Management

Theory & Practice of Management

BY MAJ AMBREEN
N/INSTR
CON AFPGMI RWP
 What is Management ?
 Simply, management is what manager do !
 Management is coordinating and overseeing work
activities of other so that these activities are
completed efficiently & effectively
 Efficiency refers to “means”, getting most output
from least amount of resources “ Doing things right”
 Effectiveness focuses on “end goals”, those work
activities that will help the organization reach its
goals” Doing the right things”
 Management is a universal process in all organized
social and economic activities
 It is an operative force in all complex organizations
trying to achieve some stated objectives
 Definitions of Management
 “Process of planning, organizing, leading and controlling
performed to determine and accomplish the objectives by
the use of people and resources" George R Terry
 “Principally the task of planning, coordinating, motivating
and controlling the efforts of others towards a specific
objective" James L Lundy
 "To manage is to forecast and to plan, to organizse, to
command, to co-ordinate and to control“ Henry Fayol
 The process and agency which directs and guides the
operations of an organization in realizing of established
aims" Ordway Tead
 “Simply the process of decision-making and control over
the actions of human beings for the express purpose of
attaining predetermined goals“ Stanley Vance
 Characteristics of Management

 Management is a universal activity

 It is not restricted to business but applicable to
any political, social, religious and educational,
healthcare institutions also
 Is necessary wherever group effort is required
 Management is a process
 This process continues till the objectives set by
organization are achieved
 Management is dynamic and not static
 Principles of management are dynamic and not
static
 It has to adopt itself according to social changes
 Cont..
 Management is a group activity
 Management comes into existence only when
there is an group activity towards a common
objective
 Management is always concerned with group
efforts and not individual efforts
 Management is a system of authority
 Authority means power to make others act in a
predetermined manner
 Management formalizes standard set of rules
and procedure to be followed by the
subordinates and ensures their compliance
 Cont..
 Management is an endeavor to achieve pre-
determined objectives
 Management is concerned with directing and
controlling the activities of organization to attain the
pre-determined objectives
 Every managerial activity has certain objectives
 Management aims at achieving the objectives in
economic terms
 Manager's primary task is to secure the productive
performance through planning, direction and control
 Rational utilization of available resources to maximize
the profit is the economic function of management
 Cont..
 Management is a Profession
 Management is a profession because there are
established principles of management which are
being applied in practice
 And it involves specialized training & has ethical
codes
 Management implies skill and experience in
getting things done through people
 Management involves doing the job through
people
 Getting the suitable type of people to execute
the operations is the significant aspect of
management
 Cont..
 Management involves decision-making
 Management implies making decisions regarding
the organization and operation
 The success or failure of an organization can be
judged by the quality of decisions taken by the
managers
 Management implies good leadership
 A manager must have the ability to lead and get
the desired course of action from the
subordinates
 Management need not be owners
 It is not necessary that managers are owners of
the enterprise
 Historical Background
 Organized form of planning, directing and
controlling the activities of people to achieve
common goals have existed for thousands of years
 Egyptian pyramids , Great wall of China, Taj Mahal !!
 However two events are specially significant to
management history
 One , publishing of book “ Wealth of Nations “ by
Adam Smith in 1776 in which he argued economic
advantages of;
 Division of labor ( Job specialization) and…
 Breakdown of jobs into narrow repetitive tasks
 Second , the “ Industrial Revolution” starting in
late 18th century, where machines started replacing
humans
 Cont..
 It became more economical to manufacture goods in
large factories than at home
 These large factories needed someone to manage the
issues like recruitment of skilled workers,
procurement of materials, directing daily activities of
people, and forecasting demands
 These some ones were, Managers
 And these managers needed formal theories to guide
them in running these large organizations
 4 major approaches to management theories were
proposed
 Classical
 Quantitative
 Behavioral
 Contemporary
 1. Classical Approach
 Propose in early 20th century
 Emphasized rationality and making organization
and workers as efficient as possible
 3 x theories borne out of classical approach ;
 Scientific management
 General administration
 Bureacratic approach
 Scientific Management
 Frederick Winslow Taylor in his book “ Principles of
Scientific Management”(1911) described use of scientific
methods to define ‘ One best way’ of doing a job
 He observed that workers used vastly different techniques
to do the same job resulting in output less than 1/3rd of
what was possible
 He proposed 4 principles of management to improve
production efficiency
– Developing a science for each element of a worker’s job
– Scientifically selecting, training workers and providing
right kind of tools and equipment
– Motivating and cooperating with workers through right
incentives
– Dividing work & responsibility almost equally b/w
management & workers
 General Administration Theory
 This theory focuses on what managers do and
what constituted good management practice
 Its most prominent advocate was ‘Henri Fayol’
 Fayol considered management an activity
common to all organizations
 He developed 14 ‘ principles of management’
that could be applied to all organizational
situations
 These 14 principles serve as frame of
referencefrom which many of current
mangement concepts have evolved
 Fayol’s 14 Principles of Management
1. Division of work
 Specialization increases output by making
employees more efficient
2. Authority
 Managers must have authority to give orders
3. Discipline
 Employees must obey and respect the rules of
the organization
4. Unity of command
 Every employee must receive orders from only
one superior
5. Unity of direction
Cont..
 Organization should have a single plan of action to guide
managers and workers
6. Subordination of individual interest to the general interest
 Interest of any single or group of employees should not
take precedence over organizational interest
7. Remuneration (monetary or non monetary)
 Workers must be paid a fair wage/ compliment for their
services
8. Centralization
 Refers to the degree to which employees are involved in
decision making, good balance
9. Scalar chain
 Line of authority from top management to the lowest
ranks should be clear
10. Order Cont..
 Employees must have the right resources at their
disposal to function properly. Work environment to
be safe and clean
11. Equity
 Managers should be kind & fair to subordinates
12. Stability
 Ensure stability of tenure and timely replacement
13. Initiative
 Employees should be allowed to express new ideas
to stay involved and interested
14. Esprit de corps
 Promoting team spirit will build harmony, unity, trust
and mutual understanding
 Bureacratic Approach
 Proposed by Max Weber- German sociologist
 Two main elements: Hierarchy and clear rules
 Principles are:
– Well defined chain of command or hierarchy
– Consistent clear rules & SOPs
– Meticulous record keeping
– Selection and promotions based on qualifications
– Formal & impersonal relations of managers with staff
 2. Quantitative Approach
 It is use of quantitative techniques to improve decision
making
 Evolved from mathematical & statistical solutions
developed for military problems during WW-II
 Involves applying statistics, mathematics and analysis
of data collected through polls, surveys
 Total Quality Management ( TQM )
 Total Quality Management
 A management philosophy devoted to continual
improvement and responding to customer’s
needs and expectations
 Customer means anyone who interacts with
organization’s product or service, externally or
internally
 Continuous improvement depends on accurate
measurements requiring statistical techniques
which measure each critical variable at
organization work place
 Manufacturers in many industries have realized
importance of TQM and implemented many of its
components
 Components of TQM
• Intense focus on the customer
(internal/external)
• Concern for continual improvement ( very good
is not good enough )
• Process focused ( Focuses on work processes )
• Improvement in the quality of every thing the
organization does ( product, service, response )
• Accurate measurement ( and comparison
against standards to identify problems )
• Empowerment of employees ( involving the
people to improve process )
 3. Behavioral Approach
 The proponents of the behavioral Approach
believed that people are the most important
asset of the organization
 Focuses on human relations and employee well
being
 Field of study that researches the behaviors of
people at work is called Organizational
Behavior (OB)
 Most important contribution to the field of OB
came out of “Hawthorne Studies” by Elton Mayo
 Cont..
 It was a scientific management experience conducted
on workers of Western Electric Company in Illinois
 Aim was to examine the effects of various lighting
levels on workers productivity
 2 groups
 Productivity of illuminated group increased
 Working conditions were changed in other ways too eg
working hours, rest breaks etc and in all cases
productivity increased
 Productivity even improved when lights dimmed and
everything returned as it was before
 Conclusion Cont..
– Meeting social needs of workers enhances
productivity
– It takes into account importance of group dynamics,
team work and positive impact of social interaction
– Productivity increased by the fact that some one was
actually concerned about their workplace
 4. Contemporary Approach
 The early approaches to management theory
focus on manager’s concerns inside
organizations
 Starting from 1960s, researchers starting
looking at what was happening in the external
environment outside the organizations
 2 x contemporary theories are part of this
approach
 System theory
 Contingency Approach
 System Theory
 A System is a set of interrelated and interdependent parts
arranged in a manner that it produces a unified whole
 There are two basic types of systems;
 Closed systems, which are neither influenced by nor
interact with their environment
 Open systems , which are influenced by and interact with
their environment
 Today’s organizations are considered open systems as
they interact with their environment in different ways ;
 Take input (resources) from environment
 Transform these resources into outputs ( product/service)
and ..
 Distribute outputs to the environment
 Principles of System Approach
• A system is greater than the sum of its parts
• Systems are goal directed
• Whole systems are composed of sub systems
• Can operate alongside each other as well as
hierarchially
• Defined by boundaries, however if boundary too
weak or rigid the system will fail
• Homeostasis: a system must maintain balance to
survive
• Adaptability: must be able to change
• Circular Causality: mutual interaction of causes
& consequences
 Contingency Approach
• Early management theories proposed principles
thought to be universally applicable However lot
of exceptions were found in a number of
principles
• Management cannot be based on simple
principles which can be applied to all
situations( One size fits all )
• Different and changing situations require mangers
to use different techniques and approaches
• Contingency approach says that different
organizations facing different situations require
different ways of managing
 Contingency Variables
 Organization Size
 As size of the organization increase , so do the
problems of coordination
 Routineness of Task Technology
 Routine technology used by organizations require
structure, leadership style and control systems
different from those required by customized
technologies
 Environmental Uncertainty
 What works in a stable and predictable environment
may be inappropriate in a rapidly changing situation
 Individual Differences
 Individual differences play a role when mangers
select motivational techniques, leadership style
 Contingency Approach and Managers

• Contingency approach is intuitively logical

• Organizations and even units within
organizations differ in term of size, goals , work
activities etc
• A universal management solution may not be
applicable to all situations within an
organization
• Primary value of Contingency approach is that
it stresses that there is no universal rule for
managers to follow
 Management Skills
 Managers need three essential skills to perform
their duties
 Technical Skills
 Human skills
 Conceptual skills
 Technical Skills
 Job specific knowledge and techniques needed
to perform proficiently
 More important for first-line managers ,
managing employees who use tools and
techniques to produce the service
 Employees with excellent technical skills can
get promoted to first line managers
 However success in managerial positions
entirely relying on technical skills can be fatal
 Human Skills
 Involve ability to work well with other people
both individually and in group
 As all managers deal with people, these skills
are equally important to all levels of manager
 Managers with good human skills can get best
out of people
 They know how to communicate, motivate and
inspire trust
 Conceptual skills
 Skills required to think, envision and
conceptualize about abstract problems and
complex situations
 Planning
 Decision making
 Research oriented
 Most important for top management
 Conclusion
 Management can be a tough and challenging job
 No universal recipe
 Contextual factors like political system, organizational
culture and socio economic factors play an important
role in the outcomes
 Yet despite all challenges being a manager can be
rewarding
 Manager is responsible to create a work environment in
which all members can perform their job to best of their
abilities and help in achieving organizational goals
 Thanks
References
1. Management - Stephen P. Robins, Marry Coulter
2. Management Principles and Practice – Bharathiar
University Coimbatore , India