MANAGEMENT- MODULE 1

FOUNDATIONS OF MANAGEMENT
Introduction: One of the most important human activities is managing.
People began forming groups to accomplish aims they could not achieve as
individuals.
ORGANIZATION Group of people working together to create a surplus.
(Organization, Firm, Institute, Company)
Ex:- Reliance, Apollo, IIM/IIT, Infosys Foundation
Fig.1
Meaning Maintaining the human resource( employees) to run the business for longer
duration
The task of management has been rising importance as society has come to
rely increasingly on group effort.
DEFINITION:
1.Management is the process of designing & maintaining an environment in which
individuals, working together in groups , efficiently accomplish selected aims.Koontz
2. Management is the attainment of organizational goals in an effective & efficient
manner through planning, organizing, leading, & controlling organizational resources
NATURE:
1. As managers, people carry out the managerial functions (major-POSDC)
2. Management applies to any kind of organization-Small & large, to profit & not-forprofit enterprises, manufacturing as well as service industries.
Enterprise refers to a business, government agency, hospital, university etc.,
3. It applies to managers at all organizational levels- All managers ( managers,
executives, administrators, supervisors) carry out managerial functions, but the time
spent for each function may differ.
4.The aim of all managers is the same - to create a surplus by establishing an
environment in which people can accomplish group goals with least amount of time,
money, materials.
5.Managing is concerned with productivity, which implies effectiveness & efficiency
Productivity- The output-input ratio within a time period with due
consideration for quality.
Effectiveness The achievements of objectives
Efficiency The achievement of the ends with least amount of resources
6.Is dynamic & complex

FUNCTIONS1. Planning Selecting missions & objectives as well as the actions to achieve them,
which requires decision making. No plan exists until a decision-a commitment of
human or material resources-has been made.
2. Organizing- Establishing an intentional structure of roles for people to fill an
organization. The purpose is to help create an environment for human performance. It
is then a management tool but not an end.
3. Staffing- Filling, & keeping filled, the positions in the organization structure.
This is done by identifying the work-force requirements, inventorying the people
available & HR functions from recruitment to career planning.
4. Directing ( Leading)-Influencing people so that they will contribute to
organizational & group goals. Since leadership implies follower ship & people tend to
follow those who offer means of satisfying their needs, wishes, desires. It includes
motivation, leadership styles, approaches & communication.
5. Controlling Measuring & correcting individual & organizational performance
to ensure that events conform to plans.
(Co-ordination Required at all functional stages)
Management & SocietyManagers cannot perform their tasks well unless they have an understanding of
environment
are responsive to many elements of internal & external environment.
Internal Organization structure, culture, Employees..
External PEST, Ecological & Ethical
Purpose/Scope of Management
Organization can efficiently orient towards action

Can learn about the needs of their customers(/society)

Can promote managerial autonomy & entrepreneurship

Can achieve productivity by paying close attention to the needs of their

people( employees)

Can focus on the business they knew best

Can go global with optimum utilization of resources:

Cost leader (Tata Automobiles), Market leader( Coca Cola), Pioneer (BioCon For
cancer drug), Price leader (Reliance fresh), Quality leader (Taj Group Of Hotels),
Service provider( Eureka Forbes)

Functional Areas of Management (Fig 2)

Management as a Science, Art or Profession
Science
The organized knowledge underlying the practice is a science
Science Disciplines( POM, Statistics, OR, MIS, IT, Accounts) contributed for
smooth flow of work
Prototypes / model are used for testing the applicability of managing the
business
Plans, Procedures, principles are applied
Effective & efficient use of resources (productivity)
ART
Managing as practice is an art (getting things done by others)
It is know-how
It is doing things in light of the realities of a situation
Arts disciplines contributed to the study of Management
Sometimes people trust their luck & intuition in handling the firm/business
PROFESSION
Like other jobs MANAGING the business is also a profession
It requires professional knowledge to minimize loss for the business
There is no place for meaningful guidance unless practitioners learn by
themselves (trial & error)
Most of the time formality is required to run the business smoothly
Requires professional updated knowledge from IT & Business field
Management & Administration Are synonymous Performs the same basic functions, principles & objectives
Management Higher extension which function like POSDC
Administration Same function in government circles
Administration is above Management
Management is generic term & includes administration
Roles of Management (Managerial Role)Mintzberg concluded the different roles played by managers into three different
categories as listed below:
Interpersonal Roles:
1. The Figurehead role - Performing ceremonial & social duties as the
representative
2. The leader role leading the team of people
3. The liaison role with the outsiders
. Informational Role
1. The recipient role Receiving information about the operation of an enterprise
2. The disseminator role passing information to subordinates

3. The Spokesperson role Transmitting information to those outside the

organization
Decision Role:
1. The entrepreneurial role taking risk in doing business
2. The disturbance-handler role Grievance handling, problem solver
3. The resource- allocator role
4. The negotiator role dealing with various persons & groups of persons
Levels Of Management(Fig.2)
Evolution Of Management Thought
The evolution of management traced to 3000 B.C to the first govt org.
developed by the Sumerians & Egyptians
The formal study of management is relatively recent
The development of Management is broadly classified into four eras namely:
1. Classical Perspective/Approaches
2. Humanistic Perspective/Approaches
3. Management Science Perspective/Approaches
4. Modern Management Perspective/ Approaches
1.CLASSICAL APPROACHES
Emerged during the early 19th & early 20th centuries
The factory system that began to appear in 1800s posed challenges
Problems arose in tooling, organizing managerial structure, training
employees, scheduling operation, increased labor dissatisfaction
It emphasized a rational, Scientific approach to the study of management &
sought to make organizing efficient operating machines

a)
b)
c)

This perspective contains three subfields:

Scientific management
Bureaucratic organization
Administrative principle

a) Scientific Management
F.W. Taylor propounded this theory
Emphasized scientifically determined changes in management practice as the
solution to improving labor productivity
The fundamental principles are as follows:
* Replacing the rule of thumb with Science (organized knowledge)
* Obtaining harmony, rather than discord, in group action
* Achieving cooperation of human beings, rather than individualism
* Working for maximum output, rather than restricted output
* Developing all workers to the fullest extent possible for their own & their
companys highest prosperity
Stages Work Study
Differential Payment

 Reorganization of supervision
Scientific requirement & training
GENERAL APPROACH
Developed standard method for performing each job
Selected workers with appropriate abilities for each job
Trained workers in standard methods
Supported workers by planning their work & eliminating interruptions
Provided wage incentives to workers for increased output
CONTRIBUTIONS
Demonstrated the importance of compensation for performance
Initiated the careful study of tasks & jobs
Demonstrated the importance of personnel selection & training
CRITICISM
Did not appreciate the social context of work & higher needs of workers
Did not acknowledge variance among individuals
Tended to regard workers as uninformed & ignored their ideas & suggestions
b) Bureaucratic organization
Max Weber, German theorist introduced the concept of bureaucratic
organization during late 1800s
Emphasized management as an impersonal
Rational basis
clearly defined authority & responsibility
formal recordkeeping
separation of ownership & management
GENERAL APPROACH*Labor is divided with clear authority & responsibility
*Positions are organized in a hierarchy of authority
*All personnel are selected & promoted based on qualification & assessment
*Management is separation from the ownership
*Mangers are subjected to rules & procedure that will ensure reliable, predictable
behavior
*Stringent environment with endless rules & red tape
Contribution
Every one gets equal treatment (fare)
c) Administrative Principles
*Contribution from Henry Fayol ( Father of Management Science), Mary Parker
Follett, Chester Barnard
*Focus on total organization, delineating management functions

Fayol discussed 14 general principles of management:

(Unity of Command, Authority & Responsibility, Division of work Discipline, Unity

of direction, Equity, Scalar Chain, Centralization, Espirit De corps, Initiative,
Subordination to individual interest, Order, Remuneration, Stability of tenure of
personnel)
*Mary Parker emphasis was on workers participation & shared goals among
managers
*Chester Barnard focused on concept of informal organization
2. HUMANISTIC PERSPECTIVE
*A management perspective that emerged around the late 19th century
*Emphasis on understanding human behavior, needs, & attitudes in the workplace
*Three approaches are:
a. The human relations movement
b. The human resources perspective
c. The behavioral Sciences approach
a. Human Relations Approaches
Elton Mayo, Roethlisberger conducted famous experiment at the Hawthorne
plant of the western Electric Company between 1927 & 1932
Emphasis on satisfaction of employees basic needs as the key to increased
worker productivity
Major part of this work involved 4 experiments & three control groups
Relay Assembly Test Room ( RATR) Change in illumination & productivity
Money was not the cause of improved productivity
b. The Human Perspective
Suggests jobs should be designed to meet higher level needs by allowing
workers to use their full potential
Abraham Maslow, Psychologist suggested need hierarchy
Douglas McGregor Theory X & Theory Y
c. The Behavioral Science Approach
It applies Social science in an organizational context, drawing from
economics, psychology, sociology, & other disciplines
Management Techniques- Organization Development (OD-1970s) to improve
organizations health & effectiveness
Aims at ability to cope with change, improve internal relationships, problem
solving capabilities
3. MANAGEMENT SCIENCE PERSPECTIVE
*Emerged after World War II
*Applied Mathematics, Statistics, & other quantitative techniques to managerial
problems
*Operations Research grew directly out of II World War
*O.R refers to the field of management that specializes in the physical production of
goods/services
*I.T in the form of MIS

4. MODERN MANAGEMENT APPROACHES

It includes three approaches as explained below:
1. SYSTEMS THEORY (Fig.3)
A system is a set of interrelated parts that functions as a whole to achieve a
common purpose
organization is open systems (characterized by entropy, synergy, & subsystem
interdependence)
Inputs are transferred into outputs
Entropy run down & die
Synergy 1+1>3
Subsystems parts of system depend on one another for their functioning
2. CONTINGENCY VIEW
Successful resolution of organizational problems is thought to depend on
managers identification of key variation in the situation at hand
Organizational phenomena exist in logical patterns
Managers devise & apply similar responses to common types of problems
Managers should understand contingencies like environment, industry,
technology & international culture
3.TOTAL QUALITY MANAGEMENT
Focus on managing the total organization to deliver quality to customer
Four significant elements of TQM employee involvement, focus on
customer, benchmarking, & continuous improvement
It is not quick fix , companies should strive on
Ex: -Six Sigma by GE , Nokia
Recent contribution to management thought
A. Learning Organization-An organization that can adapt to changes in the external
environment through continuous renewal structure & practices
Peter Senge popularized the concept
Five techniques that help organization to learn:
a) System thinking
b) Personal mastery
c) Mental models
d) Shared vision
e) Team learning
B. Theory Z
Challenges for 21st century Managers
Technology-The sum total of the knowledge we have of ways to do things
Globalization Entrepreneurship
Productivity, Effectiveness, & Efficiency
Multi culture (work force diversity)
Dual career couples
Paradigm shift in HR etc..

Social Responsibility of Managers The serious consideration of the impact of the companys actions on society
Social responsivenessThe ability of a corporation to relate its operations & policies to the social
environment in ways that are mutual beneficial to the company & to society