Unit 1.

Introduction To Management
 Definition of Management
● Management is the attainment of organizational goals in an
effective and efficient manner through planning, organizing,
staffing, directing and controlling organizational resources.
(Organizational resources include men(human beings), money, machines
and materials.)

● The process of designing and maintaining an environment in which

individuals, working together in groups, efficiently accomplish selected
aims.

● The use of people and other resources to accomplish objectives.

● The act of getting things done through people.
● Management as the art of knowing what you want to do in the best and
cheapest way.
● An organization is a group of people working together to create a surplus.
NATURE OF MANAGEMENT

● Multidisciplinary – Psychology, Economics, Statistics, etc.,

● Dynamic nature of the principles – Changes with the environment

● Relative, not absolute principles - Not applicable to all, at all times.

● Management Science or Art – Organized knowledge is science. Practice is

art.

● Management as a Profession

● Management is Universal
7 Steps of POSDCORB - Luther Gulick & Lyndall Urwick

1. Planning: Selecting missions and objectives as well as the actions to achieve

them, requiring decision making.

2. Organizing: Establishing an intentional structure of roles for people to fill in an

organization.

3. Staffing: Filling and keeping filled the positions in the organization structure.

4. Directing: Influencing people so that they will contribute to organizational goals.

5. Coordinating: Ensuring that all the departments and teams cooperate and
creating an environment where everyone working together make the
organization even more successful, like a great symphony of
accomplishments.
6. Reporting: Reporting refers to frequently updating the superior about the
progress of the work. These reports not only show how well the
organisation is doing but also help managers make smart decisions.

7. Budgeting: A financial plan that combines what the organisation wants to

achieve with smart money management. Managers carefully create
budgets, making sure, big goals match responsible spending.
Significance of management
1. Achievement of group goals
2. Minimization of cost
3. Change and growth
4. Effective and smooth running of business
5. Higher profit
6. Provide innovation
7. Social benefits
8. Effective utilization of resources
9. Development of resources
10. Sound organization structure
11. Useful for developing countries
12. Integration of various interest groups
13. Stability in the society
Basic Levels of Management
Management Level and Skills
Three kinds of skills for managers - by Robert L
Katz
1. Conceptual skills: the ability to analyze and diagnose a situation and find
the cause and effect.

2. Human skills: the ability to understand, alter, lead, and control people’s
behavior.

3.Technical skills: the job-specific knowledge required to perform a task.

Managerial Roles – Henry Mintzberg
Evolution of Management

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The Development of Management Theory

● Up to the 20th century (pre-modern era) before 1900

 Adam smith’s contribution to the field of management
 Industrial revolution’s influence on management practices

● In the early 20th century (1900-1999)

 Scientific management
 General administrative theory
 The human resources approach
 The quantitative approach

● From the later 20th century to the present (2000 – till date)
 The process approach
 The systems approach
 The contingency approach

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Development of Major Management Theories

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Historical Background of Management

● Ancient Management
○ Egypt (pyramids) and China (Great Wall)

● Adam Smith
○ Published “The Wealth of Nations” in 1776
○ Father of Modern Economics
■ Advocated the division of labor (job specialization) to increase the
productivity of workers
■ Created the concept of Gross Domestic Product (GDP)

● Industrial Revolution (1760-1840)

○ Substituted machine power for human labor
○ Created large organizations in need of management

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In the early 20th century (1900-1999)
1. Scientific Management

● Fredrick Winslow Taylor

○ Started as an apprentice to be a Chief Engineer
○ The “father” of scientific management
○ Published Principles of Scientific Management (1911)
■ The theory of scientific management
● Replacing rule of thumb with science
● Obtaining harmony rather than discord in group action
● Developing all workers to the fullest extent possible for their
own and their company‘s highest prosperity
● Achieving cooperation of human beings rather than chaotic
individualism, among the management and workers

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 Important contributions by FW Taylor

● Planning and execution are two separate functions

● Functional foremanship
● Time and motion study
2. General Administrative Theory

● Henri Fayol – French Industrialist

○ Believed that the practice of management was distinct from other
organizational functions
○ Developed fourteen principles of management that applied to all
organizational situations

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Henri Fayol’s 14 Principles of Management

1. Division of work. Specialization increases output by making employees

more efficient. Segregation of work among the workers enhances the
product quality.
2. Authority and Responsibility. Managers must be able to give orders.
Authority gives them this right. Along with authority, however goes
responsibility.
3. Discipline. Employee must obey and respect the rule that govern the
organization.
4. Unity of command. Every employee should receive orders from only
one superior.

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Henri Fayol’s 14 Principles of Management…

5. Unity of direction: The organization should have single plan of action to guide
managers and workers.
6. Subordination of individual interest to the organizational interest. The interest
of any one employee or group of employees should not take precedence over
the interest of the organization as a whole.
7. Remuneration. Workers must be paid a fair wage for their services.
8. Centralization. This term refers to the degree to which the subordinates are
involved in decision making.
9. Scalar chain. The line of authority from top management to the lowest ranks in
the scalar chain. Any information should follow a pre-defined path, which is
from the supervisor to the one in lowest position, to avoid any ambiguity.

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Henri Fayol’s 14 Principles of Management

10. Order. Orderly placement of resources 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. Staff turnover should be minimized.
Management should ensure that replacements are available to fill
vacancies.
13. Initiative. Employees should be allowed to take initiatives. It will help in
increasing their motivation and morale. originate plans and carry them out,
out plans will exert high level of effort.
14. Esprit de corps. Promoting team spirit will build harmony and unity in the
organization. (The term is French, and it literally means "the spirit of the body," with body in
this case meaning "group." )

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3.Behavioural Management Theory (HR approach)

● Behavioural Management
○ The study of how managers should behave to motivate employees and
encourage them to perform at high levels and be committed to the
achievement of organizational goals.

○ Focuses on the way a manager should personally manage to motivate

employees.

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 Early Advocates of OB

Organizational Behavior:
The study of the actions
(behaviors) of people at
work; people are an
organization’s most
important asset.

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 ● A series of productivity experiments
conducted at the Hawthorne plant of Western
Electric Company in Chicago from 1924 to
1932.
The Hawthorne ● Illumination
Studies ● Relay assembly test room (Bonus/rest
time/snacks/work timing)
● Mass interviewing
● Bank wiring observation room(Incentives for
more production/lesser production)

● Experimental findings
○ Productivity unexpectedly increased under
imposed adverse working conditions.

● Research conclusion
○ Social norms, group standards and attitudes
more strongly influence individual output
and work behavior than do monetary
incentives.

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The Hawthorne Studies – Experimental Findings

● Behavior and sentiments are closely related.

● Group influences significantly affect individual behavior.
● Group standards establish individual worker output.
● Money is less a factor in determining output than are group
standards,
● group sentiments, and security.

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From the later 20th century to the present (2000 – till date)

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The Systems Approach (After 1950)

● Based on empirical data

● Contributors:
● Weiner, Ludwig Von Bertalanffy, Kenneth Boulding et al
● Organization is viewed as a main system or an organ, composed
of interacting and interdependent parts called subsystems
● A system is a set of inter-connected and inter-related elements
or components which are arranged in order and operate
together to achieve certain goals
● The set of interrelated and interdependent parts arranged in a
manner that produces a unified whole.
Parts of a system

● Input: Based on the

objectives, it changes.
Eg. Raw material/
information
● Process: A mechanical
process/
Interpretation and
analysis
● Output: Finished
goods/ Alternatives or
conclusions
 Kinds of Systems

● Closed systems: Operates without any interaction with the

outside environment. Principles of unity of command, span of
control and equal authority and responsibility are focused on
internal relationship and consistency.
● Open Systems: Dependent on the outside environment.
Dependent on the outside environment for resources /
feedback and for disposal of finished product. An open system
dynamically interacts with its environment.
 Features of Systems Approach
● Inter-related and Inter-dependent: The sub-parts are always considered
in connection to each other and not in isolation.
● Boundary: This approach clearly defines what is within the organisation
and what is outside the organization ie. the controllable factors and
uncontrollable factors.
● Input-Output Process: System takes input from the environment and
gives output to the environment.
● Open System: An organisation being a social system is an open system
which puts effect on the environment and is affected by the
environment.
● Adaptive: Adaptability means adjusting. Under the system approach to
management, the organisation is an open organisation and it takes input
from the environment and adjusts with the changing environment
● Dynamic: The organisation is dynamic and responsive. Within an
organisation there are several sub-systems and the process in between
these sub-systems are all dynamic and vulnerable.
● Multidisciplinary: Management in any organisation is not influenced by
a single discipline. It is a result of so many disciplines like Economics,
Statistics, Sociology, Psychology, Operation Research, mathematics and
various schools of Management Thoughts.
● Probabilistic: In an organization, a manager can not be sure that what
will be the exact result of his efforts. Thus, system approach to
management says that it is probabilistic because the outcome is not
certain.
● Integration of Activities: System Approach is an integrated approach as
it integrates the activities and the departments in order to derive the
best use of scarce resources. It takes into consideration all the sub-
systems of the system.
Contingency or Situational Approach

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Contingency approach
● Developed by J W Lorsch and P R Lawrence
● Features:
● There is no one best way of doing things
● Management action is situational
● The management practices are effective if they adjust to the changes in
the environment
● No action can be universal
● It improves diagnostic skills to anticipate and be ready for changes
● Human skills are important here to accommodate and stabilize change
Functions of Management

● 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