Principles

of
Management
UNIT - I
THERE ARE MANY DIFFERENT REASONS WHY PEOPLE CHOOSE
TO STUDY MANAGEMENT:
– By studying management, you can learn how to manage other
people, as well as how to interact with people on a
professional level.
– It can increase your confidence in your managerial abilities.
– Management can teach you how to be more effective and
efficient in anything that you do.
– You can learn about how organizations work and how they are
structured.
– It can help increase your employability and can help you to
make progress in your career.
– It can also increase your income potential.
– It can teach you how to be a better leader.
– You can gain valuable skills that will be of use to you in any
field of work, as well as in your personal life.
Universal Need for Management

1–3
MANAGEMENT
DEFINITIONS
DEFINITION

According to Koontz and Weihrich “ Management is

the process of designing and maintaining an
environment in which individuals working together in
groups, efficiently accomplish selected aims.

According to F.W.Taylor, “Management is the art of

knowing what do you want to do and then seeing that
it is done in the best and cheapest way”.

According to Mary Parker Follett, management is the

“art of getting things done through people.”
 NATURE OF MANAGEMENT
1. Management is multidisciplinary in nature. (draws ideas
and concepts in ECONOMICS, STATISTICS,
MATHEMATICS, PSYCHOLOGY, SOCIOLOGY etc)
2. Management is a continuous process.
3. Management is a universal activity. (Applicable to
POLITICAL, SOCIAL, RELIGIOUS and EDUCATIONAL
INSTITUTIONS)
4. Management is a science as well as an art
5. Management is dynamic and NOT static.
6. Management is a group activity.
7. Management aims at obtaining wealthy results.
8. Management implies skill and experience in getting
things done through people.
9. Management implies good leadership.
 SCOPE OF MANAGEMENT
1. Financial Management : Forecasting, Cost Control, Management
Accounting, Budgetary Control, Financial Planning etc.,
2. Human Resource Management: Recruitment, Training, Transfers,
Promotions, Retirement, Terminations, Remuneration, Labour
Welfare etc.,
3. Marketing Management: Marketing of goods, Sales Promotion,
Advertisement and Publicity, Channels of Distribution, Market
Research etc.,
4. Production Management: Production Planning, Quality Control and
Inspection, Production Techniques etc.,
5. Material Management : Purchase of materials, issue of materials,
Storage of materials, Maintenance of records etc.,
6. Purchase Management: Inviting tenders for raw materials, placing
orders, entering into contracts etc.,
7. Maintenance Management: Proper care and maintenance of
buildings, plant and machinery etc.,
8. Office Management: Office layout, office staffing etc.,
 FUNCTIONS OF MANAGEMENT

1. PLANNING
2. ORGANISING
3. STAFFING
4. DIRECTING
5. CONTROLLING
IS MANAGEMENT A SCIENCE OR
AN ART
Management
as
or
???
 What is Science?
The following are the characteristics of science:
 The existence of systematic body of knowledge with array of
principles.
 Based on Scientific enquiry
 Principles should be verifiable
 Reliable basis for predicting future events.

EXACT SCIENCE
INEXACT SCIENCE

Management is inexact science because.

 In every organization human resource are having different
ATTITUDES,ASPIRATIONS and PERCEPTIONS.. So standard result may
not be obtained.
 Readymade and standard solution cannot be obtained.
 Management is complex and unpredictable.
 Every organization decisions are influenced by environment.
What is Art?
 Art means Application of skill in finding a desired result.
 Art is way of doing things skillfully.

Management is Art because.

 Management process involves the use of practical knowledge and
Personal skill.
 Management is creative.
 Application of practical knowledge and certain skills helps to
achieve concrete results.

Management is both – Science and arts because :

 Management is Science because it contains general principles. It
is also an art because it requires certain personal skills to achieve
desired results.
DIFFERENCE BETWEEN ADMINISTRATION AND
MANAGEMENT
 ADMINISTRATION MANAGEMENT
(The process or activity of running (The process of controlling things
a business, organization, etc.) or people)

 It is higher level Function.  It is lower level function.

 it refers to the owners of the  It refers to the employees.

organization.

 Administration is concerned  Management is concerned with

with decision Making. execution of decision

 It acts through the  It acts through the organization.

Management.
 It lays down broad policies and  It executes policies into
principles for guidance. practice.
DIFFERENCE BETWEEN Entrepreneur AND
MANAGER
 Entrepreneur Manager
(He is a person who establishes (A manager is the person
business unit and utilizes the responsible for planning &
Bases of other factors of production like directing the work of a group of
Difference land, labor and capital) individuals, monitoring their
work, and taking corrective action
when necessary.)

Status An entrepreneur is the A manager is the servant in

owner of the enterprise. the enterprise owned by the
entrepreneur
Risk Bearing An entrepreneur being the A manager as a servant does
owner of the enterprise not bear any risk involved in
assumes all risks and the enterprise.
uncertainty involved in
running the enterprise.
objectives Entrepreneur’s objective is manager’s objective is to
to innovate and create and supervise and create routines.
he acts as a change agent He implements the
entrepreneur’s plans and
ideas.
Goal Setting he sets the goal he implies that goal
Decision-Making The entrepreneur usually The professional manager
makes decisions, even those makes decisions after
of critical importance for his collecting detailed information
business, on the basis of his and reaching operative
own personal intuition conclusions, while relying on
experts both from within and
outside the organization.

qualifications and Entrepreneur is required to Conversely it’s necessary for

qualities have certain qualifications a manager to be educated in
and qualities like high the fields of management
accomplishment motive, theories and practices.
innovative thinking,
forethought, risk-bearing
ability etc.

Innovation Entrepreneur himself But, what a manager does is

thinks over what and how to simply to execute the plans
produce goods to meet the prepared by the entrepreneur.
changing demands of the Thus, a manager simply
customers. Hence, he acts as translates the entrepreneur’s
an innovator also called a ideas into practice.
‘change agent’
 LEVELS OF
MANAGEMENT
LEVELS OF MANAGEMENT
 LEVELS OF MANAGEMENT
The three levels of management are as follows
1. The Top Level Management
 Top level management consists of individuals have titles such as
Executive Vice President, President, Managing Director, Chief
Executive Officer, Chief Operating Officer or Chairman of the board.
 The top management is the ultimate source of authority and it
manages goals and policies for an enterprise.
 It devotes more time on planning and coordinating functions.
The main functions of top management are –
a. To formulate goals and policies of the company.
b. To formulate budgets.
c. To appoint top executives.
d. To provide overall direction and leadership of the company.
e. To decide the distribution of profits etc.,
2. Middle Level Management
Middle Level managers work below the
top levels of the hierarchy and directly
supervise other managers below them.
Middle Level managers have titles such
as department head, project leader, plant
managers or division manager.
The important of functions of Middle Level Management are –
a. To monitor and control the operating performance of the
sub – units and individual managers who report to them.
b. To implement overall organisational plans so that
organisational goals are achieved as expected.
c. To Train, Motivate and develop supervisory level.
d. Implement changes or strategies generated by top
managers.
e. To coordinate among themselves so as to integrate the
various activities of a department.
f. It also sends important reports and other important data
to top level management.
g. They evaluate performance of junior managers.
h. They are also responsible for inspiring lower level
managers towards better performance.
3. Lower Level Management
 Lower level Management is also known as supervisory level of
management.
 It consists of supervisors, foreman, section officers, superintendent
etc.
 Low Level managers or first line supervisors have least authority and
are at the lowest level in the hierarchy of the organisation.
 They are directly responsible for the work of operating employees.

The main functions of Lower Level Management are :

a. To train and develop the efficiency of the workers.

b. To assign jobs to workers.
c. To give orders and instructions.
d. To maintain discipline and good human relations among workers.
ROLES OF
MANAGER
ROLES OF MANAGER
 ROLES OF MANAGER
Henry Mintzberg identified ten different roles, separated into three categories. The
categories he defined are as follows

a) Interpersonal Roles
Interpersonal Roles are roles that involve people ( subordinates and persons outside the
organization) and other duties that are ceremonial and symbolic in nature.
The three interpersonal roles are :
• Figurehead role
 Perform ceremonial and symbolic duties, such as greeting visitors and signing legal
documents.

• Leader
 Direct and motivate subordinates
 Counsel and communicate with subordinates
 Responsible for staffing and training.

• Liaison
 Maintain information links both inside and outside organisation via email, phone
calls and meetings.
b) Informational Roles
Informational roles involve receiving , collecting and
disseminating information.
The three informational roles are :
• Monitor
 Seek and receive information.
 Scan periodicals and reports.
 Maintain personal contact with stakeholders.
• Disseminator
 Transmits all important information to the members of the
organization via memos, reports and phone calls.
• Spokesperson –
 Transmit information to outsiders via reports, memos and
speeches.
c) Decisional Roles
The decisional roles revolved around making choices.

The four decisional roles are :

• Entrepreneur –.
 Initiate improvement projects, identify new ideas and delegate idea
responsibility to others.
• Disturbance Handler
 Take corrective action during disputes or crisis.
 Resolve conflicts among subordinates.
 Adapt to environments.
• Resource Allocator –
 Decide who get resources.
 Prepare allocator budgets.
 Set schedules and determine priorities.
• Negotiator
 Represent department during negotiations of union contracts, sales,
purchases and budgets.
MANAGERICAL
SKILLS
 MANAGERICAL SKILLS
Managers at every level in the management hierarchy must
exercise three basic types of skills: technical, human, and
conceptual. All managers must acquire these skills in varying
proportions, although the importance of each category of skill
changes at different management levels.

• Technical skills
 Technical skills are skills that reflect both an understanding of
and a proficiency in a specialized field such as Engineering,
Computers, Accounting or manufacturing.
 These skills are more important at lower levels of management
since these managers are dealing directly with employees
doing the organization's work.
• Human skills
 Human skills refer to the ability of a manager to work
effectively as a group member and to build cooperative effort
in the team he leads.
 Human skills are concerned with understanding of people.
 Managers with good human skills are able to get the best out
of their people.
 They know how to communicate, motivate, lead and inspire
enthusiasm and trust.
• Conceptual skills
 This skill also called ‘ Design and Problem Solving Skill’. It
involves the ability :
To see the organization and the various components of it as
a whole.
To understand how its various parts and functions mesh
together.
To foresee how changes in any one of them may affect all
the others.
Taylor's Scientific Management

Frederick Winslow Taylor

 Taylor's Scientific Management
 Fredrick Winslow Taylor well-known as the founder of scientific
management was the first to recognize and emphasis the need
for adopting a scientific approach to the task of managing an
enterprise.
 He tried to diagnose the causes of low efficiency in industry and
came to the conclusion that much of waste and inefficiency is
due to the lack of order and system in the methods of
management.
 He was called ‘FATHER OF SCIENTIFIC MANAGEMENT’.
History:
 Taylor worked as a chief engineer in the Midvale steel company
where he joined as a worker.
 He worked in the Bethlehem steel works and after retirement
form his concern he worked as a consultant.
Taylor's Approach based on four basic principles:

1. Study each part of the task scientifically and develop the

best method to perform it.
2. Carefully select workers and train them to perform a
task using the scientifically developed method.
3. Cooperate fully with workers to ensure they use proper
method.
4. Divide work and responsibility. Management is
responsible for planning work methods using scientific
principles and workers are responsible for executing the
work accordingly.
Elements of Scientific Management:
The following are the elements or features of Taylor’s
scientific management:
1. Planning the Task.
2. Scientific Task and Rate-setting (work study)
3. Scientific Selection and Training
4.Standardization
5. Specialization
6.Financial Incentives
7.Economy
8. Mental Revolution.
1. Planning the Task:
 Taylors suggests the separation of planning from actual doing.
 Taylor says that supervisor should do the planning.
 The workers only concentrate on doing the work.
2. Scientific Task and Rate-Setting (work study): Work study may be defined as the
systematic, objective and critical examination of all the factors governing the
operational efficiency of any specified activity in order to effect improvement. This
can be determined by method, motion, time and fatigue studies.
(a) Methods Study:
 The management should try to ensure that the plant is laid out in the best manner
and is equipped with the best tools and machinery.
 The possibilities of eliminating or combining certain operations may be studied.
(b) Motion Study:
 It is a study of the movement, of an operator (or even of a machine) in performing
an operation with the purpose of eliminating useless motions.
(c) Time Study :
 This study determines the proper time for performing the operations.
 The movement which takes minimum time is the best one.
(d) Fatigue Study:
 Employees get both physical and mental fatigue easily.
 Fatigue Study indicates the amount and frequency of
rest required in completing the job.
 Taylor suggests a fair day’s work require certain
movements and rest periods to complete it.
(e) Rate-setting:
 Taylor recommended the differential piece wage
system, under which workers performing the standard
task within prescribed time are paid a much higher
rate per unit than inefficient workers who are not able
to come up to the standard set.
3.Selection and Training:
 Taylor has suggested that workers should be selected
scientifically by HR department. The procedure of
selection will have to be systematised.
 A worker should be physically and technically most
suitable for the selected post.
 After selection workers should be given a proper training
which makes them more efficient and effective.

4.Standardization:
 Standards must be maintained in respect of equipments
and tools, materials, period of work, amount of work,
working conditions, cost of production etc.,
 These standards will be fixed in advance on the basis of
various experiments.
5. Specialization:
 Taylor developed a theory called functional foremanship based on
specialization of function.
 Under this plan, the two functions of 'planning' and 'doing' are
separated in the organization.
 The `functional foremen' are specialists who join their hands to the
planning of the performance of operations in the workshop.
In this system eight functional foremen were involved to DIRECT
and CONTROL the activities of the workers.
(a) The Route Clerk:
 To lay down the sequence of operations and instruct the workers
concerned about it.
(b) The Instruction Card Clerk:
 To prepare detailed instructions regarding different aspects of
work.
(c) The Time and Cost Clerk:
 To send all information relating to their pay to the workers and to
secure proper returns of work from them.
(d) The Shop Disciplinarian:
 To deal with cases of breach of discipline and absenteeism.
(e) The Gang Boss:
 To assemble and set up tools and machines and to teach the
workers to make all their personal motions in the quickest and best
way.
(f) The Speed Boss:
 To ensure that machines are run at their best speeds and proper
tools are used by the workers.
(g) The Repair Boss:
 To ensure that each worker keeps his machine in good order and
maintains cleanliness around him and his machines.
(h) The Inspector:
 To show to the worker how to do the work.
6. Financial Incentives:
 Financial incentives can motivate the workers to put up
their maximum efforts.
 Taylor has suggested that wages should be based on
individual performance and not on the position which
he occupies.
 According to this scheme, a worker who completes the
normal work gets wages at higher rate and who does
not complete gets at lower rate.
7. Economy:
 Scientific Management enhances profit and economy.
 The economy and profit can be achieved by making the
resources more productive as well as by eliminating the
wastages.
8. Mental Revolution:
 Scientific Management is based on co-operation
between management and workers.
 Co-operation enhances the effective managerial
activities.
 Mutual conflict should be replaced by mutual co-
operation which is beneficial to both.
Henry Fayol's 14 Principles of Management

Henry Fayol's
 Henry Fayol's Administrative Management Theory:
 Henry fayol is a French Mining Engineer.
 His contributions are published in his famous book “The
General and Industrial Administration”.
 His book falls into two parts.
 In first part fayol divided the total industrial activities in
six categories which are given below:
1. Technical (Production, Manufacture)
2. Commercial (Buying, Selling, Exchange)
3. Financial ( Search for and optimum use of capital)
4. Security (Protection of property and persons)
5. Accounting (Balance sheets, Cost statistics)
6. Management (Planning, Organizing, Coordinating,
Directing, Controlling)
Second Part is concerned with 14 Principles of Management:
Henry Fayol’s 14 principles of management are given below:
1. Division of work
2. Authority and Responsibility
3. Discipline
4. Unity of command
5. Unity of Direction
6. Subordination of Individual Interest to General Interest
7. Remuneration of personnel
8. Centralisation
9. Scalar Chain
10. Order
11. Equity
12. Stability of tenure of personnel
13. Initiative
14. Espirit de corps.
 Henry Fayol's 14 Principles of Management:

1. Division of work:
 Work should be divided in a proper way with
reference to the available time.
 In general worker on the same job and the
managers on the same duty acquire ability sureness
and accuracy which increase their output.

2. Authority and Responsibility:

Authority: It is the power given to a person to get
work from his subordinates.
Responsibility: It is the kind and amount of work
expected of from a man by his superior.
3. Discipline:
Discipline is essential for the smooth running of
organisation.
To fayol, discipline will result from good leadership at all
levels of the organisation, fair agreements and
judiciously enforced penalties for infractions.
4. Unity of Command:
An employee must receive orders and instructions from
one supervisor only.
 Multiple command will cause conflicts and confusions.
A sound management should avoid dual command.
5. Unity of Direction:
Unity of direction signifies each group of activities having
the same objective with one head and one plan.
All the groups should coordinate and work together to
achieve the common goals.
6. Subordination of Personal Interest to General Interest:
Every employee is working in an organisation and his
interest is to earn money to meet his personal needs.
The general interest of the organisation is the
development and the progress of the organisation.
The employees should give importance first to the
general interest than his individual interest.

7. Remuneration:
Remuneration should be fair for both the employees and
the employers .
The wage payment systems should satisfy the employees.
8. Centralization:
The organisation is centralised when the power is
concentrated with one person.
If the power is fully distributed to the subordinates, the
organisation is fully decentralised.
For effective management of people decentralisation is
necessary.
Decentralisation helps to take a quick decision on all
important problems.

9. Scalar Chain:
Scalar chain principles states that instructions and orders
should be sent from the top management to the lower
management.
10. Order:
Two types of order: 1) Materials Order 2) Social
Order
In any organisation materials and men are provided
correct places so that materials can be easily taken
out and men are easily located.
Materials Order: “A place for everything and
everything in its place”.
Social Order: “A place for everyone and everyone in
its place”.
11. Equity:
Equity refers to the treatment of employees equally.
Equal treatment of the employees helps to achieve
organisational goals.
12. Stability of Tenure of Personnel:
 A high employee turnover rate is not good for the
efficient functioning of any organisation.
13. Initiative:
 It is concerned with thinking and execution of a plan.
 When employees come forward with new ideas, they
must be encouraged by the superiors.
 It will create the morale of the employees.
14. Esprit de corps:
 This means Union is strength.
 In organisation, employees should be with harmony
and unity.
 It improves the employee morale.
 EVOLUTION OF MANAGEMENT THOUGHT

 Evolution of management thought is divided into following four

stages:
1. Pre-Scientific or Pre-classical period
2. Classical Management Theory
a. Scientific Management of TAYLOR
b. Administrative Management of FAYOL.
c. Bureaucratic Model of MAX WEBER.
3. Neo-classical Theory or Behavioural Theory
4. Modern Theory
a. Systems Approach
b. Contingency approach.
PRE-SCIENTIFIC OR PRE-CLASSICAL MANAGEMENT:
1) Robert Owen ( 1771-1858)
He firmly believed that workers performance in industry
was influenced by the working conditions and treatment of
workers. He introduced new ideas of human relations such as
shorter working hours, housing facilities, training of workers in
hygiene, education of their children, provision of canteen etc.,
2) Charles Babbage ( 1792-1871)
He felt that the methods of science and mathematics could
be applied to the solution of methods in the place of guess work
for the solution of business problems.
3) Henry Robinson Towne (1844-1924)
He advised the combination of engineers and economists
as industrial managers.
CLASSICAL MANAGEMENT THEORY:
1) Scientific Management Theory by F.W.Taylor
2) Administrative Management Theory by Henry Fayol
3) Bureaucratic Management Theory by Max Weber.
Weber’s Bureaucratic system of administration is based
on the following characteristics:
a) A well-defined hierarchy
b) Division of labour and specialisation
c) System of written rules and regulations
d) Impersonal relationships between managers and
employees
e) Selection and Evaluation System
f) Records
NEO-CLASSICAL or BEHAVIOURAL MANAGEMENT
THEORY:
• Behavioural Management Theory pointed out the role of
psychology and sociology in understanding of individual and
group behaviour in an organisation.

• Abraham Maslow , a practicing psychologist developed

one of the most widely recognised HIERARCHY OF NEEDS
THEORY.
1) PHYSIOLOGICAL NEEDS OR BASIC NEEDS
2) SAFETY NEEDS
3) SOCIAL NEEDS
4) ESTEEM NEEDS
5) SELF-ACTUALISATION NEEDS
SYSTEMS APPROACH TO MANAGEMENT:
System is a set of interrelated and
interdependent parts arranged in a manner that
produces a unified whole .
While an organisation as a whole is a system, the
various components or parts within are called the
subsystem.
An organisation as a system is composed of five
elements:
INPUT
TRANSFORMATION PROCESSES
OUTPUT
FEED BACK
ENVIRONMENT
CONTINGENCY APPROACH TO MANAGEMENT:
The contingency approach is also called as
situational approach.
The crucial message of contingency theory is that
there is no one best way to organise.
In contingency approach theory, managers
identify which is suitable technique for a
particular situation, particular environment of the
organisation at a specific time.
Types of Business organization
 BUSINESS ORGANIZATION
“A business is an enterprise which means distributes or provides an article
or services which other members of the community need and are able and willing
to pay for it.
Types of Business Organizations:

a) Sole Proprietorships
 The sole proprietorship is that form of business organisation which is 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.

 i) CHARACTERISTICS OF SOLE PROPRIETORSHIP:

 One man ownership and control
 Unlimited liability
 Enjoyment of entire profit
 No separate legal entity
 Simplicity
 Self Employment
 secrecy
b) Partnerships
 The relation between persons who have agreed to share
profits of a business carried on by all or any one of them
acting for all.
 FEATURES OF PARTNERSHIP:
 Agreement
 Multiplicity of persons
 Lawful Business
 Sharing of profits
 Contractual relations
 Mutual agency
 Unlimited liability
 Registration
 Common management
 Utmost good faith
KINDS OF PARTNERS:
Active Partner
Sleeping partner
Normal Partner
Partner in Profit only
Partner by estoppel
Sub partner
Secret Partner
Minor as a partner
c) Joint Stock Company:
Limited financial resources & heavy burden
of risk involved in both of the previous forms
of organization has led to the formation of
joint stock companies these have limited
dilutives.
The capital is raised by selling shares of
different values. Persons who purchase the
shares are called shareholder.
The managing body known as; Board of
Directors; is responsible for policy making
important financial & technical decisions.
There are two main types of joint stock Companies.
(i) Private limited company.
(ii) Public limited company
(i) Private limited company:
 This type company can be formed by two or more persons.
 The maximum number of member ship is limited to 50. In this
transfer of shares is limited to members only.
 The government also does not interfere in the working of the
company.
(ii) Public Limited Company:
 Its is one whose membership is open to general public.
 The minimum number required to form such company is
seven, but there is no upper limit.
 Such company’s can advertise to offer its share to general
public through a prospectus.
 These public limited companies are subjected to greater
control & supervision of control.
d) Co-Operative Organisation:
It is a voluntary association of persons for
mutual benefit and its aims are
accomplished through self help and
collective effort.
Types of Co-operative societies:
Consumers co-operative societies
Producer co-operative societies
Co-operative marketing societies
Co-operative credit societies
Co-operative farming societies
Co-operative housing societies
Characteristics of Co-Operative Societies:
Voluntary association
Equal voting rights
Service motive
Separate legal entity
Open membership
State control
Liability
No share transfer
Statutory audit
Cash trading
e) Public Enterprises: (SETC)
Public enterprises are autonomous or semi
autonomous corporations and companies
established owned and controlled by the
state and engaged in industrial and
commercial activities.
Characteristics of Public Enterprises:
Financed by government
Government management
Public services
Legislative control
Monopoly enterprises
f) Public Corporation: (LIC)
A public corporation is an autonomous body
corporate created by a special statute of a
state or central government. A public
corporation is a separate legal entities
created for a specific purpose.
g) Government Company: (TNPL)
• Easy to form
• Flexibility in management
• Freedom of action
• Run on commercial lines
• Helpful is developing neglected sectors.
h) Corporate Companies:
 A corporation can be taxed; it can be sued; it can
enter into contractual agreements.
 The owners of a corporation are its shareholders.
 The shareholders elect a board of directors to
oversee the major policies and decisions.
 The corporation has a life of its own and does not
dissolve when ownership changes.
ORGANIZATIONAL
CULTURE
 ORGANIZATIONAL CULTURE
What is Organizational Culture? - Definition &
Characteristics
 The word culture is derived from the word “cultivation” the
process of tilling and developing land.
 Organizational culture is a system of shared assumptions,
values, and beliefs, which governs how people behave in
organizations.
 These shared values have a strong influence on the people in
the organization and dictate how they dress, act, and
perform their jobs.
 Every organization develops and maintains a unique culture,
which provides guidelines and boundaries for the behavior
of the members of the organization.
Characteristics of Organizational Culture
The seven characteristics of organizational culture are:
• Attention to Detail –
This characteristic of organizational culture dictates the degree
to which employees are expected to be accurate in their work.
A culture that places a high value on attention to detail expects
their employees to perform their work with precision.
• Innovation and Risk Taking –
Companies with cultures that place a high value on innovation
encourage their employees to take risks and innovate in the
performance of their jobs.
• Stability –
A company whose culture places a high value on stability
are rule-oriented, predictable, and bureaucratic in nature.
These types of companies typically provide consistent
and predictable levels of output and operate best in non-
changing market conditions.
• Aggressiveness –
This characteristic of organizational culture dictates the
group members to be aggressive and competitive rather
than cooperative.
Companies with an aggressive culture place a high value
on competitiveness and outperforming the competition
at all costs.
• Team orientation –
Companies that organize work activities around teams
instead of individuals, place a high value on this
characteristic of organizational culture.
People who work for these types of companies tend to
have a positive relationship with their coworkers and
managers.
• People Orientation –
Companies that place a high value on this
characteristic of organizational culture place a great
deal of importance on how their decisions will affect
the people in their organizations.
For these companies, it is important to treat their
employees with respect and dignity.
• Outcome Orientation –
Companies that focus on results or outcomes rather
than analyze how the results are achieved. Place a
high emphasis on this value of organizational culture.
BUSINESS ENVIRONMENT or ENVIRONMENTAL FACTORS

All organisations whether they are engaged

in business or non-business activities draw input
from the environment and convert it into output
and send them back to the environment .
The environment of the business consists of two
components:
1. Internal Environment
2. External Environment
1) INTERNAL ENVIRONMENTAL FACTORS
An organization's internal environment is composed of the
elements within the organization.
 Suppliers
 Customers
 Competitors

2) EXTERNAL ENVIRONMENT FACTORS:

Technology
Economic Conditions
Political factors
Socio Cultural factors
 CURRENT TRENDS AND
ISSUES IN MANAGEMENT
 CURRENT TRENDS AND ISSUES IN MANAGEMENT
Changes in socio-economic and political
conditions are bound to bring the changes in the
environment within the organisations.
Managers should update their knowledge and skills
in the following:
1. Globalisation
2. Ethics
3. Workforce Diversity
4. Entrepreneurship
5. E-Business
6. Knowledge Management
7. Learning Organisations
8. Quality Management