Principles & Practices of

Management
“For every person who’s a
manager and wants to know how
to manage people, there are 10
people who are being managed
and would like to figure out how
to make it stop.”

- Scott Adams, Creator of “Dilbert”

 Webster’s says
• Manage
– Handle or direct
– Alter by manipulation
– To achieve one’s purpose
• Manager
– One who manages
• Management
– The judicious use of means to accomplish
an end
Management
“How to plan, organize, lead and control
resources (people, money, material and
information) in order to achieve
organizational goals efficiently and
effectively”

Henri Fayol
General Industrial Management
 Importance of Management
• Management is a critical element in the
economic growth of a country.

• It is the dynamic, life-giving element in

every organization – coordinates present
with future.
 Management Functions

• Planning
• Organizing
• Controlling
• Directing
• Planning:
– Define goals for future performance
– How to get there?
– What tasks needed?
– What resources?
Lack of poor planning = Failure
• Organizing: Establishing a structure of working relationships that
enables people to work together to achieve organizational goals.
– Assignment of tasks
– Grouping of tasks into departments/teams
– Allocation of resources
– Updating management model
• Situation
• Personnel
• Constraints
• Directing – getting employees to achieve goals
– Give them the plan
– Communicate Goals (Why important?)
– ‘Conduct the orchestra’
*Communication and reassessment are the keys to success
• Controlling:
– Monitoring employee activities
– Determining if on target (Feedback Loop)
– Make course corrections as necessary
• Re-plan, organize, direct, and monitor

Peter Drucker: “What gets measured gets done.”

“Trust BUT Verify”

 Nature of Management

• Goal oriented
• Economic resource
• Integrative force
• Intangible force
• System of authority
• Universal application
• Multi-disciplinary subject
• A science and an Art
Management: a Science or an Art?
SCIENCE
• Systematized body of knowledge including concepts,
principles and theories.
• Should have a method of scientific enquiry.
• Should establish cause and effect relationship
• Principles should be verifiable
• Should ensure predictive results
• Should have universal application

SOFT/SOCIAL/IN-EXACT SCIENCE
Art is the bringing about desired result through the
application of skills

• Denotes personal skills

• Signifies practical knowledge
• Helps in achieving concrete results
• Creative in nature
 Purpose: Building Sustainable
Competitive Advantage
• Increase efficiency
• Increase quality
• Decrease cost
• Increase appropriate technology
• Increase speed, flexibility and innovation
• Increase responsiveness to customers
• Remove waste
• Improve continuously (kaizen)
• Build a set of organizational capabilities that are
difficult for competitors to duplicate
Factors affecting the work of
managers
 Manager’s Roles
• Informational:
– Monitor- scan the environment, interrogate his
contacts and subordinates
– Disseminator
– Spokesperson
• Interpersonal:
– Figurehead- to perform ceremonial nature of duties
– Leader
– Liaison
• Decisional:
– Entrepreneur, Disturbance Handler, Resource
Allocator, Negotiator
 Functions of a Manager
Luther Gullick - “PODSCORB”

• Planning
• Organizing
• Directing
• Staffing
• Coordinating
• Reporting
• budgeting
 Evolution of Management Thought
I. Early Classical Approaches
a) Scientific Management - Defined by Frederick W.
Taylor in late 1800’s:
• Focused on the process by breaking it down into steps,
optimizing each step through time-and-motion studies,
codifying it into Standard Operating Procedures (SOPs), and
then finding workers whose skills best matched the new
process.
• Differential Payment- low if std. & high if surpassed.
• Drastic reorganization of supervision- a)separation of
planning & doing, b)functional foremanship
• Scientific recruitment and training
• Intimate friendly cooperation between the management and
workers
Result: greatly enhanced efficiency and
productivity.

Limitations:
• management abuse and worker
depersonalization/boredom.
• No two individuals can work at the same
pace
• Having a man take orders from 7-8 bosses
resulted in confusion, overhead cost
• Henry L. Gantt – focused on the importance of
human element and propounded the concept of
motivation.
- 50% bonus for completion of work
- Foreman to earn bonus for each worker who
reached daily standard and extra bonus if all
reach the target.
- Gantt Chart for rating the employee publicly I.e,
worker’s progress recorded on individual bar
harts, inked in black and red.
- Gantt chart is still in use.
• Lillian Gilbreth- contributed motion and fatigue
study.
- using motion picture cameras tried to find out
most economical options for bricklaying.
- Found 17 basic types, called “therbligs” &
provided shorthand to them for easy and quick
motion observation.
- Raised worker’s morale, not only because of
their physical benefits but also management’s
concern demonstrated.
 b)Administrative Management
• Was propounded by Max Weber - based on the
concept of bureaucracy – a formal system of
organization and administration designed to
maximize efficiency and effectiveness. And

• Henri Fayol who gave 14 principles of

management
 Henri Fayol’s 14 Principles
• Division of Labor
• Authority and Responsibility (flip sides of the
management coin)
• Unity of command (reporting to more than one boss
leads to confusion)
• Unity of Direction (a single plan that everyone follows)
• Equity (fair and impartial treatment of employees)
• Order (a logical structure optimizes organizational
performance and provides opportunity for advancement)
• Line of Authority/scalar chain (clear chain of
command/Gang plank)
• Centralization (power centralized at the top)
• But with worker Initiative (fostering creativity,
innovation and independent action)
• Discipline (organization can’t function without
respectful employees)
• Subordination of Individual Interest to general
interest (interest of organization supersedes interest of
individual)
• Uniform Remuneration
• Stability of Tenure (long-term employment supports
skill development)
• Esprit de Corps (team spirit; comradeship and shared
enthusiasm foster devotion to organizational success)
 II. Neo-Classical Approaches
• Human Relations Theory – Prof. Elton Mayo gave
Hawthorne studies, experimented in four parts:
- Illumination Experiments- to test the belief that
productivity is positively correlated to illumination.
- Relay Assembly Test Room- aimed at not only knowing
the impact of illumination but also other factors as
length of working day, rest pauses, their frequency and
duration and other physical conditions.
a)feeling of importance
b)informality and tension free interpersonal and
social relations
c)high group cohesion among girls
- Interviewing Programme- to know as to what were
the basic factors responsible for human behaviour at
work. It was non-directive type of interviewing
- Bank wiring Observation room- in-depth observation
of 14 men making terminal banks of telephone wiring
assemblies, to determine the effect of informal group
norms and formal economic incentives on
productivity.
a) Group evolved its own production norms for each
individual which wee much lower than those set by
mngt.
b) Worker’s would produce that much and no more,
defeating the incentive system
c) This artificial restriction of production saved
workers from possible cut in their piece rates
and protection of weaker and slower workers.
• Rate busters (produced more)
• Chisellers (too slow)
• Squealers (complained to supervisor against
their co-workers
d) Informal leaders and internal social structure.
• Behavioural Theory – help understand
organizational behaviour. Encouraged the
process of self-direction and control instead of
imposed control. They favoured participation,
informal human groups and motivation. The
advocates of this approach are are scientists
trained in field of social sciences such as
psychology, sociology and anthropology etc.
 1)Maslow’s Hierarchy of Needs
• Based on the assumption that human needs are
inexhaustible
• A satisfied need is no longer a motivator

• Maslow categorises the needs in ascending order – physiological,

security, affiliation, esteem and self-actualisation.

• Gradual emergence of higher-level/higher-order needs as lower-

level needs become more satisfied

• Relative importance of needs changes during the psychological

development of the individual
Maslow’s Hierarchy of Needs

Source: Adopted from Abraham H. Maslow, “A Theory of Human Motivation,” Psychology Review, 1943, Vol. 50, pp. 370-396.
 2)Herzberg’s Two-Factor Ttheory
Herzberg avoids using the word ‘need’ and maintains
that in any work situation, you can distinguish
between two sets of factors.
Hygiene factors
• features of the work environment which, if present, help avoid
dissatisfaction with work e.g work environment, status, company
procedures, quality of supervision.
• Can be related roughly to Maslow’s lower-level needs.
Motivators
• features of the job itself that people find enjoyable and that have
a motivational effect.Mainly intrinsic in nature e.g. sense of
achievement, recognition, responsibility.
• can be related to Maslow’s higher-level needs.
The Two Factor Theory of
Motivation
 3) McGregor’s PARTICIPATION
THEORY
• Formulated two distinct views of human being based
on participation of workers.
• Theory X he labeled negative and
• Theory Y as positive.
4) Rensis Likert- developed a scale on 1-7 to measure
the attitude.Also gave four basic styles of leadership
- exploitative autocratic
- Benevolent autocratic
- Participative
- democratic
III. Modern approach
• Quantitative/Management Science Approach- belief
that management problems can be expressed in terms of
mathematical symbols and relationships providing
quantitative basis for managerial decisions. Techniques
commonly used are Linear programming, CPM, PERT,
Games theory, Queuing Theory, break-even Analysis.

• Decision Theory- a)defining problems, b) development

of alternatives, c)evaluating these
alternatives,d)choosing the best.

• Empirical Approach- case approach

• Systems Approach – organisation as a system with
characteristics like:
a) A system is goal oriented
b) Consists of several sub-systems which are independent and
interrelated
c) Open and dynamic

Environment

Inputs Output
Transformation /
managerial process

Feedback
• Contingency Approach – situational approach.
Three parts
a) Environment (If)-independent part
b) Management concepts, principles and
techniques (Then)- dependent part
c) Contingent relation between these two
- Forming a grid system
- No one best style of leadership
MCKINSEY’S 7S FRAMEWORK
 THE HARD S’s

Strategy: the direction and scope of the company over the long
term.

Structure: the basic organization of the company, its

departments, reporting lines, areas of expertise and responsibility
(and how they inter-relate).

Systems: formal and informal procedures that govern everyday

activity, covering everything from management information
systems, through to the systems at the point of contact with the
customer (retail systems, call center systems, online systems, etc).
 THE SOFT S’s

Skills: the capabilities and competencies that exist within

the company. What it does best.

Shared values: the values and beliefs of the company.

Ultimately they guide employees towards 'valued'
behavior.

Staff: the company's people resources and how the are

developed, trained and motivated.

Style: the leadership approach of top management and the

company's overall operating approach.