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ARNI UNIVERSITY

ARNI SCHOOL OF BUSINESS

MANAGEMENT

ESSENTIALS OF MANAGEMENT

BM101

UNIT 1

Ashish Parashar, Asst. Prof(Arni University)1

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Contents


1.1 Definitions of Management.1.2 Managerial functions.

1.3 Process of Management.

1.4 Scope of Management.

1.5 Significance of management.

1.6 Nature of Management.

1.7 Management & Administration.

1.8 Main approaches in management.

1.9 Contribution of F.W.Taylor.

1.10 Webers Contribution.

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Contd


1.11 Henry Fayols Contribution.

1.12 Likerts Contribution.

1.13 Peter F Druckers Contribution to Management

1.14 Herbert Simons Contribution.

1.15 Managerial roles and skills.

1.16 Social ethics and values in management.

1.17 Organization as a system.

1.18 Closed systems Vs Open systems.1.19 Sub systems.

1.20 Mc Kinseys 7 S approach

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1.1 Definition of Management


MANAGEMENT is a process undertaken by

one or more persons to coordinate the activities

of other persons to achieve results not attainable

by any one person acting alone.

Traditionally, the term "management" refers to

the activities (and often the group of people)

involved in the four general functions: planning,

organizing, leading and coordinating of

resources.

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Contd


The attainment of organizational goals in an

effective and efficient manner through:

- Planning,

- Organizing,

- Leading, and

- Controlling of organizational resources.

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1.2 Managerial Functions


Planning .

Organizing.

Directing/Leading.

Controlling.

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Planning


Setting goals: long-

term goals,

intermediate goals,

short-term goals

Developing strategies:how to reach the goals?

Determining resources:

capital & manpower

Setting standards:

target, e.g. save 10

million INR.

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Organizing


Allocating resources, assign tasks, establish

procedures. Preparing organization chart.

Recruiting, selecting, training & developing employees.

Matching the job with employees: effectiveness &

efficiency.

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Directing/Leading


Leading (Influencing) means guiding the

activities of the organization members in

appropriate directions. Objective is to improve

productivity.

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Controlling


Establish standards.

Measuring results.

Monitoring performance.

Taking corrective action.

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1.3 The Process of Management


Planning

Leading

Resources

Controllin

g

Organizin

g

Performance

Human

Financial

Raw

Materials

Technological

Information

Attain goals

Products

Services

Efficiency

Effectiveness

Use influence to

motivate

employees

Select goals

and ways to

attain them

Assign responsibility

for task

accomplishment

Monitor

activities and

make

corrections

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1.4 Scope of Management


Managers at different levels may work in various

areas within an organization. In any given firm,

there may be marketing, financial, operations,

human resource, administrative, and other kinds

of managers at all three levels.

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Levels of Management


TopManagers

Middle Managers

First-line/Front-line Managers

Strategic Planning &

Long-term goals

Tactical Planning &

Intermediate goals

Operational

Planning &

Short-term goals

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Levels of Management


Top management: responsible for overallperformance & effectiveness, formulate strategies, set

polices, CEO( Strategic Planning &Long-term goals).

Middle management: implement strategies, policies,

decision made by top management, Plant Manager,Division head( Tactical Planning, Intermediate goals).

Supervisory (first-level): Working & supervising

worker, interact with suppliers, Foreman, Section

leader( Operational, Planning & Short-term goals).

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Managerial Skills


Conceptual skills: mental ability to think & see beyond

the present situation, Top management.

Technical skills: ability to use the knowledge, tools &

techniques, help employees solve work-related problems

accounting, engineering, sales, First-line management.Human relations skills: able to understand and

interact with people, all level management.

Decision-making skills: ability to define problems &

selecting the best courses of action.

Time management skills: efficient and productive use

of time.

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Managerial Roles


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1.5 Significance of Management


Directed towards stated objective.

Acts as a creative, motivate & invigorating force.

Acts as a binding force.

Plays crucial role in shaping the destiny of an organization.

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1.6 Nature of Management


The term management have different meanings .

And it is important to understand different definitions, like MANAGEMENT as a PROCESS

MANAGEMENT as a DISCIPLINE

MANAGEMENT as PEOPLE

MANAGEMENT as a CAREER

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MANAGEMENT as a PROCESS


Management is a process involving certain functions and

activities that managers must perform.

Managers also use principles in managing which are

generally accepted tenets that guide their thinking andaction.

This is what managers do.

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MANAGEMENT as a DISCIPLINE


Classifying Mgmt as a discipline implies that it is an

accumulated body of knowledge that can be learned.

Thus Mgmt is a subject with principles, concepts and

theories.

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MANAGEMENT as PEOPLE


It implies people who guide, direct, and thus manageorganizations.

The perspective of management as people refers to,

and emphasizes the importance of the employees whomanagers work with and manage in accomplishing an

organization's objectives.

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MANAGEMENT as a CAREER


People who devote their working lives to the process ofmanagement actually pursue management as career.

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Are managers born or made?


Answer

A combination of both

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A summary of the essential nature of management workFigure 6.4

24 Ashish Parashar, Asst. Prof(Arni University)

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Factors affecting the work of managers


The nature of the organisation, its philosophy,objectives and size.

The type of structure.

Activities and tasks involved. Technology and methods of performing work.

The nature of people employed.

The level in the organisation at which the manager is

working.

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1.7 Management & Administration


There are many factors according to which

administration can be distinguished from management.

These are as follows:

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1. Nature of work


Administration: It is concerned about thedetermination of objectives and major policies of an

organization.

Management: It puts into action the policies and plans

laid down by the administration.

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2. Type of function

Administration : It is a determinative function.Management: It is an executive function.


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3. Scope

Administration : It takes major decisions of anenterprise as a whole.

Management: It takes decisions within the framework

set by the administration.


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4. Level of authority

Administration : It is a top-level activity.Management: It is a middle level activity.


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5. Nature of status

Administration : It consists of owners who investcapital in and receive profits from an enterprise.

Management: It is a group of managerial personnel

who use their specialized knowledge to fulfill the

objectives of an enterprise.


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6. Decision making

Administration : Its decisions are influenced bypublic opinion, government policies, social, and

religious factors.

Management: Its decisions are influenced by the

values, opinions, and beliefs of the managers.


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7. Main functions

Administration : Planning and organizing functionsare involved in it.

Management: Motivating and controlling functions

are involved in it.


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8. Abilities

Administration : It needs administrative rather thantechnical abilities.

Management: It requires technical activities

Management handles the employers.

Administration handles the business aspects such asfinance.


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1.8 Main Approaches inManagement


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1.9 Contribution of F.W.Taylor


Frederick W. Taylor gave a very important

concept of management Scientific

Management.

Frederick W Taylor (1856- 1915)

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Frederick W. Taylor (1856- 1915)

Father of scientific Management

One of the first people to study the

behavior and performance of people at

work

Was a brilliant engineer & a

management scientist.

Became a consultant and taught other

managers how to apply his scientific

management techniques.

Believed that by increasingspecialization and the division of labor,

the production process will be more

efficient.


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Scientific management grew out of the need to increase

productivity. At the beginning of 20th century skilled labour

in the United States was in short supply & it was necessary

to improve the efficiency of the workers.

His objective was to provide a scientific basis for designing

& performing jobs.

He exhorted managers to adopt scientific and systematic

approach to managerial problems in place of rule-of-thumb

or trialand-error method.


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1. Develop a true science for each element of a workersjob to replace the old rule-of-thumb method.

2. Job specialization & division of labour should be a part

of each job.

3. Scientific selection, training & development of workers.4. Close co-operation between management & workers to

ensure that work is being done systematically.

5. Maximum output in place of restricted output.


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Time Study: Time study or work measurement is designed

to establish the standard time required to carry out a job.

Motion Study: It is a systematic & critical study of the

movement of both the workers & the machines.

Scientific Task Planning: It provides answers to

questions like what is to be done, where it is to be done,how it is to be done, & when it is to be done.

Standardization & Simplification: Standardization helps

to simplify work, to ensure uniformity of operations & to

facilitate comparisons of efficiency. Functional foremanship: Taylor suggested the system of

functional foremanship in which eight supervisors

supervise a workers job.


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Critical evaluation

Mechanistic approach: Scientific management

ignores the human element in production & is devoidof human touch.

Unrealistic assumptions: Scientific management isbased on the assumption that workers are motivated by

material gains.Impracticable: For eg; functional foremanship is

likely to create problem because it violates the unity ofcommand.

Exploitation of labour: In the name of increasingefficiency, workers were forced to speed up affectingtheir physical and mental health.


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1.10 Webers Contribution

Max Weber (1864-1920), a German

Social scientist, analyzed the formation

and administration of public

bureaucracies, which happen to be

the oldest form of organization.


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Features of Webers Model Division of Work: There is a high degree of specialization or

division of labour in bureaucratic organization. Rules and regulations: Behavior is subject to discipline and

control within the framework of rules.

Hierarchy of authority: A clearly defined hierarchy is created

by downward delegation of authority. Technical competence: Selection & promotion of job holders

are based on their technical competence.

Record keeping: Every decision and action is recorded in a

wide array of written document. Impersonal relations: Relations among the members of a

bureaucratic organization are impersonal & formal.


Li it ti f B

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Limitations of Bureaucracy

Rigidity: Rules & regulations in a bureaucracy are often rigid andinflexible.

Impersonality: Organizational rules and regulations are given

priority over individuals needs and emotions.

Compartmentalization of activities: Jobs are divided intowatertight categories which restrict people from performing tasks

that they are capable of performing.

Paperwork: Bureaucracy involves excessive paperwork as every

decision must be put in writing. Empire Building: Every superior tries to increase the number of

his subordinates as if this number is considered a symbol of

prestige.


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1.11 Henry Fayols (1841-1925) Contribution

While Taylor was more productionoriented, Fayols viewpoint was that

of general management.

He was the first & the foremost

contributors to administrativemanagement theory, a French

industrialist.

Fayol started his career as a mining

engineer & then became a chief

executive.


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Fayols Principles of Management1. Division of work

2. Authority3. Discipline

4. Unity of command

5. Unity of direction

6. Subordination of individual interests to the general interest

7. Remuneration

8. Centralization

9. Scalar Chain

10. Order

11. Equity

12. Stability of tenure of personnel

13. Initiative

14. Esprit de corps


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Scalar Chain and the Gangplank

The gangplank is a meansfor providing lateralcommunications.

The Foreman (F) wishing to

communicate with Foreman(P) without reporting upwardthrough the President (A)can use a gangplank tobypass organizational redtape.


Figure 10 1 Scalar Chain and the

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Figure 10.1 - Scalar Chain and the

Gangplank

49Ashish Parashar, Asst. Prof(Arni University)

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1.12 Likerts Contribution

Likerts contribution to management is also called

Behavioral Approach.

Behavioral approach is multi dimensional in nature. Under

it the knowledge drawn from behavioral sciences, e.g.,

psychology, sociology, anthropology, etc. is applied to

understand human behavior. Therefore this approach is

also known asBehavioral science approach.


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Main Propositions of Behavioral approach

An organization is a socio-technical system.

Individuals differ in terms of their attitude, perceptions,

and value systems.

People working in the organization have their own

needs & goals which may differ from organizationalgoals.

Peoples behavior as individuals may e different from

their behavior as member of a group.

Informal groups exercise a significant influence on theattitudes, performance and behavior of employees.

Thus, behavioral approach is an extension of humanrelations movement.


1 13 Peter Druckers (Nov1909-Nov 2005)

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1.13 Peter Drucker s (Nov1909 Nov 2005)

Contribution

Nature & Role of Management:

Drucker stresses innovative management

& decries bureaucratic management. According

to him, the manager is the dynamic, life givingelement in every business. He categorically

stated that developing countries are not

underdeveloped, they are undermanaged.


d

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Contd Managers Job: Drucker has identified three tasks of management:

1. Economic Performance: Management must put economic performance atthe top. It can justify its existence and its authority only by the economic

results it produces.

2. Making work productive & worker achieving: As an enterprise

accomplishes its performance through work it is essential to make work

productive. In order to make worker achieving he should be considered ashuman being.

3. Managing social impacts & social responsibilities: Concern for the

quantities of life as well as quality of life are vital.

All the above tasks must be performed simultaneously.


C d

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Contd Business objectives & Social Responsibilities: According to

Drucker, There is only one valid definition of business purpose,to create a

customer.Profit is essential for the growth and survival of the business. It is

indeed the ultimate test of business performance. Drucker believes that profit

is necessity , not the goal of the business.

Entrepreneurial Functions: In Druckers opinion, marketing andinnovation are the most important functions of an entrepreneur.

Decision Making: According to Drucker, Whatever a manager does hedoes through making decision. Decision making has five distinct phases

defining the problem, analyzing the problem, developing alternative solutions,

deciding upon the best solution, converting the best solution into effective

action.


1 14 Herbert Simons (June 1916- Feb 2001)

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1.14 Herbert Simon s (June 1916- Feb 2001)

Contribution

This approach gained momentum during theworld war II. The main postulates of this

approach are as follows:

The job of a manager is to secure the best

solutions out of a series of inter relatedvariables.

If the model is properly formulated and the

equations are correctly solved , one can

secure the best solutions to the model.

The quality of management is judged bythe quality of decisions made in diverse

situations.


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Herbert Simon Model


INTELLIGENCE

DESIGN

CHOICE

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1.16 Social Ethics & Values in Management

Corporate social responsibility is the

continuing commitment by business to

behave ethically and contribute to

economic development while improvingthe quality of life of the workforce and

their families as well as of the local

community and society at large.


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CSR goes beyond charity and requires that a responsible

company take into full account of the impact on all stakeholders

and on the environment when making decisions. This requires

them to balance the needs of all stake holders with their need to

make a profit and reward their shareholders adequately.

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Benefits of being socially responsible

Enhanced company and brand image.

Easier to attract and retain employees.

Increased market share.

Lower operating costs.

Easier to attract investors.


S i l R ibilit b MNC

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Social Responsibility by MNCs


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1 17 O i i

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1.17 Organisation as a system

Resources

Human

Materials

Equipment

Financial

Informational

Managerial &

technologicalabilities

Planning

OrganisingLeading

Controlling

Technology

Outcomes

Product &services

Profits & losses

Employee growth& satisfaction

64

Ashish Parashar, Asst. Prof(Arni University)

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1.18 Open vs Closed systems

An open systeminfluences, and is influenced by theexternal environment. Not only is it affected by manydifferent forces (society, climate, the economy), but italso has an effect on these too.

e.g most organisations

A closed systemis complete within itself. It neitherinfluences, nor is influenced by the events going on

around it.

E.G a closed religious sect


A restaurant as an open system

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A restaurant as an open system

INPUTS

Building

Tables & chairs

Cutlery

Waiting Staff

ChefsFresh food &beverages

Money

Knowledge of

cuisine

EFTPOS terminal

TRANSFORMATION

Orders are taken

Food is prepared

Food is cooked

Bills are paid

OUTPUTS

Tasty food

Satisfied customers

Memorableexperience

ProfitSatisfied staff

FEEDBACK


1 19 S b S t

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1.19 Sub Systems

A system is a set of functions or activities within an

organization that work together for the aim of theorganization.

Subsystems of an organization are linked together asinternal customers and suppliers.

A systems perspective acknowledges the importance ofthe interactions of subsystems, not the actions of themindividually.


Manufacturing Systems

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Manufacturing Systems Marketing and sales

Product design and engineering Purchasing and receiving

Production planning and scheduling

Manufacturing and assembly

Tool engineering

Industrial engineering and process design

Finished goods inspection and test

Packaging, shipping, and warehousing

Installation and service


R l ti hi i T i l M f t i

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Relationships in a Typical ManufacturingSystem

70


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1.20 Mc Kinseys 7s Approach


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Hard Ss Strategy: the direction and scope of the company over the

long term.

Structure: the basic organization of the company, its

departments, reporting lines, areas of expertise and

responsibility (and how they inter-relate).

Systems: formal and informal procedures that govern

everyday activity, covering everything from management

information systems, through to the systems at the point of

contact with the customer (retail systems, call center

systems, online systems, etc).


S ft S

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Soft Ss Skills: the capabilities and competencies that exist within

the company. What it does best.

Shared values: the values and beliefs of the company.

Ultimately they guide employees towards 'valued' behavior.

Staff: the company's people resources and how the are

developed, trained and motivated.

Style: the leadership approach of top management and thecompany's overall operating approach.

bm101, unit 1

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