Buisness management *chap 1

DEFINITION
Management in business and organizations is an art
that coordinates the efforts of people to accomplish
goals and objectives using available resources
efficiently and effectively. Management
comprises planning, organizing, staffing, leading or
directing, and controlling an organization to
accomplish the goal.
BY- VISHAL SHARMA (21371) 2

• IN ANOTHER WAY OF THINKING, MARY PARKER FOLLETT (1868–1933), DEFINED MANAGEMENT AS "THE ART OF
GETTING THINGS DONE THROUGH PEOPLE".

NATURE/FEATURES OF MANAGEMENT
THE MAIN FEATURES OF MANAGEMENT PRINCIPLES ARE GIVEN BELOW:
UNIVERSAL APPLICATION:
• THE PRINCIPLES OF MANAGEMENT ARE UNIVERSAL IN NATURE THAT MEANS THEY CAN BE APPLIED TO ALL TYPES OF
ORGANISATIONS IRRESPECTIVE OF THEIR SIZE AND NATURE. THEIR RESULTS MAY VARY AND APPLICATION MAY BE
MODIFIED BUT THESE ARE SUITABLE FOR ALL KINDS OF ORGANISATIONS.
• FOR EXAMPLE, THE PRINCIPLE OF DIVISION OF LABOUR CAN BE APPLIED TO ALL THE ORGANISATIONS AND RESULTS IN
SPECIALIZATION ALTHOUGH THE DEGREE OF SPECIALIZATION MAY VARY DEPENDING UPON THE NATURE AND SIZE OF THE
ORGANISATION.

2. GENERAL GUIDELINES:
• MANAGEMENT PRINCIPLES ARE NOT STATIC OR ABSOLUTE STATEMENTS. THESE CANNOT BE APPLIED BLINDLY
IN ALL THE SITUATIONS. THE APPLICABILITY OF MANAGEMENT PRINCIPLES DEPENDS ON CONDITIONS AND
NATURE OF ORGANISATION.
• THE MANAGER MUST APPLY THESE PRINCIPLES ACCORDING TO THE SIZE AND NATURE OF ORGANISATION
KEEPING IN MIND THE REQUIREMENTS OF THE ORGANISATIONS.
• A MANAGEMENT PRINCIPLE GIVES GUIDELINES TO SOLVE THE PROBLEMS THESE PRINCIPLES DO NOT PROVIDE
READYMADE SOLUTION FOR ALL THE PROBLEMS.
• FOR EXAMPLE, THE PRINCIPLE OF FAIR REMUNERATION INSISTS ON FAIR OR ADEQUATE SALARY TO EMPLOYEE
BUT WHAT AMOUNT OF SALARY IS FAIR DEPENDS UPON THE NATURE, SIZE AND FINANCIAL CAPACITY OF THE
COMPANY.
• FAIR MAY MEAN RS 50,000 P.M. TO A MULTINATIONAL COMPANY AND IT MAY MEAN RS 5000 P.M. TO A SMALL
COMPANY. SO PRINCIPLES DO NOT SPECIFY THE ABSOLUTE AMOUNT TO BE PAID BUT THERE IS RELATIVITY
DEPENDING UPON PAYING CAPACITY OF THE DIFFERENT COMPANIES.

3. EVOLUTIONARY/FORMED BY PRACTICE AND
EXPERIMENTS:
• THE MANAGEMENT PRINCIPLES ARE DEVELOPED ONLY AFTER DEEP AND THOROUGH
RESEARCH WORK. THEY ARE NOT DEVELOPED OVERNIGHT OR THEY ARE NOT THE
PERSONAL FEELINGS OF ANY PERSON. PROPER OBSERVATIONS AND EXPERIMENTS ARE
CONDUCTED BEFORE DEVELOPING THEM. THESE ARE THE EXPRESSIONS OF DEEP
EXPERIENCES OF THE LEADERS OF MANAGEMENT THOUGHTS. THEREFORE THEY ARE
EVOLUTIONARY IN NATURE.

4. FLEXIBILITY:
• MANAGEMENT PRINCIPLES CAN BE APPLIED DIFFERENTLY UNDER DIFFERENT CONDITIONS. SOME CHANGES
CAN BE MADE IN APPLICATION OF PRINCIPLES ACCORDING TO THE REQUIREMENT OF THE COMPANY. THESE
ARE NOT SET OF RIGID STATEMENTS. THESE CAN BE MODIFIED BY THE MANAGERS WHO ARE USING THEM.
• FOR EXAMPLE, THE PRINCIPLE OF CENTRALISATION INSISTS ON CONCENTRATION OF POWER AND AUTHORITY
AT TOP LEVEL BUT THE EXTENT AND DEGREE OF CENTRALISATION MAY VARY ACCORDING TO NATURE OF
ORGANISATION AND CENTRALISATION DOES NOT MEAN TOTAL CENTRALISATION, THERE CAN BE USE OF
DECENTRALISATION AT LOWER LEVEL IF ORGANISATION DEMANDS IT.

5. BEHAVIOURAL IN NATURE:
• MANAGEMENT PRINCIPLES ARE FORMED TO GUIDE AND INFLUENCE THE BEHAVIOUR OF
EMPLOYEES. THESE PRINCIPLES INSIST ON IMPROVING RELATIONSHIP BETWEEN
SUPERIOR, SUBORDINATES AND ALL THE MEMBERS OF ORGANISATION. THEY ALSO
ESTABLISH RELATIONS BETWEEN HUMAN AND MATERIAL RESOURCES.
• FOR EXAMPLE, PRINCIPLE OF DISCIPLINE IMPROVES COMMITMENT OF EMPLOYEES
TOWARDS THE ORGANISATION AND PRINCIPLE OF ESPRIT DE CORPS MOULD THE
BEHAVIOUR OF EMPLOYEES TOWARDS TEAM SPIRIT.

6. BASED ON CAUSE AND EFFECT RELATIONSHIP:
• MANAGEMENT PRINCIPLES ARE BASED ON CAUSE AND EFFECT THAT MEANS THESE
PRINCIPLES TELL US IF A PARTICULAR PRINCIPLE IS APPLIED IN A SITUATION, WHAT
MIGHT BE THE EFFECT. ALTHOUGH THESE PRINCIPLES CANNOT STATE PERFECTLY
ABSOLUTE RESULT BECAUSE THESE ARE APPLIED ON HUMAN BEING BUT IT HELPS IN
KNOWING SOME IDEA ABOUT THE EFFECT. WHEN PRINCIPLES ARE APPLIED IN SIMILAR
SITUATION IN DIFFERENT ORGANISATIONS THEN THEIR EFFECTS CAN BE KNOWN WITH
MORE PERFECTION.

7. CONTINGENT:
• MANAGEMENT PRINCIPLES ARE CONTINGENT OR DEPENDENT UPON THE SITUATIONS PREVAILING IN
ORGANISATION. THEIR APPLICATION AND EFFECT DEPEND UPON THE NATURE OF ORGANISATION. THE
APPLICATION OF PRINCIPLE HAS TO BE CHANGED ACCORDING TO THE NATURE, SIZE AND TYPE OF
ORGANISATION.
• FOR EXAMPLE PRINCIPLE OF TEAM SPIRIT IS VERY IMPORTANT FOR AN ORGANISATION WHERE WORK IS
CARRIED OUT BY A GROUP OF PEOPLE WHEREAS IT IS OF NO USE IN THE COMPANIES WHERE WORK IS
PERFORMED BY INDIVIDUAL AND NOT BY A GROUP.

HENRI FAYOL’S 14 PRINCIPLES OF
MANAGEMENT

1. DIVISION OF WORK
•SPECIALIZATION ALLOWS THE INDIVIDUAL TO BUILD UP
EXPERIENCE, AND TO CONTINUOUSLY IMPROVE HIS SKILLS.
THEREBY HE CAN BE MORE PRODUCTIVE.

2. AUTHORITY
• THE RIGHT TO ISSUE COMMANDS, ALONG WITH WHICH
MUST GO THE BALANCED RESPONSIBILITY FOR ITS
FUNCTION.

3. DISCIPLINE
• EMPLOYEES MUST OBEY, BUT THIS IS TWO-SIDED:
EMPLOYEES WILL ONLY OBEY ORDERS IF MANAGEMENT PLAY
THEIR PART BY PROVIDING GOOD LEADERSHIP.

4. UNITY OF COMMAND
• EACH WORKER SHOULD HAVE ONLY ONE BOSS WITH NO
OTHER CONFLICTING LINES OF COMMAND.

5. UNITY OF DIRECTION
• PEOPLE ENGAGED IN THE SAME KIND OF ACTIVITIES MUST HAVE THE SAME
OBJECTIVES IN A SINGLE PLAN. THIS IS ESSENTIAL TO ENSURE UNITY AND
COORDINATION IN THE ENTERPRISE. UNITY OF COMMAND DOES NOT EXIST
WITHOUT UNITY OF DIRECTION BUT DOES NOT NECESSARILY FLOWS FROM
IT.

6. SUBORDINATION OF INDIVIDUAL
INTEREST
• MANAGEMENT MUST SEE THAT THE GOALS OF THE
FIRMS ARE ALWAYS PARAMOUNT.

7. REMUNERATION
• PAYMENT IS AN IMPORTANT MOTIVATOR ALTHOUGH
BY ANALYZING A NUMBER OF POSSIBILITIES, FAYOL
POINTS OUT THAT THERE IS NO SUCH THING AS A PERFECT
SYSTEM

8. CENTRALIZATION (OR
DECENTRALIZATION)
• THIS IS A MATTER OF DEGREE DEPENDING ON THE
CONDITION OF THE BUSINESS AND THE QUALITY OF ITS
PERSONNEL.

9. SCALAR CHAIN (LINE OF AUTHORITY)
• A HIERARCHY IS NECESSARY FOR UNITY OF DIRECTION. BUT LATERAL
COMMUNICATION IS ALSO FUNDAMENTAL, AS LONG AS SUPERIORS KNOW
THAT SUCH COMMUNICATION IS TAKING PLACE. SCALAR CHAIN REFERS TO
THE NUMBER OF LEVELS IN THE HIERARCHY FROM THE ULTIMATE
AUTHORITY TO THE LOWEST LEVEL IN THE ORGANIZATION. IT SHOULD NOT
BE OVER-STRETCHED AND CONSIST OF TOO-MANY LEVELS

10. ORDER
• BOTH MATERIAL ORDER AND SOCIAL ORDER ARE NECESSARY. THE
FORMER MINIMIZES LOST TIME AND USELESS HANDLING OF
MATERIALS. THE LATTER IS ACHIEVED THROUGH ORGANIZATION
AND SELECTION.

11. EQUITY
• IN RUNNING A BUSINESS A ‘COMBINATION OF
KINDLINESS AND JUSTICE’ IS NEEDED. TREATING
EMPLOYEES WELL IS IMPORTANT TO ACHIEVE EQUITY.

12. STABILITY OF TENURE OF PERSONNEL
• EMPLOYEES WORK BETTER IF JOB SECURITY AND CAREER
PROGRESS ARE ASSURED TO THEM. AN INSECURE TENURE AND A
HIGH RATE OF EMPLOYEE TURNOVER WILL AFFECT THE
ORGANIZATION ADVERSELY.

13. INITIATIVE
• ALLOWING ALL PERSONNEL TO SHOW THEIR INITIATIVE IN SOME
WAY IS A SOURCE OF STRENGTH FOR THE ORGANIZATION. EVEN
THOUGH IT MAY WELL INVOLVE A SACRIFICE OF ‘PERSONAL
VANITY’ ON THE PART OF MANY MANAGERS.

14. ESPRIT DE CORPS
• MANAGEMENT MUST FOSTER THE MORALE OF ITS EMPLOYEES. HE
FURTHER SUGGESTS THAT: “REAL TALENT IS NEEDED TO COORDINATE
EFFORT, ENCOURAGE KEENNESS, USE EACH PERSON’S ABILITIES, AND
REWARD EACH ONE’S MERIT WITHOUT AROUSING POSSIBLE JEALOUSIES
AND DISTURBING HARMONIOUS RELATIONS.”

LEVELS OF MANAGEMENT
Meaning of Levels of Management :
• Many managers work in an organisation. However, these
managers do not work at the same level. They work and
operate at different positions. Hierarchy of these
managerial positions is called Levels of Management.

THREE LEVELS OF MANAGEMENT
GENERALLY, THERE ARE THREE LEVELS OF MANAGEMENT, VIZ.,
• ADMINISTRATIVE OR TOP LEVEL OF MANAGEMENT.
• EXECUTIVE OR MIDDLE LEVEL OF MANAGEMENT.
• SUPERVISORY OR LOWER LEVEL OF MANAGEMENT.
• AT EACH LEVEL, INDIVIDUAL MANAGER HAS TO CARRY OUT DIFFERENT ROLES AND FUNCTIONS.

DIAGRAM OF LEVELS OF MANAGEMENT

TOP LEVEL OF MANAGEMENT
The Top Level Management consists of the Board of Directors (BOD) and
the Chief Executive Officer (CEO). The Chief Executive Officer is also
called General Manager (GM) or Managing Director (MD) or President.
The Board of Directors are the representatives of the Shareholders, i.e.
they are selected by the Shareholders of the company. Similarly, the
Chief Executive Officer is selected by the Board of Directors of an
organisation.

• THE MAIN ROLE OF THE TOP LEVEL MANAGEMENT IS SUMMARIZED AS FOLLOWS :-
• THE TOP LEVEL MANAGEMENT DETERMINES THE OBJECTIVES, POLICIES AND PLANS OF THE ORGANISATION.
• THEY MOBILISES (ASSEMBLE AND BRING TOGETHER) AVAILABLE RESOURCES.
• THE TOP LEVEL MANAGEMENT DOES MOSTLY THE WORK OF THINKING, PLANNING AND DECIDING. THEREFORE, THEY
ARE ALSO CALLED AS THE ADMINISTRATORS AND THE BRAIN OF THE ORGANISATION.
• THEY SPEND MORE TIME IN PLANNING AND ORGANISING.
• THEY PREPARE LONG-TERM PLANS OF THE ORGANISATION WHICH ARE GENERALLY MADE FOR 5 TO 20 YEARS.
• THE TOP LEVEL MANAGEMENT HAS MAXIMUM AUTHORITY AND RESPONSIBILITY. THEY ARE THE TOP OR FINAL
AUTHORITY IN THE ORGANISATION. THEY ARE DIRECTLY RESPONSIBLE TO THE SHAREHOLDERS, GOVERNMENT AND
THE GENERAL PUBLIC. THE SUCCESS OR FAILURE OF THE ORGANISATION LARGELY DEPENDS ON THEIR EFFICIENCY
AND DECISION MAKING.
• THEY REQUIRE MORE CONCEPTUAL SKILLS AND LESS TECHNICAL SKILLS

MIDDLE LEVEL OF MANAGEMENT
The Middle Level Management consists of the Departmental
Heads (HOD), Branch Managers, and the Junior Executives. The
Departmental heads are Finance Managers, Purchase
Managers, etc. The Branch Managers are the head of a branch
or local unit. The Junior Executives are Assistant Finance
Managers, Assistant Purchase Managers, etc. The Middle level
Management is selected by the Top Level Management.

• THE MIDDLE LEVEL MANAGEMENT EMPHASIZE MORE ON FOLLOWING TASKS :-
• MIDDLE LEVEL MANAGEMENT GIVES RECOMMENDATIONS (ADVICE) TO THE TOP LEVEL MANAGEMENT.
• IT EXECUTES (IMPLEMENTS) THE POLICIES AND PLANS WHICH ARE MADE BY THE TOP LEVEL MANAGEMENT.
• IT CO-ORDINATE THE ACTIVITIES OF ALL THE DEPARTMENTS.
• THEY ALSO HAVE TO COMMUNICATE WITH THE TOP LEVEL MANAGEMENT AND THE LOWER LEVEL MANAGEMENT.
• THEY SPEND MORE TIME IN CO-ORDINATING AND COMMUNICATING.
• THEY PREPARE SHORT-TERM PLANS OF THEIR DEPARTMENTS WHICH ARE GENERALLY MADE FOR 1 TO 5 YEARS.
• THE MIDDLE LEVEL MANAGEMENT HAS LIMITED AUTHORITY AND RESPONSIBILITY. THEY ARE INTERMEDIARY
BETWEEN TOP AND LOWER MANAGEMENT. THEY ARE DIRECTLY RESPONSIBLE TO THE CHIEF EXECUTIVE
OFFICER AND BOARD OF DIRECTORS.
• REQUIRE MORE MANAGERIAL AND TECHNICAL SKILLS AND LESS CONCEPTUAL SKILLS.

LOWER LEVEL OF MANAGEMENT
THE LOWER LEVEL MANAGEMENT CONSISTS OF THE FOREMEN AND THE SUPERVISORS. THEY ARE SELECTED BY THE MIDDLE
LEVEL MANAGEMENT. IT IS ALSO CALLED OPERATIVE / SUPERVISORY LEVEL OR FIRST LINE OF MANAGEMENT.
• THE LOWER LEVEL MANAGEMENT PERFORMS FOLLOWING ACTIVITIES :-
• LOWER LEVEL MANAGEMENT DIRECTS THE WORKERS / EMPLOYEES.
• THEY DEVELOPS MORALE IN THE WORKERS.
• IT MAINTAINS A LINK BETWEEN WORKERS AND THE MIDDLE LEVEL MANAGEMENT.
• THE LOWER LEVEL MANAGEMENT INFORMS THE WORKERS ABOUT THE DECISIONS WHICH ARE TAKEN BY THE MANAGEMENT. THEY ALSO INFORM THE
MANAGEMENT ABOUT THE PERFORMANCE, DIFFICULTIES, FEELINGS, DEMANDS, ETC., OF THE WORKERS.
• THEY SPEND MORE TIME IN DIRECTING AND CONTROLLING.
• THE LOWER LEVEL MANAGERS MAKE DAILY, WEEKLY AND MONTHLY PLANS.
• THEY HAVE LIMITED AUTHORITY BUT IMPORTANT RESPONSIBILITY OF GETTING THE WORK DONE FROM THE WORKERS. THEY REGULARLY REPORT AND ARE
DIRECTLY RESPONSIBLE TO THE MIDDLE LEVEL MANAGEMENT.
• ALONG WITH THE EXPERIENCE AND BASIC MANAGEMENT SKILLS, THEY ALSO REQUIRE MORE TECHNICAL AND COMMUNICATION SKILLS.

Buisness management *chap 1

Recomendados

Recomendados

Mais conteúdo relacionado

Mais procurados

Mais procurados (19)

Semelhante a Buisness management *chap 1

Semelhante a Buisness management *chap 1 (20)

Último

Último (20)

Buisness management *chap 1