MANAGEMENT
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What is Management?
A set of activities

planning and decision making, organizing, leading, and
controlling

directed at an organization’s resources


human, financial, physical, and information
with the aim of achieving organizational goals
in an efficient and effective
manner.

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What is a Manager?
Someone whose primary responsibility is to
carry out the management process.
 Someone who plans and makes decisions,
organizes, leads, and controls
human, financial, physical,
and information resources.

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Kinds of Managers by Level

Top Managers

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The relatively small group of executives who
manage the organization’s overall goals, strategy,
and operating policies.
Middle Managers

Largest group of managers in organizations
Implement top management’s policies and plans.
 Supervise and coordinate lower-level managers’ activities.


First-Line Managers
Managers who supervise and coordinate the
activities of operating employees.
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Management in Organizations
Planning
and decision
making
Organizing
Inputs from the environment
• Human resources
• Financial resources
• Physical resources
• Information resources
Goals attained
• Efficiently
• Effectively
Controlling
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Leading
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Figure 1.2
The Management Process
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
The Management Process
(cont’d)
Planning and Decision Making


Organizing


Determining how activities and resources are
grouped.
Leading


Setting an organization’s goals and selecting a course
of action from a set of alternatives to achieve them.
Getting organizational members to work together to
advance the interests of the organization.
Controlling
Monitoring organizational progress towards goals.

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Skills and
the
Manager
Technical Skills
Interpersonal Skills
Conceptual Skills
Fundamental
Management
Skills
Diagnostic Skills
Communication Skills
Decision-Making Skills
Time-Management Skills
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Fundamental Management
Skills

Technical


Interpersonal


The ability to communicate with, understand, and
motivate both individuals and groups.
Conceptual


Skills necessary to accomplish or understand the
specific kind of work being done in an
organization.
The manager’s ability to think in the abstract.
Diagnostic
The manager’s ability to visualize the most
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Fundamental Management Skills
(cont’d)

Communication


Decision-Making

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The manager’s abilities both to convey ideas and
information effectively to others and to receive
ideas and information effectively from others.
The manager’s ability to recognize and define
problems and opportunities correctly and then to
select an appropriate course of action to solve the
problems and capitalize on opportunities.
Time-Management
The manager’s ability to prioritize work, to work
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efficiently, and to delegate appropriately.
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Management: Science or Art?

The Science of Management
Assumes that problems can be approached using
rational, logical, objective, and systematic ways.
 Requires technical, diagnostic, and decision-making
skills and techniques to solve problems.


The Art of Management
Decisions are made and problems solved using a
blend of intuition, experience, instinct, and personal
insights.
 Requires conceptual, communication, interpersonal,
and time-management skills to accomplish the tasks
associated with managerial activities.
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
CONCEPTS OF MANAGEMENT
DEFINITION:
It is difficult to define ‘Management’
because it is looked in to by different scholars
from different way
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The Economist consider Management as a
resource like Land, Labour, Capital and
Organisation.
The Bureaucrats consider it as an authority
The Sociologists consider managers as a part
of the class elite class
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Henry L.Sisk
Defines Management is the coordination of all
resources through the process of Planning,
Organizing, Directing and Controlling in order
to attain stated objectives
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Ralph C.Davis
Defines Management as a function of
Executive Leadership
Peter Drucker
Defines Management as a Multi purpose organ
that manager a business, Manager Mangers
and Managers workers and work.
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Concepts of Management
i.
The terms management has been interrupted
in several ways as below.
Management as an Activity:
It is an activity like playing, studying,
teaching etc. It is an art of getting things
done through the effort of others
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ii. Management as a Process:
It is include the process of Planning,
Organizing, Staffing, Directing and
Controlling functions. As a process the
management includes social process,
integrated process, continuous process and
interactive process
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iii. Management as an Economic Sources:
Management occupies the central place
among other 4 m’s Men, Machine, Material
and Money
Man Power
Money
Management
Material
Machine
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Management as a Team
Managers operate at different levels of
authority like top, Middle, Operating etc.
Management is managing all these activities in
a team sprit. Managers have become elite class
in society occupying position with enormous
power and prestige.
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Management as an Academic
Discipline
Management has became a very popular field
of study since offers a very rewarding and
challenging career.
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Management as a group
Management means the group of persons
occupying managerial position like executives,
departmental head, supervisor etc.
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NATURE AND
CHARACTERISTICS OF
MANAGEMENT
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(i) Management as a goal oriented
The main goal of Management is to ensure
efficiency and economy is the utilisation of
human, physical and financial resources
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(ii) Management is Universal
All type of organization like family, club,
university, government, army, cricket team (a)
business, require management
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(iii) Management is an interactive
force
Management reconciles the individual goals
with organizational goals. It integrates human
and other resources
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(iv) Management is a social process
Management is done by the people, through
the people and for the people concerned with
interpersonal relationship. A good manager is
a leader and not a boss
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(v) Management is Multidisciplinary
Management depends up on wide knowledge
derived from several discipline like
engineering, sociology, psychology,
economics etc.
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(vi) Management is a Continuous
process
Management is a continuous process which
continues until the goal is achieved
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(vii) Management is intangible
It is invisible force. It cannot be seen but its
presence can be felt
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(viii) Management Art as well as
Sciences
Management consists of theoretical knowledge
as well as practical application of such
knowledge
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Objectives of Management
(i)
Organisational objectives :- It includes
(a) Reasonable Profit
(b) Survival and solvency of business
(c) Growth and expansion of the enterprise
(d) Improve the Good will and reputation
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(ii) Personal Objectives
(a) Fair remuneration
(b) Reasonable working conditions
(c) Training and Development
(d) Participation is Management
(e) Security of Service
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(iii) Social Objectives
(i) Prompt payment of Taxes
(ii) Conservation of energy
(iii) Preservation of ethical value
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LEVELS OF MANAGEMENT
Board of Director
Managing Director
Top Level
General Manager
Departmental Manager
Middle Level
Deputy Manager
Asst. Manager
Supervisors
Lower Level
Workers
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Figure 1.1
Kinds of Managers by Level and
Area
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Distinction Between Management
and Administration
Oliver Sheldon defines administration as a
function concerned with the determination of
corporate policies, the coordination of finance,
production, distribution, structure under the
ultimate control of the executive
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Distinction Between Management
and Administration (Contd.)
On the other hand Management is concerned
with the executives of policy within the limit
set by the administration. Thus administration
is a thinking process and management as doing
process
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Three points of view
(i)
Administration is different from Management
This view is largely held by American experts.
They held that administration is a higher level
activity while management is a lower level
function. The administration involves decision
making while the management is concerned with
the execution of policies and supervision of work.
According to American school of thought
Administration is superior to management.
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(ii) Administration is a part of
Management
According to European school of thought of
management is inclusive of Administration and
Organisation.
Management is the policy making including planning
and guidance, where as Administration is executive
of above planning. Thus management is planning
agency while administration is an implementation
agency. Thus European just appropriate view of
Americans
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(iii) Administration and Management
are one
Many writers like Henri Fayol, New man
viewed that the management and
administration are one and same used
interchangedly. The term Administration is
more popular in Government and other Public
sector organisation and the term Management
is more commonly used in other business
world.
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iii) Administration and Management
are one (Cont.d)
To solve this conflict of Opinions between
administration and management. Management
classified into –
(i) Administrative Management
(ii) Operative Management
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Distinguish Between
Administration and Management
Points of distinction Administration
Management
1.
Nature
It is a
It is an executive
determinative or or doing function
thinking function
2. Type of Work
It is concerned
with the
determination of
major
3. Levels of
authority
It is mainly a top It is largely a
level function
middle and lower
level function 42
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It is concerned
with the
implementation of
policies
Distinguish Between
Administration and Management
4. Influence
Decision are
influenced by
Public opinion
and outside forces
Decision influenced
by Objectives and
Policies of the
Company
5. Direction of
Human Efforts
Not directly
concerned
Actively concerned
6. Main
Functions
Planning and
Control are main
functions
Directing and
Organizing are main
functions
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Distinguish Between Administration
and Management
7. Skills required Conceptual and
Human Skills
Technical and
Human Skills
8. Usage
Government and
Public sector
Business
Organizations
9. Illustrations
Commissioner,
Registrar, ViceChancellor,
Governor etc
Managing
Director , General
Manager, Sales
Manager, Branch
Manager etc.
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Meaning of Planning
Planning is the process of deciding in
advance what is to be done, how it is to be
done, where, when and whom.
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According to L.F.Ur Wick
Planning is fundamentally a mental
predisposition to do things is an orderly way,
to think before and to act in the light of the fact
rather than of guesses.
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Features of Planning
a)
b)
c)
d)
e)
f)
g)
Planning is good – oriented
Planning is future oriented
Planning is an mental exercise involves creative
thinking
Planning is a primary function
Different planning is required for different levels of
organisation (Pervasiveness)
Planning is Continuous
Planning aims at efficiency
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Importance of Planning
i)
ii)
iii)
iv)
v)
vi)
vii)
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Make objectives clear
Helps the organisastion a right path
It reduces risks and uncertainty
It improves efficiency of operation
It provides the basis of control
It facilitate decision making
Effective co-ordination
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Limitation of Planning
i.
ii.
iii.
iv.
v.
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Assumptions not fully reliable
The condition under which plans are
implemented may differ from assumed
conditions.
Availability of time is a limiting factor for
planning
Cost involved in planning
Mental attitude
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Steps in Planning
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Principles of Planning
a.
b.
c.
d.
e.
Principles of contribution to objectives
Principles of Pervasiveness
Principles of Limiting factor
Principles of Flexibility
Principles of Navigational change
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Kinds of Planning
a.
b.
c.
d.
e.
Long range Plan
Short range Plan
Strategic Planning
Operational Planning
Functional Planning
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Decision Making
Definition:
According to Lereitner :
Decision Making is a process of identifying
and choosing alternative courses of action in a
manner appropriate to the demand of the
situation
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According to Peter Drucker:
Whatever Manager does, he does through
Decision Making
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Six Steps in Decision Making
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Figure 7.4
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Theories of Decision Making
1.
2.
3.
Marginal Theory : This theory stresses an
profit maximization
Psychological Theory : This theory stresses
on customer satisfaction
Mathematical Theory: This theory arrives
decision making using models like Linear
Programming, Probability etc.
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Problems in Decision Making
1.
2.
3.
4.
5.
6.
Correctness of Decision
Timing of Decision
Effective Communication of Decisions
Participation in Decision Making
Decision Environment
Implementation Decision
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Modern Quantitative Techniques of
Decision Making
1.
Linear programming : It is based on the
assumption that there exist a linear
relationship between the variables.
For Example:
With the help of linear equation, optimum
combination of cost, time and utilization of
time can be compared. The main object of
this techniques is to either maximize benefit
or to minimizes cost
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2. Probability Theory
This statistical device is based on the assumption
that certain things are likely to happen in
future depending on assumed probabilities. Ex.
Pay-off matrices, Decision trees.
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3.Queueing Theory
It is based on the assumption that although
delays are costly, eliminating them may be
even more costly. This techniques may be used
in service organisations hospitals and banks
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4.Simulation
For example : Instead of studying and
analyzing transportation system of Chennai in
a real life, its models can be prepared and real
solution can be simulated to it
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5. Net Work Techniques
The project evaluation and review techniques
(PERT) and critical path method (CPM) are
used for planning, monitoring and
implementing a project
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6. Decision Trees
It is a graphic method used for identifying the
alternatives and risk and outcome associated
with each alternatives
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Delegation
Definition :
According to Haimann “Delegation” of
authority merely means granting authority to
subordinate to operate within prescribed limits
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The Process of Delegation
1.
2.
3.
Assignment of Duties
Granting of Authority
Creating of Responsibility
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Difference between Authority and
Responsibility
Sales Manager
Branch Manager
Sales Officer
Sales Manager
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Accountability
It is the obligation of a subordinate to report
back to his superior that the job entrusted to
him has been successfully completed
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Centralisation and Decentralisation
According to Henri Fayol “Every thing which
goes to increase the subordinates” roles is
decentralisation, every thing which goes to
decrease it is centralisation”
In centralised administration, the staff depend
on the top management for guidance on all
matters. An organisation is said to be decentralised
where managers at middle and lower levels are
given the authority to take decision on matters
relating to their functions.
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Centralisation and Decentralisation
(Contd.)
For Example :
An organisation having
branches in different cities may be centralised.
Similarly, a company may be decentralised
even things all its officer are located in one
building.
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Merits of Decentralisation
1.
2.
3.
4.
5.
6.
7.
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Reduces Burden of Top Executives
Quick Decision
Motivation to Subordinates
Growth and Diversification
Management Development
Diversion of Risk
Effective Supervision and Control
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Demerits of Decentralisation
1.
2.
3.
4.
5.
Cadre of Coordination
Difficult to Control
High cost of operation
Non Availability Talented Managers
External Constraints.
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CONTROLLING
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The Control Process



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Establish objectives and standards.
Measure actual performance.
Compare results with objectives and standards.
Take necessary action.
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Establish Objectives and
Standards

There are two types of standards:


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Output Standards - measures performance results
in terms of quantity, quality, cost, or time.
Input Standards - measures work efforts that go
into a performance task.
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Measuring Actual Performance


Measurements must be accurate enough to
spot deviations or variances between what
really occurs and what is most desired.
Without measurement, effective control is not
possible.
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Comparing Results with
Objectives and Standards


The comparison of actual performance with desired
performance establishes the need for action.
Ways of making such comparisons include:
 Historical / Relative / Engineering
 Benchmarking
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Taking Corrective Action


Taking any action necessary to correct or improve
things.
Management-by-Exception focuses managerial
attention on substantial differences between actual
and desired performance.
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Taking Corrective Action


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Management-by Exception can save the
managers time, energy, and other resources, and
concentrates efforts on areas showing the
greatest need.
There are two types of exceptions:
 Problems - below standard
 Opportunities - above standard
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Effective Controls
The Best Controls in Organizations
are



Strategic and results oriented
Understandable
Encourage self-control
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Effective Controls
The Best Controls in Organizations are




Timely and exception oriented
Positive in nature
Fair and objective
Flexible
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Types of Control

Preliminary
Sometimes called the feedforward controls,
they are accomplished before a work
activity begins.
They make sure that proper directions are
set and that the right resources are available
to accomplish them.
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Types of Control

Concurrent
Focus on what happens during the work
process. Sometimes called steering controls,
they monitor ongoing operations and activities
to make sure that things are being done
correctly.
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Types of Control

Postaction
Sometimes called feedback controls, they
take place after an action is completed. They
focus on end results, as opposed to inputs
and activities.
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Types of Controls


Managers have two broad options with respect
to control.
They can rely on people to exercise selfcontrol (internal) over their own behavior.
Alternatively, managers can take direct action
(external) to control the behavior of others.
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Types of Controls


Managers have two broad options with respect
to control.
They can rely on people to exercise selfcontrol (internal) over their own behavior.
Alternatively, managers can take direct action
(external) to control the behavior of others.
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Types of Control

Internal Controls
Allows motivated individuals to
exercise self-control in fulfilling job
expectations.
The potential for self-control is enhanced
when capable people have clear performance
objectives and proper resource support.
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Types of Control

External Controls
It occurs through personal supervision and the use of
formal administrative systems.
 Performance appraisal systems, compensation and
benefit systems, employee discipline systems, and
management-by-objectives.
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