artistic approach applied in a management system?

 What is scientific management?
 What are scientific techniques used in managing activity?
 What is the difference between standardization and simplification?
 What is differential piece rate system and how is it used as a management tool?
 What are the major areas of management activity?

References

 Koontz H. and Weihrich H., Essentials of Management: An International, Innovation,

and Leadership Perspective, Ed. 3, McGraw Hill Education Private Limited, India.
 Griffin R. W., Management: Principles and Practices, Ed. 11, Cengage Learnng Private
Limited, India.
 NATIONAL INSTITUTE OF TECHNOLOGY SIKKIM
Ravangla Campus
Barfung Block, Ravangla Sub Division, South Sikkim-737139
Department of Mechanical Engineering
Principles of Management (HS16101)

 Management as an Art
The main. elements of an art are –
 Personal skills
 Practical know-how
 Application of knowledge
 Result orientation
 Creativity
 Constant practice aimed at perfection.
These features of art is also applied in management process in the following ways –
 A manager applies his knowledge and skills to coordinate the efforts of his people.
 Management seeks to achieve concrete practical results.
 Management is creative as it brings out new situations and converts it into outputs.
 Mastery in management requires a sufficiently long experience in managing.
 Effective management lead to realization of organisational and other goals.

 Management as Science
The essential elements of science are –
 Systematised body of knowledge.
 Underlying principles and theorie developed through continuous observation.
 Universal truth and applicability.
 Organised body of knowledge can be taught and learnt in class room and outside.
 Uses tools and techniques, such as PERT; CPM; MBO etc., in decision making and
achieving goals.
Thus, the theory (Science) and practice (Art) of management go side by side for the efficient
functioning of an organisation.
 Techniques of Scientific Management
Scientific management is a theory of management that analyses and synthesises workflows. Its
main objective is economic efficiency, especially labor productivity. It was one of the earliest
attempts to apply science to the engineering of processes and to management. The following
techniques are frequently used in the field of scientific management –
 NATIONAL INSTITUTE OF TECHNOLOGY SIKKIM
Ravangla Campus
Barfung Block, Ravangla Sub Division, South Sikkim-737139
Department of Mechanical Engineering
Principles of Management (HS16101)

Figure 1: Scientific management techniques

 Work study
 Method study or Mothion study
It is a systematic process of analysing the method of doing a job including human
movements involved in it. So it is the process of analysing the methods involved
in work flow to increase productivity. It deals with doing the work in a better way,
with less time and effort.
 Work measurement or Time study
It is the process of establishing the time that a given task would take when
performed by a qualified worker working at a defined level of performance under
normal working condition.
 Scientific task planning
Standard task is the quantity of work which an average worker can perform under ideal
standardised conditions in one day, generally called a fair day’s work, which for every
worker should be fixed after a scientific day.
 Standardisation and Simplification
 Standardisation
It is one way which leads to economical product. Standardisation refers to
producing maximum variety of products from minimum variety of materials,
 NATIONAL INSTITUTE OF TECHNOLOGY SIKKIM
Ravangla Campus
Barfung Block, Ravangla Sub Division, South Sikkim-737139
Department of Mechanical Engineering
Principles of Management (HS16101)

parts, tools and processes. Standardisation usually means that non-standard

products will not be produced-except when a customer orders them to be made.
 Simplification
It is the process of reducing the variety of products manufactured. It is concerned
with the reduction of product range, assemblies, parts, materials and design. A
production line is generally simplified when it possesses unnecessary complexity
and confusion.
 Differential price rate system
It is a method of wage payment in which after tests have set a standard time for any
task assigned the work gets a high price rate for completing the job within the allotted
time and lower price rate for completing the job beyond the allotted time.
 Functional foremanship
Since one supervisor cannot be an expert in all aspects of work supervision, planning
and production activities are to be separated under different managers. Dependng upon
the functions the organisational set up is to be divided.
 Levels and areas of management

Figure 2: Levels of management

The major areas of management are Marketing, Finance, Operations, Supply chain, Human
resources, and Administration.
 NATIONAL INSTITUTE OF TECHNOLOGY SIKKIM
Ravangla Campus
Barfung Block, Ravangla Sub Division, South Sikkim-737139
Department of Mechanical Engineering
Principles of Management (HS 16101)

Module: 1 Lecture No: 3

Learning Objectives

 To understand the management hierarchy in organisations.

 To distinguish the top level managers, middle level managers, front-line managers in
organisation.
 To discuss the activities carried out by the managers at different levels in the
organisation.
 To recognize the contribution of Henry Fayol in the management theory.
 To discuss the fourteen principles of Henry Fayol in developing an effective
management system in the organisation.

Important & Relevant Questions

 Who are the top level managers and what are their roles in an organisation?
 Who are the middle level managers and what are their roles in an organisation?
 Who are the front-line managers and what are their roles in an organisation?
 What is centralization?
 Why stability of tenure of personnel is important in managing an organisation?

Evaluation Questions

 How would you define management and what are the managerial functions?
 What are the differences between productivity, effectiveness, and efficiency?
 What is the difference between production management and industrial management?
 What are the characteristics of management system in organisations?

References

 Koontz H. and Weihrich H., Essentials of Management: An International, Innovation,

and Leadership Perspective, Ed. 3, McGraw Hill Education Private Limited, India.
 Griffin R. W., Management: Principles and Practices, Ed. 11, Cengage Learnng Private
Limited, India.
 NATIONAL INSTITUTE OF TECHNOLOGY SIKKIM
Ravangla Campus
Barfung Block, Ravangla Sub Division, South Sikkim-737139
Department of Mechanical Engineering
Principles of Management (HS 16101)

 Management hierarchy
Managers can be described by the functional areas in which they perform and the levels at
which they perform. Although all managers perform the same basic function, the extent to
which they perform these universal activities varies with levels in the management hierarchy.

Figure 1: Management hierarchy

Top management, consisting of the chief executive officer and the vice-presidents and
directors, is responsible for the overall management of the organisation and directs its relations
with the external environment.
Middle managers, consisting of departmental heads and branch managers, are responsible for
setting objectives that are in line with the top manager’s goals and further translate them into
plans for first-line managers to implement.
First-line managers, consisting of supervisors, team leaders, team facilitators, are responsible
for directing the actual work of the organisation at the operation level.
The key activities of the managers at different levels in the organisation are as follows –
 Top level managers – Board of Directors, MD, Owners, Chief executives
 Analyse, evaluate and deal with the environmental factors.
 Establish long term goals and broad policies of the company.
 Appoint departmental and other key executives.
 NATIONAL INSTITUTE OF TECHNOLOGY SIKKIM
Ravangla Campus
Barfung Block, Ravangla Sub Division, South Sikkim-737139
Department of Mechanical Engineering
Principles of Management (HS 16101)

 Represent the company to the outside world.

 Coordinate the activities and efforts of different department.
 Middle level managers – Department head, Branch manager, Sales head
 Interpret and explain the policies framed by top management.
 Compile and issue detailed instructions regarding operations.
 Integrate various parts of a department.
 Motivate the lower level personnel to work for the organisation’s goals.
 Train the lower level personnel.
 First-line managers – Supervisor, Foreman, Team leader, Superintendent
 Play day to day activity within the goals lay down by higher authority.
 Assign jobs to the workers and to make arrangement for their training and development.
 Evaluate and control workers and to maintain personal contact with them.
 Importance of management
 Achievement of group goals.
 Optimum utilization of resources.
 Economic growth of the organisation.
 Stability of the organisation.
 Human development in the orgainsation.
 Meet the challenge of change in the enviorment.
 Principles of management
Henry Fayol contributed 14 principles to management which is widely applied in all
organisation.
1. Divison of work
Dividing work among the workforce helps in improving the quality of the overall
product. Specialisation in work increases the productivity and improves efficiency.
Division of labour also leads to the specialization, accuracy, and speed of the workers.
This principle is applicable both in managerial as well as technical work.
2. Authority and Responsiblity
These are the two key things in management. They work hand in hand. While authority
enables the management to delegate work, responsibility makes them accountable for
any work done under their leadership. The power of authority accompanying
responsibility gives the management the right to order subordinates along with a duty
to be liable for acts of their subordinates.
3. Discipline
Nothing good was ever achieved without discipline. Good behavior and civilized
interactions make the management work smoothly and efficiently. Good conduct by
employees also helps them smoothly progress in their careers.
 NATIONAL INSTITUTE OF TECHNOLOGY SIKKIM
Ravangla Campus
Barfung Block, Ravangla Sub Division, South Sikkim-737139
Department of Mechanical Engineering
Principles of Management (HS 16101)

4. Unity of command
A person should ideally answer to just one boss. If an employee is given work from
more than one boss, there arises a conflict of interest. This can lead to confusion among
the employees and hard to pin accountability. Thus, it is very crucial to follow unity o
command.
5. Unity of direction
For any corporate to prosper, there must be a unified goal. This principle is crucial as it
incorporates the idea of a workforce working a singular direction with a unified aim.
The responsibility of planning falls on the manager and he also must monitor the
progress towards said goal.
6. Subordination of individual interests to general interest
The standard rule for any organization is the work on the collective interest of the
organization as a whole rather than personal interest of an individual. This principle
states that the interest of an individual will. Be subordinate to the objectives of the
organization. This applies to the entire chain of command in the organization.
7. Remuneration
Remuneration in an organization play as a motivational force that keeps the employees
fuelled to do well. This remuneration should be in tandem with the efforts that they put
in. Remuneration may be monetary or non-monetary. At the end, the employee must
feel that he was appropriately rewarded for his efforts.
8. Centralization
Depending on the size of the organization, it is important that the power is centralized
to an extent that the decision making is judicious at all levels and not arbitrary. This
will also depend on the size of the organization. There must be a balance in the
hierarchy and division of power.
9. Scalar chain
Every employee knows who is their immediate senior in the times of conflict or crisis.
But also the employee must be able to contact any person in the hierarchy without
hesitation during a time of crisis.
10. Order
There must be a proper defined order maintained at the work premises so that it makes
for a conducive work environment. The right environment in the place of work will
boost productivity.
11. Equity
Employees should be treated with equality and respect. This is among the core values
of management. It will fall on the manager to ensure that there is no discrimination of
any kind happening in the workplace.
 NATIONAL INSTITUTE OF TECHNOLOGY SIKKIM
Ravangla Campus
Barfung Block, Ravangla Sub Division, South Sikkim-737139
Department of Mechanical Engineering
Principles of Management (HS 16101)

12. Stability of tenure of personnel

An employee is able to deliver better when he is secure in his job. It is the duty of the
management to offer job security to their employees along with a promise of growth.
Minimizing employee turn over is important and beneficial to the management as well.
13. Initiative
Sometimes groundbreaking ideas come from unexpected places. The management must
encourage its employees to take initiatives in the organization. It will make them feel
valued and develop their interest.
14. Espirit de corps
This is one of the core principles. The management must ensure that the team remains
constantly motivated and are cooperative with each other. It is very important to
develop mutual trust among employees as it leads to a positive work environment.
 NATIONAL INSTITUTE OF TECHNOLOGY SIKKIM
Ravangla Campus
Barfung Block, Ravangla Sub Division, South Sikkim-737139
Department of Mechanical Engineering
Principles of Management (HS16101)

Module: 1 Lecture No: 4

Learning Objectives

 To appreciate evolution of management disciple and management theory.

 To comprehend different theories of management.
 To critically understand their strengths and weaknesses and modern day relevance.
 To know the contribution of pioneers of management theories.
 To become aware of contemporary management approaches and eastern management
styles.

Important & Relevant Questions

 What are major areas of classical management theory?

 What is the major difference between classical and behavioural management theory?
 Explain the difference between closed system management approach and open system
management approach with suitable examples.
 What is total quality management philosophy? Elaborate different tools and principles
used by the managers for total quality management in the organisation.

Evaluation Questions

 What is scientific in scientific management?

 What is the major difference between classical and behavioural management theory?
 What is closed and open systems management approach?
 What is the major difference between Indian management style and Japanese
management style?

References

 Koontz H. and Weihrich H., Essentials of Management: An International, Innovation,

and Leadership Perspective, Ed. 3, McGraw Hill Education Private Limited, India.
 Bhat A. and Kumar A., Management: Principles, Processes, and Practices, Ed. 10,
Oxford University Press, India.
 NATIONAL INSTITUTE OF TECHNOLOGY SIKKIM
Ravangla Campus
Barfung Block, Ravangla Sub Division, South Sikkim-737139
Department of Mechanical Engineering
Principles of Management (HS16101)

 Evolution of management theory

Academician and practioners from different eras focused on and wrote about what they belived
to be relevant aspects of good management practice. Over a period of time, management
thinkers have sought to organise and classify this voluminous information about management.
There are some major management theories which are evolved over a period of time – classical
management theory, behavioural management theory, quantitative management theory,
systems management theory, contingency management theory, and other approaches
(Excellence approach, Indian management style, and Japanese management style).
 Classical management theory
This is the oldest management theory which began around 1900 and continued into the
1920s. This theory is mainly concerned with increasing the efficiency of the workers
and organisations based on the management practices, which were an outcome of
careful observation. It includes scientific management, administrative managemen, and
bureaucratic management. Scintific management focuses on the one best way to do a
job. Administrative management focuses on the manager and basic managerial
functions. Bureaucratic management relies on the guidelines for structuring with
formalization of rules, procedures, and a clear vision of labour.
 Scientific management
Scientific management sought to create a revolution in the workplace by a
systematic study of work methods in order to improve efficiency. Fredrick W.
Taylor was its main proponent and he is known as the father of scientific
management. Taylor believed that the management’s responsibility was in
knowing what it wanted workers to do and then seeing that they do it in the best
and cheapest way. The focus was on the best way to do a job. Method study is
a scientific approach to work in order to identify the best method for
accomplishing a given task. Further, workers should be scientifically selected
based on their qualifications and trained to perform their jobs in optimal manner
– Functional foremanship. Scientific management theory also develops the
performance standards and applies a pay-for-performance incentive plan based
on work standard – Time study and Differential price rate system.
 Administrative management
In contrast to scientific management, which deals largely with jobs and work at
individual level, administrative management provides a more general theory of
management. Administrative management focuses on the processes and
principles of management. Administrative management emphasizes the role of
the manager and the functions of management. Henry Fayol is the major
contributor to this theory of management thought. His fourteen principles of
management included divison of work, authority and responsibility, discipline,
unity of command, unity of direction, subordination of individual interest to
 NATIONAL INSTITUTE OF TECHNOLOGY SIKKIM
Ravangla Campus
Barfung Block, Ravangla Sub Division, South Sikkim-737139
Department of Mechanical Engineering
Principles of Management (HS16101)

general interest, centralization, scalar chain, order, equity, stability of tenure

of personnel, remuneration, initiative, and espirit de crops.
 Bureaucratic management
Max Weber, known as the father of modern sociology, considered bureaucracy
as the most logical and rational structure for large organisations. Some of the
essential elements of bureaucratic management system included division of
labour and chain of command. Bureaucratic management focuses on the ideal
form of organisation. He proposed that a form of organisation, called a
bureaucracy, characterised by division of labour, hierarchy, formalized rules,
impersonality, and the selection and promotion of the employees based on
abilty, would lead to a more efficient management. Some dysfunction of a
bureaucratic structure ae that it has an inherent propensity to impersonalize
workplace, reject innovative ideas, result in high employee turnover, and lead
to poor customer satisfaction.
 Behavioural management theory
The behavioural management thought developed, in part, because of over-simplified
theories of classicists and failure of their application to group behaviour and the
discoveries and advances in psychological theory known as behaviourism. The classical
theory emphasized efficiency, process, and principles. This emphasis seemed to
disregard imporatant aspects of organisational life, particularly related to human
behaviour. Thus, the behavioural theory focused on trying to understand the factors that
affect human behaviour at work. The behavioural management theory began in late in
the scientific management era, but achieved large-scale recognition in 1930s. The major
areas of behavioural management theory are human relations, human resource, and
behavioural science.
 Human relations
Behavioural or human relations management emerged in 1920s and dealt with
the human aspects of organisations.
 There was no direct cause-and-effect relationship between working
conditions and productivity. Worker attitude was found to be important.
 Whenever employees are given attention, productivity is likely to change
irrespective working conditions.
 An employee’s complaint frequently is a symptom of some underlying
problem on the job, at home or in the person’s past.
 Establish and maintain an effective communication system; hire and retain
effective personnel; and motivate those personnel.
 NATIONAL INSTITUTE OF TECHNOLOGY SIKKIM
Ravangla Campus
Barfung Block, Ravangla Sub Division, South Sikkim-737139
Department of Mechanical Engineering
Principles of Management (HS16101)

 Human resources
Being in the early 1950s, the human resources theory represented a substantial
progression from human relations. The behavioural approach did not always
increase productivity. Thus, motivation and leadership techniques became a
topic of great interest. The human resources theory understands that employees
are very creative and competent, and that much of their talent is largely
untapped by their employers. Employees want to do meaningful work,
contribute, and participate in decision making and leadership functions. This
lead to the development of the concept of job enlargement, job rotation, and job
enrichment.
 Job enlargement refers to increasing the scope of a job through extending
the range of its job duties and responsibilities generally within the same
level and periphery. Horizontal extension of the job.
 Job rotation is a technique used by the employers to rotate their
employees’ assigned jobs throughout their employment.
 Job enrichment is a method of motivating employyes where a job is
designed to have interesting and challenging tasks which can require more
skills and can increase pay. This is done by giving an employee additional
responsibilities previously reserved for his manager or other higher-
ranking positions.
 Behavioural science
Behavioural science and the study of organisational behaviour emerged in the
1950s and 1960s. The behavioural science theory was a natural progression of
the human relations movement. It focused on conceptual and analytical tools to
the problem of understanding and predicting behaviour in the workplace. The
behavioural science theory has contributed to the study of management through
its focus on personality, attitude, values, motivation, group behaviour,
leadership, communication, and conflict, among other issues.
 Quantitative management theory
The quantitative management theory focuses on improving decision making via the
application of mathematical and statistical models in management.
 Operations research
Operations research uses mathematical and statistical approaches to solve
management problems. It developed during World War II as military strategists
tried to apply scientific knowledge and methods to the complex problems of
war. George Dantzig (1963) developed linear programming, an algebraic
method to determine the optimal allocation of scare resources. Other tools used
in industry include inventory theory, goal programming, queuing models, game
NATIONAL INSTITUTE OF TECHNOLOGY SIKKIM
Ravangla Campus
Barfung Block, Ravangla Sub Division, South Sikkim-737139
Department of Mechanical Engineering
Principles of Management (HS16101)

theory, and simulation. There are several factors that make up the operations
research approach:
 Specific identification and quantification of system goal/goals.
 Specific identification and quantification of all variables that affect the
attainment of goal/goals.
 Construct a mathematical model to represent the situation being studied.
 Appropriate technique to derive the feasible optimal solution, and
implementation of solution.
 Example of a Linear Programming Problem
Maximize the profit by producing 2 products A and B, where A requires
10, 6, 5 hr of processing on machine P, Q, R, respectively and B requires
7.5, 9, 13 hr on machine P, Q, R, respectively. The maximum weekly hr
available for 3 machines P, Q, R are 75, 54, 65, respectively. Profit per
unit of A and B are Rs. 60 and Rs. 70, respectively. Determine quantity of
product A and B.
 NATIONAL INSTITUTE OF TECHNOLOGY SIKKIM
Ravangla Campus
Barfung Block, Ravangla Sub Division, South Sikkim-737139
Department of Mechanical Engineering
Principles of Management (HS16101)

 Production and operations management

This theory focuses on the operation and control of the production process that
transforms resources into finished goods and services. It has its roots in
scientific management but became an identifiable area of management study
after World War II. It uses many tools and management science. The major
areas of study within operations management include capacity planning, facility
location, facilities layout, materials requirement planning, scheduling,
purchasing and inventory control, quality control, computer integrated
manufacturing, Just-In-Time inventory systems, and flexible manufacturing
systems.
 Systems management theory
During the 1940s and World War II, systems analysis theory emerged. This view point
uses systems concepts and quantitative approaches from mathematics, statistics,
engineering, and other related fields to solve problems. A system is an interrelated and
interdependent set of elements functioning as a whole.
 Open system
An open system interacts with its environments through giving and receiving
information. It takes inputs from within and from outside the organisation, and
its actions will produce outputs that impact the internal environment and the
environment outside of the organisation. A open system is more flexible
compared to a closed system. Example: Marketing and Human Resouce
departments require information from the external environment and take actions
accordingly.
 Closed system
In a closed system, there is a very little sharing of information between the
various components of the organisation and certainly little to no interaction with
the environment outside of the organisation. Example: Research and
Development department.
 Contingency management theory
In the mid-1960s, the contingency view of management or situational approach
emerged. This view emphasizes the fit between organisational processes and the
characteristics of the situation. It calls for fitting the structure of the organisation to
various possible or chance events. The contingency management theory focuses on
applying management principles and processes as directed by the unique characteristics
of each situation. It emphasizes that there is no best way to manage and that it depends
on the various situational factors, such as the external environment, technology,
organisational characteristics, characteristics of the managers, and characteristics of the
subordinates.
 NATIONAL INSTITUTE OF TECHNOLOGY SIKKIM
Ravangla Campus
Barfung Block, Ravangla Sub Division, South Sikkim-737139
Department of Mechanical Engineering
Principles of Management (HS16101)

 Contemporary approach
Management research and practice continues to evolve and new approaches to the study
of management continue to be advanced. New management viewpoints are emerging,
such as Total Quality Management, Excellence approach, and two eastern approaches
– Indian management style and Japanese management approach.
 Total Quality Management
It is a philosophy to management that focuses on managing the entire
organisation to deliver quality goods and services to customers. This approach
emphasizes the importance of improving quality by a five-step chain reaction.
This management theory proposes that when quality is improved – (1) cost
decreases because of less rework, fewer mistakes, fewer delays, and better use
of time and materials; (2) productivity improves; (3) market share increases with
better quality and prices; (4) the company increases profitability and stays in
business; (5) the number of jobs increases. The following tools and principles
are used in total quality management.

Figure 1: TQM tools and principles

 NATIONAL INSTITUTE OF TECHNOLOGY SIKKIM
Ravangla Campus
Barfung Block, Ravangla Sub Division, South Sikkim-737139
Department of Mechanical Engineering
Principles of Management (HS16101)

 Excellence approach
This managerial approach challenged managers to take a fresh, unconventional
look at managing, such as decentralization, innovation, experimentation,
customer satisfaction, and human treatment of employees.
 Indian management style
It is an attitude of detachment to the outcome and focused concentration on the
work in hand that paves the way for success.
 Japanese management style
It is a participative approach to management that brings in involvement and
commitment of employees of the organisation to contribute their best to
organisational goals.