Principles of Management

Module I
Introduction to Management and History of Management
Thought
What do we mean
by the term
‘Management?'
 Management- Meaning
• Earlier, people did not feel the need for a management system or organizations and institutions, as it
was a barter system
• Management emerged as a separate field of study when organizations developed to meet the unlimited
needs of people
• Each organization, whether business or non-business, has a goal and needs effective management to
achieve that goal
 Management- Definition
• Management is the art of getting things done through others
• F.W. Taylor, “Management is the art of knowing what is to be done and seeing that it is done in the
best possible manner’
• Koontz and Welhrich, “Management is the process of designing and maintaining an environment in
which individuals, working together in groups, efficiently accomplish selected aims”
Nature of Management
Management functions are universal

Management is purposeful

Management is an integrative force

Management is a social process

Nature of Management
Management is multidisciplinary

Management is a continuous process

Management is intangible
Scope and Functional Areas of Management

Production Management

Marketing Management

Financial Management

Personnel Management
 Managerial Functions
Staffing
Organizin
Directing
g

Managerial Controllin
Planning Functions g
Management as an Art
• Application of knowledge & skill
• Seeks to achieve concrete results
• It is creative
• Personalized process
• Leads to achievement of goals
.

Management as a Science
• Contains a systemized body of knowledge
• Principles of management have evolved through research
• They have a wide and repetitive range of application
• It is possible to teach management principles & theories
Management as a Profession
• Well defined knowledge
• Restricted entry
• Professional association
• Ethical code of conduct
• Service motive
Administration and Management
Nature of the • Administration- determinative/thinking function
• Management- Executive/doing function
function
• Major objectives/policies
Type of work • Implementation of objectives/policies

• Broad and conceptual

Scope • Narrow and operational

Level of • Top level

• Middle and lower level
authority
• Influenced by public and outside forces
Influence • Influenced by objectives and policies of the organization
Management and Administration
Direction of • Not directly concerned with the direction of
human efforts
human efforts • Actively concerned with the execution of policy

Main • Planning & Control

• Directing & Control
functions
• Mostly conceptual skills
Skills required • Technical and human skills

• Largely used in government organisations

Usage • Mainly used in business organizations
 Management Thought – Henry Fayol
i. Division of work
Principles of Management
ii. Authority

iii. Discipline

iv. Unity of Command

v. Unity of Direction

vi. Subordination of Individual interest to group interest

vii. Remuneration

viii. Centralisation

ix. Scalar chain

x. Order

xi. Equality

xii. Stability and tenure of personnel

xiii. Initiative
 Managerial Roles
Interpersonal Roles
• Figure Head Collects Information
• Leader
• Liason

Informational Roles
Feedback

• Monitor Processes Information

• Disseminator
• Spokesperson

Decisional Roles
• Entrepreneur
• Disturbance Handler Uses Information
• Resource Allocator
• Negotiator
Skills of a Manager
Technical
Human Skills
Skills

Conceptual Diagnostic
Skills Skills
Evolution of Management Thought:
Pre-scientific management
Evolution of Management Thought: Pre-scientific
management
• The concepts of pre-scientific management did not provide important insight into

management of business (or economic) institutions.

• No important techniques were available to solve organisational problems until the end of

15th century.

• double entry book-keeping was introduced to maintain financial records of the business.

• In 1800s, management theories developed as a systematic field of knowledge.

 Management Thought –
F.W. Taylor “Father of Scientific Management”
• Principles :

i. Development of a true science

ii. Scientific selection , training & development

• Mental Revolution

i. Science not rule of thumb

ii. Harmony not discord

 Management Thought –

F.W. Taylor “Father of Scientific Management”

• Techniques of Scientific Management
i. Time study
ii. Motion study
iii. Scientific task planning
iv. Standardization and Simplification
v. Differential Piece rate system
vi. Functional Foremanship
a) Route clerk
b) Instruction card clerk
c) Time & Cost clerk
d) Shop Disciplinarian
e) Gang boss
f) Speed boss
g) Repair boss
h) Inspector
 Management Thought –
F.W. Taylor “Father of Scientific Management”
• Critical Evaluation

i. Mechanistic approach

ii. Unrealistic assumptions

iii. Narrow view

iv. Impracticable

v. Exploitation of labour
Management Thought – Henry Fayol
Henry Fayol

Classification of Managerial
Elements of Principles of
Business Qualities & Evaluation
Management Management
Activities Training

Technical Commercial Financial Security Accounting Managerial

Production/ Buying/ Protection of Record

Search/Use of
Manufacturin Selling/ Persons/Prope keeping/Costin POC
Capital
g Exchange rty g/Statistics
Management Thought – Henry Fayol
Henry Fayol

Classification of Elements of Principles of Managerial Qualities &

Evaluation
Business Activities Management Management Training

Planning Organizing Commanding Coordinating Controlling

Management Thought – Henry Fayol

Henry Fayol

Managerial
Classification of Elements of Principles of
Qualities & Evaluation
Business Activities Management Management
Training
Management Thought – Henry Fayol
Henry Fayol

Managerial
Classification of Elements of Principles of
Qualities & Evaluation
Business Activities Management Management
Training

Special
Physical Mental Moral General Experience
Knowledge
Management Thought –
George Elton Mayo

• Hawthorne Experiment

i. Illumination experiment

ii. Test room experiment- Relay Assembly Test Experiments

iii. Interviewing studies- Mass Interviewing Program

iv. Observational studies – Bank wiring observation room study

 Management Thought –
George Elton Mayo- Findings
Production
Social factors Group influence Motivation
level

Cordial Behaviour of
Conflicts Leadership
Relationship workers

Reaction of
Supervision Communication
workers
 Management Thought –
Lillian and Gilbreth
• They worked as a team and devoted their time to find out the best way to do a

job

• Importance was given to time study and motion study

• He was however, not concerned about the time required to do a job but rather

the best way to do it

• He stressed on minimum motions- too much motion wastes time of the worker
 Management Thought –
Lillian and Gilbreth
• He found out 18 basic elements in all work through the analysis of several

methods of work

• He identified these these elements by using flow process charts

• He called these “therbligs”- Gilbreth spelt backwards

• These elements were:

• Motion study laid a foundation for job simplification, work standards and for

framing incentive wage plans

• New machines and tools were developed in order to find out ‘one best way’

• Management tools such as flow process chart, diagrams and merit rating were

developed