Nature of Management 2

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Objectives

*Understand the meaning & definition of management.

*Know the features of management.

*Understand the functions & Importance of management.*Get to know the relation between administration and

management.

*Understand the functions & importance of management.

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Structure Introduction Meaning of management. Definition of Management. Features or characteristics of management. Function of Management. Importance of management.

Administration and management. Summary

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IntroductionToday business is full of complexities.

Management is necessary for Business units, Banks, School, Colleges, charitabletrust, etc.

Management shapes the personality of people and shapes the destiny of a nation.Definition of management:-

Peter F.Drucker : management is an organ, organ can b e described and defines only through theirFunctions.

Henry Fayol: TO manage is to forecast a plan, to organize, to compound, to co -ordinate and tocontrol.

Donald T. clough: Management is the Art and Science of decision making and leadership.

F.W.Taylor: Management is the art of knowing what you want to do, and then seeing that it is donein the best and cheapest way.

J.N.Schulze: Management is the force which leads, guides and directs an organization in theaccomplishment of a pre- determined object. 3


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Features or Characteristics of Management .

1) Art as well as science:It is both,art by managing skill of persons and Science as it helps in developing

principles or laws to effectively run an Organization.

2) Management is an activity :It relate to effective utilization of available resources. Resources include men, money,material and machine or organization.

3) Management is a continuous process :It consists of planning, organizing, directing and controlling the resources. All thefunctionsare interrelated.

4) Management achieving Pre-determined objectives:The objectives are laid dawn. Management helps in achieving the fixed objectives.

5)Organized activitiesOrganized efforts in a systematic way helps in achieving the desired objectives.

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Features or Characteristics of Management

6)Management is a factor of productionFactor of production such as Land, Labor, Capital, entrepreneurs. According to Peter F.Drucker whatever rapid economic and social development tookplace after world war II, it occurred as a result of systematic and purposeful work of Developing Managers & Management. Developing is a matter of human energiesrather than of economic wealth and generation of human energies is the task of mgmt.according to peter.F.Drucker whatever repaid economic and social develop took place after world war ll. It occursas a result of systematic and purposeful work of developing managers andmanagement. Developing is a matter of human energies rather than of economic wealth and generation of human energies is the task of management. Management ismover and development is a consequence motivation.

7)Management as system of activity

A system may be defined as a set of component parts working as a whole. Management has balanceindividual goals and organizational expectations.

8)Management is a discipline As it aspects can be added with the changing scenario.

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9)Management is a purposeful activity

It is to achieve the objectives of an organization, so as to achieve the function of planning,organising,staffing,directing,controlling and decision making.

10) Management is a distinct entry .Management skill shown how to get thing done if required expertise & knowledge.

11) Management aims on maximizing profit:Eco growth & profit.

12)Decision making:

Right decision at the right time

13)Management is a profession :Knowledge & principles of management are applied in practice.

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14) Universal application:

application to every type of industry.

15)Management is to get thing done

16)Management as a class or a team:

17) Direction & control : Which deals the activities of human effort

18) Dynamic: Fast developing business world, new techniques Adityagroup

19) Management is needed at all level

20)Leaders: Managers are the leaders of there team.

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Function of management

1) Planning :- What to do, when to do, how to do, who will do it.

2) Organizing : Distribution of work for effective performance, the manager would determine who will report to whom. To organize human factor andmaterial factor . According to Knootzs oDonnel: organizing consists of conscious co- ordination of people towards a desired goal.

3) Staffing:- Right person at right time it includes recruitment, promotion,retirement etc.To fit the right persons for the right role.

4) Directing:- it includes guidence,supervision and motivation of employee,technique to get the work from the staff.

5) Co-ordinating:- It depends with size of the organization it alsoimprove knowledge and understanding of enterprise objectives.

6) Motivating:- To improve the performance of the employees. A resourceful

leader can do it. 8


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Function of management7) Controlling:- A good system control has the characteristics of

economy ,flexibility, understanding and accuracy to organization need. According to.Henry Fayol:- Control consist in verifying whether everything occurs in conformity with the planadapted, The instructions issued and principles issues.

8) Innovation:- Which includes new products, newtechniques ,new design, at a cost reduction.

9) Decision Making:- This helps in smooth functioningof an organization.

10)Communication:- This Helps in regulation job and co -

ordinate the activities, 9


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Main function of management :- planning, organizing, staffing

directing, co-ordinating motivating, & controllingSubsidiary function :- Decision making & communication etc.

Henry fayol:- Function of management as forecasting, planning,organising, commanding, co-ordinating & controlling.

Luther Gullik:- POSDCORBP-Planning

O-organisingS-staffingD-directing

Co-ordinatingR-reportingB-budgeting

L.Hair :- Functions of management as forecastingplanning,control,motivation and co-ordination 10


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Importance of management

It helps in utilizing the available resources at a minimum cost.

Management meets the challenges. The competitive period is handled by effectivemanagement

Accomplishment of group goals individual goals is organizational goal go hand in

hand

Effective functioning of business: best utilization of available manpower themotivation techniques.

Resource development: Resource include men,money,materialand machines

Effective utilization of business: 8 ms in business: --man,money,material,machine,method,motivation,market and management .

Sound organisation structure: Commanding direction right person for the right job. 11


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Function of managementManagement direct the organization.

Integrate various interests so as to achieve the objectives of an organization.

Stability : fluctuation in business are controlled by the

Management skill.

Innovation : new ideas, new product e.g.. Nokia co.

Co ordination team sprit

Tackling problems: Problem solution techniques.

A tool for personality development: it develops the personality of

workers and raise their efficiency & productive ability. 12


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Administration and managementRunning business requires skill :- ManagementRunning Government Departments non-profit:-

Administration institution

Board of directors Top levels

General Manager

Supervisor

Workers

Leffingwell & Robinson:- Administration determines the policies upon which the enterprises is to be conducted, while the functions of management is to be carryout the policies laid down by administrativegroup.

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Administration

Department Manager

Management


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Administration and managementHenry Fayol Said:- All undertakings require planning, organizing

,co-ordination and control to function properly, all mustobserve the same general principles. Hence we need oneadministrative science which can be applied to all public &private affairs .

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S.no. Basic of destination Administration

1.Policy and objectives

2. Directing of humanefforts

3. Main functions

4. Levels of executive

5. Position

6. Knowledge

Determines policy to be

followed and decide theobjectives to be achieved.

Not directly involves in theexecution of plan andachievement of objectives.

Planning, organising andstaffing.

Top level executives (Ownersor Board of directors)

Acts as a principles.

Requires administrativeability more than

technical ability. 15

Management

Implements the policy and

achieve the objectives.

Directly involves in theexecution of plan andachieving objectives.

Direction, motivation andcontrol.

Lower level executives(Manager, supervisor and workers).

Act as an agency.

Requires technical ability more than administrative

ability.


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Development of management Thought

Objective + Structure

Introduction:- Ancient time group efforts led by individualkautilyas Artha sastra and saint Thiruvalluvars Thirukuralalso state that co-operation, group effort, direction &control are necessary to achieve the objectives or goals of anindividual or modern world.

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Development of management Thought

Henry Fayol 1841-1925A French industrialist became famous after 1949 with his publication of management thoughts in English.

Henry fayol :- an engineer became chief managing director , due to his outstanding

abilities.

Henry Fayol Concentrated on top management his book general is industrialmanagement mentionedManagement plays a very important role in the government undertakings, whetherlarge or small, industrial,commercial,political,religious or any other.

The management functions include planning, organising,staffing,directing andcontrolling.

Organisation function include purchase, sales production and accounting

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Classification of business activities1) Technical activities relating to production

2) Commercial activities relating to purchase of basic raw materialsand other resources, selling of product and exchange.

3) Financial activities relating to identification and utilisation of available funds.

4) Accounting activities relating to recording and maintaining of account,prepration of cost sheets balance sheets and statisticaldata.

5) Security activities relating to steps taken to protect the property

of enterprise & persons

6) Managerial activities related toplanning,organising,commanding,co-ordanating and

controlling. 18


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Henry Fayol: Qualities of manager1.Physical (health,vigour )

2. Mental (ability to understand and learn, judgment, mental vigour andadaptability)

3. Moral (energy, firmness, willingness to accept responsibility, initiative , loyalty,tact and dignity)

4. General education (general acquaintance with matter not belonging excessively to the function performed)

5. Special knowledge (peculiar to the function, be it technical, commercial,financial, managerial etc.)

6. Experience (knowledge arising from work proper)

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H F l i i l f


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Henry Fayol: principles of management1.Division of work:- applied to both technical & managerial word.

2.Authority & responsibility:- Responsibility is shouldered whenever authority is exercised.

3.Discipline:- According to koontz and ODonnell Discipline is respect foragereements,directed to achieve obedienceHenry fayol:- Discipline is essential in all levels of management people.

Discipline is obtained their justice application of penalties.4. Unity of command :- Each subordinate is responsible to one superior .

5. Unity of direction:- Manager will look after all the activities of its group

6. Subordination of individual interest to group interest:- there has to bereconciliation of individual interest with group interest, in no way theinterest should dominate the group interest.

7. Unity of direction :- Manager will look after all the activities of its group.

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H F l i i l f g t


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Henry Fayol: principles of management 8. Remuneration of personnel: Employees should be given fair is reliable remuneration

9. Centralization :- small firms authority is centralized, in large firms authority isdecentralized Centralization or decentralization of authority depends upon personalcharacter of superior, his morality, reliability of resourcefulness.

10.Scalar chain :- Scalar chain is changing of superiors ranging from ultimate authority tolowest ranks. The communication flows from top to bottom.

11. Order :- right place for everything. The personnel are selected scientifically andassigned duties according to their qualifications & ability.

12. Equity :- Combination of fairness, kindness & justice. Experience and good managercan maintain equity, also it requires loyalty & devotion from subordinates.

13.Stability of tenure of personnel :- security of job is essential. Insecurity results in high labourturnover . The development of any organisation depends solely on sincerity of labouerers.

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Henry Fayol: principles of management

14. Initiative :- Manager take decisions after taking suggestions from subordinates.Initiative is the keenest satisfaction of an intelligent man with experience.

15. Espirit De corps :- Union is strength or team spirit, if any difference of opinion,

management should take corrective action. The management should not follow thepolicy of divide and rule.

F.W.Taylor 1856-1916Career:- apprentice in Philadelphia joined Midvale steel co in U.S.A, then did M.E(evening course) joined Bethlehem steel co.Taylor was an innovator of outstanding faithfulness his ideas broughtsystem,order,logic to areas where rule thumb prevailed previously .Taylor:- Known as father of scientific management.

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S i ifi M


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Scientific ManagementPhilosophy-Scientific selection and training of right workers for

right job.Provide adequate working conditions, Monetary incentives.The workers are placed according to their qualifications and

experience.Good physical working conditions lighting, ventilation

restrooms,canteen,recreation, sanitation.

Managers and supervisions should accept responsibility forplannning,scheduling, guiding, and controlling.

Taylor Firmly believed that objective of management should bemaximum property for employer, and maximum prosperity toeach employee. Employer prosperity means Low cost but highreturns employee prosperity means fair as well as high wages.

Can be achieved their adaption of scientific management.

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Principles of Scientific management1. Science not rule of thumb:- This mean replacement of old methods,

This means it include allotment of fair work, standardization in

work, adoption of differential piece rate of payment system.

2. Harmony in group action:- peace & friendship in group action skillfulpeople trying to perform at best

3. Co-operation:- Management & workers fair wages, higherproductivity, substitution of war for peace. Mutual understandingand change in thinking are factors necessary for co-operation.

4. Maximum output:- Division of work, responsibility shouldered by managements workers, proper tools, working condition should befavorable.

5. Improvement of workers:- systematic training can shape the workers

in relations to job assigned to them 24


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Elements or features of scientific management

F.W Taylor's research features:-1. Separation of panning from executive function:-

The planning function should be performed by supervisors and executive functionto be assigned to workers.

2. Scientific task setting:- fair days work to be assigned to each worker.

3. Functional foremanship:- specialization of functions performed by different

employees. So planning and executive function are to be handled separately by skillful persons

4. Work study :- systematic critical assessment of efficiency required to do the job.

2. Methods study:- To save time and improve efficiency in handling raw materialstransportation, inspection finished goods etc.

6. Motion duty:- movement of machine operator at a particular speed with itsmachine is called motion study. Less time involved and optimum result.

7. Time study:- A standard time is fixed by conducting time study and evaluate the work process.

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El f f i ifi


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Elements or features of scientific management 8. Fatigue study:- The fatigue may be mental or physical health & efficiency

should be preserved of workers work study includes:- methods of study,motion study, time study, & fatigue study.

9. Rate setting:- differential piece rate wage system may act as incentive to lazy &less efficient workers

10. Standardization:- In respect of tools & instruments working hours, working conditions, cost of production etc.

11. Scientific selections training:- Right persons for right job adequate training tobe given to new as well as existing workers in order to update their knowledge .

12. Financial incentives:- Differential piece rate high wages for efficient workers

13. Mental revolution :- The success of scientific management rests on change inattitude of management & workers ,so as to co-operate with one another andgive best results for individual & organization.

14. economic:- techniques of cost estimates and control, eliminate wastage,

maximize profits are necessary. 26


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Specific contribution of F.B Taylor

Application of principles of scientific Management.Management & employees proper role & responsibility.Mental revolution or part of employers employee. Time study & motion study aspects.Separation of planning & executive function.

Functional foreman concept invented by him.

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PETER.F.DRUCKER:- Born in 1909 at-Vierra worked as economist in an

international bank Contribution of Peter.F.Drucker

1) Nature of management:- Management is innovation, development of newideas, combination of old and new ideasManagement as a discipline:- it has tools, techniques approaches and skillsManagement as a profession:- It means achieving good results.

2) Functions of managementmanager has to determine the objectives & activities and is concerned with

the direction and controlling of the activities.

3) Organization structure:- effective organization has three basic characteristicsa. structure so as to give best resultsb.try to keep min number of managerial levels

c. Provide a chance to upgrade the skill of young people.

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4) Centralized control with a structure of decentralizationTop management has more powers than various departments areallowed to take decisions within the limits set up by topmanagement.

5) Management by objectives : MBO Drucker introduce in 1954than modified by Schick and termed as management by result.Methods of planning, setting standards, Performance appraisaland motivation are correspondent of MBO.

6) Organizational change :- There are rapid changes in society dueto rapid technological development dynamic organization acceptchanges.

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BUREAUCRACY:- MAX WEBER (1864-1920 )Max weber framed rigid rules to eliminate managerial inconsistencies which lead

to ineffectiveness.strict rules & regulation in an organization .Result in efficient form of organization:- termed as Bureaucracy Bureaucracy is based on principles of logic order and legitimate authority.

Features of Bureaucratic organization

1. Functional specialization work divided in a pre-determined manner leads to specialization

2. Hierarchy of Authority:- A clear defined hierarchy of authority needed to give commands for

proper discharge of duties at various levels.

3. Rules & Regulations:Rules & Regulations are framed to ensure consistency in the performance

of work, A special Training is provided to import knowledge of rules andprocedures.

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4. Rights & DutiesProcedures are laid down for orderly performance of work

5. Technical competence:Qualification is prescribed for every job / positision

6. Fixation of procedure:Each Procedure fixed must be time tested and adoptable by persons.

7.Record Keeping :- Written Documents ,both draft form And originalDocument are preserved.

8. Impersonal Relations:

Rewards to be given on efficiency, personal preference emotions andprejudices should not influence the functioning of an organization

Max Webers Bureaucracy: - Creates scope for proper channelization of humanenergy & mechanical energy. Bureaucracy is higher in governments and inarmy than in put business and social organization

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Advantage of Bureaucracy


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Advantage of Bureaucracy

1. Specialization: Division of work leads to specialization

2. Employee Behavior:- Under Bureaucracy, Policies, rules & regulations are wellframed and could be applied to any type of company, Employee behavior iskept under control, it facilitates the management to implementation any project.

3. Structure: To fix the duties and responsibilities maintains smooth Relationshipamong employees.

4. No Conflict: This avoids over lapping or conflicting of job duties.

5. Advance decision : Fixed criteria lead to clear decisions .

6. Optimum utilization of Human Resources. Decided Purely on Merit andexpertise, maximum use of available resources.

7. Democracy:- All employees are treated equal.

8. Perpetual succession :- The continues ever through employee changes 32

H L G (1861 1919)


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Herry.L. Gantt (1861-1919)-Introduced GANTT Task & Bonus PLAN-The relationship between production & cost & efficiency &

Bureaucracy,-Proper Reward is given to those who reach a high level of

production.

GANTT founder of new Movement:- The new machine GANTTbelieve that justice and human behavior were important elementin industrial relations.

GANTT known by GANTT CHART referred to the process of work

GANTT CHART shows the fact of actual performance of workagainst time required to complete the job.GANTT CHART :- A forerunner of PERT program evaluation &review technique.GANTT CHART :- Known as daily balance sheet chart.

GANTT:- emphasized on human productivity & motivation levels.


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GEORGE ELTON MAYO 1880-1949

Human Civilization entered machine after industrialrevolution which lead to exploitation of workers. Eithermayo emphasized that productivity is affected by desire,attitude and feelings of workers. He considered humanrelations and psychological needs of workers.

Elton mayo was regarded as founder and father of modernsociological and psychological industrial research.

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HAWTHORNE EXPERIMENTS


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HAWTHORNE EXPERIMENTSHawthorne plant was a manufacturing telephone system bell. The objective of the

experiment was to find out the behavior and attitude of employees underbetter working conditions. The benefits of the pensions and medical allowance were available to employees.

Finding of Hawthorne experimentIt opened new vistas in human behavior.Team spirit & motivation important at workplace.

1) social factors:- The social psychological characteristics of the workersdetermine the output levels & efficiency. Non financial incentives also affectthe behavior of workers significantly and their productivity.

2) Group influence:- Group behavior influences the individual behavior.

3) Production level:- Decided by social norms but not by physiological capacities,in other words there is no direct relation production level and working conditions.

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4) Motivation :- It is not merely by money but other working conditions.

5) Conflicts :- difference in managements workers group conflict may arisebecause of maladjustment of workers with management

6) leadership:- the superior is acceptable as a leader only because of hisidentification with group of objectives

7) Cordial relationship:- amicable relations with their co-workers, rather thanearn more money, so work at par.

8) Behavior of workers:- The informal group have their own norms andbeliefs.

9) supervision:- The friendliness and gaminess of supervisor.

10) communication:- Better communication leads to mutual understanding.

11) Reaction of workers:- Complaints & criticisms of workers taken care of

Nature of Management 2

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