FUNDAMENTALS

OF
MANAGEMENT

MODULE 1
MANAGEMENT…….
• Definition & Meaning
▫ “Management is a process of getting things done with the aim of
achieving goals effectively and efficiently.”

▫ Process : refers to series or sequence of steps. Management

involves a series of functions to get things done like planning,
organizing, staffing, directing and controlling.

▫ Effectiveness: refers to doing the right task, completing

activities and achieving goal.

▫ Efficiency: refers to doing the task in the right way with

minimum cost and optimum utilisation of resources.
 Nature / Characteristics
• Management is a goal oriented process – all functions of
management aims at achieving organizational objectives.
• It is pervasive – Management activities are performed in all type of
organizations, in all departments and at all levels.
• It is multidimensional – It includes management of work,
management of people and management of operations,
• It is a continuous process – all the functions of management are
performed continuously not in any order.
• It is a group activity – a group of people at different levels are
involved in managerial activities.
• It is dynamic – management has to make changes in goal and
objective as per the changes taking place in the environment.
• Intangible – It cannot be physically seen but its presence can be
felt.
Objectives of Management
Objectives are the end goals towards which all the activities are
directed. These are of three types:
Organizational Objectives – aim at prosperity and growth of
organization
•Survival
•Profit
•Growth
Social Objectives – deals with commitment of the organization
towards society for using the resources of society
•Employment opportunities for deprived classes
•Educational, health or vocational training programs
•Environmentally friendly methods of production
Individual Objectives – aims at employee satisfaction and
motivation
•Competitive salary
•Good, healthy and safe working conditions
•Personal growth and development
Management is a Science or Art
Management as Science Management as Arts
 Science is a systematic and  Art is a systematic body of
organized body of knowledge knowledge which requires skill,
based on logically observed creativity and practice
findings, facts and events.  Features:
 Features:  Systematic body of knowledge
▫ Systematic body of knowledge  Personalized application
▫ Principles are based on  Based on practice and
experimentation creativity.
▫ Universal validity  Conclusion: Management can be
 Conclusion: Management can be considered as art.
considered as inexact science or
social science.
Management can be considered as both science and It is a systematic body of
knowledge arts which needs practice and creativity. Scientific methods are applied
for problem solving but decision making is an art. Knowledge without skill is useless
and skill without knowledge is stagnancy.
Management Vs Administration
• Management
▫ It relates to conducting , controlling and taking charge of the course of action
▫ It involves achieving the goals efficiently and effectively
▫ It is responsible for putting into practice the plans and policies made by administration
▫ It deals with employees. It deals with motivating and controlling functions with technical and human abilities

• Involves planning, organizing, directing, and controlling

• Focuses on strategic planning and leadership
• Involves implementing plans and coordinating activities
• Involves working with teams to maximize their potential

• Administration
▫ Refers to managing different things
▫ It deals with executive and strategic work
▫ It means directing and superintending the execution
▫ It involves setting and following instructions and service
▫ It focus on planning and organizing function

• Involves setting policies, objectives, and plans

• Focuses on the operational and technical aspects of running a business
• Involves supervising daily operations
• Involves enforcing company policies and rules
Management Vs Administration
Administration Management
• Determinative or thinking • Executive or doing function
function
• Policy implementation
• Policy making
• Carrying out the policy laid down
• Overall determination of major by administration
policies and objectives of
business
• Middle level and lower level
function largely
• Top level function
• UK & Europe: management is
superior to administration
• USA: Administration is superior
to management
Process of Management
• Planning
▫ Planning refers to deciding in advance what to do, how to do, when to do and who
has to do. It bridges the gap between where the organization stands and where it
wants to reach
• Organizing
▫ It involves establishing an organizational structure to execute the plan
▫ Deciding the departments and number of posts and designations
▫ Distribution of authority and responsibility among people
• Staffing
▫ Recruiting, selecting, appointing, employees, assigning them duties, maintaining
cordial relation and take care of their grievances
▫ Training and development of employees
▫ Evaluating performance and maintaining personal records
• Directing
▫ Giving instructions to employees by motivating them and leading them
▫ Supervising them and communicating with them
• Controlling
▫ Comparing the actual performance with the planned performance
▫ Find out reasons of deviation if any and suggest corrective measures in the plan.
Levels of Management - Structure
Levels of Management - Responsibilities
•Determining objective

TLM
•Framing plans and objectives
•Assembling resources
•Liaison with outside world
•Analyze business environment
•welfare and survival of organization

•Interpret policies made by TLM

MLM
•Organize departmental activities
•Recruitment and selection
•Motivate employees to perform to their best ability
•Cooperate with other departments
•Responsible for activities of first line managers

•Represent problems of workers

LLM
•Maintain good and safe work condition
•Maintain quality and quantity of output
•Minimize waste
•Develop healthy superior subordinate relations
Management Skills
• Managers need three types of skills to perform all the roles
they have to play
▫ Conceptual Skills
 Ability to coordinate among different task, employees, departments
and levels
 Ability to decide, analyze, interpret and use information
 Integrate all activities of an organization
▫ Human Skills
 Ability to work with others
 Ability to motivate and inspire others
▫ Technical Skills
 Ability to use procedures, technology and knowledge of a special
field
Management Skills
Types of Management
Management styles •Organizations have
distinct approaches to
Autocratic Democratic Laissez faire
management.
Persuasiv Consultat
Visionary
•The purpose is to
e ive
bring context (why)
and clarity(how)
among employees for
Paternali
stic
Transfor
mational
Delegativ
e
their jobs.
Types of Management
• Autocratic management:
▫ Centralized decision making
▫ Top down approach – commands flow from top to down
▫ Delegation is the key
▫ Advantages: quick decision making, little room for error, best for unskilled
manpower
▫ Disadvantages : micro management, creativity stifled, no suggestion from
employees
• Persuasive management:
▫ Managers share logic and rationale behind decisions taken
▫ Employees feel more connected.
• Paternalistic management
▫ Unilateral decision making
▫ Team members are heard and their interest is kept in mind
Types of Management
• Democratic Management
▫ Employee participation in decision making is allowed
▫ Invest in career development of employees
▫ Encourage creativity and engagement among employees
▫ Best for organizations that constantly look for changes and improve
processes
• Consultative management
▫ Constant feedback from team is obtained
▫ Feedbacks are worked upon to improve processes
• Transformational management
▫ Create a culture that encourage adaptability, innovation and problem
solving among employees
▫ Invest in professional growth of the team
Managerial Environment
A managerial environment is made up of constantly changing factors — both external and internal
— that affects the operation of the organization. The environmental forces are: (PESTEL)
• Political:
▫ It include all the factors related to government like type of govt, attitude towards different groups ,
policies etc
• Economic:
▫ It include all the forces which directly influence the economy like GDP, per capita income,
employment rate, monetary and fiscal policy etc.
▫ These forces influence the purchasing power and willingness to spend of consumers
• Social:
▫ Refers to custom and traditions of society.
▫ It influence standard of living, taste and preferences , education levels etc.
• Technological
▫ It is related to scientific innovations and improvements which provide new ways of producing
goods and services and new ways of operating business.
• Ecological
▫ These are related to the nature or ecology. it include concerns like pollution control, utilisation of
natural and non renewable resources, economic use of energy etc.
• Legal:
▫ Refers to the law of the land. It includes rules and regulations made by the government like the
industrial act, MRTP act, consumer protection act etc/
Types of Management
• Laissez faire (let it go)
▫ Full autonomy is given to employees
▫ Leaders check in only when something goes wrong
▫ Best for small self motivated teams
• Visionary management
▫ Less involvement in day-today task
▫ Educate team on vision
▫ Outgoing and charismatic leaders
• Delegative management
▫ Assign task and review it
▫ Managers facilitate and give feedback
▫ Best when employees have more expertise than managers
Evolution of Management
• Classical Approach
• Neo Classical Approach
• Behavioral Approach
• Social System Approach
• Modern Organization Approach
• Contingency Approach
Classical Approach
 Concentrated on organization structure

 Emphasized on planning , technical requirements, assumptions of

rational and logical behavior

 Treated organization as a closed system

 Ignored the impact of external environment

• Administrative Theory – Henri Fayol

• Scientific Theory – F. W. Taylor

• Bureaucratic Theory – Max Weber

Administrative Management School
• Henry Fayol’s Principles of Management:

▫ Major contributions were:

 He made clear distinction between technical and

managerial skill
 He identified the major functions of management:
planning, organizing, staffing, directing , controlling
 He developed 14 principles which act as guiding
principles for managers.
Scientific Management School

• F.W Taylor’s 4 principles on management

▫ Management is a science not rule of thumb

▫ Organizations should be based on harmony not discord
▫ Work must be carried on in cooperation not
individualism
▫ Development of workers to their greatest efficiency
and prosperity
Fayol’s 14 principles of Management
• Division of work
• Authority and responsibility
• Discipline
• Unity of command
• Centralization & decentralization
• Unity of direction
• Subordination of individual interest to general interest
• Scalar chain
• Remuneration
• Order
• Initiative
• Stability of tenure of personnel
• Equity
• Esprit de Corps

( DAD U C USSR O I SEE – for the ease of remembering)

Bureaucratic Approach
• Division of Work
• Rules and regulations
• Hierarchy of authority
• Technical competence
• Record Keeping
• Impersonal Relations
Neo Classical Approach
Focused on human relations aspect and individual
behaviour.
Organization is a social system

• Human Relations Theory – Elton Mayo (Father of

Human Relations School)
Human Relations Theory
• Business organization is a social system
• Behavior is dominated by informal group
• Employees cannot be motivated by economic incentives
only. His social and psychological needs must be
satisfied.
• Cooperative attitude, not the mere command which
yield results.
• Management must develop social and leadership skills
along with technical skills. It must take interest in
welfare of workers
• Morale and productivity go hand in hand.
Hawthorne Experiments
• Phase 1: Illumination Experiments

▫ Objective: Assess the effect of illumination on employees

▫ Productivity is not dependent upon physical conditions alone but

human psychological conditions also.

• Phase 2 : Relay Assembly test room studies

▫ Objective: Evaluate the effect of rest periods and hours of work on

efficiency

▫ Socio-psychological factors such as a feeling of being important,

recognition, attention, participation, cohesive work groups and non
directive supervision held the key to productivity
Hawthorne Experiments
• Phase 3: Mass Interview Program
▫ Objective: Judge employees attitudes and opinions on
the factors influencing productivity
▫ Opportunity to talk freely about things that are
important to workers has a positive effect on
productivity

• Bank Wiring Observation Room Study

▫ Objective: Influence of group on individual output
▫ The output could not increase despite the group
incentive scheme