Concepts, Principles and Functions of Management

Mrs. Bhaumika Sharma

Lecturer, MMIHS

Banasthali, Nepal

Terms DefinitionOrganization • Group of people works together, a club, business,

institute, hospital etc.• The act of organizing something so it runs

smoothly• The organization of the timetable

Organize • To plan and prepare something in an orderly way• To put things in order

Administration • The management of a company etc• The government of a country

Administer • To be in charge of and manage• To give out

Management • As the process by which a co-operative group direction towards action

• Use of people and other resources to accomplish objectives

Contd. Terms Definition

Managers • Have an assigned position within the formal organization

• Are expected to carry out specific function duties and responsibilities

Leader Somebody who leads or who goes first, a person in charge of a group

leadership Leadership is the process of influencing people to accomplish goals

Administrator • A person who dispenses or administers something.

Effectiveness • Accomplishments of objectives

Efficiency • Accomplishments of objectives with minimum use of resources.

Concepts of Leader and Manager

Leader Manager

• Is visionary in identifying need change

• Is a role model • Is sensitive to timing

initiatives • Is creative in identifying

solutions• Individual efforts

• Assess the driving and restricting forces

• Identifies and implements strategies

• Seek subordinates input• Supports and rewards• Understands future

directions

Comparison bet. Leadership and ManagementManagement Leadership

• Management is responsible for various functions such as planning, organizing, leading and controlling, which are related to the total organization

• Management is concerned with the promotion of the welfare of the entire organization without giving scope to vested interest.

• Leadership is the ability to influence the group in achieving the goals set by the management

• Leadership influence individual which will contribute to the attainment of group goals

• Leadership used informal power to influence the group

• Leadership is necessary to create change

Comparison bet. Administration & Management

Administration Management

• Determination of Objectives • Thinking and determinative

functions. • Take major decisions about

over enterprise. • Planning and organizing

functions involved. • It coordinate finance,

production and distribution

• Plans and actions• Doing and executive function• Takes decisions within the

framework set by the admin.• Motivating and controlling

functions also involved.• It uses organization for the

achievement of the targets fixed by administration.

Administration Versus Management

Administration Management

• The process and agency which is responsible for the determination of aims for which an organization and its management are to strive, which establishes the broad policies under which they are to operate and which gives general oversight to be continuing effectiveness of the total operation in reaching the objectives sought.

• The process and agency, which directs and guides the operations as an organization in the realizing of established aims.

• Higher functions of management includes administration.

• Two types of management are there: administrative and operative management.

Fig. Management and Administration

Top Level Management

Middle Management

Lower Management

Hospital Board and Executive Director

Hospital Matron

Assistant MatronNursing Supervisors

Ward Sisters

Administration

Management

Definition

• Management etymology: – Managgaire (italian): means to handle– Manus (latin): handling – Mesnagement (french) and later menagement:

management during 17th and 18th

• The term management is used at times to indicate the “process or the functions”: planning, organizing, staffing, directing and controlling.

• Term management is also being used as a “discipline”, i.e. a body of knowledge and practice

Contd.

• Management can be defined categorizing under three orientations.1. Productivity orientation

2. Human relation orientation

3. Process orientation

4. Decision-Making orientation

5. Systems approach

Productivity Orientation• Management is the art of knowing “what you

want to do ….in the best and cheapest way.” – Frederick W. Taylor (1914), profounder of this approach

• Management is to conduct the affairs of a business, moving towards its objectives through a continuous improvement and optimization of resources via the essential management functions. – Henri Fayol (1917)

• Critics: definition ignores the human side, which is the most important element of management, and also silent about the process of management.

Human Relation Orientation

• Management is the art of getting things done through and with informally organized groups, and it is the art of creating the environment in which people can perform and individuals could cooperate towards attaining group goals.

• Critics: management thinkers put primary focus on people and their feelings, not on productivity or functions. The chief concerns are individuals, group process, interpersonal relations, leadership, and communication.

Process Orientation• Management is the process by which managers create,

direct, maintain and operate purposive organizations through systematic coordinated cooperative human efforts. – Dalton McFarland (1976)

• The distinct process consisting of planning, organizing, actuating and controlling to determine and accomplish the stated objectives by the use of human and other resources. – Terry & Franklin (1988)

• Critics: this approach embraces human element: the most important aspect of management, clarifies about what a manager has to do and why and also clearly indicates how it is done. The management thinkers believe that management does not do; it gets others to do.

Decision-Making Orientation

• Management is simply the process of decision making and control over the action of human beings for the express purpose of attaining pre determined goals.

• The management quality is judged by the quality of decision in diverse situation in the economic front and amid risks and uncertainties. – Banerjee (1996)

Contd.

• Focuses on managerial decisions. It views management as a series of decision making. Concentrates on rational approach to decision making.

• Critics: this orientation is silent about the process part, a it provides no clues at all as what the manager needs to know and do. – Ernest Dale (1973)

Systems Approach

• Management is defined as the process of planning, organizing, directing and controlling to accomplish the predetermined objectives effectively through the coordinated use of human and material resources.

• Nursing Management is the process of working through nursing and other supporting staff to provide care to patients or clients as needed by them.

Contd. • Critics: this approach views an enterprise as a

system composed of a set of interrelated but separate elements of subsystems working towards achievement of a common goal. The systems operations are viewed as procuring inputs and processing the inputs into outputs.

• Physical facilities, human resources, money are the part of a system; material, energy flow, and information are the inputs; and management processes these inputs into outputs in the form of services, products, and group-satisfaction, and others.

Terminology Related to Principles of Management

• Division of work: specialization for all kinds of works to develop

• Authority and responsibility: related authority flows from responsibility

• Discipline: implies obedience and respect of authority

• Unity of command: One employ one boss• Unity of direction: one plan and one head for

a group of activities having one objectives

Contd.

• Subordination: individual interest to general interest, interest of organization should be above the interest of individual

• Remuneration: a fair and equitable pay to employees

• Centralization: highly centralized power structure

• Scalar chain: all employees are lined with each others in a hierarchy or superior subordinate’s relationship

Contd. • Order: a place for everything and everything

in its proper place• Equity: sense of kindness and justice

throughout all levels of person• Stability: the tenure of personal job security to

avoid turnover of employee. A union is strength there should be cohesiveness spirits

• Initiative: an encourage subordinates initiate • Esprit de corps: a union is strength; there

should be cohesiveness and term spirit

Principles of Management• 14 principles of management as given by

Henry Fayol (Administrative management theory) are:– Division of Work: an employee assigned to only

one type of work to increase output which leads to specialization. The work division should be done based on efficiency of subordinates.

– Authority and Responsibility: authority means right to give order and power. Responsibility refers to the obligation to perform the manner desired and directed by superior authorities in any management process.

Contd. – Discipline: the workers should be obedient and

respectful of the organization, and this is absolutely essential.

– Unity of command: one employee should have only one boss and receive orders for him/her using one plan

– Subordination of Individual Interest to General Interest: it means supremacy of organizational goals over interests of individual or a group of individuals, including that of manager.

Contd. – Remuneration of Personnel: the price rendered

or remuneration should be fair and satisfactory to the employees and employer including the managers justifying the workload, job hazards, efficiency and quality of performance.

– Centralization: decisions are made from the top (managers). Subordinates should be given enough authority to do their job properly

– Scalar chain (Hierarchy): the line of authority from top management to lowest ranks represents the scalar chain. Communications should follow this chain.

Contd.

– Order: It implies order of things and people. Placing all required things and materials in prescribed place i.e. in right place. Working place should be clean, tidy and safe for employees. Engagement of right people in the right place.

– Equity: It is the combination of kindness and justice. Employees expect equity from the management. Employees should be treated fairly and justly, kindly for devotion and loyalty from employees in return.

Contd.

– Stability of Tenure of Personnel: For maximum productivity through efficient workers, a stable work force with stable tenure is needed.

– Initiative: passion, energy and initiative from the employees of all levels through freedom to think out a plan and execute it. It motivates people and increases productivity.

– Esprit de Corp: team or organizational spirit i.e. cohesion among personnel is a great source of strength in the organization. Managers should strive to promote team spirit, unity and organizational communication.

Function of Management

1. Planning

2. Organizing

3. Leading / directing

4. Controlling

Planning

• Planning is a basic managerial function. It is setting goals and deciding how to best achieve them in advance. Planning is predetermining future and selecting appropriate goals and actions to achieve them.

• The process by which management set objectives, assess the future, and develop course of action to accomplish these objectives.

Contd.

• Planning requires decision making by all levels of managers

• Planning is also to decide in advance about what to do, how to do, when to do and who is to do.

• A good planning is also required for good utilization of human and non human resources to accomplish pre determined goals.

Contd.

• Planning is the core area of all the functions of management. It is the foundation upon which the other three areas should be build.

• The planning process is ongoing. • There are uncontrollable, external factors that

constantly affect an organization both positively and negatively.

• Depending on the circumstances, these external factors may cause an organization to adjust its course of action in accomplishing certain goals. This is referred to as strategic planning.

Contd.

• During strategic planning, management analyzes internal and external factors that do and may affect organization, as well as the objectives and goals.

• From there they determine the organization’s strengths, weaknesses, opportunities and threats.

• In order for management to do this effectively, planning has to be realistic and comprehensive.

Organizing

• An important function of management. • Also important for performing staffing,

directing and controlling functions. • The process of arranging people and physical

resources to carry out plans and accomplish the organizational goals.

• Its ongoing.

Organizing involves:

• Defining tasks required for achieving goals. What task to be done?

• Grouping the activities in logical pattern• Determining manpower requirement• Establishing authority and responsibility for

each position. Who reports to whom?• Assigning the activities to specific position and

people

Contd.

• Coordinating their activities authority relations

• Organizing efficiency and reducing the operation cost through avoiding repetition and duplication of activities.

Leading

• Leading – A continuous process of setting objectives and trying to achieve them through the efforts of other people.

• Leadership is an important function of management.

• Leadership is guiding and influencing people to achieve goals willingly and enthusiastically in a given situation.

Contd.

• Leading consists of : Leadership, Motivation and Communication

• Leadership is the ability to influence a group toward achievement of goals.

• Motivation is the acts of stimulating people to contribute at some higher rate.

• Communication consists of conveying information from top to bottom, bottom to top and at horizontal and lateral.

Controlling

• Controlling consists of actions and decision, manager undertaken to ensure actual result.

• It ensures the right thing is done in the right manner and at the right time.

• The steps of controlling:– Establishing standards – Measuring actual performance– Finding and analyzing deviations– Corrective action

Principles of management that will apply indifferent situations

• Management by objectives• Learning from experience• Division of labor• Substitution of resources• Coordination of work activities• Functions determine structure• Delegation of authority• Management by exception

“Management by Objectives”

• Deciding and saying what to be accomplished is setting an objective ( a goal, a purpose, an end, a target). There are many kinds of objective.

• The management principle that underlies the comparison of objectives with their achievement in order to judge effectiveness is known as “Learning from Experience”.

Contd. • When there is a gap between objectives and results

(or achievements), management analyzes why only the observed results were achieved and why fell short of the set objectives.

• Some causes can be easily remedied, and action is taken accordingly.

• Others cannot be removed in short term and are then called constraints.

• Management learns from this process and uses what it has learned in its further decisions for achieving its objectives. This process is sometimes called “feedback”.

“Division of Labor”

• When work is divided, or distributed, among members of a group, and the work is directed and coordinated, the group becomes a team.

• In a team, and generally then there is specialization and division of labor, which each category of staff exercising its own skills towards achieving the objectives, management consists in assigning a balanced proportion of each kind of staff to the work to be done.

Contd.

• The team approach is the way in which management attempts to bring about balance among the different members of the team and the work they do.

“Coordination of Activities” or “Convergence of work”

• Convergence of work means that the activities of the various people who do the work come together in the achievement of objectives

• The activities should be designed, assigned and directed in such a way that they support each other in moving towards a common goal.

• Also implies that working relations-they ways in which the members of a team interact with one another-should contribute to the success of each activity, and thus to general effectiveness.

“Substitute of Resources”

• Substitution means replacement • One particular type of substitution of

resources is labour substitution e.g. using trained ANM or volunteers for tasks formerly undertaken by professionals.

“Functions Determine Structure”

• When work is clearly defined, i.e. the function and duties of individual members of the team are clearly defined and known to all, the working relations (the structure) follow.

“Delegation of Authority”

• Delegation takes place when someone with authority “lends” the authority to another person, conditionally or not, so as to enable that person to take responsibility when the need arises.

• Also ensure that the decision, once taken, is made known to all concerned. This is communication.

Contd.

• Decision should be communicated between those who make decisions, those who implement them, and the people affected by the decisions.

• “Shortest decision-path”: deals with the issue: who should make which decision? And often when and where as well. Delegation of authority is the answer to clarify this.

Contd.

• In such way, decisions are made as close as possible in time and place to the object of the decision and to those affected by it.

• It saves time and work (e.g. in transmitting information) and also ensures that decisions can take full account of the circumstances which make the decisions necessary and in which they are put into effect.

“Management by Exception”

• Management of exception means two things:– First: be selective. Do not become overloaded with

routine and unnecessary information. Keep your mind available for critical information, on which manager will be required to act.

– Second: make big decisions first. To be overloaded with petty decisions may result in more important ones being neglected or what has been called “postponing decisions until they become unnecessary”.

• In short, management by exception means selectivity in information and priority in decision.

Importance of Management

1. Optimum utilization of resources

2. Competitive strength

3. Cordial organizational relation

4. Motivation of employees

5. Introduction of new techniques

6. Effective management : society gets the benefits

7. Expansion of business

Contd.

8. Brings stability and prosperity

9. Develops team spirit

10.Ensures effective use of managers

11.Ensures smooth functioning (raises the efficiency, productivity and profitability)

12.Reduces turnover and absenteeism

13.Creates sound organisation

Evolution of Management Thought

This evolution of management thought can be studied in the following broad stages:

1.The Classical Theory of Management (Classical Approach; 1900-1930): It includes the following three streams of thought:

(i) Bureaucracy,

(ii) Scientific Management; and

(iii) Administrative Management

Contd. 2. The Neo-classical theory of Management (1930-

1960): It includes the following two streams:

(i) Human Relations Approach and

(ii) Behavioral Sciences Approach

3. The Modern Theory of Management (1960 onwards): It includes the following three streams of thought:

(i) Quantitative Approach to Management (Operations Research);

(ii) Systems Approach to Management and

(iii) Contingency Approach to Management.

Thank You