PRINCIPLES
AND
PRACTICES OF MANAGEMENT

Meaning:
• Management is an art of getting
things done by others.

Management science or
art
Art
• Practical know-how
• Technical skills
• Concrete results
• Creativity
• Personalised nature

science
• Empirically derived
• Critically tested
• General principals
• Cause & effect relationship
• Universal applicability

5 M’S of mngt.
• Money
• Manpower
• Materials
• Machinery
• Methods

NATURE/CHARACTERIS
TICS OF MNGT.
• Universal process
• Purposeful
• Social process
• Creative
• Continuous process
• Multidisciplinary
• Intangible
• Both science and art

WHY MANAGEMENT
- Effective utilisation of resources
- Development of resources
- Incorporate innovations
-Integrating varied interest groups
- Stability in the society

DEFINITIONS
• PRODUCTION ORIENTED
• DECISION ORIENTED
• PEOPLE ORIENTED
• FUNCTION ORIENTED

PRODUCTION ORIENTED
DEFINITION
• TAYLOR : “Management is
the art of knowing what you
want to do and then seeing
that it is done in the best and
cheapest way”

PRODUCTION ORIENTED
DEFINITION
• Features
– Aim/Goal
– Results
– Efficiency
Shortcomings: It does not specify how
these objectives can be achieved.

DECISION ORIENTED
DEFINITION
• Stanley Vance : “Management is
simply the process of decision-making
and control over the action of human-
beings for the expressed purpose of
attaining pre-determined goals”.

DECISION ORIENTED
DEFINITION
• It implies:
– Main activity of a manager is decision
making
– Control
– Goals
Shortcoming: The process or activities
where decision-making is involved is not
provided

PEOPLE ORIENTED
DEFINITION
• L.Apply :“Management is
accomplishment of results through
the efforts of other people”
• Koontz : “It is the art of getting
things done through and with people
in formally organised groups”

PEOPLE ORIENTED
DEFINITION
• Features
– Existence of objectives
– Working with and through people
Shortcomings: It does not specify the
functions or activities involved in the
process of getting things done by or
with the cooperation of other people

FUNCTION ORIENTED
DEFINITION
• Mac Farland :“Management is a
process by which managers create,
direct, maintain and operate
purposive organisations through
systematic, coordinated, cooperative
human efforts”

FUNCTION ORIENTED
DEFINITION
• Features
– Existence of objectives
– Organised activities
– Relation among resources
– Working with and through people
– Decision making

““Management is the process ofManagement is the process of
designing and maintaining andesigning and maintaining an
environment in which individuals,environment in which individuals,
working together in groups,working together in groups,
accomplish their aims effectively andaccomplish their aims effectively and
efficiently.”efficiently.”

Functions

This definition implies the
following:
• A process
• Universal application
• Applicable to all managerial levels
• Common aim- creating profits
• Effectiveness and efficiency

HISTORY OF
MANAGEMENT THOUGHT
• No attention paid before 20th
century
– Lowly profession compared to bankers
and lawyers
– Treatment of management as an art or
science confused people
– Belief that managers are born and not
made

EVOLUTION OF
MANAGEMENT
THOUGHTS
• Growing competition and complexity
of managing large business
organisations gave a push to the
development of management concepts
and principles.

EVOLUTION OF
MANAGEMENT THOUGHTS
• Competion gave rise to factors like
– Technology innovations
– Obsolescence
– Increase in capital investment
– Freedom at national and international
markets

EVOLUTION OF MANAGEMENT
THOUGHTS - contd…..
• Complexity came because of
– Increase in the size of business
organisations
– High degree of division of labour and
specialisation
– Pressure of various conflicting groups
– Socially oriented business controls by
government

• EVOLUTION OF MANAGEMENT THOUGHTS -
contd…..
• All these have demanded the efficiency in
management process which cannot come by
trial and error methods but by developing and
applying sound management concepts and
principles
• Economists, sociologist, psychologists
,anthropologists, mathematicians and
management practitioners—studied
organisations and its processes

EMERGENCE OF
MANAGEMENT THOUGHTS
• This all led to the emergence of a
variety of orientations or approaches
in management.
• One approach or thought was an
extention /improvement over the
previous one.

DIFFERENT APPROACHES TODIFFERENT APPROACHES TO
MANAGEMENTMANAGEMENT

CLASSIFICATION OF
MANAGEMENT THEORIES
1. CLASSICAL
2. NEO-CLASSICAL
3. MODERN

CLASSICAL APPROACH
• SCIENTIFIC
• ADMINISTRATIVE/OPERATIONAL
• BUREAUCRATIC

SCIENTIFIC MANAGEMENT
F.W TAYLOR- Father of the
Scientific Management.
- emphasised on shop-floor level
efficiency in a scientific manner.
- conducted various experiments
to find out how human beings
could be made to work more
efficiently by standardising the
work and better method of doing
the work.

Principles of Scientific
Management
1. Replacing Rule of thumb with
science
2. Harmony in group action
3. Cooperation
4. Maximum output
5. Development of workers

• Taylor's four principles are as follows:
• Replace working by "rule of thumb," or simple habit and
common sense, and instead use the scientific method to
study work and determine the most efficient way to
perform specific tasks.
• Rather than simply assign workers to just any job, match
workers to their jobs based on capability and motivation,
and train them to work at maximum efficiency.
• Monitor worker performance, and provide instructions and
supervision to ensure that they're using the most efficient
ways of working.
• Allocate the work between managers and workers so that
the managers spend their time planning and training,
allowing the workers to perform their tasks efficiently.

Elements of Scientific
Management
• Separation of planning and doing
• Funtional foremanship-specialisation of
functions
• Job analysis- find out the best way of
doing the things through Time-Motion
and fatigue studies
• Standardisation
• Scientific selection and Training of
workers
• Financial incentives
• Economy
• Mental revolution

Other contributors of
Scientific Management
• Carl Berth – developed mathematical
techniques and formulae
• Henry Gantt - developed graphic
methods of depicting plans.
Developed GANTT chart which led to
PERT.
• F. and W. Gilbreth – looked at
workers problems from social and
psychological point of view

Critical Analysis of
Scientific Management
• Concerned with problems related to
operating levels
• More relevant from engineering point
of view rather than management
point of view
• More relevant to mechanisation and
automation than the broader aspects
of management

Critical Analysis of Scientific
Management …cont
• Taylor’s SM was opposed by trade
unions, industrialists and general
public:
-aggressive mechanical view of
production
-close and strict supervision
-exploitation by industrialists

Operational /Administrative
Management
• HENRY FAYOL:
- looked at the problems of the
management from top management
point of view
- used the word Administration
rather than management

3.Administrative Management,
Fayol’s Principles
• Henri Fayol, developed a set of 14 principles:
1. Division of Labor: allows for job specialization.
• Fayol noted firms can have too much specialization leading to
poor quality and worker involvement.
2. Authority and Responsibility: Fayol included both
formal and informal authority resulting from special
expertise.
3. Unity of Command: Employees should have only one
boss.
4. Line of Authority: a clear chain from top to bottom
of the firm.
5. Centralization: the degree to which authority rests at
the very top.

Fayol’s Principles
6. Unity of Direction: One plan of action to
guide the organization.
7. Equity: Treat all employees fairly in justice
and respect.
8. Order: Each employee is put where they have
the most value.
9. Initiative: Encourage innovation.
10. Discipline: obedient, applied, respectful
employees needed.

Fayol’s Principles
11. Remuneration of Personnel: The payment
system contributes to success.
12. Stability of Tenure: Long-term employment is
important.
13. General interest over individual interest: The
organization takes precedence over the
individual.
14. Esprit de corps: Share enthusiasm or devotion
to the organization.

Behavioral Management
• Focuses on the way a manager should
personally manage to motivate employees.
• Mary Parker Follett: an influential leader
in early managerial theory.
– Suggested workers help in analyzing their
jobs for improvements.
– The worker knows the best way to improve
the job.
– If workers have the knowledge of the
task, then they should control the task.

Managerial qualities
1. Physical –health, vigor
2. Mental –learning ability, judgment,
mental vigor and capability
3. Educational –general awareness
4. Technical –peculiar to the function
5. Experience –arising from work

FAYOL’S MANAGEMENT
ACTIVITIES
1. Technical – related to production
2. Commercial –buying,selling,
exchange
3. Financial – searching for capital and
its use
4. Security –protection of property
and person
5. Managerial –planning, organising,
coordinating, controlling

2.Bureaucracy
• Seeks to create an organization that leads
to both efficiency and effectiveness.
• Max Weber developed the concept of
bureaucracy.
– A formal system of organization and
administration to ensure effectiveness and
efficiency.

Bureaucratic Principles
A BureaucracyA Bureaucracy
should haveshould have
Written rulesWritten rules
System of taskSystem of task
relationshipsrelationships
Hierarchy ofHierarchy of
authorityauthority
Fair evaluationFair evaluation
and rewardand reward

Key points of Bureaucracy
Authority is the power to hold people
accountable for their actions.
Positions in the firm should be held based on
performance not social contacts.
Position duties are clearly identified. People
should know what is expected of them.
Lines of authority should be clearly
identified. Workers know who reports to
who.
Rules, Standard Operating Procedures
(SOPs), & Norms used to determine how
the firm operates.
• Sometimes, these lead to “red-tape” and other
problems.

Features of
bureaucracy
– Administrative class
– Hierarchy
– Division of work
– Official rules
– Impersonal relations
– Official record

Bureaucratic approach
Max Weber: believed that
bureaucratic structure was the most
efficient structure.
- It was designed to accomplish large
administrative jobs
- Features
- Administrative class
- Hierarchy

Criticism of Bureaucratic
model
1. Inhuman organisation
– Too much emphasis on rules
– Rigid organisational hierarchy
– Total impersonal approach
2. Goal displacement
3. Closed system perspective