R.HARIHARAN
AP/EEE
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Management- the process of designing and
maintaining an environment in which
individuals working together in groups,
achieve their objectives.
Nature – universal, activity based, purposeful,
integrative process, involves decision making,
emphasis people, is a process, aims at
productivity
Planning
Organizing
Evaluating
Coordinating
Staffing
Directing
Controlling
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ART: Because it depends on the skills,
aptitude & creativity of the manager
SCIENCE: Because there is considerable
knowledge in the field of management
with basic principles for guidance of
basic activities.
MANAGEMENT
MAN + AGE
(EXPERIENCE)
FOR AND BY PEOPLE
ART
Organizes and uses
human talent using
motivation, leadership
etc.,
SCIENCE
Accumulated knowledge
such as clear concepts,
theory etc.,
By using optimal resources to produce optimal results
Administration refers to management
functions of planning & control
Administrative mgt
Management
Operative Mgt
 Administrative management is basically a
thinking function that is largely performed by
top management. It is concerned with
determining goals and laying down policies.
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Operative management is basically a doing
function that is largely performed by lower
levels of management. It is concerned with
execution of policies for the attainment of
goals.
Administration is a determinative function
and management is a executive function
ADMINISTRATION
MANAGEMENT
ORGANIZATION
LISTS OUT THE
REQUIRED
POLICES
BRINGS THE
POLICIES TO
EFFECT
COORDINATION
BETWEEN
ADMINISTRATION
AND
MANAGEMENT
ATTAINMENT OF
PREDETERMINED
ORGANIZATIONAL
GOALS
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Planning
Planning is deciding in advance who will do
what at a certain time and how it is to be
achieved.
◦ Assessing the future.
◦ Determining objectives and goals in the light of the
future.
◦ Developing alternative courses of action to achieve
such objectives.
◦ Selecting the best course of action among the
available alternatives.
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Organizing
◦ Administration brings out the required policies and
management brings these policies into effect.
◦ Basic materials like Men, Material and machinery
are to be organized.
◦ It involves
 Identifying and grouping of activities for achieving
objective.
 Assigning responsibilities with authority
 Follow up to ensure completion of assigned duties.
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Staffing
◦ It deals with selection and efficient management of
people.
◦ It is a continuous process as existing employees
may leave the organization and new employee join
it.
◦ Establishing job specifications and job descriptions
◦ Determining the sources
◦ Recruiting, selection and placement
◦ Training, educating and developing employees.
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Directing
◦ It means “management in action”
DIRECTING
IMPLIES
PROVIDING
GUIDANCE AND
INSPIRATION TO
PEOPLE AT WORK IN
ORDER TO
CARRYOUT
THEIR
ASSIGNED
DUTIES
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Supervision – act of supervisor who involves
in expert overseeing of sub ordinates at work
Leadership – influencing the activities of a
team for achieving goals.
Communication – to share thoughts, opinions
by the way of speech, writing or signs
Coordinating – task of integrating
harmoniously the efforts of people working
together to produce without confusion in
order to achieve goals.
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Controlling
◦ Measuring actual performance with the planned
performance.
◦ Process of reviewing performance and initiating
corrective action is called as controlling.
SET
STANDARDS
OF
PERFORMANCE
MEASURE
ACTUAL
PERFORMANCE
COMPARES
ACTUAL
PERFORMANCE
WITH
PLANNED
PERFORMANCE
NOTE
VARIATIONS
AND TAKE
CORRECTIVE
ACTION
RE-EVALUATE
AND
REFORMULATE
GOALS AND
STANDARDS
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Stage – I – The classical theory of
management.
◦ Bureaucracy of Weber
◦ Scientific management of Fedrick.W.Taylor
◦ Management process of Henry Fayol
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Stage – II – Neo classical theory
◦ Human relations of Elton Mayo
◦ Behavioral sciences approach of Maslow
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Stage – III – Modern theory
◦ Technical and quantitative sciences
◦ System approach to management and organization
◦ Contingency approach to management and
organization
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Father of modern theory
He had given overall concepts of mgt.
Advocated the organizational charts.
Concept of selection and training of workers
and managers.
Identified the key problem of delegation and
decentralization
Emphasized planning function of higher mgt.
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Division of work
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Entire work is to be divided into groups.
To be carried out with experts.
Increase in productivity
Better performance of human factor
Authority and responsibility
◦ Right to command.
◦ Accountability for performing job.
◦ Official and personal authority. Official – position
held. Personal- derived from managers own
intelligence, experience an personality
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Discipline
◦ Obedience and respect shown by the sub ordinates
to their superiors is discipline
◦ According to Fayol, it happens due to good
leadership and indiscipline is due to lack of
leadership.
◦ Good supervision at all levels
◦ Clear and fair agreement with reference to
disciplinary matters.
◦ Legal application of penalties.
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Unity of command
◦ An employee should receive orders only from one
superior.
◦ If it is of two or more then it will be a source of
conflict.
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Unity of direction
◦ There should be one head and one plan for each
group of activity with same objectives.
◦ It is concerned with personnel, whereas, the
principle of unity of direction is concerned with the
body corporate as a whole.
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Subordination of individual interest to general
interest
◦ Each employee should give more importance to
organization interest than individual interest.
◦ If there is a conflict in these management should
reconcile them.
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Remuneration to personnel
◦ Method of payment are to be fair and should give
maximum possible satisfaction to employees and
employer.
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Centralization
◦ It deals with authority
◦ All the power with one person is centralization.
◦ Distributed powers to sub ordinates is
decentralization.
◦ Fayol emphasis the need to strike a balance
between centralization of authority and dispersal in
an organization.
◦ A certain degree of decentralization is necessary to
enable people to take quick decisions on important
problems.
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Scalar chain
◦ Communication - Top to bottom. There should not
be by-passing.
◦ There should be direct communication between
intermediate levels of authority.
◦ Supreme authority must encourage his
subordinates to use gang plank – proper routes to
communicate information
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Order
◦ It is related to the arrangement of things and
people in an organization.
◦ Social order- place for everyone and everyone in its
place. It is ensured by proper selection of
employees.
◦ Material order- place for everything and everything
for its place. Material should be chosen carefully to
avoid losses and to easily identify and take them for
use when needed.
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Equity
◦ All employees are to be treated equally.
◦ Equality is a combination of fairness, kindness and
justice.
◦ Experience, good sense and fair judgement are
required by the manager in order to do equity.
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Stability of personnel
◦ High employee turnover is due to bad management
◦ This will make organization instable.
◦ This is because reasonable time is necessary for
people to settle down and get adopted to their new
work.
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Initiative
◦ It is the liberty to propose plan and getting it
executed.
◦ The managers should sacrifice personal vanity
inorder to permit subordinate to plan and execute.
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Esprit de corps
◦ Union is strength.
◦ It emphasis unity and harmony among employees
for promoting employee morale, team work and
communication.
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Father of scientific management.
Scientific management as the art of knowing
what exactly is to be done and the best
method of doing it.
Principles of Taylor
◦ Separation of planning and execution based on
specialization
◦ Scientific task setting based on time, motion and
fatigue study
◦ Fitting right person for the right job by proper
selection, training and placement of personnel
◦ Improvement in work by standardization of tools
and equipment and improvement in work
environment.
◦ Mental revolution, that is, creating a feeling that
neither the employees nor the employers are
exploiting each other.
◦ Distinguishing efficient workers from inefficient
workers with the use of differential piece rate
system
◦ Scientific study of each unit of the business.
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According to him observation, measurement,
experimentation, inference and conclusion
are the elements for directing human efforts.
He contributed the principle of finding the
best way of doing any job and training.
Developed the principle of breaking the job
into elements in order to find the standard
time of each job.
Using time study, he experimented and found
the losses of efficiency in industry and their
causes.
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Fair days work- note of fatigue incurred by
workers in doing a job and time taken to
complete it.
Concept on increasing production rate. To be
planned in advance by worker.
Main contribution by him is functional
organization in which foreman was made in
charge of each function
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Sole proprietorship
◦ Business unit owned and controlled by a single
individual
◦ He receives all the profits and risks all of his property in
the success or failure of the enterprise.
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Characteristics of sole proprietorship
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One man ownership and control
Unlimited liability
Enjoyment of entire profit
No separate legal entity
Simplicity
Self employment
secrecy
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Advantages
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Easy to form and close
Easy for decision making
Full control of business activities
Liberal legal formalities
Disadvantages
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Limited resources
Short life
Risk of entire loss
uncertainty
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Partnership
◦ A partnership firm as it is often called a group of
men who have joined capital or serves for the
prosecution of some enterprise
◦ The relation between person who have agreed to
share profits of a business carried on by all of
them acting for all.
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Features
◦ Agreement
◦ Multiplicity of person- 10-banking / 20- non
banking
◦ Lawful business
◦ Sharing of profits
◦ Contractual relations
◦ Mutual agency
◦ Unlimited liability
◦ Registration
◦ Common management
◦ Utmost good faith
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Kinds of partner
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Active
Sleeping
Normal
Partner in profit only
Partner by estoppel
Sub partner
Secret partner
Minor as a partner
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Rights of a partner
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Right
Right
Right
Right
Right
Right
to
of
of
to
to
of
express his option
participation
access to books
share profits
get interest on the capital
indemnity
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Joint stock company
◦ Private limited company
◦ Public limited company
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Governed by Indian companies act 1956
Members are called as shareholders
Contributed capital by shareholder is called
as share
Total capital is called as share capital
It has more legal formalities to start
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Characteristics
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Separate legal entity
Common seal
Perpetual existence
Limited liability
Transferability of share
Membership
Formation
management
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Advantages:
◦ Large scale operation
◦ Professional management
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Disadvantages:
◦ Formation is not easy
◦ Control by groups
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Co-operative organization
◦ Characteristics
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Voluntary association
Equal voting rights
Service motive
Separate legal activity
Open membership
State control
Liability
No share transfer
Statutory audit
Cash trading
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Public enterprises
◦ Public enterprises autonomous or semi autonomous
corporations and companies established owned and
controlled by the state and engaged in industrial
and commercial activities.
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Characteristics
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Financed by government
Government management
Public services
Legislative control
Monopoly enterprise