1. 1–1
Principles of
Management

2. INTRODUCTION TO
MANAGEMENT AND
ORGANIZATIONS
1–2
UNIT
1

3. Definition
Management is an art of knowing what is to be done and
seeing that it is done in the best possible manner." (planning
and controlling)
- F.W. Taylor
(father of scientific management)
1–3

4. Managerial Concerns
• Efficiency
• “Doing things right”
• Getting the most output for the least inputs
• Effectiveness
• “Doing the right things”
• Attaining organizational goals

5. Exhibit 1–3Effectiveness and Efficiency in
Management
1–5

6. as
or
???

7. Is Management is Science or Art?
• Management is Science – contains general
principles
• Management is Art – requires certain personal
skills to achieve desired results
1–7

8. Science
Essential Characteristics to be recognized as science
• Existence of a systematic body of knowledge with
array of principles
• Based on scientific enquiry
• Principle should be verifiable
• Reliable basis for predicting future events
1–8

9. Art
Essential Characteristics to be recognized as Art
• Use of practical knowledge and personal skill
• Creative
• Achieving concrete results
1–9

10. Comparison :
Management as
As An art
• Based on Practice and
creativity.
• It is a theoretical body of
knowledge.
• Has Personalized
Application.
As a Science
• Based on
Experimentation.
• It is a systematized body
of knowledge.
• Has Universal
Application.

11. Who Are Managers?
• Manager
• Someone who coordinates and oversees the work of other
people so that organizational goals can be accomplished.
1–11

12. Manager Vs Entrepreneur
BASIS FOR COMPARISON ENTREPRENEUR MANAGER
Meaning
Entrepreneur refers to a
person who creates an
enterprise, by taking
financial risk in order to
get profit.
Manager is an individual
who takes the
responsibility of controlling
and administering the
organization.
Focus Business startup Ongoing operations
Primary motivation Achievement Power
Approach to task Informal Formal
Status Owner Employee
Reward Profit Salary
Decision making Intuitive Calculative
Driving force Creativity and Innovation Preserving status quo
Risk orientation Risk taker Risk averse
1–12

13. Classifying Managers
• First-line Managers
• Individuals who manage the work of non-managerial employees.
• Middle Managers
• Individuals who manage the work of first-line managers.
• Top Managers
• Individuals who are responsible for making organization-wide decisions and
establishing plans and goals that affect the entire organization.
1–13

14. Managerial Levels
1–14

15. What Managers Do?
•Three Approaches
Functions they perform.
Roles they play.
Skills they need.
1–15

16. Functions of Management

17. Planning
Defining goals, establishing strategies to
achieve goals, developing plans to
integrate and coordinate activities.

18. Organizing
Arranging and structuring work to
accomplish organizational goals.

19. Leading
Involves motivating subordinates,
influencing individuals or teams as they
work, selecting the most effective
communication channels

20. Controlling
• Monitoring
• comparing
• correcting work

21. What Managers Do (Mintzberg)
•Actions
•thoughtful thinking
•practical doing
1–21

22. Management Roles
Managerial
roles
LeaderFigurehead
Entrepreneur
Disturbance
handler Spokesperson
Monitor
Negotiator
Resource
Allocator
Informational roles
Interpersonal roles
Decisional roles

23. Interpersonal Roles
• Roles that involve interacting with other people
inside and outside the organization
• Interpersonal roles:
• Figureheads: Greet visitors, Represent the company at
community events
• Leader: Influence, motivate, and direct others as well as
strategize, plan, organize, control, and develop

24. Informational Roles
Informational roles deal with
knowledge
•Collecting, Processing
•Roles: Monitor, and
spokesperson

25. Decisional Roles
Decisional roles deal with action
• Decisional roles:
• Entrepreneur: Managers must make sure their organizations
innovate, change, develop, and adopt
• Disturbance handler: Addressing unanticipated problems as
they arise and resolving them.
• Resource allocator: How best to allocate resources
• Negotiator: Negotiation is continual for managers

26. •interpersonal roles deal with people
•informational roles deal with knowledge,
•decisional roles deal with action
1–26

27. What Managers Do?
• Skills Managers Need
• Technical skills
• Knowledge and proficiency in a specific field
• Human skills
• The ability to work well with other people
• Conceptual skills
• The ability to think and conceptualize about abstract
and complex situations concerning the organization
1–27

28. Skills Needed at Different Management Levels
1–28

29. How The Manager’s Job Is Changing?
• The Increasing Importance of Customers
• Customers: the reason that organizations exist
• Managing customer relationships is the responsibility of all managers and
employees.
• Consistent high quality customer service is essential for survival.
• Innovation
• Doing things differently, and taking risks
• Managers should encourage employees to be aware of and act on
opportunities for innovation.
1–29

30. Why we should Study Management?
• The Value of Studying Management
• The universality of management
• Good management is needed in all organizations.
• The reality of work
• Employees either manage or are managed.
• Rewards and challenges of being a manager
• Management offers challenging, exciting and creative opportunities for meaningful and
fulfilling work.
• Successful managers receive significant monetary rewards for their efforts.
1–30

31. Universal Need for Management
1–31

32. Evolution of Management
• Pre-Scientific or Pre-Classical Management
Period
• Classical Management Theory
• Scientific Management by Taylor
• Administrative Management by Fayol
• Bureaucratic Model by Max Weber
• Neo-Classical or Behavioural Theory
• Modern Management Theory
• Systems Approach
• Contingency Approach

33. Pre-Scientific Management
-In the middle of 18th Century
Robert Owen (1771-1858)
• Owner of Textile Mills in Landmark
• Promoter of co-operative and trade union
movement in England
• Emphasized recognition of human element in
the industry
• Approach was very strict
• Father of Personnel Management

34. Pre-Scientific Management
-In the middle of 18th Century
Charles Babbage (1792-1871)
• Professor of Mathematics at Cambridge University
• Found manufactures uses science and
mathematics
• Felt method of science and mathematics could
be applied to the solution of methods
• Advocated the use of accurate observations,
measurement and precise knowledge for taking
business decisions
• Ideas anticipated the concept of profit sharing to
improve productivity
• Father of Modern Computing

35. Pre-Scientific Management
-In the middle of 18th Century
Henry Robinson Towne (1844-1924)
• President of “Yale and Town” a lock
manufacturing company
• Advised engineers and economist as industrial
managers
• Combination of both with least skills of
accountant is essential for successful
management of industrial workers

36. Scientific Management
• Also called Task Management
• Stated by Fredrick Winslow Taylor in the book called
“Principles of Scientific Management”in 1911
• Labour at Midwale Steel Company in U.S.A in 1878,
became chief engineer in the came company in 1884
and later on served ith Bethlehem Steel Works
• Developed due to the need to increase productivity &
efficiency
• Published journal papers on “Price Rate System”and
“Shop Mnaganement”
• Focused on time and motion study
• Introduced incentive system that paid workers more

37. Taylor’s Principle
•Study each part of the task
scientifically and develop best method
•Select workers and train
•Cooperate with workers to ensure
they use proper method
•Divide work and responsibility

38. Elements of Scientific Management
1. Planning the Task
2. Scientific Task and rate
Setting
•Method Study
- Equipment
•Motion Study
- movement of operator
or machine
•Time Study
- minimum time to finish
the task
•Fatigue Study
- amount and frequency
of rest
•Rate Setting
- differential piece wage
system
3. Scientific Selection and
Training
4. Standardization
5. Specialization
•Route Clerk
•Instruction Card Clerk
•Time and Cost Clerk
•Shop Disciplinarian
•Gang Boss
•Speed Boss
•Repair Boss
•Inspector
6. Financial Incentives
7. Economy
8. Mental Revolution

39. Benefits of Scientific Management
• Replacing Rule of Thumb with scientific techniques
• Proper selection and training of workers
• Incentive Wages
• Elimination of wastes and rationalization of system
of control
• Standardization
• Detailed instructions and constant guidance of the
workers
• Establishment of harmonious relationship
• Better utilization of various sources
• Satisfaction of the need of the customers

40. 8. Centralization
9. Line of Command/Scalar
Chain
10.Order
11.Equity
12.Stability of Tenure
13.Initiative
Administrative Management Theory
1. Division of Work or Specialization
2. Authority and Responsibility
3. Discipline
4. Unity of Command
5. Unity of Direction
6. Subordination of Individual to
General
• French Mining Engineer
• Identified 14 principles of management
• Father of modern Theory of General and Industrial
Management
• Published a famous book “The General and Industrial
Administration”
• Falls into two parts
1. Theory of Administration 2. Principles of
Management
6 Industrial Activities
• Technical
• Commercial
• Financial
• Security
• Accounting
• Management
14 Principles of Management

41. DIVISION OF WORK or SPECIALIZATION
• Division of work makes a man specialist.
• The reason is that division of work helps to
specialize in an activity which increases the output
with perfection.
• It also avoids wastage of time.
• Division can be applied to both technical and
managerial kind of work.

42. Authority & Responsibility
• Managers must be able to give orders.
• Authority gives them this right.
• Note that responsibility arises wherever
authority is exercised.

43. Discipline
Employees must obey and respect the rules that
govern the organization.

44. Unity of Command
• Every employee should receive orders from only one superior.

45. Unity of Direction
• Each group of organizational activities that have
the same objective should be directed by one
manager using one plan.

46. Subordination of Individual
• The individual should
subordinate self-interest to
the general good.
• It is incumbent upon
management to reduce
conflict between the
individual and the general
well being wherever
possible.

47. Remuneration
• Workers must be paid a fair wage for their
services.
• Means the wages and salaries paid to
employee.
• It should be fair & must be paid on time.
• It satisfy both employee & employer
• It should be decided on-Work allotted.
• cost of living.

48. Centralization
• Fayol's thought centralization of authority to be
desirable, at least for overall control.
• Certainly, both formulation of policy and the generation
of basic rules and procedures ought to be centralized

49. Scalar Chain
• The line of authority from top management to the
lowest ranks represents the scalar chain.
• Communications should follow this chain.

50. Order
• People and materials should be in the right place at
the right time.

51. Equity
• Managers should be kind and fair to their
subordinates.

52. Stability of Tenure of personnel
• High employee turnover is inefficient.
• Management should provide orderly personnel planning
and ensure that replacements are available to fill
vacancies.

53. Initiative
• The power of thinking out, proposing and executing.
• Management should encourage employees to originate
and carry out plans.

54. Esprit de Corps
• It means that create a team
spirit or union is strength.
• Developed an atmosphere of
mutual trust and
understanding.
• Create a sense of belonging
employees
• It bring a loyalty, dedication
and commitment to the group.

55. Bureaucratic Management Theory
Max Weber (1864-1920)
• German Sociologist – coined the term Bureaucracy
• European organization managed by personal family –
employees are loyal to supervisors not for organization
• Non-personal objective form of organization -
bureaucracy
• 3 types authority exist in nature:
• Traditional – Subordinate obedience based upon tradition (eg.
Kings, Queens, Chiefs)
• Charismatic - Subordinate obedience based upon personal
qualities (eg. Gandhi, Nehru, NSC Bose, Luther king)
• Rational-legal - Subordinate obedience based upon position
held by superiors (eg. Police officer, executives, supervisors)

56. Principles of Bureaucracy
•A well-defined hierarchy
•Division of labor and specialization
•System of written rules and regulation
•Impersonal relationships between
managers and employees
•Selection and Evaluation System
•Records

57. Behavioural Theory
• Classical Management failed to deal with many
management situations and behaviour of
individual employee.
• Ignored employee motivation and behaviour
• Behavioural theory modified improved and
extended classical theory
• Pointed out the role of psychology and
sociology in understanding an individual or a
group behaviour in an organization
• Several individuals and experiments contributed
to this theory

58. Behavioral Theory on How
Employees Behave Toward Work
Theory X Assumptions:
• Employees dislike work.
• Employees are
irresponsible.
• Employees lack ambition.
• Employees resist change.

59. Theory Y Assumptions:
• Employees are willing to
work.
• Employees are self
directed.
• They accept responsibility.
• Employees are creative.
• They are self-controlled.
Behavioral Theory on How
Employees Behave Toward Work

60. Modern Management Theory
- Systems Approach
• System – set of interrelated and interdependent
parts arranged in a manner that produces
unified whole
• Organization as a whole is a system &
various parts within it are subsystem
• Visualized as system of interrelated parts or
subsystems that operate as a whole in pursuit
of common goals

61. External Environment
5 Elements of Systems Approach
• Goods
• Services
• Sales Report
• Profit / Loss -
Statement
• Machinery
• Computers
• Human Skills
• Human
Resources
• Raw Materials
• Money &
Capital
Inputs
Transfor
mation
OutputFeedback

62. Terminologies to Understand Systems Approach
•Closed System – Independent of
Environment
•Open System – Interacts with
Environment
•Entropy – tendency to deteriorate
over time
•Synergy – all subsystems work, o/p

63. Managerial Levels
• Production
• Distribution
• Services
Technical
Level
• Coordinates work performance
• Integrates work performance
Organizational
Level
• Concerned and involves relating organization to the
environment
Institutional
Level

64. Modern Management Theory
- Contingency Approach
• Situational Approach
• Organization as a whole is a system &
various parts within it are subsystem
• Visualized as system of interrelated parts or
subsystems that operate as a whole in pursuit
of common goals