SYBCOM

Semester-III

Management: Principles
& Functions

Dr. Kavita Kalkoti,

Professor and Head,
Department of Commerce

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Introduction to Management
1.1 Management: Meaning, Features and Significance of
Management, Functions

1.2 Managerial Skills: Roles of a Manager (Ten Different Roles

given by Henry Mintzberg)

1.3 Evolution of Management: A) Classical Approach: i) F. W.

Taylor’s Scientific Management Concept & Principles ii) Henri
Fayol’s Principles of Management B) Human Relations
Approach and Elton Mayo’s Hawthorne Experiments, iii) Main
principles of Chanakya’s management

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What is Management? Definitions

“an art of getting the things done through

others.”-Mary parker

George Terry defines Management as a

“distinct process of planning, organising,
actuating (influencing) and controlling,
performed to determine and accomplish the
stated objectives by the use of human beings
and other resources”
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What is Management? Definitions

“To manage is to forecast & to plan, to

organise, to command, to coordinate and to
control”-Henri Fayol

John Mee defines “Management as the art of

securing maximum results with minimum
efforts so as to secure maximum prosperity
and happiness for both employer and
employee and give public the best possible
service”
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Management-
Nature/Features/Characteristics
1. A process: conversion of input into output
2. A social process: it deals with people
3. Goal oriented: sets goals and aims to
achieve them
4. Needed at all levels: top, middle and lower
5. Required in all walks of life: corporate,
Government, education, defence, NGOs, etc
6. Multidisciplinary- draws knowledge from
many disciplines such as sociology,
psychology, mathematics, etc
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Management-
Nature/Features/Characteristics

7. Continuous and dynamic: ever changing

8. Intangible: can’t be seen, only experienced
9. A combination of an Art and Science
10. A profession- but in a limited sense
11. Can be aided but can’t be replaced by
computers

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Management Levels

Top
Management

Middle
Management

Lower/First-line/
Supervisory Management
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Why Management?
Role/Significance/Importance/Benefits/Advantages

1. Brings discipline in work-avoids chaos

2. Helps in optimum use of resources
3. Raises efficiency, productivity & profitability
4. Establishes cordial relations with manpower:
better use and relations

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 Why Management?
Role/Significance/Importance/Benefits/Ad
vantages
1. Brings discipline in work – management defines the tasks to be performed by different
people and departments in the organisation, each one does their job and this helps in
avoiding chaos where everyone tries to do their part without knowing what and when
others will be completing their work.
2. Helps in optimum use of resources – a proper plan include when activities will be
completed, a proper management uses the resources (4m) without wastage
3. Raises efficiency, productivity & profitability –
• efficiency is better output by using specialized skills and expertise, eg. An engineer will be
able to improve the quality of product better than a mechanic
• productivity means ratio of input and output – with the same inputs if outputs are increased
it means the company is productive, eg. a company located in developed countries using
modern technology will be able to more because machines are able to produce more faster
than human beings
• Profitability means the capacity of investments earning profits, Return on Investment, eg.
The chances of earnings and profits for retailers from urban areas is higher because the
density of population in one area is more, so the consumers reached is higher.

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Why Management?
Role/Significance/Importance/Benefits/Advantages

4. Establishes cordial relations with manpower – management

involves planning, organizing and directing, these activities
ensure that employees of the organisation know the reporting
and communicating structure, they know what is the task that
they have to complete and when. This ensures that a
professional method is used to run the organisation and the
relations between and among the employees, managers,
workers is good and there is less strife
5. Enhances competitive strength – competition for a company
is from different firms dealing in the same product or service.
Competitive strength means that feature or quality of a
company that gives it an upper hand in the industry. An
effective or good management means that a company has the
competitive advantage and uses its resources well. This can
help organisations to succeed over competition.
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Why Management?
Role/Significance/Importance/Benefits/Advantages

6. Provides vision – the top level management plans and thinks

for the long run (----years) it helps in long term planning and
execution
7. Smooth expansion and diversification of business activities –
•expansion is increasing the market size of the same
product/service (----)
•diversification means entering into different product/ service
(---). The top and middle level management can decide on
either of these strategies for the business
8. Improves well-being of the society – use of resources,
provision of products and services as required by society lead to
a satisfied consumer and society. Business firms also deal in
products/services that are a need in the society rather than only
for profits.
9. Enhances corporate image – a systematic and good
management improves the reputation and prestige of a
company. 11
Functions of
Management

Core functions:
1. Planning
2. Organising
3. Leading
4. Controlling
Other functions:
✔ Staffing
✔ Coordinating

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 Functions of Management
Core functions:
1. Planning – deciding the future course of action for the
institution, department and the individual
2. Organising – assigning tasks and activities to individuals and
creating groups of relat4ed tasks
3. Leading – giving directions for the work to be completed to
team members
4. Controlling – comparing actuals with targets, if any deviations
are recorded, then corrective action to be taken
Other functions:
✔ Staffing – selecting the right person for the right job
(task/activity)
✔ Coordinating – conduct of all activities in a harmonized
manner such that other departments are not hindered, this
has to be done on a daily basis and is an operative necessity
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Management Skills

Robert Katz-

Three basic skills

1. Technical Skills
2. Human Skills
3. Conceptual and Design Skills

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Managerial skills
1) Technical skills:
▪job specific knowledge and
techniques needed to efficiently
perform the given tasks
▪an ability to use processes,
systems, tools and techniques
▪e.g. operating a machine,
preparing an account statement
▪Technical skills are more required
at the lower/supervisory levels.

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5
 Managerial
skills
2) Human skills:
▪ Interpersonal skills- an ability to work
with other people individually and in a
group
▪ Communication skills: an ability to talk,
listen and understand. Also includes
presentation skills
▪ Leadership skills: an ability to lead,
guide, influence and motivate others
–also include negotiation skills, an ability
to understand the problems and resolve
▪ Essential at all the levels

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Managerial
skills
3)
Administrative/Organizational
skills:
▪an ability to arrange the
resources, implement the
plans & decisions, coordinate
the diverse activities, monitor
and regulate the work
▪More essential at middle and
lower levels

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Managerial skills
4) Conceptual skills:
▪ an ability to think and conceptualize the complex situations,
▪ an ability to visualize and understand the future,
▪ prepare the long term plans and strategies,
▪ to diagnose problems and suggest solutions,
▪ to identify the opportunities and manage the change
▪ more essential at the top level

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Managerial skills at different
levels

Top

Middle

Lower

Conceptual Human Technical

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 Who are
Managers?

Organisations need
managers- good or
great managers- who
can:-
Set goals and plan to
achieve those goals

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 Organisations need managers-
good or great managers- who
can:-
Who are
Evaluate & control and change
Managers? the things if necessary
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Manager - Definition

Robbins & others define

“a manager as someone who coordinates
and oversees the work of other people so
that organizational goals can be
accomplished”

Management is what managers do.

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 Managerial Roles:
Henry Mintzberg- 10 different
roles

A) Interpersonal Roles: involve people and duties that

are ceremonial and symbolic in nature
1. As Figurehead- performing ceremonial duties,
Awards
2. As Leader- leading the subordinates by influencing,
guiding and motivating them, Rajeev Bajaj
3. As Liaison Officer-maintaining relations with insiders
and outsiders
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Managerial Roles:
B) Informational Roles: involve collecting, receiving and
disseminating information
1. As Monitor- the work of collection of information
2. As Disseminator- to supply information to those who
need it
3. As Spokesperson- represent the organisation and speak
to outsiders and media

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Managerial Roles:

C) Decisional Roles: making decisions or choices

1. As Entrepreneur- invest by starting and raising the
funds
2. As Disturbance Handler- handles the troubles and
brings peace
3. As Resource Allocator- provide resources to
different heads or staff
4. As Negotiator- to enter negotiation or contractual
obligations with suppliers, creditors, union leaders,
etc

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Evolution of Management
Historical Background of Management
Management was evolved over the years during
the following periods as production methods
changed and business expanded to larger
geographical areas and products and services
increased.
▪Pre-Industrial Revolution period.
▪Industrial & Post-Industrial Revolution period
▪Growth of Business and Managerial
Revolution
▪Development of Management as a science
and a separate discipline
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Evolution of Management

A. Classical Approach
B. Quantitative Approach
C. Behavioural Approach
D. Contemporary Approach

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 A) Classical Approach

Developed through
Three main streams namely:

i. Scientific Management
ii. Administrative Theory or Functional
Approach
iii. Bureaucratic Management

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 A. CLASSICAL APPROACH
i. Scientific Management
Looks at management from a technical viewpoint to
improve efficiency through improving or enhancing
men-machine relationships. Central concepts of
scientific management are, streamlining tasks (work/
activity/ job), standardizing it so that it can be
replicated throughout the organisation, expanding the
reach of business with the use of these similar
techniques developed by the organisation.

Main contributors: F. W. Taylor, Harrington Emerson,

Henry Gantt, Frank Gilbreth and Lillian Gilbreth etc.
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F.W.Taylor (1856-1915)
-a pioneer in Efficiency Movement

Main Elements/Tools of Scientific Management

1. Separation of planning and doing - division

of work and specialization
2. Work study - time, motion and fatigue
studies
3. Standardization - use of standard tools and
techniques

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 F. W. Taylor (1856-1915)
- a pioneer in Efficiency Movement
4. Scientific selection and training of
workers
5. Financial incentives through
differential wage payments
6. Economy- use of control techniques to
reduce wastages
7. Mental revolution- from conflict to
cooperation
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 Scientific Management-Principles
1. Replace rule-of-thumb methods with methods
based on a scientific study of the tasks (Work Study
and other studies)
2. Scientifically select, train & develop each employee
rather than leaving them to train themselves
3. Provide detailed instruction & supervision to each
worker in the performance of his task.
4. Divide work nearly equally between managers &
workers, so that the managers apply ‘scientific
management principles’ to planning the work and
the workers actually perform the tasks
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 A. CLASSICAL APPROACH
ii. General Administrative Theory
Henri Fayol (1841-1925) was a French
management theorist. He proposed five
primary functions of management

1. Planning
2. Organizing
3. Commanding
4. Coordinating
5. Controlling
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Henri Fayol-
Fourteen Principles of Management

1. Division of work: among employees leads to specialization and improves

efficiency.
2. Authority & Responsibility:
o Authority is the right to give directions/instructions and the power to
demand obedience
o Responsibility is the duty to discharge the given task or duty
o Both these must go together (at the same time) to the employee
o Both must be commiserate (neither should be more than the other) to
each other
3. Discipline: Follow/obey and respect rules and regulations of the organisation
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 Henri Fayol-
Fourteen Principles of Management

4. Unity of command:
o Each employee should have only one boss at a time to give orders.
It avoids conflicts, chaos and “passing the buck”.
5. Unity of direction:
o all activities must have the same objectives, should have one plan
of action and one head to guide subordinates. This also leads to
unity of team and coordination.

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Henri Fayol-
Fourteen Principles of Management
6. Subordination of Individual interests to the general interest:
o Organization's interests must always get preference over individual
interest
7. Remuneration:
o payment of fair remuneration to motivate employees

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Henri Fayol-
Fourteen Principles of Management
8. Centralisation and Decentralisation
o Centralisation-concentration of all authorities in one/few hands
o Decentralisation- dispersal of all major authorities to
subordinates
o Fayol suggested a proper balance between Centralisation and
Decentralisation

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 9. Scalar chain (line of authority):
o Formal chain of command is from top to bottom in an organization
for effective communication
oThe flow of command is from top to bottom and flow of reporting is
from bottom to top. Communication/information is sent both
ways-downward and upward A

B E

C F
Gang Plank(Passage)

D G
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Scalar Chain

oIn a formal structure, communication of

instructions/directions takes place from A TO B TO C TO D as
can be seen from the diagram. This chain has to be followed,
though it takes a long time. A cannot directly communicate
with D or vice-a-versa.
oSo if C has to communicate with F then it has to move up
and then down again this creates confusion and the message
may get distorted.
oSo, in emergency situations, this flow can be broken and a
direct communication link can be established through what
is called as a ‘Gang Plank’

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Henri Fayol-
Fourteen Principles of Management
10. Order: Orderliness- everything must be properly arranged
o people and materials should be in the right place and at the right
time

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Henri Fayol-
Fourteen Principles of Management
11. Equity: fair and kind treatment to employees- no exploitation
12. Stability of tenure of personnel:
o ensuring stability and long-term employment. Giving employees
job security to remove their fear

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Henri Fayol-
Fourteen Principles of Management
13. Initiative:
o Giving opportunity and freedom to employees to think about new
ideas, to plan and execute. This encourages them to give
innovative ideas
14. Esprit de corps:
o Harmony, unity and team spirit among all

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A. CLASSICAL APPROACH
iii. Bureaucratic Management

given by Max Weber-(1864-1920)

a German Sociologist
• Main emphasis on…
❖ formal & uniform rules & procedures
❖ Hierarchy of authority
❖ Specialization, Career advancement on merit, etc.
In India, the entire Government machinery is based on
Bureaucratic Structure
It is, at times, too much rigid & time consuming due to ‘Red
Tapism’ and it results into a lot of delays

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B. QUANTITATIVE APPROACH
also known as Mathematical or Operations Research
(OR) Theory

Main contributors: Simon, Newman, James March, etc

Main aspects:
• Management involves decision making after evaluating various
alternatives
• Use of mathematical models to evaluate the alternatives
• Evolved from Mathematical & Statistical solutions developed for
military problems during World War II

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B. QUANTITATIVE APPROACH

1. Use of Mathematics and Operations Research in Planning, Decision

Making and Controlling to achieve precision
2. Linear Programming to improve resource allocation decisions
3. Queuing Theory to reduce customers’ queues and serve them faster
4. Inventory Modeling for better inventory management
5. MIS for better information management
6. PERT (Programme Evaluation and Review Techniques)
and CPM (Critical Path Method) for timely completion of projects and
avoiding cost over-runs

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C) BEHAVIOURAL APPROACH and

HUMAN RELATIONS APPROACH

(NEO-CLASSICAL)
• Early contributors: Elton Mayo, Mary Parker, Robert Owen,
Chester Barnard, Hugo Munsterberg, etc.
• Classical approach focuses on Jobs whereas this approach
focuses on people performing the jobs
• Elton Mayo’s Hawthorne Experiments proved that the
Jobholder is more important than the Job

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C. Behavioural Approach
based on Psychology, Sociology and
Anthropology

• This approach led to the study of “Organizational Behaviour”

that involves the study of attitudes and behaviour of groups
• Contributors include Maslow, Davis, McGregor, Herzberg,
Rensis Likert, Kurt Lewin, Chris Argyris, etc.
• Motivation, leadership, communication, group dynamics and
participative management are the core aspects

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Human Relations Approach
• The Hawthorne Experiments revealed that productivity could be
increased not only by improving the lighting levels (physical
conditions) but through informal social relations among the
members of the work-group
• A factory or an office is not only a work-place but also a place for
social interaction
• A concept of ‘Social Man’ was introduced

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•The Hawthorne studies discovered that workers
were highly responsive to additional attention from
their managers and the feeling that their managers
actually cared, and were interested in their work
•The studies also found that although financial motives
are important, social issues are equally important
factors in worker’s productivity

Human Relations Approach

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• The Hawthorne studies were a series of investigations conducted by Elton
Mayo and Fritz Roethlisberger. The investigations were a part of a refocus on
managerial strategy with emphasis on the socio-psychological aspects of
human behaviour in organizations. These studies were conducted in the 1920s
at the Hawthorne plant of the Western Electric Company.

• The hypothesis of research was that if workers are given a choice in choosing
their co-workers, everyone works together as a group, everyone is treated
special, and everyone is supervised by a sympathetic supervisor, the
productivity of workers will increase. One of the key findings of the research
was that monetary incentives combined with good working conditions are not
as important as meeting workers’ need and desire to work as a group and
feel included in decision making.

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 Main Principles of Chanakya’s
Management

Material Uploaded in the google classroom

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