Principles of Management

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Unit 1
Management- meaning, nature, principles and styles Management and administration, difference Management and society, social responsibility, professional ethics.

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What is management?
Management consists in guiding human and physical resources into dynamic, hard-hitting organization unit that attains its objectives to the satisfaction of those served and with a high degree of morale and sense of attainment on the part of those rendering the service. Lawrence A. Appley

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 Management is the coordination of all resources through the process of planning, organizing, directing and controlling in order to attain stated objectives. Henry L. Sisk. Management is principally the task of planning, coordinating, motivating and controlling the efforts of others towards a specific objective. James L. Lundy
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 Management is the art of knowing what you want to do and then seeing that it is done in the best and cheapest way.F.W. Taylor To manage is to forecast and to plan, to organize to command, to coordinate and to control. Henry Fayol

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 Management is guiding human and physical resources into dynamic organizational units which attain their objectives to the satisfaction of those served and with a high degree of morale and sense of attainment on the part of those rendering service. American Management Association

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 Management is the process of planning, organizing, leading, and controlling the work of organization members and of using all available organizational resources to reach stated organizational goals. - Stoner, Freeman And Gilbert Management is the process of getting things done, effectively and efficiently, through and with other people.- S.P. Robins

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 Management is the process of designing and maintaining an environment in which individuals, working together in groups, efficiently accomplish selected aims. - H. Weihrich and H. Koontz

Management is a set of activities (including planning and decision making, organizing, leading, and controlling) directed at an organizations resources (human, financial, physical, and information), with the aim of achieving organizational goals in an efficient and effective manner. R.W. Griffin
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To conclude
Management is the optimum utilization of inputs (human resources, financial resources, physical resources, information resources that an organization acquires from the environment) through different managerial functions (planning, decision making, organizing, controlling, leading) to attain organizational goals efficiently and effectively.
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Management in Organization
Inputs from the environment Human resources Financial resources Physical resources Information resources
Planning and decision making

Organizing Goals attained Efficiently Effectively Leading

Contr Controlling olling

R.W. Griffin
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 Efficient: Using resources wisely and cost effective way. Doing things right/correctly. Effective: Making the right decision and successfully implementing them. Doing the right thing. Goal attainment or the achievement of objectives.

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Nature of Management:
Universality: basic principles of mgmt. can be applied in all managerial situations regardless of the size, nature and location of the organization. Purposeful: Management is always aimed at achieving organizational goals and purposes. Social process: Management essentially involves managing people organized in work groups.
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Nature of Management:
Coordinating force: Management coordinates the efforts of organization members through orderly arrangement of inter-related activities so as to avoid duplication and overlapping. Intangible: Management is intangible. It is an unseen force. Its presence can be felt everywhere by the results of its effort which comes in the form of adequate work output, satisfactory working climate, employees satisfaction etc. Continuous process: Management is a dynamic and an ongoing process. The cycle of management continues to operate so long as there is organized action for the achievement of group goals.

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Nature of Management:
Complex process: Functions of management cannot be undertaken sequentially, independent of each other. Management is a composite process made up of individual ingredients. All the functions are performed by involving several ingredients. Therefore, the whole process is integrative and performed in a network fashion.
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Management Process
Planning and Decision Making

Organizing

Controlling

Leading

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Nature of Management:
Multidisciplinary: Although management has been developed as a separate discipline, it draws knowledge and concepts from various disciplines. Not Absolute principles: Mgmt. principles are relatively not absolute they have different strength in different conditions. So, POM should be applied in the light of prevailing conditions.
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Principles of management:
Principles are fundamental truths. Accepted guidelines and have universal application. Can be changed/ do change.

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Principles of management:
DIVISION OF WORK: Work should be divided among individuals and groups to ensure that effort and attention are focused on special portions of the task. Fayol presented work specialization as the best way to use the human resources of the organization. Substitution of resources:
when the resources that are normally used to provide services become scarce different resources may be used to produce the intended result.

Span of control:
For effective supervision and leadership, the number of subordinates under the immediate supervision of one manager should be limited to manageable number.
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Principles of management:
Unity of command:
Each employee should receive orders and instructions from only one supervisor.

Unity of direction:
There should be one head and one plan for a group of activities having a common objective.

Authority and responsibility:

Authority is the power and right inherent in a managerial position and responsibility is the obligation to be fulfilled by the subordinates. There should be balance between authority and responsibility..
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Principles of management:
Subordination of individual interest to general interest:
It is essential to reconcile individual objectives with group objectives.

Remuneration to personnel:
It is the reward paid to the employees for their contribution. It should be acceptable both to the management and the employees.

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Principles of management:
Management by exception:
selectivity in work and priority in decision managers should not overload themselves with routine and repetitive work he/she should keep time available for important critical issues. Managers should make big decisions first.

Discipline Shortest decision path:

the decision must be made as closely as possible in time and place to the object of the decision and to those affected by it.
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Principles of management:
Centralization and decentralization:
Centralization is the retention of decision making authority at the top. Decentralization is the systematic division of decision making authority from top to bottom.

Scalar chain:
Unbroken line of authority from top to bottom which is important for systematic and orderly communication in an organization.
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Principles of management:
Equity:
Management has to avoid the concept of favoritism and partiality among employees.

Stability of tenure:
Employees must have feeling of security of their job to continue the work efficiently.

Management by objective Esprit De Corps:

Union is strength. It is possible only through harmony and mutual understanding among the workers.
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Management Styles
Managers have to perform many roles in an organization and how they handle various situations will depend on their style of management. It is an overall method of leadership used by a manager. There are two sharply contrasting styles :
Autocratic Leader makes all decisions unilaterally. Permissive Leader permits subordinates to take part in decision making and also gives them a considerable degree of autonomy in completing routine work activities.

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Management Styles
Combining these categories with democratic (subordinates are allowed to participate in decision making) and directive (subordinates are told exactly how to do their jobs) styles gives us four distinct ways to manage: Directive Democrat: Makes decisions participatively; closely supervises subordinates. Directive Autocrat: Makes decisions unilaterally; closely supervises subordinates. Permissive Democrat: Makes decisions participatively; gives subordinates freedom in carrying out their work. Permissive Autocrat: Makes decisions unilaterally; gives subordinates freedom in carrying out their work.

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Management Styles
Managers must also adjust their styles according to the situation that they are presented with. Telling: Works best when employees are neither willing nor able to do the job (high need of support and high need of guidance). Delegating: Works best when the employees are willing to do the job and know how to do it (low need of support and low need of guidance). Participating: Works best when employees have the ability to do the job, but need a high amount of support (low need of guidance but high need of support). Selling: Works best when employees are willing to do the job, but dont know how to do it (low need of support but high need of guidance).

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Management Styles

Which style would you pick? What would you do?

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Situation 1
The employees in your program appear to be having serious problems getting the job done. Their performance has been going downhill rapidly. They have not responded to your efforts to be friendly or to your expressions of concern for their welfare. a. Reestablish the need for following program procedures and meeting the expectations for task accomplishment. b. Be sure that staff members know you are available for discussion, but dont pressure them. c. Talk with your employees and then set performance goals. d. Wait and see what happens.
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Situation 2
During the past few months, the quality of work done by staff members has been increasing. Record keeping is accurate and up to date. You have been careful to make sure that the staff members are aware of your performance expectations. a. Stay uninvolved. b. Continue to emphasize the importance of completing tasks and meeting deadlines. c. Be supportive and provide clear feedback. Continue to make sure that staff members are aware of performance expectations. d. Make every effort to let staff members feel important and involved in the decision making process.
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Situation 3
Performance and interpersonal relations among your staff have been good. You have normally left them alone. However, a new situation has developed, and it appears that staff members are unable to solve the problem themselves. a. Bring the group together and work as a team to solve the problem. b. Continue to leave them alone to work it out. c. Act quickly and firmly to identify the problem and establish procedures to correct it d. Encourage the staff to work on the problem, letting them know you are available as a resource and for discussion if they need you.
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Situation 4
You are considering a major change in your program. Your staff has a fine record of accomplishment and a strong commitment to excellence. They are supportive of the need for change and have been involved in the planning. a. Continue to involve the staff in the planning, but direct the change. b. Announce the changes and then implement them with close supervision. c. Allow the group to be involved in developing the change, but dont push the process. d. Let the staff manage the change process.
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Management and administration

We often found terminology conflict between management and administration. Some suggests no fundamental difference between them whatever difference exist only in term of usage. Others suggests there is difference because both of them represent different activities.

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Management and administration

At the initial level, no distinction between management and administration was made and both the terms were used interchangeably. In 1923, the terminological conflict was raised by Oliver Sheldon. He emphasized administration as decision making function and management as execution function.
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Management and administration

There are following three views on the subject of distinction between administration and management: I. Management and Administration are Different/Administration is above management
Many classical thinkers supports this view, they perceive that both admin. and mgmt. are different though both of them may be performed by a single individual/team in an organization. According to Oliver Sheldon , Administration is the function in industry concerned with the determination of the corporate policy, the coordination of finance, production and distribution whereas Management is the function concerned with the execution of policy within the limits setup by administration.

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i. Management and Administration are Different/ Administration is above management

William Spriegel Administration is that phase of a business enterprise that concerns itself with the overall determination of institutional objectives and the policies necessary to be followed in achieving those objectives. Management on the other hand, is an executive function which is primarily concerned with carrying out broad policies laid down by the administration. Florance and Tead Administration involves the overall setting of major objectives determination of policies, identifying of general purposes laying down broad programs, major objectives etc. while management is the active direction of human efforts with a view to getting this done. The general view is that administration relates to policy formulation and management relates to policy execution and these two activities are not the same.
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ii. Administration is part of management

This approach holds the view that management is comprehensive term and administration is its part. According to Kimball and Kimball, Management is a generic term with wide functions including administration, which is a narrow function. According to Brech, Management is a social process entailing responsibility for the effective and economic planning and regulation of the operation of an enterprise is fulfillment of a given purpose of task. On the other hand Administration is that part of management which is concerned with the installation of carrying out of the procedures by which the programs is laid down and communicated, and the progress of activities is regulated and checked against plans.
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ii. Administration is part of management

According to this view, administration is subordinate function to overall management function. Administration concerned with day to day executive routine work is a part of management. THE FIRST AND SECOND VIEWPOINT EXTREMELY OPPOSITE TO EACH OTHER.
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iii. Management and Administration are same

The third approach is most popular and practical. Authors like Fayol, Newman Williams, do not make any distinction between these two terms. Both managerial and administrative function involves the same functions, principles and objectives or even people therefore there is no difference.
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Management and administration

Conclusion: The distinction between two terms may be drawn by analyzing the origin of the word administration. The government often use the term administrator, on the other hand business field use the term manager; whatever the term is used there is no difference in there work.
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Management and society, social responsibility, professional ethics.

Every business organization obtains inputs from environment, transforms them into outputs and again supplies to the environment. Effective manager must deal with the outside environment. The concept of social responsibility requires organizations to consider the impact of their actions on society.
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Types of Environment
International dimension Competitors The organization internal environment Regulators Political/ Legal dimension Economic dimension

Owner BOD

Employees Culture

Customers Technological dimension

Strategic allies

Suppliers

Socio-Cultural dimension
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SOCIAL RESPONSIBILITY
Social responsibility is the obligation of an organization to protect social norms and rule within which the organization is operating. Business organizations are
established, exist and perform functions in the society. utilize natural resources in production and distribution activities according to their convenience and facility.

It is the responsibility of business organization to perform their activities within the existing rules, regulations and norms of society.
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SOCIAL RESPONSIBILITY
Davis and BlomtromSocial responsibility refers to the obligation of decision makers to take actions which protect and improve the welfare of society as a whole along with their own interest.

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SOCIAL RESPONSIBILITY
R.W. GriffinSocial responsibility is the set of obligations an organization has to protect and enhance the society in which it functions.

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SOCIAL RESPONSIBILITY Contrasting views

There are two contrasting views. The first view holds that mangers act as agents for shareholders. Therefore, they are obliged to maximize the present value of the firm. This view mentions the social responsibility of business is business. This is profit maximization view. The second view considers that organizations have a wider range of responsibilities that extend beyond the production of goods and services at a profit. As a member of society, organizations should actively and responsibly participate in the community and in the larger environment.
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ARGUMENTS FOR SOCIAL RESPONSIBILITY

1. 2. Public expectation: Public opinion in support of business pursuing social as well as economic goals is now well solidified. Long-run-profit: Socially responsible business tend to have more secure long-run-profits. This is the normal result of the better community relations and improved business image that responsible behavior brings. Ethical obligation: A business firm can and should have ethics. Business should be socially responsible because responsible actions are right for their own sake. Public image: Firms seek to enhance their public image to gain more customers, better employees, access to money markets, and other benefits. Since the public considers social goals to be important, business can create a favorable public image by pursuing social goals.

3.
4.

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ARGUMENTS FOR SOCIAL RESPONSIBILITY

5. Better environment: Involvement by business can solve difficult social problems, thus creating a better quality of life and a more desirable community in which to attract and hold skilled employees. Discouragement of further government regulation: When business is unable to fulfill its social roles, it invites more government intervention in the business system. Government regulation adds economic costs and restricts managements decision flexibility. By becoming socially responsible , business can expect less government regulation. Balance of responsibility and power: Business have large amount of power in society. An equally large amount of responsibility is required to balance it. When power is significantly greater than responsibility, the imbalance encourages irresponsible behavior that works against the public good.
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6.

7.

ARGUMENTS FOR SOCIAL RESPONSIBILITY

8. Stockholder interests: Social responsibility will improve the price of a businesss stock in the long run. The stock market will view the socially responsible company as less risky and open to public attract. 9. Possession of resources: Business has the financial resources, technical experts, and managerial talent to provide support to public and charitable projects that need assistance. 10. Superiority of prevention over cures: Social problems must be dealt with at some time. Business should act on them before they become serious and costly to correct and take managements energy away from accomplishing its goal of producing goods and services.
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ARGUMENTS AGAINST SOCIAL RESPONSIBILITY

1. Violation of profit maximization: This is the essence of the classical viewpoint. Business is most socially responsible when it attends strictly to its economic interests and leaves other activities to other institutions. 2. Dilution of purpose: The purpose of social goals dilutes businesss primary purpose: economic productivity. Society may suffer as both economic and social goals are poorly accomplished. 3. Costs: Someone has to pay for socially responsible activities. Business must absorb these cost or pass them on to consumers in higher price.
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ARGUMENTS AGAINST SOCIAL RESPONSIBILITY

4. Too much power: Business is already one of the most powerful institutions in our society. If it pursued social goals, it would have even more power. Society has given business enough power. 5. Lack of skills: The outlook and abilities of business leaders are oriented primarily toward economics. Business people are poorly qualified to cope with social issues. 6. Lack of accountability: Political representatives pursue social goals and are held accountable for their actions. Such is not the case with business leaders. There are no direct lines of social accountability for the business sector to the public. 7. Lack of broad public support: There is no broad mandate from society for business to become involved in social issues.
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Approaches to social responsibility (Jones, George and Hill)

.

Obstructionist approach

Defensive approach

Accommodative approach

Proactive approach

Low social responsibility

Social responsibility

High social responsibility

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Approaches to Social Responsibility

Obstructional approach:
Not to behave in a socially responsible way. No obligation to society. Violate prevailing laws. May not really care for the society. They behave unethically and illegally. Involvement in bribing, breaking pollution standards, ignoring employee safety standards.
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Approaches to Social Responsibility

Defensive approach:
A defensive approach indicates at least a commitment to ethical behavior. Defensive managers stay within the law and abide strictly with legal requirements. But, they make no attempt to exercise social responsibility beyond what the law dictates.

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Approaches to Social Responsibility

Accommodative approach:
An accommodative approach supports social responsibility. Accommodative managers agree that organizational members should behave legally and ethically. They try to balance the interests of different stakeholders against one another. Managers adopting this approach want to make choices that are reasonable in the eyes of society.

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Approaches to Social Responsibility

Proactive approach:
This is being both legal and responsible. The position taken is that business firms have a responsibility not only to abide by legal constraints, but also to take a proactive position and support social causes or institutions. Business firms are often involved in charitable activities such as supporting higher education, local sports clubs, health projects, etc.
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Areas of Social Responsibility

Towards investors (Shareholders) Towards customers Towards employees Towards government

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MANAGERIAL ETHICS
Set of moral principles and rules. Guides an individuals behavior. Basis of determining right or wrong in a given situation. Personal perception and belief while taking a decision. Ethical behavior of an individual depends upon the moral standard or codes of conduct determined by the society.
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MANAGERIAL ETHICS
Stoner, Freeman, and GilbertEthics is the study of how our decisions affect other people. It is the study of peoples rights and duties, the moral rules that people apply in making decisions.

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MANAGERIAL ETHICS
R.W. GriffinEthics is an individuals personal belief about whether a behavior, action, or decision is right or wrong. Managerial ethics are the standard of behavior that guides individual managers in their work.
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MANAGERIAL ETHICS
From the above definitions, it may be concluded that: Ethics are personal beliefs of an individual about right or wrong. Ethical behavior differs from person to person. For
one person certain behavior may be ethical. For others, the same behavior may be unethical. Ethical behavior conforms to generally accepted social norms.

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Ethical Effects on Organizations:

Managerial ethics determines management-employee relationships in an organization. Employment issues are being affected by the ethical standards of managers. Hiring, firing, promotion, rewards, welfare, and compensation are influenced by the ethical practice of managers. The individual ethical standards of employees also affect organizations. Employees are responsible for maintaining work standards, secrecy, honesty, and information. They can use unethical methods in procurement, entertainment, travel and other expenses related in doing business.

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Sources of Ethical Behavior

Value forming institutions: Family, school, state, religion. Values Peers and Colleagues Work and carrier Professional codes Moral rules
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Significance of Management Ethics:

Promotes goodwill and image. Helps maintain better relation with stakeholders. Less interference from government. Promotes fair competition. Promotes social responsibility. Improve working environment. Helps to increase market share.
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Thank you.

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