MODERN BUSINESS

PRACTICES

Prepared by DEEPALI MITTAL (SDJIC)

UNIT 1: MANAGERIAL
FUNDAMENTALS (15%)
 WHAT IS
MANAGEMENT?
A 'Management Is a distinct process consisting of planning, organizing, actuating and
controlling; utilizing in each both science and art, and followed in order to accomplish pre-
determined objectives.“
-George R Terry

"Management is the art of getting things done through others and with formally
organized groups.“ -Harold Koontz

"Management is the art of knowing what you want to do and then seeing that they do it
in the best and the cheapest may."
-Frederick Winslow Taylor

“Management is a multi-purpose organ that manages business and manages managers

and manages workers and work.”
-Peter Ferdinand Drucker
LEVELS OF MANAGEMENT
Characteristics/Features of Management
 Characteristics/Features of Management

• UNIVERSAL: This means that the principles, concepts, and techniques of

management apply across various types of organizations and industries, irrespective
of their size, location, or sector.
• GOAL ORIENTED: The functions and activities of manager lead to the achievement of
organizational objectives; for example, if the objective of a company is to sell 1000
computers then manager will plan the course of action, motivate all the employees
and organize all the resources keeping in mind the main target of selling 1000
computers.
• CONTINOUS PROCESS: Management is a continuous or never ending function. All
the functions of management are performed continuously, for example planning,
organising, staffing, directing and controlling are performed by all the managers all
the time. Sometimes, they are doing planning, then staffing or organizing etc.
Managers perform ongoing series of functions continuously in the organization.
• MULTIDIMENSIONAL: Management does not mean one single activity but it
includes three main activities:
• i. Management of work
• ii. Management of people
• iii. Management of operations
• GROUP ACTIVITY: Management always refers to a group of people involved in
managerial activities. The management functions cannot be performed in
isolation. Each individual performs his/her role at his/her status and department,
and then only management function can be executed.
• DYNAMIC FUNCTION: Management has to make changes in goal, objectives and
other activities according to changes taking place in the environment. The external
environment such as social, economical, technical and political environment has
great influence over the management.
• INTAGIBLE: Management function cannot be physically seen. The presence of
management can be felt by seeing the orderliness and coordination in the working
environment. It is easier to feel the presence of mismanagement as it leads to
chaos and confusion in the organization.
 IMPORTANCE OF MANAGEMENT
• It helps in Achieving Group Goals - It arranges the factors of production, assembles
and organizes the resources, integrates the resources in effective manner to achieve
goals. It directs group efforts towards achievement of pre-determined goals. By
defining objective of organization clearly there would be no wastage of time, money
and effort. Management converts disorganized resources of men, machines, money
etc. into useful enterprise. These resources are coordinated, directed and controlled
in such a manner that enterprise work towards attainment of goals.
• Optimum Utilization of Resources - Management utilizes all the physical & human
resources productively. This leads to efficacy in management. Management provides
maximum utilization of scarce resources by selecting its best possible alternate use in
industry from out of various uses. It makes use of experts, professional and these
services leads to use of their skills, knowledge, and proper utilization and avoids
wastage. If employees and machines are producing its maximum there is no under
employment of any resources.
• Reduces Costs - It gets maximum results through minimum input by proper planning
and by using minimum input & getting maximum output. Management uses physical,
human and financial resources in such a manner which results in best combination.
This helps in cost reduction.
• Establishes Sound Organization - No overlapping of efforts (smooth and coordinated
functions). To establish sound organizational structure is one of the objective of
management which is in tune with objective of organization and for fulfillment of this,
it establishes effective authority & responsibility relationship i.e. who is accountable
to whom, who can give instructions to whom, who are superiors & who are
subordinates. Management fills up various positions with right persons, having right
skills, training and qualification. All jobs should be cleared to everyone.
• Establishes Equilibrium - It enables the organization to survive in changing
environment. It keeps in touch with the changing environment. With the change is
external environment, the initial co-ordination of organization must be changed. So it
adapts organization to changing demand of market/changing needs of societies. It is
responsible for growth and survival of organization.
• Essentials for Prosperity of Society - Efficient management leads to better
economical production which helps in turn to increase the welfare of people. Good
management makes a difficult task easier by avoiding wastage of scarce resource.
It improves standard of living. It increases the profit which is beneficial to business
and society will get maximum output at minimum cost by creating employment
opportunities which generate income in hands. Organization comes with new
products and researches beneficial for society.
• POSDCORB is an acronym coined by Luther Gulick in the early 20th century to
describe the core functions of management in a hierarchical organization
P - Planning:
• Planning involves setting organizational goals, defining strategies to achieve
those goals, and creating plans to guide the allocation of resources.
• Example: A retail company plans to increase its annual revenue by 10% over the
next fiscal year. To achieve this, they develop a detailed plan that includes
marketing strategies, inventory management, and sales targets.
O - Organizing:
• Organizing involves arranging resources, tasks, and people in a way that ensures
the efficient execution of plans.
• Example: In a manufacturing plant, the manager organizes the workforce,
machinery, and raw materials in a way that optimizes production output and
minimizes waste.
S - Staffing:
• Staffing deals with recruiting, training, and managing the personnel needed
to carry out the organization's objectives.
• Example: A software company hires software developers, QA engineers, and
project managers to build and maintain their products. They also provide
training to keep their skills up to date.
D - Directing:
• Directing involves guiding and supervising employees to ensure they work
towards the organization's goals effectively.
• Example: A restaurant manager directs the kitchen staff to ensure that orders
are prepared correctly and served promptly, while the front-of-house staff
provides excellent customer service.
CO - Coordinating:
• Coordinating focuses on harmonizing the efforts of different departments or
individuals to avoid conflicts and ensure that everyone is working towards the
same goals.
• Example: In a hospital, various departments such as radiology, surgery, and
nursing need to coordinate their activities to provide comprehensive patient
care.
R - Reporting:
• Reporting involves the flow of information up and down the organization
hierarchy. It ensures that superiors are informed of progress and challenges
while subordinates receive guidance and feedback.
• Example: Employees submit weekly progress reports to their supervisors,
detailing their accomplishments and any obstacles they encountered.
B - Budgeting:
• Budgeting involves the allocation of financial resources to various activities
and projects based on the organization's goals and plans.
• Example: A non-profit organization creates an annual budget that outlines
how donations will be used to fund different programs, such as education
initiatives or community outreach.
 BASIS FOR
MANAGEMENT ADMINISTRATION
COMPARISON

An organized way of The process of administering

managing people and things an organization by a group of
Meaning
of a business organization is people is known as the
called the Management. Administration.

Authority Middle and Lower Level Top level

Role Executive Decisive

Concerned with Policy Implementation Policy Formulation

 Area of It works under It has full control over the
operation administration. activities of the organization.
Government offices, military,
Profit making organizations, clubs, business enterprises,
Applicable to
i.e. business organizations. hospitals, religious and
educational organizations.
Who will do the work? And What should be done? And
Decides
How will it be done? When is should be done?
Putting plans and policies Formulation of plans, framing
Work
into actions. policies and setting objectives

Making best possible

Focus on Managing work
allocation of limited resources.
 Making best possible
Focus on Managing work allocation of limited
resources.

Key person Manager Administrator

Employees, who work for Owners, who get a return on

Represents
remuneration the capital invested by them.

Function Executive and Governing Legislative and Determinative

MANAGERIAL ROLES BY
HENRY MINTZBERG
Who are Managers?
A manager is a person who is responsible for a part of a
company, i.e., they ‘manage‘ the company.

▪ Someone who works with and through other people by

coordinating their work activities in order to accomplish
organizational goals.
▪ manager is a person responsible for supervising and
motivating employees and for directing the progress of an
organization.

“Management consists of getting things done through others.

Manager is one who accomplishes the objectives by directing
the efforts of others.”
- S. George
• Managers perform many different roles every day.
• Leading your team, resolving a conflict, negotiating new contracts,
representing your department at a board meeting, or approving a
request for a new computer system.
• A manager is constantly switching roles as tasks, situations, and
expectations change.

Management expert and professor Henry Mintzberg recognized that

there are Ten primary roles or behaviors that can be used to categorize
a manager's different functions.
 Interpersonal Roles

It relates to establishing relationship by a manager with

other persons & parties on formal authority and status.

According to study by Mintzberg, manager spend,

• About 45% of their contact time with peer,

• About 45% with people outside organization &

• Only 10% with superior

1. Figurehead(unit head) : As a manager, you have social and legal
responsibilities. You're expected to be a source of inspiration. People look
up to you as a person with authority, and as a figurehead.

2. Leader – This is where you provide leadership for your team, your
department or perhaps your entire organization; and it's where you
manage the performance and responsibilities of everyone in the group.

3. Liaison(to communicate) – Managers must communicate with internal

and external contacts. You need to be able to network effectively on behalf
of your organization.
 Informational Roles
Concerned with managing information, in coming as well
as outgoing, effectively. Manager develops a system
wherein he is able to receive all relevant pieces of
information from others and share the same with other
persons as per the need of situation.
4. Monitor(eagles eye) – In this role, you regularly seek out information
related to your organization and industry, looking for relevant changes in the
environment. You also monitor your team, in terms of both their
productivity, and their well-being.

5. Disseminator – This is where you communicate potentially useful

information to your colleagues and your team.

6. Spokesperson(representative) – Managers represent and speak for their

organization. In this role, you're responsible for transmitting information
about your organization and its goals to the people outside it.
 Decisional Roles

7. Entrepreneur – As a manager, you create and control change within the

organization. This means solving problems, generating new ideas, and
implementing them.

8. Disturbance Handler – When an organization or team hits an unexpected

roadblock, it's the manager who must take charge. You also need to help
mediate disputes within it. Eg strike, fire, break-down of machines, etc.
9. Resource Allocator – You'll also need to determine where organizational
resources are best applied. This involves allocating funding, as well as
assigning staff and other organizational resources.

10. Negotiator – You may be needed to take part in, and direct, important
negotiations within your team, department, or organization. Discuss about
the burning issue on the behalf of the organization with the concerned
parties.
SCIENTIFIC MANAGEMENT BY
FREDRICK TAYLOR

1-#
“Scientific management is the substitution of exact scientific
investigations and knowledge for the old individual judgment or
opinion in all matters relating to the work done in the shop”.
—F.W. Taylor

“The core of scientific management is the organized study of work,

the analysis of work into its simplest elements and the systematic
improvement of the worker’s performance of each element.”
—Peter F. Drucker
Historical Perspective:

• He started the Scientific Management movement, and he and his

associates were the first people to study the work process scientifically.

• They studied how work was performed, and they looked at how this
affected worker productivity.

• "The Principles of Scientific Management" - In this, he proposed that by

optimizing and simplifying jobs, productivity would increase.

• He found that by calculating the time needed for the various elements of a
task, he could develop the "best" way to complete that task.
Four Principles of Scientific Management
1.Science, not the rule of thumb:

The decision should be based on scientific analysis and cause and effect

relationships rather than ‘Rule of Thumb’ where the decision is taken according to

the manager’s personal judgement.

2. Harmony, not discord:

Discord means lack of harmony. Taylor indicated and believed that the

relationship between the workers and management should be cordial and

completely harmonious. Management and workers should acknowledge and

understand each other’s importance.

3. Cooperation, not individualism:
Work must be done with cooperation and mutual understanding.
E.g. At the time of assigning the job to workers if management asks them about
their area of interest then definitely the workers will perform the work more
efficiently.
4. Development of workers to their greatest efficiency and prosperity:
In this principle, Taylor mainly focuses on the appropriate selection of employees
and giving jobs according to their skills and capabilities. Employees must be sent
for training to update their knowledge which will help in the growth of employees
as well as the organization.
14 PRINCIPLES OF
MANAGEMENT
1-#
 1. Division of Work
• Work should be divided among individuals and groups.

• When employees are specialized, output can increase because they

become increasingly skilled and efficient.

• It produces more and better work with the same effort.

• Fayol said that work specialization is the best way to use the human
resources of the organisation.
 2. Authority and Responsibility
• Authority was defined by Fayol as the right to give orders and the
power to exact obedience.

• Responsibility involves being accountable, and is therefore naturally

associated with authority.

• Managers must have the authority to give orders, but they must also
keep in mind that with authority comes responsibility.

• Responsibility is closely related to authority and it arises wherever

authority is exercised.
 3. Discipline

• Discipline means obedience to authority, observance of the rules and

norms of performance, respect for agreements, sincere efforts for
completing the given job, respect for the superiors and the organization,
etc.

• The best means of maintaining discipline are good supervisors at all

levels, clear and fair agreements between the employees and the
employer, and judicious application of penalties.
 4. Unity of Command

• Each employee should receive instructions about a particular work

from one superior only.

• If there were to be more than one superiors, the employee would be

confused due to conflict in instructions.
 5. Unity of Direction

• Teams with the same objective should be working under the direction
of one manager, using one plan.

• Fayol advocates "One head and one plan" which means that group
efforts on a particular plan be led and directed by a single person.

• This enables effective co-ordination of individual efforts and energy.

 6. Subordination of Individual Interest
to General Interest
• First priority to general interest.

• An individual is always interested in maximizing his own satisfaction

through more money, recognition, status, etc.

• It is very often against the general interest of the organization.

• The interests of one employee should NOT be allowed to become more

important than those of the group.
 7. Fair Remuneration to employees

• According to Fayol wage-rates and method of their payment should be

fair, proper and satisfactory.

• Fair remuneration increases workers’ efficiency and boost their morale.

• It also plays a vital role in making the relations of the employees and
the management better.
 8. Centralization & Decentralization
• Centralization implies the concentration of decision making authority
at the top management (executive board).

• Sharing of authorities for the decision-making process with lower

levels (middle and lower management), is referred to as
decentralization by Henri Fayol.

• According to Fayol there should be proper and effective adjustment

between centralization and decentralization in order to achieve
maximum objectives of the business.
 9. Scalar Chain

• Scalar chain is the formal line of authority which moves from highest to
lowest rank in a straight line.

• This chain specifies the route through which the information is to be

communicated to the desired location/person.

• Fayol emphasized that every information in the organization must flow

according to this chain to facilitate clear communication of orders of
the superiors and feelings of the subordinates.
 10. Order

• “right place for everything and right man at right place”

• There should be proper, systematic and orderly arrangement of

physical and social factors, such as land, raw materials, tools and
equipment's and employees respectively.

• There should be an orderliness in work through suitable

organization of men and materials.
 11. EQUITY

• Management should treat all its employees as equally as possible.

• Managers should be free from all prejudices, personal likes or

dislikes.

• It ensures healthy industrial relations between management and

labor.

• This will create loyalty and devotion among the employees.

 12. Stability of Tenure of Personnel

• Workers should be assured of the security of job by the management.

• This is important to motivate them and extract better work from them.

• If they fear for job security, their morale will be low and they cannot
give efficient work.

• Also, they will not have any sense of attachment to the organization and
they will always be on the lookout for a job elsewhere.
 13. INITIATIVE

• Under this principle, the successful management provides an

opportunity to suggest their new ideas to its employees

• Experiences and more convenient methods of work.

• Employees should be given the necessary level of freedom to create

and carry out plans.

• Employees should be encouraged to make all kinds of suggestions to

conceive and carry out their plans.
 14. ESPRIT DE CORPS.

• This term means TEAM SPIRIT

• Harmony and unity among the employees is a great source of strength

to the organization.

• Verbal communication should be used for removing misunderstandings.

• To achieve this, the motto of divide and rule should be avoided.

THANK YOU!