MFOB - UNIT 1

Management - Definition

Who Are Managers?

Manager
Someone who coordinates and oversees the
work of other people so that organizational
goals can be accomplished.

Classifying Managers
First-line Managers
Individuals who manage the work of non-managerial
employees.

Middle Managers
Individuals who manage the work of first-line
managers.

Top Managers
Individuals who are responsible for making
organization-wide decisions and establishing plans
and goals that affect the entire organization.

Managerial Levels

What is Management ???

Is the process of using what you have

{ RESOURCES }, to do what you want
to do . {GOALS}

Resources {Assets}
7 categories of resources:
People (Men)
Money
Materials
Equipment (Machine)
Time
Work Procedures
Energy

Goals
Profit Levels or Maximum cost levels
Maintenance or growth of financial
strength
Quality standards
Guest employee & management concerns
Professional obligations
Societal concerns

What Is Management?
Managerial Concerns
Efficiency
Doing things right
Getting the most output
for the least inputs

Effectiveness
Doing the right things
Attaining organizational
goals

Effectiveness and Efficiency in

Management

Management
Management refers to the tasks and activities
involved in directing an organization or one of
its units: planning, organizing, leading, and
controlling.
The process of reaching organizational goals by
working with and through people and other
organizational resources.
The Role of Management
To guide the organizations towards goal accomplishment.

Management is the accomplishment of results through the

efforts of other people. (Lawrence A. Appley)
Management is the art of getting things done through and
with the people in formally organised groups. (Koontz H.)
Management is a process of planning organising,
actuating and controlling to determine and accomplish
the objectives by the use of people and resources. (Terry
G.)
Management is the process by which managers create,
direct, maintain and operate purposive organisations
through systematic, coordinated, cooperative human
effort. (McFarland)
It is the coordination of all resources through the process
of planning organising, directing and controlling in order
to attain stated objectives. (Sisk)
Management has also been defined as a decisionmaking, rule-making and rule-enforcing body.

IS management an art or science ?

ART: Because it depends on the skills,
aptitude & creativity of the manager
SCIENCE: Because there is considerable
knowledge in the field of management
with basic principles for guidance of basic
activities.

Need and Scope of

Management

Need of Management

Need of Management
1.
2.
3.
4.
5.
6.

Achievement of group goals

Optimum utilization of resources
Minimization of cost
Survival and Growth
Generation of Employment
Development of Nation

Scope of Management

Different Schools of
Management Thoughts
-Behavioral
-Scientific
-Systems
-Contingency

Historical Background of Management

Ancient Management
Egypt (pyramids) and China (Great Wall)
Venetians (floating warship assembly lines)

Adam Smith
Published The Wealth of Nations in 1776
Advocated the division of labor (job specialization) to
increase the productivity of workers

Industrial Revolution
Substituted machine power for human labor
Created large organizations in need of
management

Development of Major Management Theories

Major Approaches to
Management

Scientific Management
General Administrative Theory
Quantitative Management
Organizational Behavior
Systems Approach
Contingency Approach

Scientific Management
Fredrick Winslow Taylor
The father of scientific management
Published Principles of Scientific Management
(1911)
The theory of scientific management
Using scientific methods to define the one best way for a job to
be done:
Putting the right person on the job with the correct tools and
equipment.
Having a standardized method of doing the job.
Providing an economic incentive to the worker.

Taylors Four Principles of Management

1. Develop a science for each element of an
individuals work, which will replace the old ruleof-thumb method.
2. Scientifically select and then train, teach, and
develop the worker.
3. Heartily cooperate with the workers so as to
ensure that all work is done in accordance with the
principles of the science that has been developed.
4. Divide work and responsibility almost equally
between management and workers. Management
takes over all work for which it is better fitted than
the workers.

Scientific Management (contd)

Frank and Lillian Gilbreth
Focused on increasing worker productivity
through the reduction of wasted motion
Developed the microchronometer to time worker
motions and optimize work performance

How Do Todays Managers Use Scientific

Management?
Use time and motion studies to increase
productivity
Hire the best qualified employees
Design incentive systems based on output

General Administrative Theory

Henri Fayol
Believed that the practice of management was
distinct from other organizational functions
Developed fourteen principles of management
that applied to all organizational situations

Max Weber
Developed a theory of authority based on an
ideal type of organization (bureaucracy)
Emphasized rationality, predictability, impersonality,
technical competence, and authoritarianism

Fayols 14 Principles of Management

1. Division of work.

7. Remuneration.

2. Authority.

8. Centralization.

3. Discipline.

9. Scalar chain.

4. Unity of command.

10. Order.

5. Unity of direction.

11. Equity.

6. Subordination of
individual interests
to the general
interest.

12. Stability of tenure

of personnel.
13. Initiative.
14. Esprit de corps.

Webers Ideal Bureaucracy

Quantitative Approach to
Management
Quantitative Approach
Also called operations research or management
science
Evolved from mathematical and statistical
methods developed to solve WWII military
logistics and quality control problems
Focuses on improving managerial decision
making by applying:
Statistics, optimization models, information models,
and computer simulations

Understanding Organizational
Behavior
Organizational Behavior (OB)
The study of the actions of people at work; people
are the most important asset of an organization

Early OB Advocates
Robert Owen
Hugo Munsterberg
Mary Parker Follett
Chester Barnard

Early Advocates of OB

The Hawthorne Studies

A series of productivity experiments conducted
at Western Electric from 1927 to 1932.
Experimental findings
Productivity unexpectedly increased under imposed
adverse working conditions.
The effect of incentive plans was less than
expected.

Research conclusion
Social norms, group standards and attitudes more
strongly influence individual output and work behavior
than do monetary incentives.

The Systems Approach

System Defined
A set of interrelated and interdependent parts
arranged in a manner that produces a unified
whole.

Basic Types of Systems

Closed systems
Are not influenced by and do not interact with their
environment (all system input and output is internal).

Open systems
Dynamically interact to their environments by taking in
inputs and transforming them into outputs that are
distributed into their environments.

The Organization as an Open System

Implications of the Systems

Approach
Coordination of the organizations parts is
essential for proper functioning of the entire
organization.
Decisions and actions taken in one area of the
organization will have an effect in other areas
of the organization.
Organizations are not self-contained and,
therefore, must adapt to changes in their
external environment.

The Contingency Approach

Contingency Approach Defined
Also sometimes called the situational approach.
There is no one universally applicable set of
management principles (rules) by which to
manage organizations.
Organizations are individually different, face
different situations (contingency variables), and
require different ways of managing.

Popular Contingency Variables

Organization size
As size increases, so do the problems of coordination.

Routineness of task technology

Routine technologies require organizational structures,
leadership styles, and control systems that differ from those
required by customized or nonroutine technologies.

Environmental uncertainty
What works best in a stable and predictable environment
may be totally inappropriate in a rapidly changing and
unpredictable environment. (Airlines industry vs education)

Individual differences
Individuals differ in terms of their desire for growth,
autonomy, tolerance of ambiguity, and expectations.

Contribution of Management
Thinkers
-Taylor
-Fayol
-Elton Mayo

Taylors contribution to
management

Scientific Management
Fredrick Winslow Taylor
The father of scientific management
Published Principles of Scientific Management
(1911)
The theory of scientific management
Using scientific methods to define the one best way for a job to
be done:
Putting the right person on the job with the correct tools and
equipment.
Having a standardized method of doing the job.
Providing an economic incentive to the worker.

Taylors Four Principles of Management

1. Develop a science for each element of an
individuals work, which will replace the old ruleof-thumb method.
2. Scientifically select and then train, teach, and
develop the worker.
3. Heartily cooperate with the workers so as to
ensure that all work is done in accordance with the
principles of the science that has been developed.
4. Divide work and responsibility almost equally
between management and workers. Management
takes over all work for which it is better fitted than
the workers.

Fayols
contribution to
management

 Henri Fayol
Believed that the practice of management
was distinct from other organizational
functions
Developed fourteen principles of management
that applied to all organizational situations

Fayols 14 Principles of
Management
1. Division of work.

7. Remuneration.

2. Authority.

8. Centralization.

3. Discipline.

9. Scalar chain.

4. Unity of command.

10. Order.

5. Unity of direction.

11. Equity.

6. Subordination of
individual interests
to the general
interest.

12. Stability of tenure

of personnel.
13. Initiative.
14. Esprit de corps.

Elton Mayos Hawthorne

experiment and its
contributions to management

Hawthorne Experiment:
In 1927, a group of researchers led by Elton Mayo and Fritz
Roethlisberger of the Harvard Business School were invited to
join in the studies at the Hawthorne Works of Western Electric
Company, Chicago. The experiment lasted up to 1932.
The Hawthorne Experiments brought out that the productivity of
the employees is not the function of only physical conditions of
work and money wages paid to them.
Productivity of employees depends heavily upon the
satisfaction of the employees in their work situation.
Mayos idea was that logical factors were far less important
than emotional factors in determining productivity efficiency.
Furthermore, of all the human factors influencing employee
behaviour, the most powerful were those emanating from the
workers participation in social groups.
Thus, Mayo concluded that work arrangements in addition to
meeting the objective requirements of production must at the
same time satisfy the employees subjective requirement of
social satisfaction at his work place.

The Hawthorne experiment

consists of four parts:
1.
2.
3.
4.

Illumination Experiment.
Relay Assembly Test Room Experiment.
Interviewing Programme.
Bank Wiring Test Room Experiment.

1. Illumination Experiment:
This experiment was conducted to establish
relationship between output and illumination.
When the intensity of light was increased, the
output also increased. The output showed an
upward trend even when the illumination was
gradually brought down to the normal level.
Therefore, it was concluded that there is no
consistent relationship between output of
workers and illumination in the factory. There
must be some other factor which affected
productivity.

2. Relay Assembly Test Room Experiment:

This phase aimed at knowing not only the impact of
illumination on production but also other factors like
length of the working day, rest hours, and other
physical conditions. In this experiment, a small
homogeneous work-group of six girls was constituted.
These girls were friendly to each other and were
asked to work in a very informal atmosphere under the
supervision of a researcher. Productivity and morale
increased considerably during the period of the
experiment. Productivity went on increasing and
stabilized at a high level even when all the
improvements were taken away and the pre-test
conditions were reintroduced. The researchers
concluded that socio-psychological factors such as
feeling of being important, recognition, attention,
participation, cohesive work-group, and non-directive
supervision held the key for higher productivity.

3. Mass Interview Programme:

The objective of this programme was to make a
systematic study of the employees attitudes which
would reveal the meaning which their working
situation has for them. The researchers interviewed
a large number of workers with regard to their
opinions on work, working conditions and
supervision. Initially, a direct approach was used
whereby interviews asked questions considered
important by managers and researchers. The
researchers observed that the replies of the
workmen were guarded. Therefore, this approach
was replaced by an indirect technique, where the
interviewer simply listened to what the workmen had
to say. The findings confirmed the importance of
social factors at work in the total work environment.

4. Bank Wiring Test Room Experiment:

This experiment was conducted by Roethlisberger and
Dickson with a view to develop a new method of
observation and obtaining more exact information about
social groups within a company and also finding out the
causes which restrict output. The experiment was
conducted to study a group of workers under conditions
which were as close as possible to normal. This group
comprised of 14 workers. After the experiment, the
production records of this group were compared with their
earlier production records. It was observed that the group
evolved its own production norms for each individual
worker, which was made lower than those set by the
management. Because of this, workers would produce
only that much, thereby defeating the incentive system.
Those workers who tried to produce more than the group
norms were isolated, harassed or punished by the group.

The findings of the study are: Each individual was restricting output.
The group had its own unofficial
standards of performance.
Individual output remained fairly
constant over a period of time.
Informal groups play an important role
in the working of an organization.

Contributions of the Hawthorne Experiment:

Elton Mayo and his associates conducted their studies in the
Hawthorne plant of the western electrical company, U.S.A.,
between 1927 and 1930. According to them, behavioural science
methods have many areas of application in management. The
important features of the Hawthorne Experiment are:1. A business organization is basically a social system. It is not
just a techno-economic system.
2. The employer can be motivated by psychological and social
wants because his behaviour is also influenced by feelings,
emotions and attitudes. Thus economic incentives are not the
only method to motivate people.
3. Management must learn to develop co-operative attitudes and
not rely merely on command.
4. Participation becomes an important instrument in human
relations movement. In order to achieve participation, effective
two-way communication network is essential.

Contributions of the Hawthorne

Experiment: (contd..)
5. Productivity is linked with employee satisfaction in
any business organization. Therefore
management must take greater interest in
employee satisfaction.
6. Group psychology plays an important role in any
business organization. We must therefore rely
more on informal group effort.
7. The neo-classical theory emphasizes that man is a
living machine and he is far more important than
the inanimate machine. Hence, the key to higher
productivity lies in employee morale. High morale
results in higher output

Functions of Management

Functions of Management: Planning,

Organizing, Leading; & Controlling (PLOC)

Functions of Management
Planning
defining goals and objectives
deciding what type of activities the
company will engage in
determining the resources needed to
achieve the organizations goals &
objectives.

Functions of Management
Leading
Attracting people to the organization.
Specifying job responsibilities
Grouping jobs into work units
Marshalling and allocation of resources
Creating good working conditions

Functions of Management
Organizing
Directing, motivating, and communication
with employees, individually & in groups.
Conflict resolution.

Functions of Management
Controlling
Monitoring performance of people & units.
Provision of feedback or information about
progress.
Identification of performance problems &
actions to correct problems.

Role of a Manager

 A role is a set of behaviours associated

with a particular job.
Management Roles Specific categories
of managerial behavior.

94

Mintzbergs Managerial Roles

Henry Mintzberg studied CEOs at
work and created a scheme to
define what managers do on the
job. These are commonly referred
to as Mintzbergs managerial
roles.
These can be grouped into three
primary headings: interpersonal,
informational and decisional
96

Role

INFORMATIONAL
Description

Monitor

Manager receives and

collects information

Communication
(Disseminator)

Manager distributes
information within the
organization

Spokesperson

Manager distributes
information outside the
organization

Identifiable Activity

Reading magazines
and reports;
maintaining personal
contacts
Holding meetings;
making phone calls to
relay information;
email/memos
Holding board
meetings; giving
information to the
media

97

 Interpersonal Roles Managerial roles

that involve people and other duties that
are ceremonial and symbolic in nature.
Information Roles Managerial roles that
involve collecting, receiving and
disseminating information.
Decisional Roles Managerial roles that
revolve around making choices.

Role
Figurehead

Leader

Liaison

INTERPERSONAL
Description

Symbolic Head, Manager serves

as an official representative of
the organization or unit
Manager guides and motivates
staff and acts as a positive
influence in the workplace
Manager interacts with peers
and with people outside the
organization to gain information

Identifiable Activity

Greeting visitors;
signing legal
documents
Staffing, training

Acknowledging
mail/email; serving on
boards; performing
activities that involve
outsiders
101

Role

DECISIONAL
Description

Entrepreneur

Manager initiates change

Disturbance
Handler

Manager decides how

conflicts between
subordinates should be
resolved
Manager decides how the
organization will use its
resources

Resource
Allocator
Negotiator

Manager decides to negotiate

major contracts with other
organizations or individuals

Identifiable Activity

Organizing sessions to
develop new
programs; supervises
design of projects
Steps in when an
employee suddenly
leaves or an important
customer is lost
Scheduling;
requesting
authorization;
budgeting
Participating in union
contract negotiations
or in those with 102
suppliers

Task of a Professional
Manager

 Specialization in every field, technological

advancement, globalization of business results
into appointment of qualified managers. They can
be called as professional managers.
A professional manager is an expert, trained and
experienced enough to adeptly manage any type
of organization be it a manufacturing house, a
service organization, a hospital or a government
agency. Professional managers:

Are objective, focused and performance oriented.

Help in meeting competitive challenges of business.
Are creative and dynamic.
Follow management practices based on world wide
experiences and information.
Apply theories of management to solve emerging
organizational problems.

Tasks - Manager
1. Deciding the basic mission of firm
2. Unrelenting existence and growth.
3. Sustaining firms effectiveness, profit creation and adopting
technological advancements.
4. Confronting the test of increasing competition and transformation.
5. Managing for novelty and modernity.
6. Edifying human organization.
7. Keeping hold of talent and inculcating sense of devotion.
8. Sustaining headship value.
9. Maintaining equilibrium between inventiveness and conventionality.
10. Pushing back managerial obsolescence.
11. Enduring the mounting communal disparagement and opinionated
antagonism.
12. Safeguarding relations with various general public fragments.

Some Professional Manager Tasks

Providing direction to the firm: The first task, envisioning
goals, is one of the tasks that should never be delegated.
This is the ability to define overarching goals that serve to
unify people and focus energies. Its about effectively
declaring whats possible for the team to achieve and
compelling them to accomplish more than they ever thought
possible.
Managing survival and growth: Ensuring survival of the firm
is a critical task of a manager. The manager must also seek
growth. Two sets of factors impinge upon the firms survival
and growth. The first is the set of factors which are internal to
the firm and are largely controllable. These internal factors
are choice of technology, efficiency of labour, competence of
managerial staff, company image, financial resources, etc.
The second set of factors are external to the firm like
government policy, laws and regulations, changing customer
tastes, attitudes and values, increasing competition, etc.

 Maintaining firms efficiency: A manager has not only

to perform and produce results, but to do so in the most
efficient manner. The more output a manager can
produce with the same input, the greater will be the profit.
Meeting the competition challenge: A manager must
anticipate and prepare for the increasing competition.
Competition is increasing in terms of more producers,
products, better quality, etc.
Innovation: Innovation is finding new, different and
better ways of doing existing tasks. To plan and manage
for innovation is an on-going task of a manager. The
manager must maintain close contact and relation with
customers. Keeping track of competitors activities and
moves can also be a source of innovation, as can
improvements in technology.

 Renewal: Managers are responsible for fostering the

process of renewal. Renewing has to do with providing new
processes and resources. The practices and strategy that
got you where you are today may be inadequate for the
challenges and opportunities you face tomorrow.
Building Human Organization: Man is by far the most
critical resource of an organization. A good worker is a
valuable asset to any company. Every manager must
constantly look out for people with potential and attract them
to join the company.
Selection Information technology: Todays managers are
faced with a bewildering array of information technology
choices that promise to change the way work gets done.
Computers, the Internet, intranets, telecommunications, and
a seemingly infinite range of software applications confront
the modern manager with the challenge of using the best
technology.

 Leadership: Organizational success is determined by the

quality of leadership that is exhibited. "A leader can be a
manager, but a manager is not necessarily a leader,"
says Gemmy Allen (1998). Leadership is the power of
persuasion of one person over others to inspire actions
towards achieving the goals of the company. Those in the
leadership role must be able to influence/motivate
workers to an elevated goal and direct themselves to the
duties or responsibilities assigned during the planning
process. Leadership involves the interpersonal
characteristic of a manager's position that includes
communication and close contact with team members.
The only way a manager can be acknowledged as a
leader is by continually demonstrating his abilities.
Change management: A manager has to perform the
task of a change agent. Its the managers task to ensure
that the change is introduced and incorporated in a
smooth manner with the least disturbance and resistance.

Example
A professional manager or a chief administrative officer for a
city has duties which include meeting with elected council to
determine polices that are determined by the council and to
notify council members and citizens about the local
government operations. Discussing of certain reforms,
installing a bridge, setting up new traffic plans, or proposing a
new building-all these and many more things which can affect
community life are some of the responsibilities of the
professional manager in a township. He is also responsible
for preparing the annual budget, presenting it to elected
officials for sanction and then implementing it, after it is
approved. Listening to citizen grievances with regards to
administration, civic problems, law and order and presenting
the matter to the elected officials for appropriate actions are
some of the tasks of a professional manager who is in charge
of the administration of a city.

Responsibilities of a
Professional Manager

Responsibilities - Manager
Towards customer the king,
Towards shareholders,
Towards people working in the organization,
Towards purveyors, whole-sellers, distributors and
retailers,
Towards competitors,
Towards employees union,
Towards commanding regime,
Towards the social order
Towards understanding the organizational context,
Towards administering the activities and resources,

Responsibility towards Customers: A firm's responsibility towards

its customer is in terms of ensuring that the desired quality of
product at a reasonable price is made easily available to the
customers. It is the responsibility of the manager to provide the right
match between quality and price.

Responsibility towards Shareholders: The main responsibility of

the manager is to ensure the security of the shareholders' capital.
The manager must ensure that the firm does not become bankrupt.
In other words, the manager must, at least, ensure the survival of
the firm. The manager has to ensure that the shareholders are able
to earn profit on their capital.

Responsibility towards Employees: Employees are the most

important resource. The manager has to ensure that employees are
getting a fair deal in terms of wages and salaries. The responsibility
of a manager is to ensure that all dealings with the employees are
fair. Whether it is determining the profit linked bonus that is being
calculated or the provident fund of a retired employee, which has to
be paid, you must ensure that the employees are not cheated,
harassed or embarrassed.

 Responsibility towards Suppliers: Suppliers provide

the raw materials, components and parts necessary for
the production of products. The manager's responsibility
towards suppliers of funds, i.e., banks and other financial
institutions, is that not only he has to make the interest
payments, but make the repayment on time as per the
agreed repayment schedules.
Responsibility towards Distributors and Retailers: A
manager is responsible for ensuring regular supplies to
the distributors. The products that are supplied to the
distributor must be checked for quality to ensure that
second grade or inferior quality goods are not shipped.
Responsibility towards Industry and Competition: A
manager is responsible to register the firm as a member
of industry association and comply with all its rules and
regulations.

Responsibility towards Union: A manager should acknowledge

employees' union as a friend rather than as a foe of the firm. Most
problems with unions arise because of the assumption of the
managers that unions have no constructive contribution. A
responsible manager must understand and appreciate the fact that
the management and union have a great degree of mutual
dependence and the union cannot further its interests at the cost of
the firm's interests and vice versa.

Responsibility towards Government: A manager should ensure

that the constitution and operations of the firm are within the legal
framework as specified by the government.

Responsibility towards Society: The manager has responsibility

towards his surroundings and the people living in the vicinity of his
factory and office. Firms behave irresponsibly when they pollute the
environment by releasing harmful gasses, discharging toxic effluents
into nearby rivers, lakes or seas, and dumping their waste matter in
surrounding lands. A manager should make sure that the operations
of the firm do not obstruct, disturb, disrupt or destroy physical
structures (historical buildings, monuments), the flora and fauna, and
animal and human life.

Managerial Skills

 Skills are abilities crucial to success in

a managerial position.

t
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g
a
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a
M
r
o
f
d
e
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e
Skills Ne
Success
Technical skills
Managers ability to understand and use the techniques,
knowledge, and tools and equipment of a specific discipline
or department.

Human skills
Interpersonal skills that enable a manager to work effectively
with and through people.

Conceptual skills
Ability to see the organization as a unified whole and to
understand how each part of the overall organization
interacts with other parts.

Conceptual Skills
Using information to solve business problems
Identifying of opportunities for innovation
Recognizing problem areas and implementing
solutions
Selecting critical information from masses of
data
Understanding of business uses of technology
Understanding of organizations business model

Communication Skills
Ability to transform ideas into words and
actions
Credibility among colleagues, peers, and
subordinates
Listening and asking questions
Presentation skills; spoken format
Presentation skills; written and/or graphic
formats

Effectiveness Skills
Contributing to corporate mission/departmental
objectives
Customer focus
Multitasking: working at multiple tasks in parallel
Negotiating skills
Project management
Reviewing operations and implementing improvements
Setting and maintaining performance standards
internally and externally
Setting priorities for attention and activity
Time management

Interpersonal Skills
Coaching and mentoring skills
Diversity skills: working with diverse
people and cultures
Networking within the organization
Networking outside the organization
Working in teams; cooperation and
commitment

Skills needed at Different Levels

Management Skills and Management Function Matrix

Thank You