Principles of

Management
By Prof. Raghavendran.V
Learning Objectives:
 The Nature and purpose
 Trends in IT and globalization.
 Concepts of productivity, Effectiveness &

Efficiency.
 Theories and science applied in light of

situations.
 Various approaches to management their

contributions n Limitations.
 Managerial functions of planning, organizing,

Staffing, leading & controlling.

Definition of MANAGEMENT??

Fore fathers of mgmt like

Mr.Kotler, Koontz, Terry, Cyrill,
McFarland, Kimball and Brech
have defined in their own terms
in order to understand concept
in simpler and better way.
Mgmt is the process of designing and
maintaining an environment in which
individuals, working together in groups,
effectively accomplished selected aims.

The process of planning, organizing, leading

and controlling the work of organization
members and of using all available
organization resources to reach stated
organizational goals
Components of mgmt? *(G2O2I)
Organizational activity: to coordinate the
actions & reactions of Individual
Goal formation: defined targets to achieve.
Goal Accomplishment and Evaluation:
Measure of goal accomplishments.
Organizational Survival: Ability and forecast
and adopt to change in global village.
Implementation: Action taken are
implemented.
Feature of management:
 UniversalProcess, An
integrative process, Dynamic
Function, Social Process,
Management make things
happen, Multifaceted
discipline, intangible force.
Functions of Management:
 Planning: it is an indispensable function of
mgmt determining the objective to be
achieved and course of action to be followed
to achieve them. It is a mental process
requiring the use of intellectual faculties,
foresight and sound judgment.

What lower, middle and senior managers plan

according to their powers??
Organizing:
Organizing: Identification and grouping the
activities to be performed and dividing them
among the individuals and creating authority
and responsibility amongst them.
Determination of objectives
Division of activities.
Fitting individuals and specific jobs; &
Developing relationship in term of authorities
and responsibility.
Staffing:
Manning the organizational structure through
proper and effective selection process,
appraisal and the development of personnel
to fill the roles designed into the structure.
Involves Proper recruitment and selection of
the people;
Fixing salary;
T&D selected people to discharge
organizational function; &
Appraisal of personnel.
Directing:
 Process which actuates the organizational
members to work efficiently and effectively
for the attainment of Organizational
objectives.
It is interpersonal aspect of management which
deals directly influencing, guiding,
supervising and motivating the subordinates
for accomplishment of pre set OBJ.
It has 4 sub functions and they are:
Sub functions of Directing:
Communication,
Leadership,
Motivation, &
Supervision.
Controlling:
It is to visualize that actual performance is
guided towards expected performance. It is
measurement tool to appraise the
subordinates.
It involves Fixing standards,
Measurement of actual performance,
Comparing actual to planned performance,
Finding Variances b/w the 2 and reasons.
Taking corrective actions.
Nature of Management:**
Science Vs Art
Management as a Science
Management science is a systematized body of
knowledge pertaining to a particular field of
enquiry. The various concepts and principles
of science are developed on the basis of
observation and experiments
It deals with people and very difficult to predict
their behavior accurately. Hence it is
behavioral science and results may not same
every time.
There fore it is also known as soft science.
Management is an art:
 Art is about bringing out the desired results
through application of skill. It is concerned
with the application of knowledge and skills.
 Creative forms, it requires a vast knowledge &

certain innovating, initiating, implementing

and integrating skills in relation to goals,
resources, techniques and results
Levels of management:
TOP-LEVEL MANAGEMENT: Chair person, CEO,
CFO, COO,CPO, GM, Dir, President, Vp….
MIDDLE-LEVEL MANAGEMENT: Branch Head,
Sale manager, Finance , HR-Manager,
Production, Security Inspector, Inventory &
Internal Auditor.
LOW-LEVEL MANAGEMENT: Team leader, Sales
Executive, HR Exec, Accountant, Receptionist,
Shop floor exec, guard and etc.
Time spent in carrying out
managerial functions:

To
p

Middle

Low
Skills and Mgmt levels:

Top
High Conceptual and design skills

Middle
Moderate Conceptual, High Human skills Middle

Low Low
Low Human Skills and high Technical skills Low
Management as a profession:
 Existence of Knowledge,
 Formal teaching of knowledge,
 Existence of representative

body,
 Ethical Standards &
 Reasonable renumeration.
THE EVOLUTION OF
MANAGEMENT THOUGHT
AND THE PATTERNS OF
MANAGEMENT ANALYSIS
Many contributions of writers and authors/
practitioners have resulted in different
approaches (Schools) to management and
these make management jungle.
Generally School are broadly classified into 2
types:
School of Classical Theories &
School of Neoclassical Theories.
School of Classical Theory:
The term ‘classical’ in English refers to traditional
or long established. The beginning of classical
theory can be traced back to industrial
transformation in late 19th century.

In those days, large scale operations were carried

out by the organizations with the help of
unskilled & semiskilled people but later on the
technological development changed the
industrial scene completely and led to
economic, social & technical problems.
Classical theory:
Writers viewed that the organizations as a
machine and human beings as different
components of that of machine. The
approach was focused on output-input
mediators and given less attention to
constraining and facilitating factors in
external environment. It other words,
increased human productivity would
facilitated the organization’s goal n objective.
Assumptions of Classical theory.
 The relationship b/w workers and mgmt was
established through formal communications,
defined tasks & accountability & formalized
procedures and practices to minimize conflict
b/w them.
 Labors are considered to be driven economic

considerations, who can be motivated by cash

rewards. Here money is only motivator.
 Managers were characterized as rational, kind-

hearted, intelligent and qualified personnel.

……contd
Assumptions of Classical theory.
 Organization is a machine and people
working are its components.
 Theory assumed that best waysdoi9ng a job

by improving the machines and devoting time

to such on technical engineering and
administrative aspects of ORG, which makes
labors to slog as much as they can with
minimum expenses so that labors can
contribute more to ORG & earn more for
themselves in return. ………contd
Assumptions of Classical theory.
 It emphasized on error and particularly on the
detection of error and corrections after it
happens.
 Theory assumed that labors relatively

homogenous and unmodifiable, while

designing the jobs.
 Essential character is centralized system &

integration of the system is achieved through

the authority and central mechanism.
2 streams of classical theory.
The 2 streams are scientific mgmt
and the other is administrative
mgmt.
Scientific mgmt emphasized on the
efficiency of lower cadres of
organizations while administrative
mgmt focused on higher cadres.
Classical theory. (Scientific Mgmt)
Frederick Winslow Taylor(F.W. Taylor) is called as
father of Scientific Mgmt Approach.
Brief History: He gave up to college and started as an
apprentice and machinist in 1878, joined the Midvale
steel company and rose to chief-engineer after
earning engineering degree through evening college.

His experiences as an apprentice, a foreman, a

common labor, a master mechanic and then chief
engineer of a steel company gave first hand the
problems and attitude of front line workers.
Classical theory:
Taking these considerations he published the
‘principles of scientific management’ in 1911.
the fundamental mental principles that
underlying the scientific approaches to mgmt
as follows.
1) Replacing rules of thumb. ( organized
knowledge).
2) Obtaining harmony in group action, rather
than discord.
3) Achieving cooperation of human beings.
Classical theory:
4) Working for maximum output, rather than
restricted output.
5) Developing all workers to the fullest extent
possible for their own and their company’s
highest prosperity.
Scientific mgmt was mainly connected to
operators level and these were quite different
from others tasks in ORG.
a) The tasks are largely repetitive in nature so
that activities of labor can be subdivided in
cyclical.
Classical Theory:
b) These task do not require any problem
solving activity by the workers. Thus
attention was given for standardizing the
working methods.
Classical theory: ( Admin Mgmt)
Administrative stream of organization theory
emphasis efficiency at higher levels. It was
concerned with the managerial ORG &
process. Henry fayol was the leader for this
group. He, for the first time studied the
functions and laid down the principles of
mgmt.
The other contributors were Gulick, Oliver
Sheldon, Mooney, Reliey, Urwick, Weber and
others.
Classical theory:
These two approaches were similar in
recognizing the fact that organization is a
closed system.
Characteristic of Classical Theory:
There are four key pillars on which the classical
organization theory seems to have been built.
They are
 Division of labors,
 Scalar and functional process,
 Structure, &
 The span of control.
Principles of the classical theory:

1. Division of work 1. Stability

2. Authority and 2. Initiative
responsibility 3. Team spirit
3. Discipline 4. Centralization
4. Unity of command 5. Scalar Chain
5. Unity of direction 6. order
6. Subordination of
individual interests
to general interests
School of Neoclassical Theory:
This approach was developed as a reaction to
classical approach which was attracted to
behaviorists to make further researches into
the human behaviors at work.
This movement was started by ‘Mayo’ et al at
Howthorne plant of the western electric
company, Chicago in early 1920’s and gained
momentum n continued to dominate 1960’s.
Neoclassical theory:
This theory was a product of time and following
reasons;
i) The mgmt thinking was showing signs of
change cos of improved standards of living
& education level. The technological
advancement were forcing the management
to expand size of ORG and complexities
were increasing.
ii) The trade union movement got momentum
and made the workers conscious of their
rights. It was no longer possible for mgmt
to treat labors at work for granted.
Neoclassical theory:
Neoclassicists, identified the weakness of
classicists through empirical research.
Howthorne studies were the beginning of the
series. The other contributors are Roethlisberger,
Dickson, white head, Lippitt, White, Coach and
French Jr., etc.
Neoclassical theory is based on 2 main points
I. Organizational situation should be viewed in
social as well as economic & technical terms
II. The social process of group behavior can be
understood in terms of clinical methods.
Prepositions of Neoclassical theory:
 The ORG in general is social system composed
of numerous interacting parts.
 The social environment on the job affects the

worker and is also affected them, Mgmt is not

the variable.
 The informal org exists within the framework of

formal ORG.
 There is always a conflict b/w ORG n Personal

goals.
 People are inter dependent & their behavior is

predicted in terms of social factors.

Prepositions of Neoclassical theory:
 Money is one of motivator but not sole
motivator, labor diversely motivated and
socio- psychological factors are important.
 Man’s job is not always rational. He behaves

irrationally as far as rewards from the job are

concerned.
 Both way communication is necessary.
 Team work is very essential for cooperative

and sound functioning of the organization.

Fact Discovered through Hawthorne
experiments
This study was important of neoclassical
school. Mayo et al carried out several
experiments there, by providing better
working conditions & living conditions and
financial incentives and they had amazing
results.
The facts were:
 The individual roles as defined and norms

established by their social system and differ

from those of formal ORG.
Hawthrone facts:
 Non economic rewards and social sanctions
also played quite a significant role in guiding
the behavior of the workers. It is perception
of the situation that matters and not that of
mgmt.
 The group plays an important role in

determining the attitudes of performance of

individual worker
 Informal leader is not the formal leader, the

formal leaders enforce norms.

Hawtrone facts:
 There is need for communication b/w the
ranks participation in decision-making and
democratic leadership
 Increase in satisfaction lead increase of org

effectiveness.
 The mgmt should posses technical as well as

good social skills.

 People are motivated in the organization not

merely lower needs but also higher needs.

Thus conclusion of basic theories of mgmt.
Assignment (1) Handwritten
Write an essay on “systems approach to the
management process” with figures.
100 marks.

Refer “essential of management” by Harold

Koontz & Heinz weihrich, 6th edition, Tata
McGraw hill Pub.