THE SYSTEM OF MANAGEMENT - CHAPTER I

ORORORAGNIADING

THE PLATE FORM OF LEADERS

PLANNING, ORGANIZING, STAFFING, DIRECTING, CONTROLLING

Year 2016

WRITER:SYED AQEEL RAZA

Master of Commerce & Arts

P R E F A C EThe role of management in business is started from the first day of business or on coming to the idea of doing business. A man who wants to do business thinks essentially how to plan, to organize, to hire staff, to give direction and to control activities in business under changeable social environment then he has to form a managerial structure in different areas in order to get desired results go in profit.

Unfortunately, our here there is no more attention on the education of management because of this the management moves around a man who does business knowing him all in one and who directs to his managers whatever he wants in his and/or in business interest.

If it is seen then the experiences of businessmen are made the cause of making the skill of management who applied right or wrong their ideas and directions to get desired results and it will not be saying wrong that experiences and ideas of them in controlling business activities created principles and gave thinkers.

In the world, the education of management is being felt necessary and every country making institutions for providing the managerial skill to organizations in order to increase business volume when in our country the ratio of education in management is equal to nothing.

This is right that the progress of any country depends on business and business requires managerial system; the system is made on principles and principles that are suitable for workmen not for trouble them in getting results.

In my book, I tried my best to point out the principles of management and troubles of managers in handling managerial matters in any organizations whatever I have seen, listened and read which I think may differ or agree to others with their thinking.

Writer

I N T E N T I O N

My intention is writing this book “The system of Management” is to give clear concept on management between employer and employee in easy understanding. I think this work is difficult but not to write something you know, see, listen and read. This is a separate talk that some topics are not described or under-described but can be improved later and I know only that pen off whatever you know least you should be unknown and a word helps anyone is reward indeed. According to this theory, I present a little struggle of mine in shape of this book which requires friends’ insertion or improvement to this noble cause.

The topic of management is such a system which will require many more thinkers in every future for overcoming the changing modes of human’s nature.

I further intend to add or remove thinking and errors as and when I know because of beating hand and foot alone in writing.

The page is awaited to value the comment and material of well- wishers to this book.

WRITER

WRITING IN FOCUS

The knowledge, education, work experience in different fields and thinking mind are the cause of writing something over subjects below creatively and skillfully.

THE SYSTEM OF ACCOUNTING

Volume I consists of five chapters; introduction to accounting, affects on business transactions, accounting cycle, accounts making and question and answer.

Volume II consists of six chapters named; the mode of transaction and its drivers, journal making, ledger making, trial balances, financial statements and questions & answers.

Volume III is in writing and written chapters; Accounting for Debt, Budgeting, Accounting for employment, Depreciation, the basis of accounting, accounting for purchases,

THE SYSTEM OF MANAGEMENT

The book named “The System of Management” represents planning, organizing staffing, directing and controlling.

The book also describes on principles from experts and mine and requires new thinking and materials for further improvement.

APPLIED WORDS

The book Applied Words is in writing which will have contents Idioms, Phrases, English Grammar and Proverbs enlightens the society's imbalances and wise thinking under writer's proverb based on " A word helps anyone is reward indeed.

FATHER OF MODERN MANAGEMENT

Henri Fayol (1841-1925) Turkey

Henri Fayol was a French coal mine engineer and director of mines and management theoretician. His scientific management theory formed the basis of business management. He is the founder of the fourteen principles of management and the five functions of management and has written books on management based on his own management. In 1916, he published his experiences in the book “Administration Industrielle et Generale (General and Industrial Management).

FATHER OF SCIENTIFIC MANAGEMENT

Frederick Windslow Taylor (1856-1915) Pennsylvania

Taylor was an American Mechanical Engineer improved industrial efficiency giving his efficiency techniques in his book “The Principle of Scientific Management”.

Taylor’s scientific management consisted on four principles;

- Replace working by “rule of thumb”, or simple habit and common sense, and instead use the scientific method to study work and determine the most efficient way to perform specific tasks.

- Rather than simply assign workers to just any job, match workers to their jobs based on capability and motivation, and train them to work at maximum efficiency.

- Monitor worker performance, and provide instructions and supervision to ensure that they are using the most efficient ways of working.

- Allocate the work between manager and workers so that the managers spend their time planning and training, allowing the workers to perform their tasks efficiently.

CHAPTER I

TABLE OF CONTENTS: PAGE NO:The system of management - 1 - 2Definition of management 3 - 5Science and Management 6 - 7Science Arts & Management 7 -Politics and management 8The need for principles of management 9The need of an organization 9The system of management (Urdu) 10Henri Fayol 11Fayol’s 14 principles of management 11Division of work 12Authority & responsibility 2 13 -14Discipline 3 14Unity of command 4 14Unity of direction 5 15Subordination of Individual Interest to mutual interest 6 15Fair remuneration 7 16Centralization 8 17Scalar chain 9 18Order 10 18Equality 11 19Stability of tenure 12 19Initiative 13 20Team Spirit 14 20FIVE PRINCIPLES FOR MANAGEMENT 21Appreciation 22Common progress 23Impersonal thinking 24Humiliation 25Satisfaction 26

<THE SYSTEM OF ACCOUNTING < VOLUME 1< SYED AQEEL RAZA<[email protected]>

THE SYSTEM OF MANAGEMENT-1

THE SYSTEM OF MANAGEMENT

Everything is moving under system; the system has principles which control the system like pillar to roof and the principles describes policies like root to fruit and policies make procedures to walk and to reach at goal then every system of human’s nature comes under management which is the art of taking work with human’s nature in getting desired results.

There are two types of sciences; exact science and inexact science, exact science involves in material and material may be fixed by principles and formulae because of which the knowledge which discusses with material is science and the knowledge which discusses to living things cannot be exact because of which the human’s nature, habit, thinking, style of talking, view of examining is changeable and does not match each other because of the reason any talk or any example does not fit on each other and like this today’s talk does not become example for next day; next day will have new things, new thinking, new knowledge and new environment.

The management involves human resources to get the desired result in an organization and can say it the social knowledge or social sciences.

In order to perform any work in best possible manner, the management is needed based on planning, organizing, staffing, directing and controlling and which can be consisted on one person in small organization and more than one in large organization and those persons are performing it called managers of their area which is given to them.



Management represents the group of managers who make polices and gets them acted upon and they should have no differences in principles and policies. In a case of any difference must be solved mutually.

The management requires persons good in education, experience, good character, creative mind and the person can get destination satisfactorily.

The management is a way to achieve result with a good line of action under the framework of policies, processes, and procedures used by the management.

People have been managing work for hundreds of years but from the time of Fayol and Taylor, who gave principles to modern management and scientific management which made the cause of further progress in management.

We owe much of our understanding of managerial practices to the many theorists, and businessmen based on practices and experiences who tried to understand how best to conduct business.

The system of management moves around social actions and policies.



DEFINITION OF MANAGEMENT

The management is the social knowledge based on Planning, organizing, staffing, directing and controlling by which an entity achieves smooth working and reaches at given goal with the result of the common struggle of the management group.

The experts of management define it that;

- “Management is an art of knowing what is to be done and seeing that it is done in the best possible manner.”(Planning & Controlling) F.W. Taylor (father of scientific management)

- Management is to forecast, to plan, to organize, to command, to coordinate and control activities of others. Henri Fayol (father of modern management)

- Management is the process by which co-operative group directs actions towards common goals.Joseph Massie

- Management is the process by which managers create, direct, maintain and operate a purposive organization through systematic, coordinated and cooperative human efforts.McFarland



- Management is the coordination of all resources through the process of planning, organizing, directing and controlling in order to attain stated goals.Henry Sisk

- Management is a social and technical process that utilizes resources, influence human action and facilitates changes in order to accomplish an organization’s goals.Tho Harmann, William Scott

- Management is the art of applying social knowledge under changing situation to achieve goal following management principle. (Writer)

D.S. Kimball says “management embraces all duties and functions that pertain to the initiation of an enterprise, financing the asset, the establishment of all major policies, the provision of all necessary equipment, the outline of the general form of organization under which the enterprise is to operate and the selection of the principal officer”.

The following requirements for establishing of an organization are included in management;

- Initiation of an enterprise- Financing the asset- Establishment of all major policies- The provision of necessary equipment- The outline of the general form of organization- Selection of the principal officer



We concluded from the above view point of view on management that

- The management concerns with a party, not with one person.The objective is an essential element for management.

- The management has a close connection with party’s objectives.

- The management is responsible for getting the decided and prominent objective.

- The success of management is to get the desired result successfully.

- The secret to the success of a manager is to take works others under particular objective.

- Management is a function or entity.- The management is a social way of getting the desired result

through planning and directing.

In the nutshell, the management does plan, to organize, to hire staff, to direct and to control human activities and to initiate an enterprise, to provide finance, to make policies, to select staff and to provide materials are also the responsibilities of the management. Hence, the management involves in all physically and mentally.

The art of taking work with human’s nature is management.



SCIENCE AND MANAGEMENT

The science bases on perfect knowledge require experiment and observation but discuss to the material. The new thing which come into exist is the result of experiment and observation which is because of knowledge when in management, knowledge takes work with person and persons to material hence science and management requires knowledge but difference is that science has perfect knowledge and the management has changeable knowledge according to the situation but is moving under principle to achieve result.

The consideration and thought of management were not satisfactory which left it back with other sciences and this knowledge is supposed incomplete. Like other sciences, its principles cannot match or same in any entity or in any place.

The management is also science but neither visible nor complete like other scientific knowledge and the supposition of its visibility and completion is zero because its principles create different results in different entities, in different environment and in different times because of;

- Here is no laboratory for testing the principle of management.- In management, the inclusion of man’s action is therein widely.- The thought and imagination in management are of immediately.- The management is based on imaginations and thoughts.- The existing of management is old as the man intends to do it.- In scientific knowledge, it is said by convincing that if a chemical is mixed

with specific quantity and in an environment that the required result will obtain but the knowledge of management differ it.



From the above discussion, we can say that the management is an inexact science because of the reason that it depends on thoughts and imagination, man’s action and have no exact principle or formula.

The management is a social science.

SCIENCE, ARTS, AND MANAGEMENT

The science means knowledge discusses on exact principle or formula but art is the way of getting the desired result through the application of skill.

Terry says “art is the bringing out of the desired result through the application of skill.

We can say that the management involves science and art and both are not separate but essential to each other. The art helps management to get the best result through the application of skill and science is the knowledge of understanding and viewing the up and down of human’s nature which we can say it to social science or social knowledge.

The mixture of science and arts is the essence of management.<THE SYSTEM OF ACCOUNTING < VOLUME 1< SYED AQEEL RAZA<[email protected]>


POLITICS AND MANAGEMENT

The politics is also a science but inexact and an organization like management has principles which are the democracy, equality, diversity, security, creativity, self-determination, interdependence, justice, peace, ecology, and economy.

The management and politics have a close relationship and both work on human’s nature and mentality. In politics, the politician is like as a manager of his area assigned to work and get desired result according to party’s mandate and like this in management, the manager works on the principles made for getting the desired result of the organization.

Everything has two sides; positive and negative, and principles are made for positive for the welfare of human being but negative works above principles and like this good management and mismanagement, true politics and hypocritical politics are the positive and negative sides.

The leadership is the part of politics and management.<THE SYSTEM OF ACCOUNTING < VOLUME 1< SYED AQEEL RAZA<[email protected]>


THE NEED FOR PRINCIPLE OF MANAGEMENT

If we consider, in doing anything in life, we have to walk on principles some of the perfect nature, some of the temporary nature, some of the time base nature and often we have to break them under changing situation at the movement for life.

Like this, in business, the management is needed and on acting on the principles of management, an organization can achieve the desired result in business following planning, organizing, staffing, directing and controlling.

The principles are made for life but life is not for it.

THE NEED OF AN ORGANIZATION

Organization means to make arrangements and arrangements have ways and methods which require managers and staff if they are good then the rules and regulations of any institution can be stable for every place and the work of an institution walks in better ways.

We can say that organization is made by category wise working persons and is necessary for every institution like blood in the body and from which the desired results of an institution are obtained.

In order to get the desired result, an organization consists of ways and methods for managers and officers as leaders for his group.

Organization requires management and management requires it too.<THE SYSTEM OF ACCOUNTING < VOLUME 1< SYED AQEEL RAZA<[email protected]>


HENRI FAYOL

According to Henri Fayol in his book General and Industrial Management (1916), there are fourteen general principles for management which provide necessary base to managerial skill and are as useful in today’s practical world as in his time and the fourteen principles that Fayol concentrated on were;

FAYOL ’S 14 PRINCIPLES OF MANAGEMENT

Division of Work Authority & Responsibility Discipline Unity of Command Unity of Direction Subordination of individual interests to the general interest Fair Remuneration Centralization Scalar chain Order Equity Stability of tenure Intuition Team Sprit



DIVISION OF WORK 1

Fayol directed to use this principle in any kind of work either be administrative or be technical so that every work could perform more and more with proficiency and according to this principle the whole work is divided into small tasks to workmen according to their ability and skill.

The division of work is to divide an organization into departments as individual entities where a departmental head or manager is assigned to control activities and submit his reports to his Chief and/or divide working to workmen division wise according to their knowledge and experience.

A man can be expert in one field but not in all and suppose that if he is expert in all field will not be able to work in all fields requires assistance certainly then the division of work increase the proficiency of a man in one particular field which will give quality to work and the quality of business.

Our here generally in a small organization, this principle of Fayol is being exploited. A man is used to take work all kind of nature like the jack of all trades by which the ability of the workman and the quality of work is decreasing.

Every person must be given work according to his ability and experience.

The division of work is like cities in a country.<THE SYSTEM OF ACCOUNTING < VOLUME 1< SYED AQEEL RAZA<[email protected]>


AURHORTITY AND RESPONSIBILITY 2

Authority means the right of a superior to give enhances order to his subordinates; responsibility means an obligation for performance and both are joined with each other who will have authority will be responsible definitely for the works which are assigned to him and it requires subordinate and/or subordinates to complete the assignment.

The authority and responsibility bind managers to take work with their subordinate in order to complete the task or to keep work free from errors and for which he have to organize his staff, to plan the work how to take, to give direction and to control expenditure, quality of work, smooth working, etc. in their areas.

Then we can say that authority and responsibility are the tools in management which one side gives more or less owner’s right to managers and on another side bind them to keep work according to the target given.

But in our today’s society or in one man show, the authority goes to owner and responsibility to managers wherein they have to work on his direction and have no right to decide, to plan, and to hire staff but on his consent. If it is seen that the managers who were hired having qualified for the work and have also experience and qualification in the field but they cannot work according to their abilities in bindings and because of having no authority, they have to work like subordinate as they have their assistants for completing the task and then we can say in this case all are subordinate except one in one man show.

In this case, the owner comes under clouds in solving small and small problems which would be solved by the managers for which they assigned resulting in making the cause of not increasing business volume.

If the managers will apply their skills in their areas according to their mental abilities, the business will move forward and the owner will come in peace.



This is an important and useful principle of management and cannot be given to employees and sometimes the relation between management and employees is badly affected by non-delegation of proper authority.

The authority is the mother of responsibility.

DISCIPLINE 3

Discipline means obedience, proper conduct in relation to others, respect for authority, etc. and it is an essential element for the smooth functioning of all organizations.

The discipline is the name of a system of rules for behavior.

UNITY OF COMMAND 4

Unity of command binds subordinates to receive orders and be accountable to one and only one superior. If an employee receives orders from more than one superior, it is likely to create confusion and conflict.

The unity of command is concerned with taking orders from one head.



UNITY OF DIRECTION 5

The unity of direction states one head one plan means that all employees have the same objective must be directed towards the achievement of the common goal and thus must have one head and one plan.

All activities should be put under one group, there should be one plan of action for them, and they should be under the control of one manager.

The unity of direction is concerned with the direction to the efforts of the employee of one division towards the achievement of the objectives of that division.

The unity in direction retards the way of mismanagement.

SUBORDINATION OF INDIVIDUAL INTEREST TO MUTUAL INTEREST 6

The interests of goals of the organization must prevail over the personal interests of individuals. Any individual’s interest that conflicts with an organizational interest must be subordinated to the interests of the organization. The organization must find ways to reconcile the tension between individual and organizational interests. Therefore, the management must put aside personal consideration and put company objectives firstly.

The common interest is the way of success.



FAIR REMUNERATION 7

The way of paying wages or remuneration should be fair, reasonable and rewarding of effort as this is the chief motivation of employees and therefore greatly influences productivity and because of this workmen get satisfaction more and more and like this owner generates profit more and more and business grows.

Money is the thing which man gives after heavy thinking and wages is the name of money paid against work decided or undecided because of this government has made the rule for minimum wages to workmen but besides this, the matter of wages is made issue among businessmen.

The way of growing is to take something for something.<THE SYSTEM OF ACCOUNTING < VOLUME 1< SYED AQEEL RAZA<[email protected]>


Centralization 8

Centralization means that ruling power should be with one man at the top level of management or central organization that has supreme leadership. In other words, in centralization, management retains most of the decision- making authority and in decentralization; decision making is distributed among all levels of the organization.

The coordination of managers and officers with the center is necessary for getting desired objectives and far away from center is not in favor of any business.

In our time it is seeing that the centralization is misleading because of its own and increasing distance with workmen because of misbehavior, creating problems, making the horrifying atmosphere, unnecessary questions and even more this and because of which the desired results could not be obtained properly.

The best way of carrying near to staff is to appreciate them in their works, to ignore mistakes of small nature and to educate them on works that could not become the cause of heartbreaking.

Everything has a center but management is the center itself.<THE SYSTEM OF ACCOUNTING < VOLUME 1< SYED AQEEL RAZA<[email protected]>


Scalar chain 9

Fayol defines the scalar chain as the chain of supervisors ranging from the ultimate authority to the lowest rank. An employee should feel free to contract his supervisor about anything through the scalar chain.

The chain of superiors from upper to lower level comes under the scalar chain.

Order 10

No work can be done in time and in better ways without order. In fact, it educates work and workers in any organization.

Social order ensures the fluid operation of a company through the authoritative procedure. Material order ensures safety and efficiency in the workplace. The order should be acceptable and under the rules of the company.

The order makes work in action.<THE SYSTEM OF ACCOUNTING < VOLUME 1< SYED AQEEL RAZA<[email protected]>


Equality 11

The manager should do justice and equality in taking work with his subordinates so that the work of his organization could be with satisfactory and for this, the manager should be fair and impartial when dealing with employees, giving equal attention towards all employees.

Equality is near to justice.

Stability of tenure 12

The workers must have the satisfaction that they have kept for which period could work peacefully. The stability of tenure increases the capability of workers and the stability of an organization.

The stability of tenure is the stability of the business.<THE SYSTEM OF ACCOUNTING < VOLUME 1< SYED AQEEL RAZA<[email protected]>


Initiative 13

Fayol says that the manager should give the chance of working to his subordinates by themselves which in sometimes they solve problems of unsolved matters.

The initiative can add strength and generates new ideas for an organization and on the part of employees is a source of strength for the organization because it provides new and better ideas.

The intuition is the gift from God.

Team Spirit 14

This refers to the need of managers to ensure and develop morale in the workplace; individually and communally. Team spirit helps develop and atmosphere of mutual trust and understanding which helps to finish the task in time.

The spirit of a group that makes the members wants the group to succeed.<THE SYSTEM OF ACCOUNTING < VOLUME 1< SYED AQEEL RAZA<[email protected]>


FIVE SOCIAL PRINCIPLES FOR MANAGEMENT

There may be five social principles in management need to be considered in the process of getting desired objectives which I want to make the part of this book based on my study and experience;

- Appreciation- Common progress- Impersonal thinking- Humiliation- Satisfaction



APPRECIATION

In the process of getting desired objectives, the manpower is required which is the single source of getting desired objectives and it is true that all principles and functions of management are enforceable because of manpower.

Human’s nature requires appreciation, salutation, value, words of thanks and any good talk. The appreciation can also be orally wordily and to upgrade, to give value, to give appreciative credentials, to give a reward, to appreciate before others are the vital tools of appreciation and in contra if the work of any worker is overviewed, the destination will be obtained not on time and loss in gain.

Sometimes, much appreciation weakens the control system because the person appreciated extraordinarily considers himself like an owner and does not care about rules and regulations. Hence, the appreciation must be in work not in personal.

The Appreciation is the vital tool for reaching the goal.<THE SYSTEM OF ACCOUNTING < VOLUME 1< SYED AQEEL RAZA<[email protected]>


COMMON PROGRESS:

A man who does business and invests capital in the business in anticipation of getting profit says I shall progress. Is his saying right?

His saying that I shall progress is not right because of the reason that his money is invested surely in business but he can do nothing in business along and the manpower should be required to move business activities so the manpower and his investment are common in the progress of business. The employees are the source of getting desired objectives following principles and functions of management.

Therefore, he must say “we shall progress” not in saying but in common in progress and the objective of progress is to gain and gain must be in common. This tool creates enthusiasm in workmen and they work for the organization as their own. The objectives of the organization will be their objectives because of common progress.

The slogan “common progress” is the guarantee of success in business.<THE SYSTEM OF ACCOUNTING < VOLUME 1< SYED AQEEL RAZA<[email protected]>


IMPERSONAL THINKING

Every kind of people’s work in business they belong to the different tongue, religion and nationality kept under the theory of need for obtaining objectives of an organization and besides this in need, manpower is hired from abroad.

The theory of need creates impersonal thinking, makes policies above nationality and religion and says all is equal for obtaining the objectives of the organization.

The business moves with principles and if principles are made for the different community on the basis of the tongue, relative, religion, etc. the system of management will have no meaning.

The personal thinking in business is poison killing.



HUMILIATION

The employee is just like a business partner in obtaining the desired objectives of an organization. The services of employee and finance of investor both when to meet then become the cause of gain and gain is the desired objective of the investor for which all principles and functions of management work.

Sometimes the attitude of managers with their subordinates is of humiliation nature even then calling bad names, stand hand, take work forcibly, threaten to terminate, take extra hours work without payment, humiliate before juniors and much other cause to do it.

If the worker is humiliated, he will take no interest in the work and will search other opportunities and because of this, the destination will far talk. Hence, the humiliation of employees will create mismanagement.

For making desired destination fruitful, the good environment and the good personnel are required in business.

The humiliation is the fierce enemy of business.<THE SYSTEM OF ACCOUNTING < VOLUME 1< SYED AQEEL RAZA<[email protected]>


SATISFACTION

The satisfaction of employee and employer in getting desired objectives is an essential part of management. The principal wants to get satisfaction in his objectives which end result of gain obtained passing through functions and principles of management. During the process of getting desired objectives, the principal has to face may problems in the matters of social and financial and up and down in business become the cause of his dissatisfaction. Like this, the subordinates work for money which satisfies the need of their own and for working they have to walk on the principles which are made by the management.

The satisfaction of principal based on gain and subordinates on emoluments then the subordinates should work and walk according to principal’s system in achieving the desired result.

The principal should include subordinates in the progress which ends to gain. The satisfaction does not end to gain but requires mental relaxation to subordinates in working environment, in medical, in superannuation, in leaves, in up gradation and work according to ability.

Under this principle, the problems of the employee will be the problem of employer and objectives of the employer will be the objective of the employee.

The satisfaction of employee and employer are the part of good management<THE SYSTEM OF ACCOUNTING < VOLUME 1< SYED AQEEL RAZA<[email protected]>

Management is an unforeseen force to increase efficiency.

HELP FOR EDUCATION AND NEEDAQEEL RAZA

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THE SYSTEM OF MANAGEMENT - CHAPTER I

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