PRINCPLES & PRACTICES OF

MANAGEMENT

Definitions

Management is the process of designing and maintaining an environment in which

individuals working together in groups efficiently accomplish selected aims.
- Weihrich and Kuontz

The use of people and other resources to accomplish objectives.

- Boone and Kurtz

The process by which managers create, direct , maintain and operate purposive
organizations through systematic, coordinated, cooperative human effort.
- Mc. Farland

Management is a multi-purpose organ that manages a business, manages a

manager and manages workers and work.
- Peter Drucker

Management- Science & Art

Science
Advances by
knowledge
Proves
Predicts
Defines
Measures
Impresses

Art
Advances by
practice
Feels
Guesses
Describes
Opines
Expresses

Why Study Management

Utilization of resources
Best performance is a given situation
To achieve pre-determined objectives
Internal and External Environmental factors affecting
business
For formulating corporate strategy
To face competitive challenges
For R &D
To understand the impact of change
To understand the importance of quality
To understand how it can be applied to solve any
business problem

PROFESSIONAL MANAGEMENT

Professional Management
Separation of ownership from management
Knowledge based decision making
Professional managers are performance
oriented
They follow management practices based
on information obtained/experience
Application of management theories to
solve emerging organizational problems

Evolution of Management thought

Classical approach

Fredrick Taylor (1856-1915)

Science, not rule of the thumb
Harmony, not discord
Cooperation, not individualism
Maximum output
Development to greatest efficiency and prosperity
High wages, low cost

1.
2.
3.
4.
5.
6.

1.
2.
3.
4.
5.
6.

Charles Babbage
Specialization
Work measurement/ methods
Utilization of machines and tools
Division of labour
Science and mathematics
Cost reduction

Cont..

1.
2.
3.

1.
2.
3.

Frank and Lillian Gilberth (1868-1924 & 1878-1972)

Time and motion study
Worker welfare
Potential of workers

Henry Gantt (1861-1919)

Gantt Chart
Bonuses for Workers and Supervisors
Good understanding of IR

Cont

Henry Fayol ( 1841-1925)

1.

Division of labour
Discipline
Unity of command
Subordination of individual interest to common good
Remuneration
Centralization
Hierarchy
Order
Equity
Stability of Staff
Initiative
Esprit De Corps

2.
3.
4.
5.
6.
7.
8.
9.
10.
11.
12.

Cont.
Max Weber (1864-1920)

Bureaucracy
Criticisms

Elton Mayo- The Hawthorn Experiments (1927-32) (1880-1949)

Mary Parker Follett (1868-1933)

Chester Barnard (1886-1961

Cont.

Behavioral Science

Maslow
Mc. Gregor
Alderfer
Herzberg

Management Science

Mathematical Modelling, or for solutions of management problems

Recent Developments

Systems Approach
Contingency Approach
Dynamic Engagement Approach
Ethics and social Responsibility
Cultures and Multiculturism
TQM

Relation of Motion & Time Study to

Work Design
Objective

Improve Ops by
Effective utilization
Of all resources

Method Study/ OR
Developed
by

Gilberth
s

Motion
Study

Standard Symbols
o Operation
TN/ Movement
Combined Activity

Objective

Work
Design

Improve Control by
More accurate plng/
estimating/ evaluating
performance

Used to Evaluate
Alternate designs/methods
Used to find the fastest
Motion sequences

Inspection

Delay/ Temp Storage

Work Measurement
Developed by Taylor

Time Study

Storage

Managerial roles identified by

Mintzberg

Interpersonal
Figurehead
Leader
Liaison
Informational
Monitor
Disseminator
Spokesperson
Decisional
The Entrepreneurial role
The disturbance handler role
The resource allocator role
The negotiator role

Aim all communication at identifying and solving

problems, not blaming.

Managerial Attributes

Professional Competence
Ethics/ Value Driven
Candor and honesty
Emotional Intelligence
Commitment
Human Values
Leadership Qualities

Key Aspect of the Management Process

Planning
Organizing
Staffing
Leading
Controlling
Coordinating

Labour
Capital
Materials
Machinery
Information
Organizational Resources

Functions of Management

Types of Managers
Type 1- Expectations

Values

Targets

Type 2- Expectations

Values

Targets

Type 3- Expectations

Values

Targets

Type 4- Expectations

Values

Targets

Attainment
Of
Organizationa
l
Goal

Social & Ethical Responsibility of

Management

CSR refers to the businessmans decisions and actions taken for

reasons partially beyond the firms direct economic or technical
interest.
- Keith Davis
CSR contends that management is responsible to the organization
itself and to all the interest groups with which it interacts. Other
interest groups such as workers, customers, creditors, suppliers,
govt. and society in general are placed essentially equal with
shareholders
- Operational Definition
Ethics
How our decisions affect other people
Study of peoples rights & duties
Moral rules people apply while making decisions
Nature of relationships among people

 Arguments for Social Involvement

Improvements benefit both society and business

Greater Freedom and flexibility from govt.
Power with responsibility
Problems can become profits
Favorable public image
Better to prevent than cure

Arguments Against

Primary Objectives
Costs Associated
Enough Power
No Accountability

Planning

Planning is a continuous process of making present entrepreneurial

decisions systematically and with best possible knowledge of their
futurity, organizing systemically the efforts needed to carry out these
decisions and measuring the results against expectations through
feedback system.
- Peter Drucker

Planning is the selection and relating the facts and making use of
assumptions regarding the future in the visualization and formalization
of proposed activities believed necessary to achieve the desired result.
- Terry

Nature of Planning

Planning
Planning
process
Planning
Planning
Planning
Planning
Planning
Planning

is goal oriented
is an intellectual or rational
is a primary function
is all pervasive
is forward looking
is a perpetual process
is an integrated process
involves choice

Significance of Planning

Focuses attention on objectives

Offsets uncertainty and risk
Provides sense of direction
Provides guidelines for decision making
Increases organizational effectiveness
Provides efficiency in operations
Ensures better coordination
Facilitates controls
Encourages innovation and creativity
Facilitates delegation

Types of Plans
Top Level
Time

Long
Range

Scope

Strategic

Middle Level

Intermediate
Range
Tactical
Eight major areas of Strategic Goals

Market Standing and Customer loyalty

Innovation
Human Resources Management
Financial Resources
Physical Resources, Deployment and Use
Productivity, effectiveness , efficiency
Social Responsibility
Profit Requirements

Lower Level
Short Range
Operational

Understanding organization

What is Organization?

Building Blocks
Division of work
Departmentalization
Hierarchy
Coordination

Mechanistic V/s Organic Systems

Cont

Classification of Organizations
Predominantly coercive, non-legitimate authority
Predominantly utilitarian, rational legal authority, use of
economic rewards
Predominantly normative, use of membership status and
intrinsic value rewards authority on charisma/ expertise
Mixed structures

Structures

By Function
By Product
Matrix/Mixed

Organizing

Definition

Identification and classification of required objectives

Grouping of activities necessary to attain objectives
Assignment of each grouping to the manager with authority to supervise it
Provision of coordination horizontally and vertically

Formalized intentional structure of roles or positions.

Determining what tasks are to be done, who is to do them, how the tasks are to be
grouped, who reports to whom and where decisions are to be made
- Robbins & Coulter

Organizing is a management function involving assigning duties, grouping tasks,

delegating authority and responsibility and allocating resources to carry out a
specific plan in an efficient manner

Common Organizational Designs

Simple Structure
Bureaucracy
Matrix Structure
Team Structure
Virtual Organization
Boundary less Organization
Divisional Structure
Functional Structure

Why Do Structures Differ?

Mechanistic Vs Organic Models

Strategy
Organizational Size
Technology
Environment

Line and Staff Authority

Line Authority

Directly responsible for organizational goals

Standard chain of command
Based on legitimate power

Staff Authority

Provides services and authority to line managers

Expert help and advice
Based on expert power
Research, analysis and option development
Policy implementation, monitoring and control

Functional Authority
Right to Control activities of other departments
Based on legitimate power/ expert power
Practiced in most organizations

Contd

Delegation

Formal authority and accountability to

carry out specific tasks
Necessary for efficient functioning of
any organization

Span of Control

Department
Wide Span
Narrow Span
Factors determining effective span
Factors determining effective Span of Control

Trained subordinated
Clarity of delegation of authority
Clarity of plans
Use of objective standards
Rate of change
Communication techniques
Amount of personal contact needed
Use of Staff Assistants
Competence of Manager

Relationships ( Views on Conflicts)

Importance of Conflict Management

Rewards

Leadership
Change (Nadler and Tushman)

Incremental

Strategic

Anticipatory

Tuning

Re-orientation

Reactive

Adaptation

Re-creation

Learning Organizations
Tolerance for ambiguity
Managing diversity
Open Communications
CPS
Conflict Resolution
Team Orientation
Innovative Efforts

Conflict Handling Modes

(High)

Competitive
(own concerns at others
Expense)

Compromising
(Mutually acceptable solution)

Assertivene
ss

(Low)

Collaborating
(working with other
party to find solutions)

Avoidance
(Not addressing conflict)
Cooperativeness

(Low)
Mode
Competing
Collaboraing
Avoiding
Accomodating
Compromising

Accommodating
(Satisfying)

Assertiveness
High
High
Low
Low
Moderate

Cooperativeness
Low
Low
Low
High
Moderate

(High)

Culture

The complex mixture of assumptions, behaviours, stories, myths, metaphors and

other ideas that fit together to define what it means to be a member of a
particular society
Body Shop
Work, Live, Love and Learn- rather than
work, work, work
See meaning and money- rather than money
alone
Build network of relationships- rather than
hierarchies of power
Sustain resources rather than Use it and
Lose it
Grow Naturally- rather than grow fast
Embrace work and family- rather than work
or family
Artifacts- Espoused values- Basic Assumptions

Cont.

Cultural Practices
Material Vs Non Material cultures
Ecology and Culture
Cultural Characteristics
Observed Behavior
Norms
Values, Attitudes and beliefs
Philosophy
Rules
Organizational Climate

Decision Making

Process of identifying and selecting a course of action to solve a specific problem

Important aspects
Past Experience both positive and negative
Human Relationships
Problems and opportunity finding
Deciding to decide

Problem finding process

Deviation from past experience
Deviation from set plans
From other people
Performance of competitors
Opportunity finding process
Something that offers a chance to exceed objectives
Dialectical inquiry method (Devils Advocate method)
Importance of information gathering
Recognizing the Problem
Prioritize
Is the problem easy to deal with
Might the problem solve itself
Is this my decision to make

Cont

1.
2.

Decision Making
Specific Requirements
Expected Results
Resource Constraints
Prioritize Needs
Optional Courses of Action
Choose Best Option
Identify Potential unfavorable
consequences

Cont.
Nature of Decision Making

Programmed

Non Programmed

Certainty

Objectives

Accurate, measurable and reliable information

Risk

Outcome cannot be predicted

Probability factor

Uncertainty

Little known about alternative and outcome

Importance of external factors and information

Programmed
programmed
Certainty
Risk

High

Managerial control

Non

Uncertainty

Low

Factors affecting the decision

making process

Information
Time factor
Environmental factors
Internal Factors
Personality of the decision maker
Participation, acceptance & implementation
Precedent
Escalation of commitment
Problem perception

Rational Decision Making Process

Investigate Sit:
Define problem
Diagnose causes
Identify decision
objectives

Implement
and monitor

Plan Implementation
Monitor
Make adjustment

Develop
alternatives

Seek creative
alternatives
Do not evaluate
yet

Evaluate
Alternatives &
Select best
available

Cont

Investigation
Define the problem
Diagnose the causes
Identify decision objectives
Development
Easy for programmed
Difficult for non-programmed
Evaluation
Is the alternative feasible
Is the alternative a satisfactory solution
What are the consequences for the rest of the organization?
Implementation
Appropriate instructions
Acquisition/ Allocation of resources
Assigning responsibilities, budgeting
Progress reports and corrections

Information Systems for Managerial Control and

Decision Making

Corporate
Databases
Information for decision
Making

Information for control

MIS

Feedback
Control Systems

DSS

Mgt Control Systems

EIS

Balanced Scorecard

Management Control Systems

Reason
For
Deviation

Actual
Performance

Measure
Performance

Deviations
Comparison

Desired
performance
Corrective
Actions

Feedback Loop

Objectives of MCS

Relationship with organizational goals

Identification of critical processes that
affect goals
Identify key success factors
Identify responsibilities
Accountability
Financial Vs non financial performance
Improvement of collective decision making

Why Management Control system

fail??

Most control systems are past action

oriented
Precision Leave little margin for error
Controls do not change with missions,
strategies, objectives and plan
Behavioral and human side if the control
system overlooked
Standards are not modified as per the
situation at hand
Importance of speedy and reliable feedback

ERP

ERP- Integration of business processes across departments into an

enterprise wide information system

Integration of

Product Planning
Parts purchasing
Inventory Control
Product Distribution and fulfillment
Order tracking

ERP Users
Those who execute strategic planning
Those who perform managerial control
Those who do operational control

Cont.

Sales
Order placement
Order scheduling
Shipping and invoicing
Finance
Financial data
Financial reports
Trial Balance, Balance Sheet
Quarterly financial data

Management Control

Management control is a systematic effort to set performance

standards with planning objectives to design information
feedback with these pre determined standards and to measure
their significance and to take any action required to assure that
all corporate resources are being used in the most effective
and efficient way possible in achieving corporate objectives
- Mockler

Planning
Strategies to achieve objectives
Implementation of strategies
Control by comparing
Actual results with planned results

Feedback Loop of Management

Control
Desired
Performance

Actual
Performance

Analysis
Deviations

Identification
Of deviations

Corrective
Action

Implementation
Of correction

Measurement
Performance

Comparison
Against
Standards

Cont..

1.
2.
3.
4.
5.

Management Control helps in

Coping with uncertainty
Detecting irregularities
Identifying opportunities
Handling complex situations
Minimizing costs