Module 2Management

Definition• ‘The art of getting things through

others.’ - Mary

Parker• ‘The process undertaken by one or

more persons to cordinate the activités of other persons to achieve results not attainable by one person acting alone.’

- Ivancherich, Donelly & Gibson

Meaning • Management consists of getting things

done through others by directing their efforts in an integrated and co-ordinated manner in order to attain business objectives.

• It also involves securing men, money and machinary needed for achievement of business objectives.

• Consists of organasational activities that involve goal formation and accomplishment.

Characteristics of Management• Art as well as science• Management is an activity• Management is a continuous process• Achieving pre determined objectives• Organised Activities• Management is discipline • Purposeful Activity • Decision Making Activity• Aims at maximizing profit

• Distinct Activity• It’s a Profession• Universal Application• Direction and Control• Leadership Quality• Dynamic• Needed at all levels• As a career• As a class or team• It’s a System

Principles of ManagementHenry Fayol started his career as a mining engineer 1860 in France. In 1866, he was appointed as a manager and remained in this position for 22 years. He then went on to become the GM of the company for the next 30 years. At the time of his retirement the company had become the biggest coal company in France.

Before After

Fayol’s Principles Management• Division of Labour: Specialise & efficiency

• Authority: Give orders, get things done, obedience• Discipline: Respect rules & regulations• Unity in Command• Unity in Direction: Directed by 1 manager for 1 plan• Subordination of individual interest to

common goal.• Remunaration

• Order: Materials & people RT & RP• Equality: Friendly & Fair• Initiative: Subordinates

should be given freedom.• The Hierarchy• Centralisation• Stability of staff• Esprit de corps

Emergence of Management Thought

The Evolution of Management can beclassified into 3 stages:1. Classical Theory of Management• Bureaucracy Theory - Max Weber• Scientific Management - F.W. Taylor• Process Management – Henri Fayol

•This is also known as the structural theory of management.

Bureaucracy • A system of carrying on the business of government

by means of departments or bureaus, each under the control of a chief, government conducted on this system.

• In the 1930’s Max Weber, a German sociologist, described bureaucratic form as being the ideal way of governing an organization.

• Essential & Basic Elements Hierarchy Division of Work A system of Rules Impersonality of impersonal relations Standardization Selection and Promotion Only legal power and Authority

Scientific ManagementRobert Owen, Charles Babbage & Henry Robinson Towne were the forerunners of scientific Management.• Robert Owen: The first person to pay attention to labour welfare. He suggested a change in the attitude of industrialists towards workers.• Charles Babbage: A leading British Mathematician at Cambridge University 1828-1839. He studied the working conditions of factories and observed that most of them work on the basis of estimation & imagination. They were traditional rather then scientific.•The pioneering work:Differential Engine on the ‘Economy of machinary and manufacturers.’ He said that methods of science and mathematics could be applied in the solution of factory problems.

Fredrick Winslow Taylor: Popularly known as the father of scientific management. He made a systematic study of management and evolved a set of orderly principles to replace the trial & error methods that were in vogue.•He observed that workers at the ‘Midvale Steel Factory’ were not enthusiastic about work, instead of getting angry with them he sympathized.• He joined ‘Bethleham Steel Factory’ where he firstintroduced scientific management, but there wasstrong opposition from his managers because of hisuncompromising nature which led to his termination.• After leaving he wrote a books ‘ Shop Management’ and Principles and Methods of Scientific Managementwere his pioneering works.

Principles Of Scientific Management

Time & Motion Study:•Observing motions os workers in the work place.•Identifying movements carried out at work•Elimination of unnecessary movements•Observing the time required for each movement-Stop watch• Developing shorter & fewer motions• Standardising motion & time

•Differential Payment: Differential piece rate system. Fixed the standard level of production, the ones who produced less received less.• Group Harmony: Achieved through satisfying theneeds of group members.

• Cooperation between workers and ManagementManagement should understand workersWorkers should understand organisational requirements.• Standardization: in tools, instruments, working hours,working conditions, quality of work, (COP)? etc,,

•Methods Study: Methodology and systematic movement of materials ensure fast movement of materials in the factory. Reduction on transportation time.•Scientific selection and training: Scientific selection based on job analysis and using selection tests should be done. Providing training to all employees based on training needs, for organizational success.

• Seperation of planning from execution: Supervisors perform planning function whereas workers perform the execution.

Administrative TheoryHenri Fayol in 1916 put his observations on paper under the french title ‘ Administration Industriella et Generale’ and was later translated into english under the title ‘ General and Industrial Adminisration’This book contains two parts• Theory of administration• Discussion on training for administration.

Fayol the activities could be divided in 6 groups :

• Technical •Commercial•Financial•Security•Accounting &•Managerial

Henri Fayol felt the first five were well known as a result devoted most of his book to the sixth. Classified the managerial group into 6 sub-groups•Forecasting•Planning•Organising•Coordinating•Commanding & •Controlling•He stated the qualities required by managers were to be physical, menrtal, moral, educational and technical.•He emphasized that as one goes higher up in the levels of management, administrative knowledge becomes more important than technical skills.

Social Responsibility

Traditional View: It was eariler believed that the main puropose of business was profit maximization, it was believed that profit earned by business was exclusively for its shareholders and if the profits were used in a social need, money is used in a place that it was not intended to be used for.

Mordern View: It is slowly being recognized that business is not an end but it is only means to an end, the end is ___.be is a worker, customer, or any that member of the society.It is believed that the establishment and development of a business are contributions of the society.Society allots land, provide facilities and develop and provide human resources. It is mainly because of the customers that a business functions.Thus business totally depends on the society and must do something in return for it.

Responsibilities Towards•Towards Consumers/Customers•Towards Employees• Towards owners/shareholders•Towards Inter-businesses• Towards the state• Towards the community

Towards Consumers/Customers• Meet needs of different classes• Reasonably priced, dependable quality• After sales service• Fair and wide distribution of goods and services• Prevention on goods to be concentrated only with a few producers

Towards Employees•Right to fair wage• Participate in decisions relating to work life• Membership of trade union• To go on strikes

Towards Owners/Shareholders• A fair and reasonable return on capital• Political and economic security for investmentthrough a stable govt,good law and order, stabletax policies etc,,• Knowledge about the working of the enterprise,periodical reports regarding functioning• Unfair trade practices are legally prohibited

Towards Inter-Business• Healthy co-operative relationships• Resist unfair and unethical competition

Towards the Community• In the field of Industry: Earn while you learn programmes, such programmes must be labour intensive in areas like carpentry, pottery, spinning, weaving etc,, so that increasing employment can be provided in rural areas. The business can help providing aids.• In the field of Agriculture• Housing Facilities: Expand loans andfinancial support

Towards the Community•Transportation: Development of cheap transportation anddistribution system and improved journey planning, improved procedures of granting licences etc,,• Health and Education• Industrail aid to education in urban areas• Social audit on factual assessment: Comprehensiveevaluation of the way company discharges its responsibilities

What is Ethics?

“VALUING PEOPLE THE RIGHT WAY” The set of moral principles or values that defines right and wrong

for a person or group.

Definition“A branch of philosophy dealing with values relating to human conduct with respect to the rightness or wrongness of certain action.”

Business Ethics•Ethics in the society may not be the same in business, thats beacuse both opearte on different objectives.

•Business Ethics refers to the application of moral values and moral principles to business.

•Morals refer to generally accepted customs of conduct and proper living as per need of the society.

• We should understand that business basically is not an end to the economic activity.

Need for Business Ethics• Business ethics makes the business to realize the basic objective of any economic institution

•Necessary to protect the interest of the society and to maximize human welfare

•Convince to respect competitors

•To respect customers

• Improves confidence of customers, employers, suppliers, bankers etc,,

• Discharges role towards the govt., etc..