Principle of Management
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1. It is a process or series of continuing and related activities. 2. It involves and concentrates on reaching organizational goals. 3. It reaches these goals by working with and through peoples and organizational resources. Functions of Management:-
The four basic management functions that make up the management process are described in the following sections: 1. Planning
Planning involves choosing tasks that must be performed to attain organizational goals, outlining how the tasks must be performed, and indicating when they should be performed. Planning activity focuses on attaining goals. Managers outline exactly what organizations should do to be successful. Planning is concerned with the success of the organization in the short term as well as in the long term.
Organizing can be thought of as assigning the tasks developed in the planning stages, to various individuals or groups within the organization. Organizing is to create a mechanism to put plans into action. People within the organization are given work assignments that contribute to the company’s goals. Tasks are organized so that the output of each individual contributes to the success of departments, which, in turn, contributes to the success of divisions, which ultimately contributes to the success of the organization. Influencing/Leading:-
Inspiring and motivating workers to work hard to achieve organizational goals. Controlling:-
Controlling is the following roles played by the manager: 1. Gather information that measures performance
2. Compare present performance to pre-established performance norms. 3. Determine the next action plan and modifications for meeting the desired performance parameters. Controlling is an ongoing process.
Terms of Management:-
There are two terms of Management: 1. Efficient Management
2. Effective Management
It is that term of Management which achieves the organizational goals in a given period of time by the usage of all the resources by working with and through the people Effective Management:-
It is a term of Management which achieves the organizational goals before the given period of time with the usage of minimum resources by working with and through the people. Types of Management:-
There are three types of Management:
1. Top Managers.
2. Middle Managers.
3. Lower Managers.
This is the type of management who do the following duties in an organization: 1. They make the decisions to bring innovations, expansions of business etc. 2. To make the policy for the organization on which the organization will have to run and to achieve its goals. 3. These managers monitor the business that is it going fair and have to point out the errors and problems in evaluation. Usually the Board of Directors and M.D are counted in Top Managers. Middle Managers:-
These are the type of managers who have direct contact with both the top managers as well as the lower manager. Thus we can say that they form a chain between top managers and lower managers. The deputy director is called Middle Manager. The middle manager does the following tasks: 1. The Middle managers take the policies from the Top managers and bring them to the lower managers. 2. The Middle manager read the problems of the Lower manager and discusses those problems with the Top managers. 3. The contribute from about 20 to 25% in policy making with the Top manager Lower Managers:-
These are the managers who are in direct contact with the employees. They are also in contact with the middle manager. So we can consider the Lower Manager as a chain between employees and Middle manager. The supervisors are called as the Lower managers. The Lower manager does the following tasks: 1. They take the problems of employees to the higher level (middle managers). 2. They examine the employee’s efficiency, working etc.
3. They perform the daily activities of business given to them by the Middle managers Types of Roles:
There are three types of Roles which are performed by the Managers. Roles refer to the types of action. 1. Decisional Roles:
The actions which are done by the top managers are called decisional roles. In these actions the top managers make decisions.
2. Impersonal Roles:
The roles which are performed by the Middle Managers are called Impersonal roles. In this type of roles the managers take the policy from top managers and give the policy to the Lower managers. 3. Informational Roles:
The Roles which are performed by the lower managers are called informational roles. In this type of roles the managers gives information to the employees about the business tasks. The one who performs the informational roles are called leaders or figurehead. Managerial skills:-
Managers need three types of key skills to perform the duties and activities associated with being a Manager. 1. Technical skills are skills that reflect both an understanding of and a proficiency in a specialized field. Technical skills include knowledge of and proficiency in a certain specialized Field, such as engineering, computers, accounting, or manufacturing. These skills are more important at lower levels of management since these managers are dealing directly with Employees doing the organization’s work. 2. Human skills are associated with a manager’s ability to work well with others both as a Member of a group and as a leader who gets things done through others. Because managers Deal directly with people, this skill is crucial! Managers with good human skills are able to get the best out of their people. They know how to communicate, motivate, lead, and inspire enthusiasm and trust. These skills are equally important at all levels of management. 3. Conceptual skills are skills related to the ability to visualize the organization as a whole, discern interrelationships among organizational parts, and understand how the organization fit into the wider context of the industry, community, and world. Conceptual skills are the skills managers must have to think and to conceptualize about abstract and complex situations. Using these skills, managers must be able to see the organization as a whole, understand the relationships among various submits, and visualize how the organization fits into its broader environment. Classical viewpoint is divided into three parts:
1. Scientific Management.
2. Bureaucratic Management.
3. Administrative Management.
Scientific management is defined as the use of the scientific method to define the “one best way” for a job to be done. Four principles of Scientific Management:-
1. Study each part of the task scientifically, and develop a best method to perform it. 2. Carefully select workers and train them to perform a task using the scientifically developed method. 3. Cooperate fully with workers to ensure they use the proper method. 4. Divide work and responsibility so management is responsible for planning work methods using scientific principles and workers are responsible for executing the work accordingly. Bureaucratic Management:
This type of Management was explained by the Max weber and Henry Fayol in the same year when the Taylor introduced the four principle of scientific Management. This is the type of Management which order the middle and lower Manager to perform the work in a proper way. Administrative Management:-
It is a term used for those early-day contributors who developed and taught principles to be used by managers, both individually and collectively, to improve the performance of the overall functions of the organization. Fayol’s fourteen principles of administrative Management:- 1. Division of work:
Specialization increases output by making employees more efficient. 2. Authority:
Managers must be able to give order. Authority gives them this right. Along with authority, however, goes responsibility. 3. Discipline:
Employees must obey and respect the rules that govern the organization.
4. Unity of Command:
An employee should receive orders from one superior only.
5. Unity of direction:
The organization should have a single plan of action to guide managers and workers. 6. Subordination of individual interests to the general interest: The interests of any one employee or group of employees should not take precedence over the interests of the organization as a whole. 7. Remuneration:
Workers must be paid a fair wage for their services.
This term refers to the degree to which subordinates are involved in decision making.
9. Scalar Chain:
The line term refers to the degree to which subordinates are involved in decision making.
People and materials should be in the right place at the right time.
Managers should be kind and fair to their subordinates.
12. Stability of tenure of personnel:
Management should provide orderly personnel planning and ensure that replacements are available to fill vacancies. 13. Initiative:
Employees who are allowed to originate and carry out plans will exert high levels of effort.
14. Esprit de corps:
Promoting team spirit will build harmony and unity within the organization. Behavioral Theory of Management
Organizational behavior (OB) research has contributed much of what we know about behavioral views of management, human resources management, motivation, leadership, trust, teamwork, and conflict management.
Hugo Munsterbeg (1863-1916):
He is considered to be the “father of industrial psychology” and is regarded by students of psychology as an important figure as Frederick Taylor is by students of management. Munsterberg attempted to develop practical applications of psychology. He argued that psychologists could help industry in three major areas:
1. Finding ways to identify individuals best suited to particular jobs. 2. Identifying the psychological conditions for optimum efficiency. 3. Finding ways to influence individual behavior to be congruent with management’s objectives. Mary Parker Follett (1868-1933):
She brought to management the perspectives of political science and social work. She identified:
1. The importance of the functioning of groups is not just individuals, in organization. 2. The principle of “power with” rather than “Power over” in management-employee relations. 3. Conflict resolution through integration, i.e., finding a solution to a conflict that would satisfy both parties. 4. The achievement of integrative unity, whereby the organization operates as a functional whole, with the various interrelated parts working together effectively to achieve organizational goals. The Hawthorne Studies:
He gave four points about the organizational behavior Management: 1. No correlation was found between changes in lighting conditions and individual work performance. 2. The Hawtrone effect refers to the possibility to individual single out for the studies may improve their performance. 3. The 3rd set of studies centered on group production norms and individual motivation. 4. The Hawtrone studies establish the impact that social aspect of the job has no productivity. Abraham Maslow (1908-1970):
He developed a theory of motivation that was based on three assumptions about Human nature:
1. Human beings have needs that are never completely satisfied. 2. Human behavior is aimed at satisfying the needs that are yet unsatisfied at a given point in time. 3. Needs fit into a somewhat predictable hierarchy ranging from basic, lower-level needs to higher level needs. Douglas McGregor (1906-1964):
He developed the Theory of X and Theory of Y. Theory of X:
Theory X, managers tend to assume that workers are lazy, need to be coerced, have little ambition, and are focused on security needs. These managers then treat their subordinates as if these assumptions were true. Theory of Y:
Theory Y managers tend to assume that workers do not inherently dislike work, are capable of self-control, have the capacity to
be creative and innovative, and generally have higher-level needs that are often not met on the job. These managers then treat their subordinates as if these assumptions were true. Environment:
The environment is defined as outside institutions and forces outside the organization that potentially affect an organization’s performance.
The following are the two types of environment:
1) External Environment
2) Internal Environment.
‘Major forces outside the organization with potential to influence significantly a product or Service’s likely success is called its external environment.’ Types of External Environments:
The insights derived from systems theory have helped to highlight the importance of a managed interaction between an organization and its external environment. Two major divisions have been made in the external Environment: 1) The Mega Environment
2) The Task Environment
The Mega Environment:
The mega-environment, or general environment as it is sometimes called, is that segment of the external environment that reflects the broad conditions and trends in the societies within which an organization operates. Major Elements of the Mega Environment:
1. The technological element of the mega-environment reflects the current state of knowledge regarding the production of products and services. 2. The economic element of the mega-environment encompasses the systems of producing, distributing, and consuming wealth. 3. The legal-political element of the mega-environment includes the legal and governmental systems within which an organization must function. 4. The socio-cultural element of the mega-environment includes the attitudes, values, norms, beliefs, behaviors, and associated demographic trends that are characteristic of a given geographic area. 5. The international element of the mega-environment includes the developments in countries outside an organization’s home country that have the potential impact to the organization. International factors far beyond the direct influence of a particular organization can have profound effects on its ability to operate successfully. Task Environment:
The task environment is that segment of the external environment made up of specific outside elements (usually organizations) with which an organization interfaces in the course of conducting its business. Elements of the Task Environment:
1. An organization’s customers and clients are those individuals and organizations that purchase its products and/or services. 2. An organization’s competitors are other organizations that either offers of have a high potential of offering rival products or services. 3. An organization’s suppliers are those individual organizations that supply the resources (such as raw materials, products, or services) the organization needs to conduct its operations. 4. An organization’s labor supply consists of those individuals who are potentially employable by the organization. 5. Various government agencies provide services and monitor compliance with laws and regulations at local (e.g., consumer affairs), state or regional (e.g., health department), and national (e.g., CBR) levels.
Organizational culture is a system of shared meaning and beliefs within an organization that determines, in large degree, how employees act. This definition implies several things. The organizational culture has the following seven dimensions: 1. Innovation and risk taking (the degree to which employees are encouraged to be innovative and take risks) 2. Attention to detail (the degree to which employees are expected to exhibit precision, analysis, and attention to detail) 3. Outcome orientation (the degree to which managers focus on results or outcomes rather than on the techniques and processes used to achieve those outcomes) 4. People orientation (the degree to which management decisions take into consideration the effect on people within the organization). 5. Team orientation (the degree to which work activities are organized around teams rather than individuals). 6. Aggressiveness (the degree to which people are aggressive and competitive rather than easygoing and cooperative). 7. Stability (the degree to which organizational activities emphasize maintaining the status quo in contrast to growth). Social Responsibility:
The social responsibility refers to protect and develop the standard of living of society with the earning of profit. But the time has been changed now. In this era there are two views of social responsibility. 1. Classical view.
2. Social economic view.
Classical view is the view that management only social responsibility is to maximize the profit. Socio-economic view:
The socio economic view is the view that management’s social responsibility goes well beyond the making of profits to include protecting and improving the society’s welfare.
There are ten major arguments for the social responsibility, they include the following: 1. Public expectations.
2. Long-run profit.
3. Ethical obligation.
4. Public image.
5. Better environment.
6. Discouragement of further government obligation.
7. Balance of power and responsibility.
8. Stock holder interest.
9. Possession of resources.
10. Superiority of prevention over cures.
While there are major six arguments against the social responsibility: 1. Violation of profit maximization.
2. Dilution of profit.
4. Too much power.
5. Lack of skills.
6. Lack of accountability.
Corporate Social Responsibility (CSR):
CSR is that part of a business organization which perform the non-profit activities for the development of society. Managerial Ethics:
Ethics refers to the rule and principle that define the right and wrong conduct. There are ethical dimensions to managerial decisions and actions: 1. Utilitarian view of ethics.
2. Right view of ethics.
3. Theory of Justice View of ethics.
4. Integrative social contract theory.
Planning is the process/function that determine in advance that what should be done. Nature of Planning:
1. Planning is a mental activity. Planning is not a simple process. It is an intellectual exercise and involves thinking and forethought on the part of the manager. 2. Planning is forward looking. It is futuristic in nature since it is performed to accomplish some objectives in the future. 3. Planning is the primary function. The planning logically precedes over the all other managerial functions. 4. Planning is based on facts.
Types of planning:
There are three types of planning: 1. Group planning.
2. Divisional or Functional planning.
3. Strategic Planning.
i. Group planning:
It refers to the planning for the specific groups or sections within a department or division. ii. Divisional/functional planning:
Such planning includes the plan formulated for various department of an enterprise. iii. Strategic plan:
It is made by the top level managers to improve overall conditions planning for a company as a whole is known as strategic or corporate planning. Planning process:
1. Define the task or objective.
2. Identify the resources.
3. Consider the alternatives.
4. Create the planning.
5. Work on the planning.
Limitations of planning:
1. Lack of accurate information.
2. Time and cost.
3. Resistance to change.
4. Lack of ability to plan.
5. False sense of security.
6. Environment constraints.
Essentials of good plan:
1. Clearly defined objectives.
2. It should be comprehensive.
3. It should be proved through proper analysis.
4. There should be flexibility.
5. It must use all the available resources.
6. It should be free from social factors.
7. There should be proper co-ordination.