Prudential Education Siddharth S Jain ©

Business Management, Ethics &

Business Management, Communication

For CS Foundation

Ethics & Communication December 2014 & June 2015

Overview Materials
This lecture series is intended to impart knowledge to CS Foundation The following material shall be
students on Business Environment & Entrepreneurship. This series shall used during lecture:
cover Chapter 1 to 5 & 12 to 14 of Paper 1 in Exam.
! Lecture plan/notes typeset

Objectives ! PPTs

We shall conduct this lecture series in following order: ! Assignments

! Nature of Management & it’s Process ! Q & A sheets

! Planning
! Dedicated Website
! Organization
! Human Resource Management
Other Resources
! Direction & Co-ordination
Students may refer the ICSI study
! Controlling
material (Module) if required.
! Recent Trends in Management
Solving and submitting of all
assignments is compulsory and no
student shall be exempt from the
same.

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Chapter 1: Nature of Management & its Process

Learning agenda:

• Concept of Management
• Objectives of Management
• Importance of Management
• Management - Science or Art
• Management as Profession

• Schools of Management

• Management Functions

• Planning

• Organizing

• HRM/Staffing

• Direction

• Control

• Innovation and Manager

• Goals of a Manager

• Coordination- The Essence of Management

• Principles of Co-ordination

• Development of Management Theory

• Principles of Management

• Frederick Taylor

• Henry Fayol

• Administration and Management

• Managerial Skills

Concept of Management

The economic environment around us consists of three basic entities –

Households (the consumers), Firms (the producers) and Government (the co-coordinator).

- Households provide their service to firms and get paid for the same in the forms of wages/salaries, whereas,

- Firms provide goods and services to the household and get paid in the form of prices.

- Government ensures that above process is properly organized, directed and coordinated

The word management derives its origin from a Greek word nomos which means management.

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Prudential Education Siddharth S Jain ©
Management

- It denotes not only a function but also the people who accept the responsibility to run an organization
- It denotes not only a special position and rank but also a discipline and field of study.

It is the management that provides planning, organization and direction which are necessary for business operations. In
a more important sense, management is a vital function concerned with all aspects of the working of an enterprise.

Management may be defined as the art of getting things done.

Definitions of Management by various economists:

Hick defines management as the process of getting things done by the people and through the people.

Koontz and O DonneII state that management means, Getting things done through and with people.

According to Henry Fayol, to manage is to forecast, and to plan, to organize to command, to coordinate and to
command

Haimann observes that, management is the function of getting things done through people and directing the efforts of
individuals cowards a common objective.

Objectives of management

• Achieving Maximum Output with Minimum Efforts

• Optimum Use of Resources
• Maximum Prosperity for employees
• Human Betterment & Social Justice

Importance of Management

(i) Achieving Group Goals:

• It arranges the factors of production, assembles and organizes the resources, integrates the resources in
effective manner to achieve goals.
• It directs group efforts towards achievement of pre-determined goals.

(ii) Optimum Utilization of Resources:

• Management leads to efficacy in management.

• Management provides maximum utilization of scarce resources by selecting its best possible alternate use.

(iii) Reduces Costs:

• Management uses physical, human and financial resources in such a manner to reduce costs.

(iv) Establishes Sound Organizational Structure:

• Management establishes effective authority & responsibility relationship.

(v) Establishes Equilibrium:

• It enables the organization to survive in changing environment.

(vi) Prosperity of Society:

• Efficient management leads to better economical production which helps in turn to increase the welfare of
people.

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Management- Science or Art

Science = A body of knowledge systematized through application of scientific method in any department of enquiry.

Art = To effect change or accomplish goals by deliberate efforts.

Science includes

• physical sciences such as physics, chemistry, mathematics (also known as exact sciences) and
• social sciences such as economics, sociology, psychology (variable sciences)

It is better to emphasize here that management is still a growing science.

Features of Management as a Science

• Management is an inexact science because it deals with complex human phenomena with limited knowledge
• Management is still a developing science, and
• Management is an inter-disciplinary science-it relates to disciplines such as economics, sociology and psychology.

Features of Management as an Art

• The process of management involves the use of knowhow and skills,

• The process of management is directed towards the accomplishment of concrete results,
• It is the function of creating productive situations needed for further improvements,
• Management is personalized in the sense that every manager has his own approach to problems.

Management as a Profession

Growing administrative complexities, emergence of the corporate form of organization with separation of ownership
from management and development of an organized body of systematic knowledge of management are factors of great
importance responsible for raising management to the status of a distinct profession. But there are people who still do
not agree to management being a profession. To comment on this issue, therefore, one has to be conversant with
important features of a profession.

Features of Management as Profession

A field is normally characterizer as profession when the following special features are present in it:

• Systematic body of knowledge,

• Need for learning and proper organization;
• Entry restricted on the basis of examination or education, and
• Dominance of service motive.

Schools/Approaches of Management

Empirical Approach

Scholars belonging to this school believe that clear understanding of the management theories can only be developed
by the study and analysis of cases and comparative approach. They have a strong conviction that it is through the study
of successes and failures of managers in individual instances and their endeavour to solve specific problems, that it is
possible to apply effective techniques in comparable situations. In their approach they intend to make some
generalizations from case study with a view to establishing theories as useful guides for future course of action.

Interpersonal Behaviour Approach

Since managing involves getting things done with and through people, scholars belonging to this school feel that study
of management should be based on interpersonal relations. This approach is termed as behavioural science, leadership

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or human relations approach by different group of scholars. In the presentation and study of the theories, this school
attached significance to interpersonal relations, personality dynamics, relations of the cultures of individuals and groups.
In other words, this approach leans too heavily on the human aspect of management. Their attention is primarily on
individual and his or her motivations as a socio-psychological being.

Group Behaviour Approach

In fact, this approach is closely related to interpersonal behaviour approach. But this school of thought has basically
centered on studying the behavioural pattern of members and groups in an Organization. The ultimate objective is to
indicate the ways of achieving relatively effective organizational behaviour. Belief and thinking of the scholars of this
group approach move around the behavioural dynamics of small and large groups in any Organization. That apart,
recognition of the organised enterprise as a social organism, institutional foundations of Organization authority,
influence of formal Organization and social factors are the main areas of their attention which considerably helped
management practitioners in their real life situation.

Decision Theory Approach

The exponents of the decision theory emphasise that decision-making is the core of management. They concentrate on
rational decision making, selection from among possible alternatives of a course of action or policy. The approach of
this school of opinion is concerned with the persons, or organizational groups making the decision, or with the analysis
of the decision making process. Besides the economic rationale of decisions, attempt is also made in this theory to
cover the social and psychological aspects and environment of the decisions and the decision-makers.

Mathematical Approach

There cannot be any two opinions that mathematical tools and methods can be used by any school of management.
But some management scholars and practitioners have viewed management exclusively as a system of mathematical
models and processes. Operation researchers and analysts primarily belong to this group. They are of the opinion that if
planning, decision-making, organising, etc., conform to logical processes then the same can easily and suitably be
presented in mathematical symbols. The leaning of this school is heavily on expressing and interpreting the basic
relationship of the problems in terms of determined goals. In a way, it is thus closely related to decision theory approach
but unrelated in the sense that it emphasized extensive use of mathematics in management.

Operational Approach

This approach consolidated the vital thinking of all the approaches to management in order to identify and highlight
what relates to actual managing and which can be most useful in real life situations. The operational approach thus
fundamentally recognises thatthere is a central core of knowledge about managing which exists only in managements.
its applicability can be brought to bear at all levels of management irrespective of the nature and size of the
Organization. But at the same time this approach does recognize that the problems faced by the executives and
managers in their real life normally vary with the nature, size and level of enterprise.

Further, operationalists have drawn and developed their concepts from all possible disciplines which have direct or
indirect effect on human behaviour and organizational functioning. And in this way, the basic theory for the various
facets of management has generally been established.

Thus, it may be seen from the above that the various approaches to interpret the term management may at best be
described aswindow in as much as they emphasize a particular aspect of management while portraying its total picture.
That management draws heavily from a variety of disciplines further creates interpretational problems.

Nevertheless, the various approaches described above encourage holistic, not partisan appreciation of the concept
whose emergence has been described as having even more profound influence than in the industrial revolution.

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