Principles of Management

(ME3104D)
Course faculty: Dr. Anoop K P, MED, NITC
[email protected]
Course objectives
• To explain the characteristics and functions of management in the
contemporary context
• To demonstrate ability in decision-making process and appreciate
various decision-making models
• To summarize the functional areas of management
• To comprehend the concept of entrepreneurship and create business
plans
Syllabus
Module 1: (15 hours)
• Introduction to management, classical, neo-classical and modern
management theories.
• Levels of managers and skill required.
• Management process – planning – mission – objectives – goals –
strategy – policies – programmes – procedures.
• Organizing, principles of organizing, organization structures.
• Directing, Leadership, Motivation, Controlling.
Syllabus (Contd.)
Module 2: (11 hours)
• Concept of productivity and its measurement
• Competitiveness
• Decision making process; decision making under certainty, risk and
uncertainty
• Decision trees
• Models of decision making
Syllabus (Contd.)
Module 3: (13 hours)
• Introduction to functional areas of management; Operations
management, Human resources management, Marketing
management, Financial management
• Entrepreneurship
• Business plans
• Corporate social responsibility
• Patents and Intellectual property rights
Evaluation policy
Evaluation Policy for Principles of Management Course
Examination Marks distribution Portions
Mid-Term Examination 30 Marks Module 1
Homeworks / Assignments / Class 30 marks
tests / Case study discussions /
Presentations/ Participation /
Tutorials / Quiz / Seminar
End-Term Examination 40 marks Modules 2 and 3

Main reference books:

1. H. Koontz, and H. Weihrich, Essentials of Management: An International Perspective. 8th ed., McGraw-Hill,
2009.
2. S. P. Robbins, D. A. DeCenzo, S. Bhattacharyya and M. N. Agarwal, Fundamentals of Management: Essential
Concepts and Applications, 6th ed., Pearson, 2009.
Introduction to Management
• Managing – essential to ensure the coordination of individual efforts
• Society rely increasingly on group effort and as organized groups
become large, the task of managers rise in importance
• Management is the process of designing and maintaining an
environment in which individuals, working together in groups,
efficiently accomplish selected aims.
• An organization is a deliberate collection of people brought together
to accomplish some specific purpose
Introduction to Management
• Non-managerial employees: people who work directly on a job or
task and have no responsibility for overseeing the work of others.
• Managers direct and oversee the activities of other people in the
organization so organizational goals can be accomplished.
• Anyone who works in an organization, not just managers, can gain
insight into how organizations work and the behaviors of the
employees at various levels
• Managing: Science or Art?
• Managing as practice is an art; the organized knowledge underlying the
practice may be referred to as science
Classification of managerial roles
• Top managers: direction of the organization/policies/values;
Example: President, Vice President, MD, CEO, COO etc.
• Middle managers: translating the goals set by top managers
into specific details that lower-level managers will see get
done; E.g. Department Head, Project Leader, Unit Chief,
Division Manager etc.
• First-line managers: direct the day-to-day activities of
nonmanagerial employees and/or team leaders; Example:
supervisors, shift managers, office managers etc.
• Team leaders: lead and facilitate the activities of a work
team
Frederick Taylor and Scientific Management
• The word management was popularized by Frederick Winslow Taylor
• Taylor’s famous book “Principles of Scientific Management” was published
in 1911.
• Taylor’s theory of scientific management: the use of scientific methods to
define the “one best way” for a job to be done.
• Fundamental principles proposed by Taylor:
• Replacing rules of thumb with science (organized knowledge)
• Obtaining harmony rather than discord in group action
• Achieving cooperation of human beings rather than chaotic individualism
• Working for maximum output rather than restricted output
• Developing all workers to the fullest extent possible for their own and their
company’s highest prosperity
Functions of managers
• Planning: Selecting missions and objectives as well as the actions to
achieve them, which requires decision-making.
• Organizing: Establishing an intentional structure of roles for people to
fill in an organization
• Staffing: Filling and keeping filled the positions in the organization
structure.
• Leading: Influencing people so that they will contribute to
organizational and group goals.
• Controlling: Measuring and correcting individual and organizational
performance to ensure that events conform to plans.
Functions of managers (Contd.)
• All managers carry out managerial functions. However, the time spent
for each function may differ.

Time spent in carrying out managerial functions

Skills at management levels
Productivity, Effectiveness and Efficiency
• Productivity
• The output–input ratio within a time period with due consideration for
quality.
Productivity = Outputs/Inputs (within a time period, quality considered)
• How can productivity be improved?
• Examples of input: labor, material, capital
• Productivity implies effectiveness and efficiency in individual and
organizational performance.
• Effectiveness is the achievement of objectives and Efficiency is the
achievement of the ends with the least amount of resources.
General Administrative Theory
• Father of modern management theory – French industrialist Henri Fayol.
• He recognized a widespread need for principles and management teaching.
• Henri Fayol and Max Weber (German Sociologist) looked at organizational
practices by focusing on what managers do and what constituted good
management.
• This approach is known as general administrative theory
• He identified five management functions - planning, organizing,
commanding, coordinating, and controlling
• He also identified 14 principles of management – fundamental rules that
can be applied to all organizations
General Administrative Theory
1. Division of Work - Specialization increases output by making employees
more efficient
2. Authority - Managers must be able to give orders (responsibility arises)
3. Discipline - Employees must obey and respect the rules that govern the
organization
4. Unity of Command - Every employee should receive orders from only one
superior
5. Unity of Direction - Organizational activities that have the same objective
should be directed by one manager using one plan
6. Subordination of Individual Interests to the General Interest
7. Remuneration - Workers must be paid a fair wage for their services
General Administrative Theory
8. Centralization - Find the optimum degree of centralization for each
situation
9. Scalar Chain - The line of authority from top management to the lowest
ranks
10. Order - People and materials should be in the right place at the right
time
11. Equity - Managers should be kind and fair to their subordinates
12. Stability of Tenure of Personnel
13. Initiative - Employees who are allowed to originate and carry out plans
will exert high levels of effort
14. Esprit de Corps - Promoting team spirit will build harmony and unity
within the organization
Bureaucratic Theory
• Max Weber is known for his description and analysis of bureaucracy -
which he believed was an ideal, rational form of organization structure,
especially for large organizations.
• Most medium-sized and large organizations are structured as a
bureaucracy because its traits—specialization, formal rules and regulations,
clear chain of command, and departmentalization—help efficiently
structure people and tasks
• Six major principles:
1. A formal hierarchical structure
2. Rules-based Management
3. Functional Specialty organization
4. Up-focused or In-focused Mission
5. Impersonal
6. Employment-based on Technical Qualifications
Hawthorne Studies
• The Hawthorne studies - a series of studies that provided new insights into
individual and group behavior - most important contribution to the
behavioral approach to management
• Elton Mayo, F. J. Roethlisberger, and others undertook the experiments at
the Hawthorne (Cicero, Illinois) plant of the Western Electric Company
between 1927 and 1932
• Objective - Determine the effect of illumination and other conditions on
workers and their productivity
• Changing illumination for the test group, modifying rest periods,
shortening workdays, and varying incentive pay systems did not seem to
explain changes in productivity
Hawthorne Studies
• Mayo and his researchers then came to the conclusion that other
factors were responsible.
• They found - The improvement in productivity was due to such social
factors as morale, satisfactory interrelationships between members of
a work group and effective management
• Effective management - a kind of managing that takes into account human
behavior, especially group behavior, and serves it through such interpersonal
skills as motivating, counseling, leading, and communicating
Quantitative approach to management
• The use of quantitative techniques to improve decision making—
evolved from mathematical and statistical solutions developed for
military problems during World War II.
• After the war was over, many of these techniques used for military
problems were applied to businesses
• For instance, one group of military officers, joined Ford Motor
Company in the mid-1940s and immediately began using statistical
methods to improve decision making at Ford.
Total Quality Management
• After World War II, Japanese organizations enthusiastically embraced the
concepts espoused by a small group of quality experts, the most famous
being W. Edwards Deming and Joseph M. Juran.
• These Japanese manufacturers began beating U.S. competitors in quality
comparisons
• Their ideas became the basis for total quality management (TQM), which
is a management philosophy devoted to continual improvement and
responding to customer needs and expectations.
Total Quality Management

Four levels of TQM

Total Quality Management
• Eight principles of TQM:
• Customer-focused: The customer ultimately determines the level of quality.
• Total employee involvement: All employees participate in working toward common
goals (fear is eliminated from the workplace)
• Process-centered: A fundamental part of TQM is a focus on process thinking. Process
clearly defined and performance continuously monitored
• Integrated system: focus on horizontal processes integrating vertical
departments/functions
• Strategic and systematic approach: strategic plan which integrates quality as a core
component
• Continual improvement: continual process improvement
• Fact-based decision making: data on performance measures
• Communications: Communications involve strategies, method, and timeliness.
Systems approach
• An approach to management that views an organization as a system,
which is a set of interrelated and interdependent parts arranged in a
manner that produces a unified whole
• Systems have boundaries, but they also interact with the external
environment; that means organizations are open systems
• Recognizes the importance of studying the interrelatedness of
planning, organizing, and controlling in an organization as well as in
the many subsystems
Systems approach – key features
• Interconnected Sub-systems: An organization is like a big puzzle made up of
smaller pieces that work together
• No Isolation: We can’t understand the sub-systems by looking at them
individually
• Boundary: An organization has a boundary that sets it apart from other
systems
• Changing Environment: Organizations are dynamic systems because they
are affected by their environment
• Sensitivity to the Environment: Because organizations are influenced by
their environment, they need to be sensitive to changes
• Monitoring and Taking Action: Pay attention to signs of problems and take
corrective action promptly
Contingency approach
• Managerial practice depends on circumstances (contingency or a
situation)
• Contingency theory recognizes the influence of given solutions on
organizational behaviour patterns
• Managers have long realized that there is no one best way to do
things
• Difficult to determine all relevant contingency factors and to show
their relationships
Additional online references
• https://managementweekly.org/taylorism-management/
• https://www.toppr.com/guides/fundamentals-of-economics-and-
management/evolution-of-management-thought/bureaucratic-
theory-by-max-weber/
• https://asq.org/quality-resources/total-quality-management
• https://ebooks.inflibnet.ac.in/mgmtp05/chapter/58/
• https://www.encyclopedia.com/management/encyclopedias-
almanacs-transcripts-and-maps/contingency-approach-management