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Principles of Management For the Dept. of Bio-Medical........-1.1-

Principles of Management

UNIT I Historical Development

Introduction

The verb manage comes from the Italian maneggiare (to handle especially a horse),which in turn derives from the Latin manus (hand). The French word mesnagement (later

mnagement) influenced the development in meaning of the English word management in the17th and 18th centuries.

The word management is probably a more descriptive and precise term than

management. Popular usage, however, has made management the widely accepted term. It is,

therefore, erroneous to refer to an economic class, social class, or apolitical class as management,

although his usage has popular appeal. Management is not people; it is an activity like walking,

reading, swimming or running. People who perform can be designated as managers, members of

management, or executive leaders. Thus, management can be studies as a process

Some definitions of management are:

Organization and coordination of the activities of an enterprise in accordance with

certain policies and in achievement of clearly defined objectives. Management is

often included as a factor of production along with machines, materials, and money.

According to the management guru Peter Drucker (19092005), the basic task of amanagement is twofold: marketing and innovation.

Directors and managers who have the power and responsibility to make decisions to

manage an enterprise. As a discipline, management comprises the interlocking

functions of formulating corporate policy and organizing, planning, controlling, and

directing the firm's resources to achieve the policy's objectives. The size of

management can range from one person in a small firm to hundreds or thousands of

managers in multinational companies. In large firms the board of directors formulates

the policy which is implemented by the chief executive officer.

Harold Koontz - management is the art of getting things done through and with the

people in formally organized groups.

Mc Farland Management is defined for conceptual, theoretical and analytical

purposes as that process by which managers create, direct, maintain, and operate

purposive organization through systematic, coordinated co-operative human effort.

Management as a Science

The following characteristics are essential for a subject to be recognized as a Science.

1. The existence of systematic body of knowledge with an array of principles

2. Based on Scientific enquiry

3. Principles should be verifiable

4. Reliable basis for predicting future events

Management as a discipline fulfills the science criterion. The application of these

principles helps any practicing manager to achieve the desired goals.

Science can be classified into two types they are:

1. Exact Science

2. Inexact ScienceExact Science:

In this the results are Accurate. There is no scope for the probability.

In-Exact Science:

1. Every organization human resources are different in attitude, aspirations andperceptions. So standard results may not be obtained.

2. Readymade and Standard Solutions cannot be obtained.

3. Management is complex and Unpredictable.

By N. P. K.For the Dept. of Bio-Medical Noorul Islam University


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4. Every organization decisions are influenced by the environment. The

environment is so complex and prone to unexpected changes.

Management as a Science

Art means application of skjill in finding a desired result. Art is the way of doing things skillfully.

Management is an art because of the following facts.1. Management process involves the use of practical knowledge and personal skill.

2. Management is creative.3. Application of practical knowledge helps to achieve concrete result

Management as both Science and Art

Management is a science because it contains general principles. It is also an art because it

requires certain personal skills to achieve desired results.

Management

Management in all business and human organization activity is the act of getting people

together to accomplish desired goals and objectives. Management comprises planning,

organizing, staffing, leading or directing, and controlling an organization (a group of one or more

people or entities) or effort for the purpose of accomplishing a goal. Resourcing encompasses the

deployment and manipulation of human resources, financial resources, technological resources,

and natural resources. Management can also refer to the person or people who perform the act(s)

of management.

Basic functions of management

Management operates through various functions, often classified as planning, organizing,

leading/directing, and controlling/monitoring.

Planning:

o Deciding what needs to happen in the future (today, next week, next month,

next year, over the next 5 years, etc.) and generating plans for action.

Organizing:

o (Implementation) making optimum use of the resources required to enable

the successful carrying out of plans.

Staffing:

o Job Analyzing, recruitment, and hiring individuals for appropriate jobs.

Leading/directing:

o Determining what needs to be done in a situation and getting people to do it.

Controlling/Monitoring:

o Checking progress against plans, which may need modification based on

feedback.

Formation of the business policy

The mission of the business is its most obvious purpose -- which may be, forexample, to make soap.

The vision of the business reflects its aspirations and specifies its intended direction

or future destination.

The objectives of the business refers to the ends or activity at which a certain task is

aimed.

The business's policy is a guide that stipulates rules, regulations and objectives, and

may be used in the managers' decision-making. It must be flexible and easily

interpreted and understood by all employees.

The business's strategy refers to the coordinated plan of action that it is going to

take, as well as the resources that it will use, to realize its vision and long-term

objectives. It is a guideline to managers, stipulating how they ought to allocate and



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utilize the factors of production to the business's advantage. Initially, it could help the

managers decide on what type of business they want to form.

How to implement policies and strategies

All policies and strategies must be discussed with all managerial personnel and staff.

Managers must understand where and how they can implement their policies and

strategies.

A plan of action must be devised for each department. Policies and strategies must be reviewed regularly.

Contingency plans must be devised in case the environment changes.

Assessments of progress ought to be carried out regularly by top-level managers.

A good environment and team spirit is required within the business.

The missions, objectives, strengths and weaknesses of each department must be

analysed to determine their roles in achieving the business's mission.

The forecasting method develops a reliable picture of the business's future

environment.

A planning unit must be created to ensure that all plans are consistent and that

policies and strategies are aimed at achieving the same mission and objectives.

Contingency plans must be developed, just in case.

All policies must be discussed with all managerial personnel and staff that is requiredin the execution of any departmental policy.

Organizational change is strategically achieved through the implementation of the

eight-step plan of action established by John P. Kotter: Increase urgency, get the

vision right, communicate the buy-in, empower action, create short-term wins, don't

let up, and make change stick.Where policies and strategies fit into the planning process

They give mid- and lower-level managers a good idea of the future plans for each

department in an organization.

A framework is created whereby plans and decisions are made.

Mid- and lower-level management may add their own plans to the business's strategic

ones.

Multi-D ivisional Management HierarchyThe management of a large organization may have three levels:

1. Senior management (or "top management" or "upper management")

2. Middle management

3. Low-level management, such as supervisors or team-leaders

4. Foreman

5. Rank and FileTop-level management

Require an extensive knowledge of management roles and skills.

They have to be very aware of external factors such as markets.

Their decisions are generally of a long-term nature

Their decisions are made using analytic, directive, conceptual and/or

behavioral/participative processes They are responsible forstrategic decisions.

They have to chalk out the plan and see that plan may be effective in the future.

They are executive in nature.

Middle management

Mid-level managers have a specialized understanding of certain managerial tasks.

They are responsible for carrying out the decisions made by top-level management.

Lower management



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This level of management ensures that the decisions and plans taken by the other two are

carried out.

Lower-level managers' decisions are generally short-term ones.

Foreman / lead hand

They are people who have direct supervision over the working force in office factory,

sales field or other workgroup or areas of activity.

Rank and File The responsibilities of the persons belonging to this group are even more restricted and

more specific than those of the foreman.

History of Management

Theoretical scope

Mary Parker Follett (18681933), who wrote on the topic in the early twentieth century,

defined management as "the art of getting things done through people". She also described

management as philosophy. One can also think of management functionally, as the action of

measuring a quantity on a regular basis and of adjusting some initial plan; or as the actions taken

to reach one's intended goal. This applies even in situations where planning does not take place.

From this perspective, Frenchman Henri Fayol considers management to consist of seven

functions: 1.Planning, 2.Organizing, 3.Leading, 4.Co-ordinating, 5.Controlling, 6.Staffing, and7.Motivating.

Some people, however, find this definition, while useful, far too narrow. The phrase

"management is what managers do" occurs widely, suggesting the difficulty of defining

management, the shifting nature of definitions, and the connection of managerial practices with

the existence of a managerial cadre or class.

One habit of thought regards management as equivalent to "business administration" and

thus excludes management in places outside commerce, as for example in charities and in the

public sector. More realistically, however, every organization must manage its work, people,

processes, technology, etc. in order to maximize its effectiveness. Nonetheless, many people referto university departments which teach management as "business schools." Some institutions (such

as the Harvard Business School) use that name while others (such as the Yale School of

Management) employ the more inclusive term "management."English speakers may also use the term "management" or "the management" as a

collective word describing the managers of an organization, for example of a corporation.

Historically this use of the term was often contrasted with the term "Labor" referring to those

being managed.

Nature of managerial work

In for-profit work, management has as its primary function the satisfaction of a range of

stakeholders. This typically involves making a profit (for the shareholders), creating valued

products at a reasonable cost (for customers), and providing rewarding employment opportunities

(for employees). In nonprofit management, add the importance of keeping the faith of donors. In

most models of management/governance, shareholders vote for the board of directors, and the

board then hires senior management. Some organizations have experimented with other methods

(such as employee-voting models) of selecting or reviewing managers; but this occurs only veryrarely.

In the public sectorof countries constituted as representative democracies, voters elect

politicians to public office. Such politicians hire many managers and administrators, and in somecountries like the United States political appointees lose their jobs on the election of a new

president/governor/mayor.

Historical development

Difficulties arise in tracing the history of management. Some see it (by definition) as a

late modern (in the sense of late modernity) conceptualization. On those terms it cannot have a

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pre-modern history, only harbingers (such as stewards). Others, however, detect management-

like-thought back to Sumerian traders and to the builders of the pyramids ofancient Egypt. Slave-

owners through the centuries faced the problems of exploiting/motivating a dependent but

sometimes unenthusiastic or recalcitrant workforce, but many pre-industrial enterprises, given

their small scale, did not feel compelled to face the issues of management systematically.However, innovations such as the spread of Arabic numerals (5th to 15th centuries) and the

codification of double-entry book-keeping (1494) provided tools for management assessment,planning and control.

Given the scale of most commercial operations and the lack of mechanized record-

keeping and recording before the industrial revolution, it made sense for most owners of

enterprises in those times to carry out management functions by and for themselves. But with

growing size and complexity of organizations, the split between owners (individuals, industrial

dynasties or groups of shareholders) and day-to-day managers (independent specialists in

planning and control) gradually became more common.

Early writing

While management has been present for millennia, several writers have created a

background of works that assisted in modern management theories.

Sun Tzu's The Art of War

Written by Chinese general Sun Tzu in the 6th century BC, The Art of Waris a militarystrategy book that, for managerial purposes, recommends being aware of and acting on strengths

and weaknesses of both a manager's organization and a foe's.

Niccol Machiavelli's The Prince

Believing that people were motivated by self-interest, Niccol Machiavelli wrote ThePrince in 1513 as advice for the leadership of Florence, Italy. Machiavelli recommended that

leaders use fearbut not hatredto maintain control.

Adam Smith's The Wealth of Nations

Written in 1776 by Adam Smith, a Scottish moral philosopher, The Wealth of Nations

aims for efficient organization of work through Specialization of labor. Smith described how

changes in processes could boost productivity in the manufacture of pins. While individuals could

produce 200 pins per day, Smith analyzed the steps involved in manufacture and, with 10

specialists, enabled production of 48,000 pins per day.19th Century Management

Classical economists such as Adam Smith (1723 - 1790) andJohn Stuart Mill(1806 -

1873) provided a theoretical background to resource-allocation, production, and pricing issues.

About the same time, innovators like Eli Whitney (1765 - 1825),James Watt(1736 - 1819), and

Matthew Boulton (1728 - 1809) developed elements of technical production such as

standardization, quality-control procedures, cost-accounting, interchangeability of parts, andwork-planning. Many of these aspects of management existed in the pre-1861 slave-based sector

of the US economy. That environment saw 4 million people, as the contemporary usages had it,

"managed" in profitable quasi-mass production. By the late 19th century, marginal economists

Alfred Marshall(1842 - 1924),Lon Walras (1834 - 1910), and others introduced a new layer ofcomplexity to the theoretical underpinnings of management.Joseph Wharton offered the first

tertiary-level course in management in 1881.20th Century Management

By about 1900 one finds managers trying to place their theories on what they regarded as

a thoroughly scientific basis (see scientism for perceived limitations of this belief). Examples

includeHenry R. Towne's Science of managementin the 1890s, Frederick Winslow Taylor's The

Principles of Scientific Management (1911), Frank andLillian Gilbreth's Applied motionstudy

(1917), and Henry L. Gantt's charts (1910s). J. Duncan wrote the first college management

textbook in 1911. In 1912 Yoichi Ueno introduced Taylorism to Japan and became first

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management consultant of the "Japanese-management style". His son Ichiro Ueno pioneered

Japanese quality assurance.

The first comprehensive theories of management appeared around 1920. The Harvard

Business School invented the Master of Business Administration degree (MBA) in 1921. People

like Henri Fayol (1841 - 1925) andAlexander Church described the various branches ofmanagement and their inter-relationships. In the early 20th century, people like Ordway Tead

(1891 - 1973), Walter Scottand J. Mooney applied the principles ofpsychology to management,while other writers, such asElton Mayo (1880 - 1949), Mary Parker Follett (1868 - 1933),

Chester Barnard(1886 - 1961),Max Weber(1864 - 1920),Rensis Likert(1903 - 1981), and ChrisArgyris (1923 - ) approached the phenomenon of management from a sociological perspective.

Peter Drucker (1909 2005) wrote one of the earliest books on applied management:

Concept of the Corporation (published in 1946). It resulted fromAlfred Sloan (chairman of

General Motors until 1956) commissioning a study of the organization. Drucker went on to write

39 books, many in the same vein.

H. Dodge, Ronald Fisher (1890 - 1962), and Thornton C. Fry introduced statistical

techniques into management-studies. In the 1940s, Patrick Blackett combined these statistical

theories with microeconomic theory and gave birth to the science of operations research.

Operations research, sometimes known as "management science" (but distinct from Taylor's

scientific management), attempts to take a scientific approach to solving management problems,particularly in the areas of logistics and operations.

Some of the more recent developments include the Theory of Constraints, management

by objectives, reengineering, Six Sigma and various information-technology-driven theories such

as agile software development, as well as group management theories such as Cog's Ladder.As the general recognition of managers as a class solidified during the 20th century and

gave perceived practitioners of the art/science of management a certain amount of prestige, so the

way opened for popularized systems of management ideas to peddle their wares. In this context

many management fads may have had more to do with pop psychology than with scientific

theories of management.

Towards the end of the 20th century, business management came to consist of six

separate branches, namely:

Human resource management Operations management or production management

Strategic management

Marketing management

Financial management

Information technology management responsible for management information systems

21st Century Management

In the 21st century observers find it increasingly difficult to subdivide management into

functional categories in this way. More and more processes simultaneously involve several

categories. Instead, one tends to think in terms of the various processes, tasks, and objects subject

to management.

Branches of management theory also exist relating to nonprofits and to government: suchas public administration, public management, and educational management. Further, management

programs related to civil-society organizations have also spawned programs in nonprofit

management and social entrepreneurship.

Note that many of the assumptions made by management have come under attack from

business ethics viewpoints, critical management studies, and anti-corporate activism.

As one consequence, workplace democracy has become both more common, and more

advocated, in some places distributing all management functions among the workers, each of

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whom takes on a portion of the work. However, these models predate any current political issue,

and may occur more naturally than does a command hierarchy. All management to some degree

embraces democratic principles in that in the long term workers must give majority support to

management; otherwise they leave to find other work, or go on strike. Despite the move toward

workplace democracy, command-and-control organization structures remain commonplace andthe de facto organization structure. Indeed, the entrenched nature of command-and-control can be

seen in the way that recent layoffs have been conducted with management ranks affected far lessthan employees at the lower levels of organizations. In some cases, management has even

rewarded itself with bonuses when lower level employees have been laid off.

Administration (business)

In business, administration consists of the performance or management of business

operations and thus the making or implementing of major decisions. Administration can be

defined as the universal process of organizing people and resources efficiently so as to direct

activities toward common goals and objectives.

The word is derived from the Middle English word administracioun, which is in turn

derived from the French administration, itself derived from the Latin administratio a

compounding ofad("to") and ministratio ("give service").

Administrator can serve as the title of the general manager or company secretary whoreports to a corporate board of directors. This title is archaic, but, in many enterprises, this

function, together with its associated Finance, Personnel and management information systems

services, is what is intended when the term "the administration" is used.

In some organizational analyses, management is viewed as a subset of administration,specifically associated with the technical and mundane elements within an organization's

operation. It stands distinct from executive or strategic work.

In other organizational analyses, administration can refer to the bureaucratic or

operationalperformance of mundane office tasks, usually internally oriented and reactive rather

than proactive.

The world's first business school, the Ecole Suprieure de Commerce de Paris, France,

was established in 1819. The first business school in the United States, the Wharton School of the

University of Pennsylvania, was founded in 1881. Anecdotically, top French business schoolHEC was also created in 1881, while Harvard Business School, founded in 1908, was born just

one year after France's prestigious ESSEC Business School.Administrative functions

Administrators, broadly speaking, engage in a common set of functions to meet the

organization's goals. These "functions" of the administrator were described by Henri Fayol as

"the 5 elements of administration" (in bold below).

Planningis deciding in advance what to do, how to do it, when to do it, and who should

do it. It maps the path from where the organization is to where it wants to be. The

planning function involves establishing goals and arranging them in logical order.

Administrators engage in both short-range and long-range planning.

Organizing involves identifying responsibilities to be performed, grouping

responsibilities into departments or divisions, and specifying organizational relationships.The purpose is to achieve coordinated effort among all the elements in the organization

(Coordinating). Organizing must take into account delegation of authority and

responsibility and span of control within supervisory units.

Staffing means filling job positions with the right people at the right time. It involves

determining staffing needs, writing job descriptions, recruiting and screening people to

fill the positions.

Directing (Commanding)is leading people in a manner that achieves the goals of the

organization. This involves proper allocation of resources and providing an effective

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support system. Directing requires exceptional interpersonal skills and the ability to

motivate people. One of the crucial issues in directing is to find the correct balance

between emphasis on staff needs and emphasis on economic production.

Controlling is the function that evaluates quality in all areas and detects potential or

actual deviations from the organization's plan. This ensures high-quality performance and

satisfactory results while maintaining an orderly and problem-free environment.

Controlling includes information management, measurement of performance, andinstitution of corrective actions.

Budgeting, exempted from the list above, incorporates most of the administrative

functions, beginning with the implementation of a budget plan through the application of

budget controls.

MANAGEMENT LEVELS

Managers are organizational members who are responsible for the work performance of

other organizational members. Managers have formal authority to use organizational resources

and to make decisions. In organizations, there are typically three levels of management: top-level,

middle-level, and first-level. These three main levels of managers form a hierarchy, in which they

are ranked in order of importance. In most organizations, the number of managers at each level issuch that the hierarchy resembles a pyramid, with many more first-level managers, fewer middle

managers, and the fewest managers at the top level. Each of these management levels is described

below in terms of their possible job titles and their primary responsibilities and the paths taken to

hold these positions. Additionally, there are differences across the management levels as to what

types of management tasks each does and the roles that they take in their jobs. Finally, there are a

number of changes that are occurring in many organizations that are changing the management

hierarchies in them, such as the increasing use of teams, the prevalence of outsourcing, and the

flattening of organizational structures.

TOP-LEVEL MANAGERS

Top-level managers, or top managers, are also called senior management or executives.

These individuals are at the top one or two levels in an organization, and hold titles such as: ChiefExecutive Officer (CEO), Chief Financial Officer (CFO), Chief Operational Officer (COO),

Chief Information Officer (CIO), Chairperson of the Board, President, Vice president, Corporate

head.

Often, a set of these managers will constitute the top management team, which is

composed of the CEO, the COO, and other department heads. Top-level managers makedecisions affecting the entirety of the firm. Top managers do not direct the day-to-day activities

of the firm; rather, they set goals for the organization and direct the company to achieve them.

Top managers are ultimately responsible for the performance of the organization, and often, these

managers have very visible jobs.

Top managers in most organizations have a great deal of managerial experience and have

moved up through the ranks of management within the company or in another firm. An exception

to this is a top manager who is also an entrepreneur; such an individual may start a smallcompany and manage it until it grows enough to support several levels of management. Many top

managers possess an advanced degree, such as a Masters in Business Administration, but such a

degree is not required.

Some CEOs are hired in from other top management positions in other companies.

Conversely, they may be promoted from within and groomed for top management with

management development activities, coaching, and mentoring. They may be tagged for

promotion through succession planning, which identifies high potential managers.

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Exhibit 1

Time Spent on Management Functions at Different Management Levels

Management Roles

In addition to the broad categories of management functions, managers in different levels

of the hierarchy fill different managerial roles. These roles were categorized by researcher Henry

Mintzberg, and they can be grouped into three major types: decisional, interpersonal, andinformational.

Decisional Roles.

Decisional roles require managers to plan strategy and utilize resources. There are four

specific roles that are decisional. The entrepreneurrole requires the manager to assign resources

to develop innovative goods and services, or to expand a business. Most of these roles will be

held by top-level managers, although middle managers may be given some ability to make suchdecisions. The disturbance handlercorrects unanticipated problems facing the organization from

the internal or external environment. Managers at all levels may take this role. For example, first-

line managers may correct a problem halting the assembly line or a middle level manager may

attempt to address the aftermath of a store robbery. Top managers are more likely to deal with

major crises, such as requiring a recall of defective products. The third decisional role, that ofresource allocator, involves determining which work units will get which resources. Top

managers are likely to make large, overall budget decisions, while middle mangers may make

more specific allocations. In some organizations, supervisory managers are responsible for

determine allocation of salary raises to employees. Finally, the negotiatorworks with others, such

as suppliers, distributors, or labor unions, to reach agreements regarding products and services.

First-level managers may negotiate with employees on issues of salary increases or overtime

hours, or they may work with other supervisory managers when needed resources must be shared.

Middle managers also negotiate with other managers and are likely to work to secure preferred

prices from suppliers and distributors. Top managers negotiate on larger issues, such as laborcontracts, or even on mergers and acquisitions of other companies.

Interpersonal Roles.Interpersonal roles require managers to direct and supervise employees and the

organization. The figurehead is typically a top of middle manager. This manager may

communicate future organizational goals or ethical guidelines to employees at company meetings.

A leaderacts as an example for other employees to follow, gives commands and directions to

subordinates, makes decisions, and mobilizes employee support. Managers must be leaders at all

levels of the organization; often lower-level managers look to top management for this leadership

example. In the role of liaison, a manger must coordinate the work of others in different work

units, establish alliances between others, and work to share resources. This role is particularly



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critical for middle managers, who must often compete with other managers for important

resources, yet must maintain successful working relationships with them for long time periods.

Informational Roles.

Informational roles are those in which managers obtain and transmit information. Theseroles have changed dramatically as technology has improved. The monitor evaluates the

performance of others and takes corrective action to improve that performance. Monitors alsowatch for changes in the environment and within the company that may affect individual and

organizational performance. Monitoring occurs at all levels of management, although managers at

higher levels of the organization are more likely to monitor external threats to the environment

than are middle or first-line managers. The role of disseminator requires that managers inform

employees of changes that affect them and the organization. They also communicate the

company's vision and purpose.

Managers at each level disseminate information to those below them, and much

information of this nature trickles from the top down. Finally, a spokesperson communicates with

the external environment, from advertising the company's goods and services, to informing the

community about the direction of the organization. The spokesperson for major announcements,

such as a change in strategic direction, is likely to be a top manager. But, other, more routine

information may be provided by a manager at any level of a company. For example, a middlemanager may give a press release to a local newspaper, or a supervisor manager may give a

presentation at a community meeting.

Management Skills

Regardless of organizational level, all managers must have five critical skills: technical

skill, interpersonal skill, conceptual skill, diagnostic skill, and political skill.

Technical Skill.

Technical skill involves understanding and demonstrating proficiency in a particular

workplace activity. Technical skills are things such as using a computer word processing

program, creating a budget, operating a piece of machinery, or preparing a presentation. The

technical skills used will differ in each level of management. First-level managers may engage inthe actual operations of the organization; they need to have an understanding of how production

and service occur in the organization in order to direct and evaluate line employees. Additionally,

first-line managers need skill in scheduling workers and preparing budgets. Middle managers use

more technical skills related to planning and organizing, and top managers need to have skill to

understand the complex financial workings of the organization.

Interpersonal Skill.

Interpersonal skill involves human relations, or the manager's ability to interact

effectively with organizational members. Communication is a critical part of interpersonal skill,

and an inability to communicate effectively can prevent career progression for managers.Managers who have excellent technical skill, but poor interpersonal skill are unlikely to succeed

in their jobs. This skill is critical at all levels of management.

Conceptual Skill.

Conceptual skill is a manager's ability to see the organization as a whole, as a complete

entity. It involves understanding how organizational units work together and how the

organization fits into its competitive environment. Conceptual skill is crucial for top managers,

whose ability to see "the big picture" can have major repercussions on the success of the business.

However, conceptual skill is still necessary for middle and supervisory managers, who must use

this skill to envision, for example, how work units and teams are best organized.



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Diagnostic Skill.

Diagnostic skill is used to investigate problems, decide on a remedy, and implement a

solution. Diagnostic skill involves other skillstechnical, interpersonal, conceptual, and politic.

For instance, to determine the root of a problem, a manager may need to speak with manyorganizational members or understand a variety of informational documents. The difference in

the use of diagnostic skill across the three levels of management is primarily due to the types ofproblems that must be addressed at each level. For example, first-level managers may deal

primarily with issues of motivation and discipline, such as determining why a particular

employee's performance is flagging and how to improve it. Middle managers are likely to deal

with issues related to larger work units, such as a plant or sales office. For instance, a middle-

level manager may have to diagnose why sales in a retail location have dipped. Top managers

diagnose organization-wide problems, and may address issues such as strategic position, the

possibility of outsourcing tasks, or opportunities for overseas expansion of a business.

Political Skill.

Political skill involves obtaining power and preventing other employees from taking

away one's power. Managers use power to achieve organizational objectives, and this skill can

often reach goals with less effort than others who lack political skill. Much like the other skillsdescribed, political skill cannot stand alone as a manager's skill; in particular, though, using

political skill without appropriate levels of other skills can lead to promoting a manager's own

career rather than reaching organizational goals. Managers at all levels require political skill;

managers must avoid others taking control that they should have in their work positions. Topmanagers may find that they need higher levels of political skill in order to successfully operate in

their environments. Interacting with competitors, suppliers, customers, shareholders, government,

and the public may require political skill.

CHANGES IN MANAGEMENT - HIERARCHIES

There are a number of changes to organizational structures that influence how many

managers are at each level of the organizational hierarchy, and what tasks they perform each day.

Flat vs. Tall Organizational Hierarchy

FLATTER ORGANIZATIONAL STRUCTURES.



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Organizational structures can be described by the number of levels of hierarchy; those

with many levels are called "tall" organizations. They have numerous levels of middle

management, and each manager supervises a small number of employees or other managers. That

is, they have a small span of control. Conversely, "flat" organizations have fewer levels of middlemanagement, and each manager has a much wider span of control. Examples of organization

charts that show tall and flat organizational structures are presented in Exhibit 2.Many organizational structures are now more flat than they were in previous decades.

This is due to a number of factors. Many organizations want to be more flexible and increasingly

responsive to complex environments. By becoming flatter, many organizations also become less

centralized. Centralized organizational structures have most of the decisions and responsibility at

the top of the organization, while decentralized organizations allow decision-making and

authority at lower levels of the organization. Flat organizations that make use of decentralization

are often more able to efficiently respond to customer needs and the changing competitive

environment.

As organizations move to flatter structures, the ranks of middle-level managers are

diminishing. This means that there a fewer opportunities for promotion for first-level managers,

but this also means that employees at all levels are likely to have more autonomy in their jobs, as

flatter organizations promote decentralization. When organizations move from taller to flatterhierarchies, this may mean that middle managers lose their jobs, and are either laid off from the

organization, or are demoted to lower-level management positions. This creates a surplus of labor

of middle level managers, who may find themselves with fewer job opportunities at the same

level.INCREASED USE OF TEAMS.

A team is a group of individuals with complementary skills who work together to achieve

a common goal. That is, each team member has different capabilities, yet they collaborate to

perform tasks. Many organizations are now using teams more frequently to accomplish work

because they may be capable of performing at a level higher than that of individual employees.

Additionally, teams tend to be more successful when tasks require speed, innovation, integration

of functions, and a complex and rapidly changing environment.

Another type of managerial position in an organization that uses teams is the team leader,who is sometimes called a project manager, a program manager, or task force leader. This person

manages the team by acting as a facilitator and catalyst. He or she may also engage in work to

help accomplish the team's goals. Some teams do not have leaders, but instead are self-managed.

Members of self-managed teams hold each other accountable for the team's goals and manage

one another without the presence of a specific leader.

OUTSOURCING.

Outsourcing occurs when an organization contracts with another company to perform

work that it previously performed itself. Outsourcing is intended to reduce costs and promote

efficiency. Costs can be reduced through outsourcing, often because the work can be done inother countries, where labor and resources are less expensive than in the United States.

Additionally, by having an out-sourcing company aid in production or service, the contractingcompany can devote more attention and resources to the company's core competencies. Through

outsourcing, many jobs that were previously performed by American workers are now performed

overseas. Thus, this has reduced the need for many first-level and middle-level managers, who

may not be able to find other similar jobs in another company.

There are three major levels of management: top-level, middle-level, and first-level.

Managers at each of these levels have different responsibilities and different functions.

Additionally, managers perform different roles within those managerial functions. Finally, many



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organizational hierarchies are changing, due to changes to organizational structures due to the

increasing use of teams, the flattening of organizations, and outsourcing.

Difference Between Administration and Management

Administration Management

1. Administration is concerned with Policy

making

1. Management is concerned with

Implementation of Policy2. .Its functions are legislative and

determinative

2. Its functions are executive and largely

governing

3. It involves planning and organizing 3. Management involves motivating and

controlling

4. It relates to top level management 4. It relates to Middle level management

5. Administration is the master of Industry 5. Management is the Servant of

Administration

6. It co-ordinates finance, production and

distribution

6. It uses organization for the achievement of

the targets fixed by the administration

7. It needs administrative ability rather than

technical ability

7. Management requires technical ability

more than administrative ability

8. Its functions expand at eh higher level and

contract at the Lower level

8. Its functions contract at the Upper level and

expands at the lower level

9. The term administration is mostly used ingovernment or public sector

9. Most used in the private sector

Board of Directors

Chief Executives

General Manager

Superindentent

Supervisor


Administration

Management


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FAYOLISM

Henri Fayol

Fayolism is one of the first comprehensive statement of a general theory of management,

developed by the French management theorist Henri Fayol (18411925): one of the most

influential contributors to modern concepts of management,

Fayol has proposed that there are five primary functions of management: (1) planning, (2)

organizing, (3) commanding, (4) coordinating, and (5) controlling (Fayol, 1949, 1987).

Controlling is described in the sense that a manager must receive feedback on a process in order

to make necessary adjustments.

Fayol's work has stood the test of time and has been shown to be relevant and appropriate

to contemporary management. Many of todays management texts including Daft (2005) have

reduced the five functions to four: (1) planning, (2) organizing, (3) leading, and (4) controlling.

Daft's text is organized around Fayol's four functions.

The 6 types of Operations

For Fayol any Organisation can be subdivided into six types of Operations. Each

Operation being fulfilled by its correspondingEssential Function:

1. Technical Operations (production, manufacturing, transformation)

2. Commercial Operations (purchases, sales, exchanges)

3. Financial Operations (seek for capital and finance management)

4. Security Operations (protection of goods and people)

5. Accounting Operations (balance, P&L, cost control, statistics, etc)

6. Administrative' Operations(Management)(see below The 5 Elements of Administration)In 1925 six month before Henri Fayols death Verney helped Fayol redefine The function of

administration (Administration Industrielle et Generale).

The old definition went as follows:The activities involved in businesses can all be classified under one of the

following six headings: TECHNICAL, COMMERCIAL, FINANCIAL, SECURITY,

ACCOUNTING, ADMINISTRATIVE organization, command, coordination and control.

Compared with the new definition:

The activities involved in businesses can all be classified under one of the

following five headings: TECHNICAL, COMMERCIAL, FINANCIAL, SECURITY,

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ACCOUNTING These activities must be planned, organized, directed, coordinated and

controlled, in a word: administered.

The removal of the distinction between management and administration and the

re-definition of administration, it appears that Fayol had finally synthesized these two

concepts. Therefore the previous difficulties with this distinction no longer exist(Breeze,J., & Miner Jr., F.)

The 9 Levels

Fayol was representing an organisation like a living body ( corps social , ie. "social

body") with main organs hierarchically structured as follow:

1. Shareholders,

2. Board of Administration,

3. General Direction and its General staff (advisors),

4. Regional/local Directions,

5. Main Engineers,

6. Services Managers,

7. Workshops Managers,8. Foremen,

9. Workers.The 5 Elements of Administration

Popularized by Fayol with the acronym of POCCC:

1. Planning'(to foresee/anticipate and make plans)

2. Organisation (to provide theFunction with all is needed for its smooth running:Supplies, Tools, Funding, Employees)

3. Commandment (to lead the people employed by the organisation)

4. Coordination (to harmonise all actions of an Organisation in order to facilitateits smooth running andsuccess)

5. Control (to verify if everything happens in accordance with defined plans,orders given, and accepted principles)

The word Controlclearly provoked some misunderstanding by English-readers becauseits 1st meaning in French is "to check" and its 2nd meaning is "to have a grip over". And it is the

other way round in English. So for the French-reader Fayol clearly meant "Check everything!".

For Fayol, "The Art of Commandingrelies upon certain personal qualities and upon the

knowledge of management general principles. (...) It has, like all other arts, its degrees. (...) The

manager in charge of a commandment must:

1. Have a deep knowledge of his staff;

2. Cull the incapables;

3. Well know the conventions binding the organisation and its members;4. Give the good example (by his attitude);

5. Conduct regular inspections of the corps social ;

6. Get together his main partners in conferences (meetings) where are prepared the

unity of direction and the focus of efforts;7. Not be distracted by details;

8. Aim to make prevalent among his staff, energy, initiative and dvouement."

The 14 Principles of Administration

1. Division of work:Reduces the span of attention or effort for any one person or group.Develops practice or routine and familiarity.

2. Authority:"The right to give orders. Should not be considered without reference toresponsibility."



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3. Discipline: "Outward marks of respect in accordance with formal or informalagreements between a firm and it's employees."

4. Unity of command: "One man one superior!"

5. Unity of direction: "One head and One plan for a group of activities with the sameobjective."

6. Subordination of Individual Interests to the Common Interest: "The interests ofone individual or group should not prevail over the general or common good."

7. Remuneration of personnel: "Pay should be fair to both the worker as well as theorganization."

8. Centralisation: "Is always present to a greater or lesser extent, depending on the sizeof the company and the quality of its managers."

9. Scalar chain:"The line of authority from top to bottom of the organization."

10. Order: "A place for everything and everything in its right place; ie. the right man inthe right place."

11. Equity: "A combination of kindness and justice towards employees."

12. Stability of personnel tenure: "Employees need to be given time to settle in to theirjobs, even though this may be a lengthy period in the case of some managers."

13. Initiative: "Within the limits of authority and discipline, all levels of staff should beencouraged to show initiative."

14. Esprit de corps (Union is strength): "Harmony is a great strength to anorganization; teamworkshould be encouraged."

Fayol suggested that it is important to have unity of command: a concept that suggests

there should be only one supervisor for each person in an organization. Like Socrates, Fayol

suggested that management is a universal human activity that applies equally well to the family as

it does to the corporation.The 16 Management Duties of the Organisation

1. To aim at giving serious thoughts to activity plans and having them firmly executed.

2. To aim at having employed people and used equipment being relevant to the goal, the

resources and the needs of the organisation.

3. To set up a unique Direction (top management), skilled and vigorous.4. To consult others for actions, to coordinate efforts.

5. To formulate decisions in a clear, clean and precise way.

6. To aim to an efficient recruitment, each department needing to be lead by a skilled

and active man, each employee being at the place where he can provide the most

services.

7. To define clearly the attributions (ie. job description).

8. To encourage people to take initiatives and responsibilities.

9. To pay fairly and expertly for the services provided to the Organisation.

10. to sanction faults and errors.

11. To enforce discipline.

12. To aim at having individual interests subordinated to the Organisation's interest.

13. To give a special attention to the Unity of Command.14. To supervise the material order and social order (ie. to keep the place tidy and to

avoid strikes).

15. To verify everything (ie. to apply quality control on every operation).

To Fight Against The Red Tape Attitude.

The 7 Qualities

The 7 qualities he was expecting from managers were:

1. Health and vigour;



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2. Cleverness;

3. Moral qualities;

4. General knowledge (culture);

5. Management capacity;

6. Notions about other functions (activities);7. The strongest skills in the function managed.

For the Top Managing Director, the 7th quality was "the broadest skills in the dedicatedactivity of the organisation".

For example, if the organisation was a car manufacturer, the top Director must have the

largest possible knowledge about the manufacturing of cars. This was suggesting that this

Director would have to be probably a former car manufacturing engineer.

Managers need the ability to perform the elements of Management but they also need

abilities in the Technical, commercial, financial, security, and Accounting areas of the enterprise.

Managerial Ability became more important as he moves up to upper level management. Fayol's

ideas inspired a number of individuals to teach and Write about management(Wren).

Scientific management

Frederick Taylor (1856-1915), developer of scientific management

Scientific management (also called Taylorism or the Taylor system) is a theory of

management that analyzes and synthesizes workflows, with the objective of improving labor

productivity. The core ideas of the theory were developed by Frederick Winslow Taylor in the1880s and 1890s, and were first published in his monographs,Shop Management(1905) and The

Principles of Scientific Management(1911). Taylor believed that decisions based upon traditionand rules of thumb should be replaced by precise procedures developed after careful study of an

individual at work. Its application is contingent on a high level of managerial control over

employee work practices.

Taylorism is a variation on the theme ofefficiency; it is a late 19th and early 20th century

instance of the larger recurring theme in human life of increasing efficiency, decreasing waste,

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and using empirical methods to decide what matters, rather than uncritically accepting pre-

existing ideas of what matters. Thus it is a chapter in the larger narrative that also includes, for

example, the folk wisdom of thrift, time and motion study, Fordism, and lean manufacturing. It

overlapped considerably with the Efficiency Movement, which was the broader cultural echo of

scientific management's impact on business managers specifically.In management literature today, the greatest use of the concept of Taylorism is as a

contrast to a new, improved way of doing business. In political and sociological terms, Taylorismcan be seen as the division of laborpushed to its logical extreme, with a consequent de-skilling of

the worker and dehumanisation of the workplace.

General approach

1. Shift in decision making from employees to managers

2. Develop a standard method for performing each job

3. Select workers with appropriate abilities for each job

4. Train workers in the standard method previously developed

5. Support workers by planning their work and eliminating interruptions

6. Provide wage incentives to workers for increased output

Contributions

Scientific approach to business management and process improvement Importance of compensation for performance

Began the careful study of tasks and jobs

Importance of selection criteria by management

Elements

Labor is defined and authority/responsibility is legitimised/official

Positions placed in hierarchy and under authority of higher level

Selection is based upon technical competence, training or experience

Actions and decisions are recorded to allow continuity and memory

Management is different from ownership of the organization

Managers follow rules/procedures to enable reliable/predictable behavior

Criticisms Did not appreciate the social context of work and higher needs of workers.

Did not acknowledge variance among individuals.

Tended to regard workers as uninformed and ignored their ideas and suggestions.

Mass production methods

Taylorism is often mentioned along with Fordism, because it was closely associated with

mass production methods in manufacturing factories. Taylor's own name for his approach was

scientific management. This sort of task-oriented optimization of work tasks is nearly ubiquitoustoday in industry, and has made most industrial work menial, repetitive and tedious; this can be

noted, for instance, in assembly lines andfast-foodrestaurants. Taylor's methods began from his

observation that, in general, workers forced to perform repetitive tasks work at the slowest ratethat goes unpunished. This slow rate of work has been called by various terms, including

"soldiering", (reflecting the way conscripts may approach following orders), "dogging it", or

"goldbricking". Managers may call it by those names or "loafing" or "malingering"; workers may

call it "getting through the day" or "preventing management from abusing us". Taylor used the

term "soldiering" and observed that, when paid the same amount, workers will tend to do the

amount of work that the slowest among them does. This reflects the idea that workers have a

vested interest in their own well-being, and do not benefit from working above the defined rate of

work when it will not increase their compensation. He therefore proposed that the work practice

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that had been developed in most work environments was crafted, intentionally or unintentionally,

to be very inefficient in its execution. He posited that rational analysis and synthesis could

uncover one best method for performing any particular task, that prevailing methods were seldom

equal to these best methods, and that if the best methods were taught to workers and their

compensation was linked to output, theirproductivity would go up.Taylor introduced many concepts that were not widely accepted at the time. For example,

by observing workers, he decided that labor should include rest breaks so that the worker has timeto recover from fatigue. He proved this with the task of unloading ore: workers were taught to

take rest during work and as a result production increased.

Today's armies employ scientific management. Of the key points listed, all but wage

incentives for increased output are used by modern military organizations. Wage incentives rather

appear in the form of skill bonuses for enlistments.

Division of labor

Unless people manage themselves, somebody has to take care of administration, and thus

there is a division of work between workers and administrators. One of the tasks of administration

is to select the right person for the right job:The labor should include rest breaks so that the worker has time to recover from

fatigue.Now one of the very first requirements for a man who is fit to handle pig iron as a regularoccupation is that he shall be so stupid and so phlegmatic that he more nearly resembles in his

mental make-up the ox than any other type. The man who is mentally alert and intelligent is for

this very reason entirely unsuited to what would, for him, be the grinding monotony of work of

this character. Therefore the workman who is best suited to handling pig iron is unable to

understand the real science of doing this class of work.

Taylor 1911, 59

This viewmatch the worker to the jobhas resurfaced time and time again in

management theories.Many theories have been applied to the business.

Extension to "Sales Engineering"

Taylor believed scientific management could be extended to "the work of our salesmen."Shortly after his death, his acolyte Harlow S. Person began to lecture corporate audiences on the

possibility of using Taylorism for "sales engineering." (Dawson 2005) This was a watershed

insight in the history of corporate marketing.

Criticism

Applications of scientific management sometimes fail to account for two inherent difficulties:

Individuals are different from each other: the most efficient way of working for one

person may be inefficient for another;

The economic interests of workers and management are rarely identical, so that both

the measurement processes and the retraining required by Taylor's methods are

frequently resented and sometimes sabotaged by the workforce.

Both difficulties were recognised by Taylor, but are generally not fully addressed by

managers who only see the potential improvements to efficiency. Taylor believed that scientific

management cannot work unless the worker benefits. In his view management should arrange the

work in such a way that one is able to produce more and get paid more, by teaching and

implementing more efficient procedures for producing a product.

Although Taylor did not compare workers with machines, some of his critics use this

metaphor to explain how his approach makes work more efficient by removing unnecessary or

wasted effort. However, some would say that this approach ignores the complications introduced

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because workers are necessarily human: personal needs, interpersonal difficulties and the very

real difficulties introduced by making jobs so efficient that workers have no time to relax. As a

result, workers worked harder, but became dissatisfied with the work environment. Some have

argued that this discounting of worker personalities led to the rise oflabor unions.

It can also be said that the rise in labor unions is leading to a push on the part of industryto accelerate the process of automation, a process that is undergoing a renaissance with the

invention of a host of new technologies starting with the computer and the Internet. This shift inproduction to machines was clearly one of the goals of Taylorism, and represents a victory for his

theories.

It may not be adaptive to changing scenarios; it overemphasizes routine procedures, i.e

strictly following a given set of rules and regulations, work procedures, production centredness

etc.

However, tactfully choosing to ignore the still controversial process of automating human

work is also politically expedient, so many still say that practical problems caused by Taylorism

led to its replacement by thehuman relations school of management in 1930. Others (Braverman

1974) insisted that human relations did notreplace Taylorism but that both approaches are rather

complementary: Taylorism determining the actual organisation of the work process and human

relations helping to adapt the workers to the new procedures.

However, Taylor's theories were clearly at the roots of a global revival in theories ofscientific management in the last two decades of the 20th century, under the moniker of

'corporate reengineering' or'business process reengineering'. As such, Taylor's ideas can be seen

as the root of a very influential series of developments in the workplace, with the goal being the

eventual elimination of industry's need for unskilled, and later perhaps, even most skilled labor inany form, directly following Taylor's recipe for deconstructing a process. This has come to be

known as commodification, and no skilled profession, even medicine, has proven to be immune

from the efforts of Taylor's followers, the 'reengineers', who are often called derogatory names

such as 'bean counters'.

Legacy

Scientific management was an early attempt to systematically treat management andprocess improvement as a scientific problem. With the advancement of statistical methods, the

approach was improved and referred to as quality control in 1920s and 1930s. During the 1940s

and 1950s, the body of knowledge for doing scientific management evolved into Operations

Researchand management cybernetics. In the 1980s there was total quality management, in the

1990s re-engineering. Today's Six Sigma and lean manufacturing could be seen as new kinds of

scientific management, though their principles vary so drastically that the comparison might be

misleading. In particular, Shigeo Shingo, one of the originators of the Toyota Production System

that this system and Japanese management culture in general should be seen as kind of scientific

management.

Peter Druckersaw Frederick Taylor as the creator ofknowledge management, as the aimof scientific management is to produce knowledge about how to improve work processes.

Although some have questioned whether scientific management is suitable only formanufacturing, Taylor himself advocated scientific management for all sorts of work, including

the management of universities and government.Scientific management has had an important influence in sports, where stop watches and

motion studies rule the day. (Taylor himself enjoyed sportsespecially tennis and golfand he

invented improved tennis racquets and improved golf clubs, although other players liked to tease

him for his unorthodox designs, and they did not catch on as replacements for the mainstream

implements.)

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Scientific management and the Soviet Union

Taylorism in the Soviet Union was advocated by Aleksei Gastev and nauchnaia

organizatsia truda (the movement for the scientific organisation of labor). It found support in both

Lenin andTrotsky. Gastev continued to promote this system of labor management until his arrest

and execution in 1939. Historian Thomas Hughes (Hughes 2004) has detailed the way in whichthe Soviet Union in the 1920s and 1930s enthusiastically embraced Fordism and Taylorism,

importing American experts in both fields as well as American engineering firms to build parts of

its new industrial infrastructure. The concepts of the Five Year Plan and the centrally planned

economy can be traced directly to the influence of Taylorism on Soviet thinking. Hughes quotesStalin:

American efficiency is that indomitable force which neither knows nor recognises

obstacles; which continues on a task once started until it is finished, even if it is a minor task; and

without which serious constructive work is impossible . . . The combination of the Russian

revolutionary sweep with American efficiency is the essence ofLeninism.

Hughes 2004: 251, quoting Stalin 1976: 115

Hughes offers the equation "Taylorismus + Fordismus = Amerikanismus" to describe

what happened: as the Soviet Union developed and grew in power, both sides, the Soviets and the

Americans, chose to ignore or deny the contribution that American ideas and expertise had: the

Soviets because they wished to portray themselves as creators of their own destiny and not

indebted to a rival, and the Americans because they did not wish to acknowledge their part in

creating a powerful rival.

Different Types of Business Organizations

One of the most important decisions any business owner will face when starting a new

business is deciding on what structure the business will take. Some of the factors which will

assist you in making that decision include. Your needs for capital.

The number of people you project employing.

How you plan to distribute earnings.

Any liabilities you are assuming.

How long you are planning to operate your business.

Any legal restrictions.

What type of business operation you start.

The tax implications.

Listed below are some of the advantages and disadvantages associated with types ofbusiness

organizations including sole proprietorship, partnership and corporation.

Sole Proprietorship

A sole proprietorship is the least expensive and easiest way to start your business. What

is simpler than finding a location for your business and opening the doors? All right, I might have

oversimplified it there, but it really is pretty easy. You will have to register a business name and

obtain other local licenses which will depend on your local government. There will also be fees

associated with obtaining them. Hiring an attorney would be a smart move and the attorney fees

will be less than other forms of business as there is a smaller amount of documents to be filed

because the owner of the business has the final word in all business decisions.

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