MBA-I, Semester--I

Management
UNIT-I

Ms. Kajal Yadav

Assistant Professor, Arya Institute
of Engineering & Technology 1
 Meaning

• Management is the creation and maintenance of an internal

environment in an enterprise where individuals, working in groups,
can perform effectively and efficiently towards the attainment of
group goals.

• It is the art of getting the work done through and with people in
formally organised group.

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 Concept of Management
1. Management as a Process:
• Management is considered as a process as it comprises of sequence of
activities.
• It involves setting of goals and taking necessary actions .

i) Management is a Social Process:

• It is considered as social process because while carrying out the
management operations , managers have to deal with people who are
involved in attaining goals.

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ii) Management is an Integrating Process:
• There is a continuous interaction between human and the non-human
resources in an organisation.

• It is the of the management to combine the efforts of the employees

with other organisational resources.

iii) Management is a Continuous Process

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 2- Management as an Activity
Management is considered as a process as it involves a set of activities
which in order to be effective should be carried out in a particular
sequence.
i) Informational Activities:
• Managers perform information sharing activities in verbal and non-
verbal format.
• They provide and receive information regarding different people,
processes etc.

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ii) Decisional Activities:
• One of the most important activity performed by managers is decision
making.
• Mangers are required to invest a substantial amount of time in making
various decision.

iii) Inter-personal Activities:

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 3- Management as a Group

• As a Group, management is stated as a section of people that holds

managerial positions in the organisation.

• These groups of people collectively perform different managerial

operations.

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 4- Management as a Discipline

• In present time, management is documented as an organised

discipline that can be studied and taught.

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 5. Management as an Economic Resources

• Management is understood as optimum utilisation of

scarce resources.
• These resources are commonly called the 5 Ms- material,
money, machinery , method and manpower.

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 Scope of Management
1- Activity Point of view:

i) Planning:
ii) Organising:
iii) Staffing
iv) Directing
v) Controlling

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 2- Functional areas of Management

i) Financial management:
It involves- Budgetary control, financial planning, making cost control
forecasts, statistical control etc.
ii) Personnel management:
It involves recruiting and selecting the employees, training them,
providing them social security, maintaining industrial relations etc.

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iii) Purchasing management:
It deals with material control, inviting tenders for purchasing materials,
entering into contracts, placing orders etc.

iv) Production management:

It involves times-study, quality inspection and control, production
planning, motion studies etc.

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v) Maintenance Management:
Maintaining and taking good care of organisational infrastructure like
machinery, plants tec.

vi) Marketing management:

vii) Office Management

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3) Management is an Inter- Disciplinary Approach:
• For successful application of management principles and practices,
study of different fields like psychology, economics, mathematics etc is
very crucial.

4) Universality in Management:
Can be applied to anywhere.

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 Importance of Management

1. It helps in Achieving Group Goals -

•By defining objective of organization clearly there would be no

wastage of time, money and effort. Management converts disorganized
resources of men, machines, money etc. into useful enterprise.

•These resources are coordinated, directed and controlled in such a

manner that enterprise work towards attainment of goals.

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2. Optimum Utilization of Resources -

•Management utilizes all the physical & human resources

productively. This leads to efficacy in management.

•Management provides maximum utilization of scarce resources

by selecting its best possible alternate use in industry from out of
various uses.

•It makes use of experts, professional and these services leads to

use of their skills, knowledge, and proper utilization and avoids
wastage.

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3. Reduces Costs –
• It gets maximum results through minimum input by
proper planning and by using minimum input & getting
maximum output.
• Management uses physical, human and financial resources
in such a manner which results in best combination.
• This helps in cost reduction.

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4. Enhances employee Relations:
• Management helps in establishing proper coordination between the
various divisions, sections and departments of the organization.
• Cordial relations between the top level, middle level and lower level
management results in a team spirit among employees.

5. Fosters teamwork:
• Management motivates its employees to work in a team, likewise the
coordination between team members increases productivity.
• Unity among team members is essential for achieving objective of the
organization.
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6. Decrease Employee Turnover and Absenteeism:

• The main reason for turnover is lack of motivation.

• If managers identify motivational needs of employees and provide
suitable incentives, employee will not think of leaving the organisation.

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 Managerial Roles

Multiple roles are assumed by managers for fulfilling different

responsibilities.

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1. Interpersonal roles
These roles connected with interpersonal relations shared by manager
and his subordinates.

i) Figurehead: A manager has a role of a star figure during some

events like: welcoming foreign business associates, attending
personal function of the subordinates etc.

ii) Leader: To encourage his subordinates and motivate them

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iii) Liaison:
Every manager should be a good communicator outside his
commanding area to gather info from other sources present in the
organisation.

Informational roles
Collection and dissemination of information is a major part of
managerial work performed by a manager.

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i) Monitor:
• A manager should develop a personal network of contacts inside
and outside of the organisation.
• As a monitor, he has to constantly analyse his business environment
for extracting information, questioning his subordinates.

ii) Disseminator:
• Share business information with his department.

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iii) Spokesperson:
Acts like a spokesperson for his company.

Decisional Role

i) Entrepreneur:
A successful manager adopts environmental changes, implement them
and improve existing and new products.

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ii) Disturbance Handler:
• A manger must be prepared for handling unanticipated problems in
and outside the organisation.
• He must have contingency plans in case of emergency.

iii) Resource Allocator

iv) Negotiator:
• Represents the organisation in case of a dispute that calls for
negotiation .

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1. Technical Skills:
• Technical skills are mainly concerned with the knowledge of the
particular subject or area.

• These skills are related to the knowledge of various processes,

procedures, techniques and methodologies.

• These skills can be enhanced by training and on the job experience.

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2. Human Skills:
• A manager should be social and friendly towards his subordinates.

• He should have the capacity to clearly explain his ideas to his subordinates.

• He should have the ability to judge the possible outcomes of his actions.
•

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3. Conceptual Skills
• These skills are related with ideas.

• The thought process behind developing new and innovative products

is called conceptualising.

• These skills are present in the form of vision, inspiration, idealistic

ideas and imagination.

• These skills helps in visualising.

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Functions of Management

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 Planning
• It is the basic function of management.

• It deals with chalking out a future course of action & deciding in advance the most appropriate
course of actions for achievement of pre-determined goals.

• According to KOONTZ, “Planning is deciding in advance - what to do, when to do & how to do. It
bridges the gap from where we are & where we want to be”. A plan is a future course of actions. It is
an exercise in problem solving & decision making.

• Planning is determination of courses of action to achieve desired goals.

• Thus, planning is a systematic thinking about ways & means for accomplishment of pre-determined
goals

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 Organising
• It is the process of bringing together physical, financial and human
resources and developing productive relationship amongst them for
achievement of organizational goals.

• According to Henry Fayol, “To organize a business is to provide it with

everything useful or its functioning i.e. raw material, tools, capital and
personnel’s”.

• To organize a business involves determining & providing human and

non-human resources to the organizational structure.
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 Staffing
• The purpose of staffing is to put right man on right job.

• According to Kootz & O’Donell, “Managerial function of staffing involves manning

the organization structure through proper and effective selection, appraisal &
development of personnel to fill the roles designed in the structure”.

• Staffing involves:
•Human resource Planning
•Recruitment, Selection & Placement.
•Training & Development
•Remuneration
•Performance Appraisal
•Promotions & Transfer.

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 Directing
• Directing is telling people what to do.
• Directing motivates the employees to perform their responsibilities
in realising the organisational goals.

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 Controlling
• It implies measurement of accomplishment against the standards and correction of
deviation if any to ensure achievement of organizational goals.

• The purpose of controlling is to ensure that everything occurs in conformities with

the standards.

• An efficient system of control helps to predict deviations before they actually occur.

• According to Theo Haimann, “Controlling is the process of checking whether or not

proper progress is being made towards the objectives and goals and acting if
necessary, to correct any deviation”.

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School of Management Thoughts

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Classical Perspective/ Classical Approach

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 Scientific Management/ Contribution of F.W Taylor

• The concept of scientific management was announced by Frederick Winslow Taylor in

U.S.A.

• This theory was strongly recommend by many theorist .

• Scientific Management is concerned with knowing exactly what you want men to do and
then see in that they do it in the best and cheapest way.

• F. W Taylor was named as Father of Scientific Management.

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 Principles of Scientific Management
• Taylor was waned to signify the power of workmen in the organisation,
for this purpose he conducted various researches which would result in
high labour productivity without pressuring the workers.

1- Replacing Rule of Thumb with Science:

• Scientific method includes investigation of standard method to be

utilised in the organisation .
• Thus, the use of scientific method helps in determining accurate
outputs whereas rule of thumb is based on estimations.

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2. Harmony in Group Action:
• The group action should be well-coordinated and in harmony so as
to attain maximum output.
• Proper understanding help to maintain cordial relations between
the group.
• Taylor emphasize that there should be complete harmony between
group members and management .

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3. Maximum Output in Place of Restricted Output:

• The application of scientific management theory implicates high

production and efficiency by eliminating restricted production.
• Both the workers and the management should work with an aim to
improve the productivity.

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4. Development of Workers through Scientific Selection and Training:

• Scientific method should be adopted for selection and training process.

• After the selection process, workers should be assigned jobs as per their
intellectual and physical capabilities followed by proper training.

5. Cooperation between Management and Workers:

• There should be proper coordination between workers and
management.
• This can be attained through mutual understanding.
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Techniques of Scientific Management

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1- Time Study:
• Time study is the technique of observing and recording the time required by a workman
of reasonable skills and ability to perform each element of the tasks in a job.

• Through time study, the precise time required for each element of a man’s work is
determined. It helps in fixing the standard time required to do a particular job.

• The purpose of time study is to scientifically determine the standard time for doing a job
under given condition.

• It helps to measure the efficiency of workers. It creates time consciousness among

workers. Saving in time leads to cost reduction and increased efficiency.

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2. Motion study:
• Motion study is a technique which involves close observations of the
movement of body and limbs of an individual required to perform a job.

• It is the study of the movement of an operator or a machine to eliminate

useless motions and find out the best method of doing a particular job.

• By undertaking motion study, an attempt is made to know whether some

elements of a job can be eliminated, combined or their sequence
changed to achieve the necessary rhythm.

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3. Standardisation

• Standardisation refers to the process of setting up standards tools,

techniques, equipment, working condition etc.

• Efforts should be made to provide standardised working environment

and methods of production to the workers.

• Standardisation would help to reduce spoilage and wastage of

materials, improve quality of work, reduce cost of production and
reduce fatigue among the workers.

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4. Differential Piece Rate Plan:

• This plan was suggested by Taylor to attract highly efficient workers.

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• Under this plan, there are two piece work rates, one is lower and
another is higher.

• The standard of efficiency is determined in terms of number of units

during a day or standard same.

• The worker who produces more than standard output within the
standard time. He will be given higher piece rate.

• if a worker is below the standard, he shall be given lower rate of

wages. 47
5. Functional foremanship

• Taylor advocated that specialization must be introduced in a factory.

He advocated ‘functional foremanship’ for this purpose.

• Functional foremanship is a form, of organisation which involves

supervision of a worker by several specialist foremen.

• The purpose of functional foremanship is to improve the quality of

supervision of workers by employing specialist foremen.

• Taylor believed that a single foreman is not competent to supervise all

functional matters.

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Administrative Management; Contribution of F.W Taylor

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 Henri Fayol

• Henri Fayol, is considered as the “Father of Modern Management”

• He was a French industrialist and a mining engineer.

• He worked at all position of the mining company before becoming the

managing Director of the company.

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Bureaucratic Management/ Contribution of Max Weber

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• The theory of bureaucracy by Max weber has made a major contribution
towards the management schools of thought.

• He used the theory of bureaucracy for a special kind of administrative

organisation.

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 Features of Bureaucracy

1. Division of work:
• It is practiced at both operative and administrative levels in an
organisation.

• This can be divided into specialised tasks.

• Thus, division of work leads to specialisation of work.

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2. Hierarchy of Positions:
• Every organisation has a hierarchy of authority from top to bottom level.

• The bottom positions are under the control of top management positions.

• This signifies the concept of unity of command.

• The amount of authority one holds, keep on increasing as one climbs the hierarchical
ladder in an organisation.

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3. Rules & Regulations:

• Under the management of top level, certain rules, regulations and

processes are defined.

• They help to standardise the organisational operations and decision.

• The learning and experiences of past events help to drive future actions.

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4. Impersonal Conduct:

• Members of an organisation do not have any personal relationships with

each other.

• The decision-making process strictly adheres to the rules and

regulations and is entirely impersonal in nature.

• There is no space for emotions and sentiments in the bureaucratic

structure.

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5. Staffing

• An employee enters into a contractual relationship with the employer

to serve the company in return of a certain fixed remuneration.

• The contract includes all the terms and conditions of employment.

6. Technical competence:

• A bureaucrat only gets selected for his technical competencies and on

the basis of election.
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Behavioural Perspective/ Theory

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• The behavioral management theory is often called the human relations
movement because it addresses the human dimension of work.

• Behavioral theorists believed that a better understanding of human

behavior at work, such as motivation, conflict, expectations, and group
dynamics, improved productivity.

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Contribution of Elton Mayo: Hawthrone Experiment

The Hawthorne studies were conducted in order to find out the role of
human resource in increasing the production of an organization.

This experiment includes many studies:

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1- Illumination Experiments:

• Illumination experiments were undertaken to find out how varying

levels of illumination (amount of light at the workplace, a
physical factor) affected the productivity.

• The hypothesis was that with higher illumination, productivity

will increase.

• In the first series of experiments, a group of workers was chosen

and placed in two separate groups.

• One group was exposed to varying intensities of illumination.

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• Another group continued to work under constant intensities of
illumination.

• The researchers found that as they increased the illumination , both

groups increased production.

• When the intensity of illumination decreased, the production continued

to increase in both the groups.

• Thus, it was concluded that illumination did not have any effect on
productivity but something else was interfering with the productivity..

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2- Relay Room Experiments:

• Relay assembly test room experiments were designed to determine the

effect of changes in various job conditions on group productivity.

• For this purpose, 6 female employees who were responsible for

assembling telephones were chosen. Then modified several factors in
physical environment to determine the impact of these factors on
productivity.

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• Factors include- Hours of work, rest intervals, temperature, group
incentive and enhanced physical conditions.

• Researchers found that there is no effective relationship between any of

these factors and productivity.

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3- Bank Wiring Room Experiment:

Basic objective of researchers was to identify the actual determinant

affecting productivity.

i) 14 employees were selected and production records of these employees

were compared with their earlier production records.

ii) Group had decided its own ‘informal’ performance standards.

iii) Output of each individual remained somewhat stable for a particular

period.

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4- Interview Programme:

• The aim of interview programme was to identify factors affecting

productivity.

• Hence, 20,000 interview were carried out.

• A questionnaire was given and ask to fill without hesitation.

• The result of these interviews explained the relevance of social factors

on working environment.

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 Findings of Hawthrone Experiments:

• Workers should primarily be treated as social being before they are

considered as members of an organisation.

• Work is essentially a group effort.

• Non-financial incentive like status, social rewards, approval etc. are

important variable that determine the employee motivation level.

• Informal groups which are formed during working in the given workplace
situation have a strong bearing on the attitude and behaviour of the
workers on individual level.

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Contribution of Chester Barnard to the Management Thought

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1. Concept of Organisation:

• He defined the concept of formal organisation as a system which

purposively coordinates the activities of two or more individuals or
departments.

• He insisted that an organisation can exist only if three conditions stated

are fulfilled:

i) The people in an organisation should be able to communicate with each

other.
ii) The people should be willing to contribute towards the action.

iii) The people should try to attain the mutual objectives. 69

2. Formal and Informal Organisation:

• Barnard encourages the development of more informal organisation to act

as a medium of communication, to encourage a sense of cohesiveness in
the members of the organisation and to protect individual from
dominance of the formal organisation.

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3. Elements of organisation:

Every organisation should consist of 4 elements:

i) Departmentation
ii) A system which offers incentive to encourage people for contributing
towards group activities.
iii) A system of power where the employees adhere to the decision taken by
the mangers.
iv) A system which follows rational process of decision-making.

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4. Functions of the Executive:

• An executive should performs three types of functions in a formal

organisation:

i) Maintaining Organisational communication through a structure of

formal interaction.

ii) Securing assigned services from the individuals for realising

organisational goals.

iii) To develop and clearly state organisational objective

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5. Motivation:

• Bernard has identifies many non-monetary incentives to overcome the

shortcomings of monetary incentives in terms of motivating the
employees.

• The major non-financial motivating techniques include pride of

workmanship, opportunity to achieve authority, amicable working
conditions, sense of belongingness.

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Modern Theory

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System approach for Understanding Organisations:

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• System approach of management is of view that all organisational
decisions should be implemented only when the managers have
determined their impact on the entire organisation and its functional
areas.

• It says that manager in an organisation cannot perform their

responsibilities in isolation.

• Managers should establish proper communication channels with other

departments.

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1- Sub-System:
• Each department is a sub system of a unit, a unit is a sub-system to
company which in turn is a sub-system of a parent company.
• This company is a sub-system in the industry in which it functions and
industry is a sub-system of the national economy.

2- Synergy:
• It can be defined as a combined effort of separate parts which is greater
than their individual efforts.

• So, rather than working in isolation, each department can function in an

effective and efficient manner by interacting and cooperating with other
department
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3- System Boundary-
• An open system has a very flexible boundary whereas a closed system
has an inflexible boundary.

• Organisation have adopted the flexible system boundary approach.

4- Feedback:
• Feedback is essential for determining the success of system operations.

• An effective mechanism ensures that tasks are evaluated, corrections are

made and the information is delivered back to concerned area.

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 Contingency Approach for
Understanding Organisations

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• Contingency approach can also be termed as situational approach.

• This theory is of view that there cannot one specific action or response
for different situations faced by the organisation.

• Contingency approach states that management effectiveness is contingent

or dependent upon the interaction that occurs between the specific
organisational situations and behaviour of management with dealing with
situations.

• It is situation based approach which compels the mangers to examine,

analyse and identify the situation.

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• Different situations demand different responses from the management.

Implications of Contingency Approach

1- Management is broadly based on current situations and the concept of

universal principles of management is not applicable in the ever-changing
scenario.

2- The organisation has to continuously interact and communicate with its

environment.

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