Evolution of Management Principles

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Evolution of Management Thought

EARLY PERSPECTIVES The first known management ideas were recorded in 3000-4000 B.C. One Pyramid built by Egyptian ruler Cheops required work to be done by 100,000 men for over twenty years in 2900 B.C. It covered 13 acres of land and measured 481 meters in height. The stone slabs had to be moved thousands of kilometres of distance. As folklore goes, even the sound of a hammer was not heard in the villages in the vicinity of the site of these pyramids. Such monumental work could not be completed without adherence to principles of sound management. CLASSICAL MANAGEMENT THEORY Rational economic view, scientific management, administrative principles, and bureaucratic organisation characterise this phase. While the rational economic view assumed that people are motivated by economic gains primarily; scientific management of F.W. Taylor and others emphasised one best way of production etc; administrative theorists personified by Henri Fayol etc looked at the best way to combine jobs and people into an efficient organisation; bureaucratic organisation theorists led by Max Weber looked at ways to eliminate managerial inconsistencies due to abuse of power which contributed to ineffectiveness. This was the era of the industrial revolution and factory system of production. Large scale production would not have been possible without adherence to the principles governing organising production based on division of labour and specialisation, relationship between man and the machine, managing people and so on. NEO CLASSICAL THEORY HUMAN RELATIONS APPROACH This school of thought developed between 1920s to 1950s felt that employees simply do not respond rationally to rules, chains of authority and economic incentives alone but are also guided by social needs, drives and attitudes. Hawthorne Studies at GEC etc., were conducted then. It was quite natural that in the early phases of the industrial revolution, the emphasis was on development of techniques and technology. The attention to the human factor was the salient aspect of this school of thought. This attention was to serve as a precursor to the development of behavioural sciences. MANAGEMENT SCIENCE/OPERATIONAL RESEARCH It emphasises research on operations and use of quantitative techniques to aid managers to take decisions. MODERN MANAGEMENT It sees modern organisations as complex systems and underlies contingency approach and use of modern techniques to solve organisational and human problems.

Principles of Management
PLANNING - Management principles

Planning bridges the gap from where we are to where we want to go...
ORGANISING - Management principles

Organisation is the process of identifying and grouping of the works to be performed...

DIRECTING - Management principles

Directing means giving instructions, guiding, counselling, motivating...

Staffing Management Principles

Staffing is the function by which managers build an organisation through the recruitment, selection, and development of individuals as capable employees.
Controlling - Management Principles

The managerial function controlling always maximise the use of scarce resources to achieve the purposeful behaviour of employees in an organisation...

The Five Functions of Management

Controlling a complex organisation so as to achieve desired goals resulted in the evolution of the concept management. Management include all those people who are concerned with managing an organisation. It is a sum of organised activities by a group of people. Management involves decision making at various levels of organisation for getting things done by others. It is both science and as well as an art, because the fundamentals of management are the same everywhere but the practices differ.

Definition of Management
To manage is to forecast and plan, to organise, to command, to co-ordinate and to control. - Henry Fayol Management is a distinct process consisting of planning, organising, activating and controlling to determine and accomplish the objectives by the use of people and resources. - G.R. Terry Management is the development of people and not the direction of things. Management is the personnel administration. - Lawrence A. Apply Management is the art of getting things done through and with the people in formally organised groups. - Horold Kanontz. Management is simply the process of decision making and control over the action of human beings for the express purpose of attaining predetermined goals. - Stanley Vance.

Functions of Management
George and Jerry explained four fundamental functions of management. According to them functions of management are planning, organizing, actuating and controlling. POSDCORB is the key word used by Luther Gullick to explain the functions of managment. In POSDCORB; P stands for planning, O for organizing, S for staffing, D for directing, Co for coordination, R for reporting and B for budgeting. Newman and Summer gave the managerial functions which include organizing, planning, reading and measuring and controlling. Koontz and ODonnel explained five functions of management. They have become widely accepted functions of management everywhere. They are planning, organizing, staffing, directing and controlling.

Five Functions of Management

1. Planning: Deciding in advance what to do, how to do, why to do, where to do and who will be responsible for doing is planning. Determination of the objectives of business, splitting of objectives into goals for each department of the organization and formulating policies, programs, procedures rules and regulations and budget are the important steps involved in planning. 2. Organizing: Division of work into functions and sub-functions, grouping of activities that are closely related in their nature, assigning of duties and responsibilities to the employees and

finally delegation of authority and power to each employee or the group to discharge their duties accordingly are the processes come under the function of management organizing.

3. Directing: Communication, leadership and supervision and last but not the least motivation are the elements come under the function of management, directing. Directing is nothing but guiding and leading the people in an organization. It is not just giving instructions by a superior to the sub-ordinates but also is a process of supervising, guiding and motivating the latter to achieve the organizational goals. It is a complex function of management that ensures the employees work effectively and efficiently. 4. Staffing: The process of making out, assessing, appointing, evaluating and developing the employees at work in an organization is staffing. In here the characteristics of a job are determined primarily. It is followed by ensuring of the right number of and kind of employees are placed at the right places and at the right time when organization is in need of them. Staffing function of management begins with notifying the vacancies in the organisation and selecting the best individuals as employees. Performance appraisal and man power development are the other processes involved under staffing function of management. 5. Controlling: It is the process that ensures whether the resources are obtained and used efficiently in achieving the organizational objectives. Controlling function of management is closely linked with the planning function because, it includes checking the performance of employees to see whether the planned performance is being achieved by them or not. Budgetary control, Inventory control, quality control, profit and loss control, Management audit, cost accounting and cost control, production control, financial control, break-even analysis and internal audit control are the important control devices of controlling techniques.

Functions of Management Planning in Management

Planning is deciding in advance what to do and how to do. It is one of the basic managerial functions. Before doing something, the manager must formulate an idea of how to work on a particular task. Thus, planning is closely connected with creativity and innovation. It involves setting objectives and developing appropriate courses of action to achieve these objectives.

Planning Definition
"Planning bridges the gap from where we are to where we want to go. It makes it possible for things to occur which would not otherwise happen" - Koontz and O'Donnel.

Importance of Planning
Planning provides directions

 Planning reduces the risks of uncertainty Planning reduces overlapping and wasteful activities Planning promotes innovative ideas Planning facilitates decision making Planning establishes standards for controlling.

Features of planning
Planning focuses on achieving objectives Planning is a primary function of management Planning is pervasive Planning is continuous Planning is futuristic Planning involves decision making Planning is a mental exercise

Planning Process
Setting objectives: Objectives may be set for the entire organisation and each department or unit within the organisation. Developing premises: Planning is concerned with the future which is uncertain and every planner is using conjucture about what might happen in future. Identifying alternative courses of action: Once objectives are set, assumptions are made. Then the next step would be to act upon them. Evaluating alternative courses: The next step is to weigh the pros and cons of each alternative. Selecting an alternative: This is the real point of decision making. The best plan has to be adopted and implemented. Implement the plan: This is concerned with putting the plan into action. Follow-up action: Monitoring the plans are equally important to ensure that objectives are achieved.

Types of Plans
Objectives: Objectives are very basic to the organisation and they are defined as ends which the management seeks to achieve by its operations.They serve as a guide for overall business planning.

Strategy: strategy is a comprehensive plan for accomplishing an organisation objectives. This comprehensive plan will include three dimensions, (a) determining long term objectives, (b) adopting a particular course of action, and (c) allocating resources necessary to achieve the objective. Policy: They are guides to managerial action and decisions in the implementation of strategy. Procedure: Procedures are routine steps on how to carry out activities. Procedures are specified steps to be followed in particular circumstances. Method: Methods provide the prescribed ways or manner in which a task has to be performed considering the objective. It deals with a task comprising one step of a procedure and specifies how this step is to be performed. Rule: Rules are specific statements that inform what is to be done. They do not allow for any flexibility or discretion. Programme: Programmes are detailed statements about a project which outlines the objectives, policies, procedures, rules, tasks, human and physical resources required and the budget to implement any course of action. Budget: It is a plan which quantifies future facts and figures. It is a fundamental planning instrument in many organisations.

Organising in Management
Organising is the process of defining and grouping activities and establishing authority relationships among them to attain organizational objectives.

Organising Definition
"Organisation is the process of identifying and grouping of the works to be performed, defining and delegating responsibility and authority and establishing relationships for the purpose of enabling people to work most efficiently" - Louis A. Allen

Importance of Organising
Organising helps Organisations to reap the benefit of specialization. Organising provides for Optimum utilization of resources. Organising helps in Effective administration. Organising channels for Expansion and growth. Organising achieves co-ordination among different departments.

 Organising creates scope for new change.

Organising Process
Division of work: The first process of Organising includes identification and division of work which shall be done in accordance with the plans that are determined previously. Departmentation: once the work of identifying and dividing the work has been done those are similar are to be grouped. Linking departments: When the process of departmentation was completed, linking of departments has to be done so that those departments operate in a co-ordinated manner which gives a shape to overall organisation structure. Assigning Duties: On completion of departmentation process assigning duties i.e. defining authority and responsibilty to the employees on the basis of their skills and capabilities has to be done, which in consequence magnifies efficiency with regard to their work. Defining hierarchal structure: Each employee should also know from whom he has to take orders and to whom he is accountable/responsible.

Organisation Structure
Organisation structure is the pattern of relationships among various components or parts of the organisation which prescribes the relations among various activities and positions. An effective structure will result in increased profitability of the enterprise. whenever an enterprise grows in size or complexity it needs an adequate organisation structure. Line Organisation Structure:Hierarchy derived from a scalar process. Organisation is quite simple in understanding and implementation. this does not offer scope for specialization. Line and Staff Organisation Structure: Staff personnel generally specialists in their fields advice line managers to perform their duties. Staff personnel have right to recommend, but have no authority. Functional Organisation: Grouping of activities on the basis of functions required for the achievement of ultimate objectives. Divisional Organisation Structure: Several fairly self-contained autonomous units were created. Each unit was headed by a manager and is directly accountable to the organisation.

Directing in Management

Directing means giving instructions, guiding, counselling, motivating and leading the staff in an organisation in doing work to achieve Organisational goals. Directing is a key managerial function to be performed by the manager along with planning,organising, staffing and controlling. From top executive to supervisor performs the function of directing and it takes place accordingly wherever superior subordinate relations exist. Directing is a continuous process initiated at top level and flows to the bottom through organisational hierarchy.

Directing Definition
"Activating deals with the steps a manager takes to get sub-ordinates and others to carry out plans" - Newman and Warren.

Importance of Directing
Direction initiates actions to get the desired results in an organisation. Direction attempts to get maximum out of employees by identifying their capabilities. Direction is essential to keep the elements like Supervision, Motivation, Leadership and

Communication effective.
It ensures that every employee work for organisational goals. Coping up with the changes in the Organisation is possible through effective direction. Stability and balance can be achieved through directing.

Elements of Direction Supervision

"Guiding and directing efforts of employees and other resources to accomplish stated work outputs" - Terry and Franklin. Supervision is an element of direction. "Day-to-day relationship between an executive and his immediate assistant and covers training, direction, motivation, coordination, maintenance of discipline, etc." - Newman and Warren. Supervision denotes the functions performed by the supervisors.

Motivation

"Motivation is the complex force starting and keeping a person at work in an organisation. Motivation is something that moves the person to action, and continues him in the course of action already initiates." - Dubin. Motivation is the core of management. Technically, the term motivation can be traced to the Latin word movere, which means 'to move'. Motivating is a term which implies that one person induces another, to engage in action by ensuring that a channel to satisfy the motive becomes available to the individual. Motive is energizer of action, motivating is the channelisation and activation of motives, motivation is the work behavior itself. Motivation depends on motives and motivating. It is a complex process.

Leadership
"Leadership is essentially a continuous process of influencing behaviour. A leader breathes life into the group and motivates it towards goals. The lukewarm desires for achievement are transformed into burning passion for accomplishment" - George R. Terry. Leadership is the process of influencing the behavior of others to work willingly and enthusiastically for achieving predetermined goals. It is an essential ingredient for successful organisation.The successful organisation has one major attribute that sets sets it apart from unsuccessful organisation that is dynamic and effective leadership.

Communication
"Communication is the transfer of information from one person to another person. It is a way of reaching others by transmitting ideas, facts, thoughts, feeling sand values." - Newstrom and Davis. Communication is regarded as basic to the functioning of the organisation, in its absence, the organisation would cease to exist. It is the process through which two or more persons come to exchange ideas and understanding among themselves.

Staffing in Management
Staffing is that part of the process of management which is concerned with acquiring, developing, employing, appraising, renumerating and retaining people so that right type of people are available at right positions and at right time in the organisation. In the simplest terms, staffing is putting people to jobs.

Staffing Definition

"Staffing is the function by which managers build an organisation through the recruitment, selection, and development of individuals as capable employees" - McFarland

Importance of Staffing
Filling the Organisational positions Developing competencies to challanges Retaining personnel - professionalism Optimum utilisation of the human resources

Staffing Process
1. Analyzing Manpower requirements: It is making an analysis of work and estimating the manpower requirement to accomplish the same. 2. Recruitment: It is identifying and attracting capable applicants for employment. it ends with the submission of applications by the aspirants. 3. Selection: It is choosing the fit candidates from the applications received in the process of recruitment. 4. Placement: This may be on probation and on successfully completion of the same the candidate may be offered permanent employment. 5. Training and Development: It is concerned with imparting and developing specific skills for a particular purpose. 6. Performance Appraisal:Systematic evaluation of personnel by superiors or others familiar with their performance so as to rank employees to ascertain their eligibilty for promotions.

Difference between Recruitment and Selection

Attracting maximum number of applicants so as to have more options is Recruitment and

where as Selection is picking the best among them.

Recruitment is known as a positive process as it contain only the process of creating the

application pool. Selection process include rejection and fewer candidates are selected or sometimes even not a single candidate is selected.
For the process of Recruitment High Skills are not essentials but whereas for the later

process, Selection, High Skills are must to select only those who are really fit for the job.
Output for recruitment process, creating application pool is input for the later process,

selection.

Difference between Training and Development

Training is for Non-Managerial personnel, Development is for Managerial personnel Technical and Mechanical fields are emphasized in the process of training whereas the idea

behind the process of Development is to enhance the conceptual ideas.

Training is given to the personnel for specific job. Development process is for preparing the

personnel for variety of jobs.

Training is always a short-term process on the other hand development is a long-term

process.

Controlling in Management
The managerial function controlling always maximise the use of scarce resources to achieve the purposeful behaviour of employees in an organisation. In planning stage, it is decided that how the resources would be utilised but where as in the controlling stage it is observed that whether the resources are being utilised in the same way as planned or not. Thus, control completes the whole sequence of management process.

Controlling Definition
"Control refers to the task of ensuring that activities are producing the desired results. Control in this case is limited to monitoring the outcome of activities, reviewing feedback information about this outcome, and if necessary, taking corrective actions". - Reeves and Woodward "Controlling is determining what is being accomplished - that is, evealuating performance and, if necessary, applying corrective measures so that performance takes place according to plans". - Terry and Franklin.

Features of Controlling
One can control future happenings but not the happened. Hence in here all the past

performance is measured for taking corrective actions for future periods.

Every manager in an organisation has to perform the control function. The control may be

quality control, inventory control, production control, or even administrative control.

Control is a continuous process, it follow a definite pattern and time-table, month after month

and year after year on a continuous basis.

Importance of Controlling

 Control system acts as an adjustment in organisational operations. It mainly checks whether

plans are being observed and suitable progress towards the objectives is being made or not, and if necessary any action to control the deviations.
Policies and other planning elements set by the managers become the basis and reason for

control. Through control it is monitored whether the individuals adhere to those frameworks or not so that organisation and management can verify the quality of various policies.
Exercising some authority and forming superior-subordinate relationship throughout the

organisation can be established through controlling.

With the presence of authority or control the individuals will work properly and exhibit better

performance to reach the targets set for them.

Control system ensures the organisational efficiency and effectiveness. When Proper system

exists the organisation effectively achieves its objectives.

Management by Exception
It is a system of identification and communication that signals to the manager when his attention is needed and he concentrates more on the important areas where deviation occurred. Components of management by exception are as follows: Measurement: By measuring past and present performance the manager tries to find out the deviations. Projection: Manager analyses those measurements that are meaningful to the organisational objectives. Selection: It involves the criteria which the manager will use to follow progress towards organizational objectives. Observation: It involves measurements of current performances. Comparison: The manager makes comparisons of actual and planned performance and identifies the exceptions that require attention. Decision Making: The manager prescribes the action that must be taken in order to bring performance back into control or to adjust expectations to reflect changing conditions.