Principles of Management by Shafi

Principles of Management-UNIT-I MBA I semester
Definitions of Management:-
Def 1: According to Mary Parker “the art of getting things done through others”.
Def 2: According to Donelley and Gibson, management as “the process undertaken by one or more
persons to coordinate the activities of others persons to achieve results not attainable by any one
person acting alone”.
Def 3: According to A. pearce and Richard B. Robinson “management is the process of optimizing
human, material and financial contributions for the for the achievement of organizational goasl.
Def 4: According to Harold koontz management is “the process of designing and maintaining an
environment in which individuals, working together in groups, efficiently accomplish selected aims”.
Def 5: Management as designing, providing and maintaining a conductive internal environment in

tune with the opportunities and challenges of external environment through planning, organizing,
staffing, directing and controlling. All resources and operations in order to achieve effective
organizational strategy.
Def 6: Management is the process of decision making and control over the actions of human beings
for the express purpose of attaining pre determined goal.
Def 7: Management is the function of (leadership) executive leadership any where.
Def 8: Management is concerned with seeking that the jobs gets done its task all center on planning
and guiding the operations that are going in the enterprises.
Def 9: Management is the social process if planning, organizing, staffing, directing and controlling
for the determination and achievement of organizational objectives in the dynamic environment.
Def 10: Management has the process of combining scarce resources for the accomplishment of given
objectives. Managers directed the human resources towards the effective utilization of non human
resources.
CHARACTERISTICS OF MANAGEMENT:
The management has its own characteristics namely:
 Management is goal oriented. It achieves the organizational goals through coordination of
the efforts of the personnel.
 Management works as a catalyst to produce goods using labour, materials and capital.
 Management is a distinct process comprising of functions such as planning, organizing,
staffing, directing and controlling.
 Management represents a system of authority – a hierarchy of command and control.
S.SHAFIULLA MBA +91-9441793800:: Page 1 :: S.V. PG COLLEGE.KADAPA

 Management at different levels possesses various degrees of authority.

 Management is unifying force. It integrates human and other resources to achieve the
desired objectives.
 Management harmonizes the individual’s goals with the organizational goals to minimize
conflicts in the organization.
 Management is a multi-disciplinary subject. It grew taking the helps of subjects such as
Engineering, psychology, Sociology, Anthropology, Operations Research etc.
 Management is universal in character. The principles and techniques of management are
equally applicable in the fields of business, industry, education, government, army,
hospitals etc.
Importance of Management:
The existence of management ensures proper functioning and running of an enterprise.

Management can plan the activities to achieve the objectives and utilize the available resources at
minimum cost. The significance or importance of management is briefly explained below:
1. Management meets the challenge of change: In modern business world, there are frequent
changes. The changes place the business in a dangerous position. Only an efficient management
can save the business from the dangers brought in by the challenges.
2. Effective utilization of business: Management is an effective tool for the efficient utilization of
available resources.
3. Innovation: New ideas are developed by the management and implemented in the organization.
Better performance is achieved through new ideas.
4. Stability: The fluctuations of business are Change in stabilized by the management. The
fluctuations of business are caused by the changing policy of the government, pressures on the part
of competitors and changing preferences of customers.
Additional Importance of Management:
a) Management creates a vital, dynamic and life giving force to the enterprise.
b) Management coordinates activities of different departments in an enterprise and establishes
team-spirit among the persons.
c) Management provides new ideas and vision to the organization to do better.
d) Management tackles business problems and provides a tool for the best way of doing things.
e) Management only can meet the challenge of change.
f) Management provides stability to the enterprise by changing the modifying the resources in
accordance with the changing environment of the society.
g) Management helps personality development thereby raising efficiency and productivity.

h) Truly speaking, no enterprise can survive without management, even if it possesses huge
money, excellent machinery and expert man-power, because without management, it will be all
confusion and nobody will know what to do and when to do.
Functions of management:
Planning Organizing
Staffing
Directing Controlling
1. Planning: Planning is deciding in advance in planning is deciding in advance what should be done.
Managers think logically to achieve goals.
Planning is the most fundamental and the most pervasive of all management functions. Henning
and Le Breton define a plan as a “predetermined course of action and the planning function…… as
the core function on which all executive functions are dependent. If people working in groups have
to perform effectively, they should know in advance what is to be done, what activities they have
to perform in order to do what is to be done, and when it is to be done. Planning is concerned with
‘what’, ‘how’, and ‘when’ of performance. It is deciding in the present about the future objectives
and the courses of action for their achievement. It thus involves:
a) determination of long and short-range objectives;
b) development of strategies and courses of actions to be followed for the achievement of these
objectives; and
c) Formulations of policies, procedures, and rules, etc., for the implementation of strategies and
plans.
2. Organizing: Organizing is the process of linking and arranging activities in a sequence. It includes
allocating work, authority and resources.
Organizing involves identification of activities required for the achievement of enterprise
objectives and implementation of plans; grouping of activities into jobs; assignment of these jobs

and activities to departments and individuals; delegation of responsibility and authority for
performance. Organizing thus involves the following sub-functions:
1. Identification of activities required for the achievement of objectives and implementation of
plans.
2. Grouping of activities so as to create self-contained jobs.
3. Assignment of jobs to employees.
4. Delegation of authority so as to enable them to perform their jobs and to command the
resources needed for their performance.
5. Establishment of a network of coordinating relationships.
3. Staffing: Staffing is acquiring, developing, utilizing and compensating human resources necessarily
to achieve organizational goals. Human resources help the process of converting inputs input and
achieving inputs into output and achieving customer satisfaction.
Staffing is a continuous and vital function of management. Staffing has been recognized as a
distinct function of management. It comprises several sub-functions:
1. Manpower planning involving determination of the number and the king of personnel required
2. Recruitment for attracting suitable number of potential employees to seek jobs in the enterprise
concerned.
3. Selection of the most suitable persons for the jobs under consideration.
4. Placement, induction and orientation.
5. Transfers, promotion, termination and layoff.
6. Training and development of employees.
4. Directing: Directing involves leading, influencing and motivating the people to perform
organizational tasks and to convert input into output.
Directing is the function of leading the employees to perform efficiently and effectively, and
contribute their optimum to the achievement of organizational objectives. Jobs assigned to
subordinates have to be explained and clarified, they have to be provided guidance in job
performance and supervised, and they are to be motivated to contribute their optimum performance
with zeal and enthusiasm. The function of directing thus involves the following sub-functions;
1. Communication.
2. Motivation.
3. Leadership.
5. Controlling: controlling is make sure that the organization is moving towards its mission and
objectives. The sub functions of controlling are measurement of performance against pre determined
goals. Identification of deviations from these goals. Corrective actions to rectify deviations.

Henry Fayol's principles:-Henry fayol is the father of administrative management.
1. Division of Labour: - The more people specialize, the more efficiently they can perform in their
work.
2. Authority:-Managers must give orders so they can get things done. while their formal authority
gives them right to command, Managers will not always compel obedience unless they have personal
authority.
3. Discipline: - Members in an organization need to respect the rules and agreements that govern the
organization.
4. Unity of command: - Each employee must receive instructions from only one person when an
employee reported to more than one manager, conflicts in instructions and confusion of authority
would ultimately happen.
5. Unity of directions: - Those operations within the organization that have the same objective
should be directed by only one manager using one plan.
EX:- The personnel department in the company should not have two directors, each with a different
hiring policy.
6. Remuneration:-Compensation for work done should be fair to both employees and employers.
7. Subordination of individual’s interest to the common goal: - In any undertaking, the interests of
employees should not take precedence over the interests of the organization as a whole.
8. Decentralization\centralization:- Decrease in role of subordinates in decision making is

centralization, increasing the role of subordinates in decision making is decentralization.
9. The hierarchy: - The lines of authority in an organization are often represented today by the neat
boxes and lines of the organization chart that runs in order of rank from top management to lowest
level of the enterprise. The hierarchy levels must reduce for the effective flow of information.
10. Order: - Materials and people should be in right place at the right time. Peoples in particular,
should be in the jobs or positions in which they are most suited.
11. Equity: - Managers should be both friendly and fair to their subordinates.
12. Stability of staff: - A high employee turnover rate undermines the efficient functioning of an
organization.

13. Initiative: - Subordinates should be given the freedom to conceive and carry out their plans, even
though some mistakes may result.
14. Esprit De corps: - Promoting team spirit will give the organization a sense of unity.
Some other principles of Management
Coordinative principles: - There should a unity of action in the pursuit of common, explicit goals.
This is same as that of fayol's principles of unity if direction.
Function principles: - There should be division of labour based on functional specialization.
Scalar principle: - There should be a scalar chain of authority running through the organization.
Staff phase of functional principle: - It lays down that functional specialization should provide for
the creation of staff unity for providing service and advice to line managers.
Principles of Bureaucracy:-Max Weber is defined Bureaucracy as the most efficient from of

organization and pronounced the following principles.
1) There should be a continue body of rules and all the organizational work should be performed in
accordance with this rules.
2) A hierarchy of a position should provide for the supervision of each office by a higher authority.
3) Appointments promotions should be made on the basis on universally criterion. People in

supervising positions should be trained in the rules and requirement of position.
4) All administrative acts, actions, and decisions should be recorded in writing, so as to provide for
future permanent records. Specific areas of competence should be determined on the basis of division
of labour adequate authority should be delegated to performance of organizational work.
The Exceptions principle: - Taylor pronounced the principle of management by exception. He held
that policies, rules, procedures, methods and standards should be laid down for the performance of day
to day work.
Principle of supportive relationship:- It states that there should be a maximum probability that in
all interactions and in all relationships with in the organization. Each member will give the
experience as supportive as supportive and one in which builds and maintains his sense of personal

work and importance, the superior behavior towards the subordinates should be aimed at building his
ego rather than deflating his ego.
Classical principle and contingency approach: - Management function differs in degree as well as
variety in various kinds of organizations, as well as in different environments. Hence, the application
of principle of management will vary from situation to another situation.
Nature of management:-
Management as an art, science as well as profession.
1) Management as a science:
F.W. Taylor was the first management theorist who made significant, contribution to the
development of management as a science he used the scientific methods of analysis observation and
experimentation in the management of production function. A perfect manager he distilled certain
fundamental principles and pronounced theory and principles of scientific management.
2) Management as an art: - Management as an art and engineer uses the sciences of engineering
while building a bridge. A manager uses the knowledge of management theory while performing his
managerial function engineer is a science its application to the solution of practical problem is an
art.
3) Management as a profession: generally mean of a manager who undertakes management as a
career and is not interested in acquiring ownership, share in the enterprise which he manages.
Mc ferland describes a management profession requires the following characteristics,
1. Body of Knowledge: Management knowledge is developed systematically and scientifically

based on research studies, experiments, experiences and observations.
2. Development and updating the knowledge: Managers should update their knowledge by
learning and acquiring the latest developments through training, executive development and
formal study.
3. Professional Journals: There are number of professional journals all over the world to publish
the findings of research studies and latest developments in management.
Ex: Havard Business Review, Vikalpa, Decision, Indian Management, Journal of Industrial
Relations
4. Professional Associations: There should be professional associations in order to monitor and

enable professional development.
Ex: All India Management Association, National Institute of Personnel Management etc.

5. Code of Conduct: The professionals should behave ethically while discharging their duties. All
India Management Association, National Institute of Personnel Management, Institute of
Chartered Accountants of India and other professional Organizations formulate the code of
conduct.
6. Specialized Educational Qualifications: Indian Institute of Management and Departments of
Management in the Universities are established to provide specialized management education
leading to postgraduate diploma in Management PGDM and Master of Business
Administration Degree.
Management Vs Administration:
Different writers and management thinkers view management and administration differently.
There is no unanimity among the writers regarding these two concepts. According to one to
one section of writers, administration involves policy making, formulation of vision, mission,
objectives, and strategies.
Administration: Administration is the process of determination of objectives, laying down

plans and policies and ensuring that achievement of the objectives. It involves policy making,
formulation of vision, mission, objectives and strategies. Such as administration is the function
of top level management. It decides organizational structure and prepares the organizational
plans.
According to peter F. Drucker, the term administration is applicable to non-profit

organizations like government organizations, service-oriented hospitals and educational
institutions, military, churches, temples etc. The main activity of administration is planning,
organizing, directing, controlling and rendering services. Thus, governance of non-profit
organization is called administration. Administration is measured by efficiency in rendering
services.
Management: It involves executing the plans and strategies and carrying out various activities
determined by the administration. Management function is the function of lower level people in
the company. It directs and controls the subordinates, i.e. lower level people, lower level
managers. Governance of business organization referred to as management. Thus management
is concerned with business organization and profit-oriented organizations. It is measured by the
efficiency in profit –making.
Levels of Management: There are 3 levels in Management,

1. Top Level Management

2. Middle Level Management
3. Lower Level Management
Top Level Management: Top Level managers are senior level executives of the company
including Managing Director, president or Vice Presidents, General Managers, Chief Executives of
the Co.
Top level management formulates objectives, policies and corporate level strategies of the
co. top level managers are lead and motivate the middle level managers. They coordinate the
activities of middle level managers.
Middle Level Managers: middle level managers are responsible for coordination of the activities of
various departments. Middle level managers include managers of various departments like
production department, marketing department, finance department, Humana resource Department
and R&D department. These managers are responsible for success or failure of their departments.
Middle level managers formulate the objectives, goals and strategies of their departments
based on those of the organization. Middle level managers lead, motivate and coordinate the
activities of the lower level managers.
Lower Level Managers: Lower level managers are responsible for the work of the operating staff
working with them. Lower level managers are also called first-line or first level or Junior Managers.
They direct, lead, motivate and coordinate the activities of the operating employees. These
managers mostly supervise the operating employees while they perform their work. As such, the
lower level Managers are also called ‘Supervisors”.

Top Level Management
Middle Level
Management
Lower Level
Management
MANAGEMENT THOUGHT
The nature of management principles includes universal applicability, dynamism, relativeness etc.
A number of practitioners’ thinkers and academicians of management have contributed to the
formation and development of management principles, thought and approaches. These scholars are
attempted to classify management thought in six schools of management theory.
1. The classical Approach
2. Human relations Approach
3. Management Science approach
4. Systems approach to management
5. Contingency approach
6. The decision theory approach
School of Management Management scientists Element focused

1. Classical School 1. F.W. Taylor Raising productivities through greater
(or) efficiency is production and increased pay
Scientific Management for workers by applying the scientific
School method
(or)
Bureaucracy Theory 2. Henry L. Gantt Called for scientific selection of workers
school and “Human cooperation” between labour
and management. He also stressed the
need for training.
3. Frank and Lillian Gilberth Frank is known primarily for his time and
motion studies. Lillian focused on the
human aspects of work and the
understanding of workers personalities and
needs.
2. Human Relations 1. Hawthorne
School 2. Roethlisberger Influence of social attitudes and
( Neo – classical school ) 3. Elton Mayo relationships of work groups on
performance.
3. Decision Theory school 1. Simon Management process a decision making
process.
4. Management Science 1. Harold koontz Management is treated as a system of
school 2. Maslow mathematical models and processes.

5. System theory school 1. J.D.Thompson The task of Manager is to maintain a

2. C. Bernard system of cooperative effort in a formal
organization.
6. Contingency theory 1. Tosi It focuses on the inter-relationships within
school 2. Hammer and among subsystems as well as between
3. Kast the organization and its environment.
1. The Classical Approach
This approach include three theories they are

1. Scientific management theory
2. Management process theory
3. Bureaucracy theory
i. Scientific management theory: - this theory was proposed by F.W. Taylor, and the principles of
scientific management are
Time and motion study: F.W. Taylor observed that a number of movements of the workers at the workers
at the work place were unnecessary and consequently they were taking more time to do the job than
necessary. The time and motion study include the aspects:
 Observing the various motions of the workers at the work place.
 Identify the necessary and unnecessary movements in carrying out the work
 Elimination of unnecessary movements.
 Observing the time required for each of the necessary movements with the help of a stop
watch.
 Standardizing the motions and time.
Science, but not rule of the thumb: - Scientific management suggests doing the work systematically,
determining the work clearly and sequentially, and standardization of motions and time for each motion
and allotment of fair work to each worker. Thus, scientific management eliminated the rule of the
thumb at the work place.
Differential payment: - F.W. Taylor suggested differential piece rate system.

He fixed the standard level of production. Those employees who produce less than the standard
production received low piece rate and employees produced above the standard production received
higher piece rate. Differential payment is introduced in order to motivate the employees to produce
more than the standard level and enhance productivity.
Cooperation between workers and management:

Sound employee-employer relations can be achieved in the following ways:

o Management should understand the workers need and take steps to satisfy them.
o Workers should understand the organizational requirements like increasing
productivity, sales profitability etc., and maximizing their contribution.
Standardization: Taylor advocated the importance of standardization tools, instruments, working

hours, working conditions, quality of work, cost of production etc.
Mental revolution:- Taylor techniques of determining work standards, eliminating wasteful operations
and differential piecework system of wage payment would benefit the workers in the form of higher
wages, and the employers in the form of higher production, it would result into a “mental revolution”
both among the management and the workers.
ii. Management process theory: - the first proponent of management process theory was Henry
fayol. Fayol identified five functions of management Planning, Organizing, commanding, Coordinating
and controlling.
Henry fayol propounded some important principles of management

1) Division of Labor 2)Authority 3) Discipline 4) Unity of command 5) Unity of Direction
6) Subordination of individual interest to the common goals 7) Remuneration 8) Centralization, 9)
The Hierarchy 10) Order 11) Equity 12) Stability of Staff 13) Initiative 14) Esprit De corps
iii. Bureaucracy theory: - Max Weber contributed bureaucracy as the most efficient form of
organization, and propounded the following principles of management of bureaucratic organizations.
1) There should be a continuing body of rules and all the organizational work should be
performed in accordance with these rules.
2) Specific areas of competence should be determined on the basis of division of labor, and
adequate authority should be delegated to incumbents for the performance of organizational work.
3) A hierarchy of positions should provide for the supervision of each office by a higher
authority.
4) Appointments and promotions should be made on the basis of universalistic criterion of
demonstrated competence. Further, people placed in supervisory positions should be trained in the rules
and requirements of positions.
5) All administrative acts, actions and decisions should be recorded in writing so as to provide for
future scrutiny and permanent record.

2. Human relations Approach: - The essence of human relations approach is that workers should be
treated as human beings but not as mere factors of productions, workers needs, feelings, attitudes,
values and desires are extremely important. The terms of human relations approach is that
1). Organizational situation should be viewed in social terms as well as in economic and technical terms
2). The social process of group behavior can be understood in terms of the clinical method analogous to
the doctor’s diagnosis of the human organism.
3). Management Science approach: - The scientific character of management is well supported by
mathematical models and operations research. Management science is systematic in the sense that
certain relationships between variables have been ascertained, principles and their limitations have been
discovered tested and established.
The management science must have the following characteristics:
• Systematic body of knowledge
• Method of scientific enquiry
• Should establish cause and effect relationship
• Principles should be verifiable
• Should ensure predictable results
• Should have universal application
4. Systems approach to management: -
A system is a set of inter related but separate parts working towards common purpose. Systems
approached to management views the organization as the unified purposeful system composed of inter
related parts. Systems oriented managers would make decisions only after they have identified impact
of theses decisions on all other departments and the entire organization
The components of system approach to management are

1.subsystem 2. Synergy 3. Open system 4. Closed system 5. System
boundary 6.flows 7. Feedback
1. Subsystem: - subsystem is those arts which make up the whole system. Each system in turn
may be a subsystem of a still larger system. Thus, a department is a subsystem of a factory, which
is subsystem of a firm, which is a subsystem of an industry, which is a subsystem of a national
economy, which is a subsystem of the world economic system.

2. Synergy: - synergy is the situation in which the ole is greater than the sum of its parts. In the
organizational terms synergy means that departments that interact co-operatively are more
productive than they would be, if they operated in isolation.
3. Opens system: - It is a system that interacts with its environment. All organizations interact
with their environment, but the extent to which they do so varies.
4. Closed system: - It is a system that does not interact with its environment.
5. System Boundary: - It is the boundary that separates each system from its environment. It is
rigid in a closed system while flexible in an open system.
6. Flows: - A system has flows of information, materials and synergy. These enter the system from
the environment as inputs, undergo transformation process within the system and exist in the
system as outputs.
7. Feedback: - It is the part of system control in which the result of actions is returned to the
individual, allowing work procedures to be analyzed and corrected.
FEATURES OF SYSTEMS APPROACH TO MANAGEMENT:- According to Herbert the

features of systems approach to management are:
(i). dynamic: The process between subsystems within an organization is dynamic.

(ii). Multi motivated: Since the organization is dynamic and has multiple goals, an act in the
organization may be motivated by several motives.
(iii). Descriptive: Instead of providing certain prescriptions, this theory describes the features of
organization and management.
(iv). Adaptive: All the subsystems should be adaptable and accommodate to the changes in other
subsystems.
5. Contingency approach:-
This approach is called situational approach. This approach was developed by managers,
consultants and researchers who tried to apply the concepts of the major schools to real life
situations. They sought to know the causes for the success of methods in one situation and failure
in another situation. Advocates of this approach answered that result differ because situation
differs, as such a technique that works effectively in one situation will not necessarily work in all
cases. It focuses on the inter-relationship within and among the subsystems as well as between the
organization and its environment. It emphasis the multivariate nature of organizations and attempts

to understand how organizations operate under varying conditions and in specific situation, it
regards management as situational.
6. The decision theory approach:-
The decision theory approach, propounded by Simon and others, focus on the decision, the
decision making process, the decision making process, the decision maker and the environment of
the decision maker. It looks at management through this key hole and includes in it the entire field
of enterprise operation and its environment. Decision making, though central to managing, is only
an aspect of management and not the totality of management. The most important tasks of a
modern manager are innovating, integrating the organization with external environment, and
creation of an organizational climate conductive to the optimum performance by its members. The
decision theories might as extent their area of enquiry to the whole field of human knowledge
rather than limit to the field of management.
Managerial Skills:
Introduction:
What makes a good manager? Innate traits or acquired skills? Assuming that a manager is one who
directs the activities of other persons and undertakes the responsibility for achievement of objectives
through such efforts, successful management seems to rest on three basic developable skills: technical,
human and conceptual. The relative importance of these three skills varies with the level of managerial
responsibility.

Technical Skill
• The technical skill implies an understanding of and proficiency in a specific kind of activity,
particularly one involving methods, processes, procedures, or techniques; it involves
specialized knowledge, analytical ability within that specialty, and facility in the use of the
tools and techniques of the specific discipline.
• Vocational and on-the-job training programmes largely do a good job in developing this skill.
Human Skill
• This refers to the ability to work with, understand and motivate other people; the way the
individual perceives (and recognizes the perceptions of) his superiors, equals, and subordinates,
and the way he behaves subsequently.
• The person with highly developed human skills is aware of his own attitudes, assumptions, and
beliefs about other individuals and groups.
• He is sufficiently sensitive to the needs and motivations of others in his organization so that he
can judge the possible reactions to, and outcomes of, the various courses of action he may
undertake.
• Human skills could be usefully divided into
 leadership ability within the manager's own unit and
 skill in intergroup relationships:
• Experience shows that outstanding capability in one of these roles is frequently accompanied
by mediocre performance in the other.
• Intragroup skills are essential in lower and middle management roles and intergroup skills
become increasingly important in successively higher levels of management.
• To acquire the Human Skill, the executive must develop his own personal point of view toward
human activity so that he will:
(a) Recognize the feelings and sentiments which he brings to a situation,

(b) Have an attitude about his own experience which will enable him to re-evaluate and learn from
them,
(c) Develop ability in understanding what others by their actions and words are trying to
communicate to him and
(d) Develop ability in successfully communicating his ideas and attitudes to others.
• The process of acquiring this ability can be effectively aided by a skilled instructor through use
of case problems coupled with impromptu role playing.
Conceptual Skill
• This skill involves the ability to see the enterprise as a whole; it includes recognizing how the
various functions of the organization depend on one another, and how changes in any one part
affect all the others;
• It extends to visualizing the relationship of the individual business to the industry, the
community, and the political, social and economic forces of the nation as a whole.
• Training can enhance previously developed conceptual abilities. In developing the conceptual
skill, some of the best results have been achieved through "coaching" of subordinates by
superiors.
• One way a superior can help "coach" his subordinate is by assigning a particular responsibility,
and then responding with searching questions or opinions, rather than giving answers.
• Technical skills are not so important for the chief executives in large organisations where such
executives have extensive staff assistance and highly competent, experienced technical
operators are available.
Relative Significance of Managerial Skills
Conceptual Conceptual
Conceptual
Human
Human

Technical Human
Technical
Technical *
Supervisory level Middle mgmt level Top mgmt level
Managerial roles:
Introduction:
• Manager is responsible to integrates all the activities which are performed in an organization.
In other words, he has co-ordinate the talents of people working under him for the purpose of
achieving the organizational goals.
• The role of a manager gets much importance than other executives in an organization. Hence a
manager’s job is very much complex and requires some special qualities to be ahead.
1. Director: Manager gives direction to people working under him. It includes
instructions. Manager has directed the executives towards achieving

organizational goals.
2. Motivator: Manager understands likes and dislikes of executives and motivates

them accordingly. It stimulates the performance of job. The manager stimulates
the executives through motivation.
3. Human being: Manager treats all the people working under him equally and no personal bias.
He has to mingle with others and understand the feeling of other executives.
4. Guide: Manager should be well aware of using the equipment, techniques and procedures
involved in performing specific tasks. If so, he can guide others whenever a need arise.
5. Friend: Unnecessary misunderstanding may be arise among the executives. Now, the manager
should come forward voluntarily and eliminate the misunderstanding at the earliest. Here, the
manager is acting as a friend.

6. Planner: Day-to-day requirements of the organization has to be identified and arranged by the
manager. He has to plan the work and assign the same to the executives according to their
position held.
7. Supervisor: Manager has to supervise and control, executives performance and maintain
personal contacts with them. He has to perform this work along with the work to be performed
by him.
8. Reporter: The feedback information is provided by the manager to the top management
people. Sometimes, workers problems have not been solved by the manager. If so, the same
should be communicated to the authorities.
RESPONSIBILTIES OF A PROFESSIONAL MANAGER:
Manager is getting things done through others. He prepares plan, build an organization, help
and motivate the employees according to plans for the purpose of achieving organization goals.
1. Planning of work: Manager has to identify the work which are necessary to achieve the
objectives. Every work should lead to the achievement of objectives. Manager is responsible
for planning of work.
2. Proper and effective Communication: There must be a free flow of communication within
the organization.
3. Co-ordination of Efforts: The efforts of employees have more value than the finance. The
finance can be earned through hard work. But, if efforts are not properly co-ordinate, all the
efforts are in vain.
4. Getting co-operation of Employees: Different nature of employees are working in an

organization. Hence, the manager is responsible for getting co-operation form employees
working under him.
5. Encourages a team spirit: The manager is not only guide the employees but also encourages a
team spirit among them.
6. Better utilization of Resources: Resources of any organization is limited one. An

organization has more resources on certain items and limited resources on certain measures.

7. Selecting the Procedure: Top management executives frame the policy and goals of an
organization. There are many ways available to achieve the objectives. Even though the
manager is responsible to select a procedure which is more suitable and adoptable.
8. Maintaining good human relations: He is responsible for maintaining good human relations
with the employees and maintain good human relations among the employees also. Employees
are working in different temperaments.
9. Solve the problem: Sometimes problem may arised among the employees. When, the manager
takes the initiative steps for solving such problems.
10. Arranging training and development facilities: Training and Development facilities should
be arranged by the manager for the benefit the organization and employees.
Hence, the manager has the responsibility of arranging training and development facilities.
Roles: The two sets of roles enable the manger to play the four decisional roles.
Interpersonal Roles:
The important interpersonal roles of managers are:
Figurehead Role: Managers perform the duties of a ceremonial nature as head of the organization, a
strategic business unit or department. Duties of interpersonal roles include routine, involving little
serious communication and less important decisions.
Leader role: The manager, in charge of the organization/department, coordinates the work of others
and leads his subordinates.
Liaison Role: As the leader of the organization or unit, the manager has to perform the functions of
motivation, communication, encouraging team spirit and the like.
Informational roles:
Manager emerges as the nerve centre of his organization in view of his interpersonal links with his
subordinates, peers, superiors and outsiders.
The information roles of a manager include:

Monitor’s Role: As a result of the network of contacts, the manager gets the information by scanning
his environment, subordinates, peers and superiors. Managers mostly collect information in verbal
form often as gossip and grapevine channels.
Disseminator’s Role: The manager disseminates the information which he collects from different
sources and through various means. The manager plays an important role in disseminating the
information to his subordinates, when they don’t have contact with one another.
Spokesman’s Role: Some insiders and /or outsiders control the unit/department or the organization.
The manager has to keep them informed about the development in his unit.
Customers must be informed about the new product developments, quality maintenance, government
officials about implementation of law etc.
Decisional Roles:
Information is an important and basic input to decision-making. The managers play a crucial role in
decision-making system of the unit. The decisional roles of the manager are:
Entrepreneurial Role: As a entrepreneur, the manager is a creator and innovator.
According to Peter F.Drucker, “the manager has the task of creating a true whole that is larger
than the sum of its parts, a productive entity that turns out more than the sum of the resources put into
it.”
Disturbance Handler Role: Entrepreneurial role describes the manager as the voluntary initiator of
change; the disturbance handler role presents the manager as the involuntarily responding to pressures.
The manager should have enough time handling disturbances carefully, skillfully and
effectively.
Resource Allocator’s Role: The most important resource that a manager allocates to his subordinates
is his time and allows the subordinates to express their opinions and share their experiences.
This process helps both the manager and his subordinates in making effective decisions.
Negotiator’s Role: Managers spend considerable time in the task of negotiations. He negotiates with
the subordinates for improved commitment and loyalty, with the peers for cooperation, coordination

and integration, with workers and their unions regarding conditions of employment, commitment,
productivity and with the government about providing facilities for business expansion etc.
The manager has to perform these roles simultaneously by integrating one with the another. As
a strategist, the manager has to integrate all the roles in decision-making and performing his tasks.
Business Environment:
Meaning of Business Environment:
Environment of a business means the external forces influencing the business decisions. They can
be forces of economic, social, political and technological factors. These factors are outside the control
of the business. The business can do little to change them.
Following features:
1. Totality of external forces: Business environment is the sum total of all things external to
business firms and, as such, is aggregative in nature.
2. Specific and general forces: Business environment includes both specific and general forces.
Specific forces (such as investors, customers, competitors and suppliers) affect individual
enterprises directly and immediately in their day-to-day working. General forces (such as social,
political, legal and technological conditions) have impact on all business enterprises and thus may
affect an individual firm only indirectly.
3. Dynamic nature: Business environment is dynamic in that it keeps on changing whether in terms
of technological improvement, shifts in consumer preferences or entry of new competition in the
market.
4. Uncertainty: Business environment is largely uncertain as it is very difficult to predict future
happenings, especially when environment changes are taking place too frequently as in the case of
information technology or fashion industries.
5. Relativity: Business environment is a relative concept since it differs from country to country and
even region to region. Political conditions in the USA, for instance, differ from those in China or
Pakistan. Similarly, demand for sarees may be fairly high in India whereas it may be almost non-
existent in France.
Importance of Business Environment
1. Firm to identify opportunities and getting the first mover advantage: Early identification of
opportunities helps an enterprise to be the first to exploit them instead of losing them to

competitors. For example, Maruti Udyog became the leader in the small car market because it was
the first to recognize the need for small cars in India.
2. firm to identify threats and early warning signals: If an Indian firm finds that a foreign
multinational is entering the Indian market it should gives a warning signal and Indian firms can
meet the threat by adopting by improving the quality of the product, reducing cost of the
production, engaging in aggressive advertising, and so on.
3. Coping with rapid changes: All sizes and all types of enterprises are facing increasingly dynamic
environment. In order to effectively cope with these significant changes, managers must
understand and examine the environment and develop suitable courses of action.
4. Improving performance: the enterprises that continuously monitor their environment and adopt
suitable business practices are the ones which not only improve their present performance but also
continue to succeed in the market for a longer period.
5. Dimensions of Business Environment

What constitutes the general environment of a business?
The following are the key components of general environment of a business.
1. Economic environment economic environment consists of economic factors that influence the
business in a country. These factors include gross national product, corporate profits, inflation rate,
employment, balance of payments, interest rates consumer income etc.
2. Social environment It describes the characteristics of the society in which the organization exists.
Literacy rate, customs, values, beliefs, lifestyle, demographic features and mobility of population
are part o the social environment. It is important for managers to notice the direction in which the
society is moving and formulate progressive policies according to the changing social scenario.
3. Political environment It comprises political stability and the policies of the government.
Ideological inclination of political parties, personal interest on politicians, influence of party
forums etc. create political environment. For example, Bangalore established itself as the most
important IT centre of India mainly because of political support.
4. Legal environment This consists of legislation that is passed by the parliament and state
legislatures. Examples of such legislation specifically aimed at business operations include the
Trade mark Act 1969, Essential Commodities Act 1955, Standards of Weights and Measures Act
1969 and Consumer Protection Act 196.
5. Technological environment It includes the level of technology available in a country. It also
indicates the pace of research and development and progress made in introducing modern
technology in production. Technology provides capital intensive but cost effective alternative to

traditional labor intensive methods. In a competitive business environment technology is the key to
development.
Economic Environment in India
In order to solve economic problems of our country, the government took several steps including
control by the State of certain industries, central planning and reduced importance of the private
sector.
Liberalization:
• The economic reforms that were introduced were aimed at liberalizing the Indian business and
industry from all unnecessary controls and restrictions.
• They indicate the end of the license-permit-quota raj.
• Liberalization of the Indian industry has taken place with respect to:
1. Abolishing licensing requirement in most of the industries except a short list,
2. Freedom in deciding the scale of business activities i.e., no restrictions on expansion or
contraction of business activities,
3. Removal of restrictions on the movement of goods and services,
4. Freedom in fixing the prices of goods services,
5. Reduction in tax rates and lifting of unnecessary controls over the economy,
6. Simplifying procedures for imports and experts, and
7. Making it easier to attract foreign capital and technology to india.
Privatization:
• The new set of economic reforms aimed at giving greater role to the private sector in the nation
building process and a reduced role to the public sector.
• To achieve this, the government redefined the role of the public sector in the New Industrial Policy
of 1991
• The purpose of the sale, according to the government, was mainly to improve financial discipline
and facilitate modernization.
Globalization:
• Globalizations are the outcome of the policies of liberalization and privatization.
• Globalization is generally understood to mean integration of the economy of the country with the
world economy, it is a complex phenomenon.
• It is an outcome of the set of various policies that are aimed at transforming the world towards
greater interdependence and integration.
• It involves creation of networks and activities transcending economic, social and geographical
boundaries.

• Globalization involves an increased level of interaction and interdependence among the various
nations of the global economy.
• Physical geographical gap or political boundaries no longer remain barriers for a business
enterprise to serve a customer in a distant geographical market.
Impact of Government Policy Changes on Business and Industry
1. Increasing competition: As a result of changes in the rules of industrial licensing and entry of
foreign firms, competition for Indian firms has increased especially in service industries like
telecommunications, airlines, banking, insurance, etc. which were earlier in the public sector.
2. More demanding customers: Customers today have become more demanding because they are
well-informed. Increased competition in the market gives the customers wider choice in
purchasing better quality of goods and services.
3. Rapidly changing technological environment: Increased competition forces the firms to develop
new ways to survive and grow in the market. New technologies make it possible to improve
machines, process, products and services. The rapidly changing technological environment creates
tough challenges before smaller firms.
4. Necessity for change: In a regulated environment of pre-1991 era, the firms could have relatively
stable policies and practices. After 1991, the market forces have become turbulent as a result of
which the enterprises have to continuously modify their operations.
5. Threat from MNC Massive entry of multi nationals in Indian marker constitutes new challenge.
The Indian subsidiaries of multi-nationals gained strategic advantage. Many of these companies
could get limited support in technology from their foreign partners due to restrictions in
ownerships. Once these restrictions have been limited to reasonable levels, there is increased
technology transfer from the foreign partners
Social Responsibilities of Business and Business Ethics

Introduction: We all know that people engage in business to earn profit. However, profit
making is not the sole function of business. It performs a number of social functions, as it is a part of
the society. It takes care of those who are instrumental in securing its existence and survival like- the
owners, investors, employees, consumers and government in particular and the society and community
in general. So, every business must contribute in some way or the other for their benefit. For example,
every business must ensure a satisfactory rate of return to investors, provide good salary, security and

proper working condition to its employees, make available quality products at reasonable price to its
consumers, maintain the environment properly etc.
However, while doing so two things need to be noted to view it as social responsibility of
business. First, any such activity is not charity. It means that if any business donates some amount of
money to any hospital or temple or school and college etc., it is not to be considered as discharge of
social responsibility because charity does not imply fulfilling responsibility. Secondly, any such
activity should not be such that it is good for somebody and bad for others. Suppose a businessman
makes a lot of money by smuggling or by cheating customers, and then runs a hospital to treat poor
patients at low prices his actions cannot be socially justified. Social responsibility implies that a
businessman should not do anything harmful to the society in course of his business activities.
Definition: The obligation of any business to protect and serve public interest is known as social
responsibility of business.
As we know, every business operates within a society. It uses the resources of the society and depends
on the society for its functioning. This creates an obligation on the part of business to look after the
welfare of society. So all the activities of the business should be such that they will not harm, rather
they will protect and contribute to the interests of the society. Social responsibility of business refers to
all such duties and obligations of business directed towards the welfare of society. These duties can be
a part of the routine functions of carrying on business activity or they may be an additional function of
carrying out welfare activity.
Why should business be socially responsible?

Social responsibility is a voluntary effort on the part of business to take various steps to satisfy the
expectation of the different interest groups. As you have already learnt, the interest groups may be
owners, investors, employees, consumers, government and society or community. But the question
arises, why should the business come forward and be responsible towards these interest groups. Let us
consider the following points:
i. Public Image - The activities of business towards the welfare of the society earn goodwill and
reputation for the business. The earnings of business also depend upon the public image of its
activities. People prefer to buy products of a company that engages itself in various social welfare
programmes. Again, good public image also attracts honest and competent employees to work with
such employers.
ii. Government Regulation - To avoid government regulations businessmen should discharge their
duties voluntarily. For example, if any business firm pollutes the environment it will naturally come
under strict government regulation, which may ultimately force the firm to close down its business.
Instead, the business firm should engage itself in maintaining a pollution free environment.

iii. Survival and Growth -Every business is a part of the society. So for its survival and growth,
support from the society is very much essential. Business utilizes the available resources like power,
water, land, roads, etc. of the society. So it should be the responsibility of every business to spend a
part of its profit for the welfare of the society.
iv. Employee satisfaction - Besides getting good salary and working in a healthy atmosphere,
employees also expect other facilities like proper accommodation, transportation, education and
training. The employers should try to fulfill all the expectation of the employees because employee
satisfaction is directly related to productivity and it is also required for the long-term prosperity of the
organisation. For example, if business spends money on training of the employees, it will have more
efficient people to work and thus, earn more profit.
v. Consumer Awareness - Now-a-days consumers have become very conscious about their rights.
They protest against the supply of inferior and harmful products by forming different groups. This has
made it obligatory for the business to protect the interest of the consumers by providing quality
products at the most competitive price.
Responsibility Towards Different Interest Groups:

After getting some idea about the concept and importance of social responsibility of business let us
look into the various responsibilities that a business has towards different groups with whom it
interacts. The business generally interacts with owners, investors, employees, suppliers, customers,
competitors, government and society. They are called as interest groups because by each and every
activity of business, the interest of these groups is affected directly or indirectly.
Business
Towards
the
Suppliers Competitor Society
Owners Investors Employees Customers Governme different
s
nt
interest
groups
i. Responsibility towards owners: Owners are the persons who own the business. They contribute
capital and bear the business risks. The primary responsibilities of business towards its owners are to:

a. Run the business efficiently.

b. Proper utilization of capital and other resources.
c. Growth and appreciation of capital.
d. Regular and fair return on capital invested.
ii. Responsibility towards investors
Investors are those who provide finance by way of investment in debentures, bonds, deposits etc.
Banks, financial institutions, and investing public are all included in this category. The responsibilities
of business towards its investors are :
a. Ensuring safety of their investment,
b. Regular payment of interest,
c. Timely repayment of principal amount.
iii. Responsibility towards employees
Business needs employees or workers to work for it. These employees put their best effort for the
benefit of the business. So it is the prime responsibility of every business to take care of the interest of
their employees. If the employees are satisfied and efficient, then the only business can be successful.
The responsibilities of business towards its employees include:
a. Timely and regular payment of wages and salaries.
b. Proper working conditions and welfare amenities.
d. Opportunity for better career prospects.
e. Job security as well as social security like facilities of provident fund, group insurance, pension,
retirement benefits, etc.
f. Better living conditions like housing, transport, canteen, crèches etc.
g. Timely training and development.
iv. Responsibility towards suppliers
Suppliers are businessmen who supply raw materials and other items required by manufacturers and
traders. Certain suppliers, called distributors, supply finished products to the consumers. The
responsibilities of business towards these suppliers are:
a. Giving regular orders for purchase of goods.
b. Dealing on fair terms and conditions.
c. Availing reasonable credit period.
d. Timely payment of dues.
v. Responsibility towards customers
No business can survive without the support of customers. As a part of the responsibility of
business towards them the business should provide the following facilities:
a. Products and services must be able to take care of the needs of the customers.

b. Products and services must be qualitative

c. There must be regularity in supply of goods and services
d. Price of the goods and services should be reasonable and affordable.
e. All the advantages and disadvantages of the product as well as procedure to use the products must
be informed do the customers.
f. There must be proper after-sales service.
g. Grievances of the consumers, if any, must be settled quickly.
h. Unfair means like under weighing the product, adulteration, etc. must be avoided.
vi. Responsibility towards competitors
Competitors are the other businessmen or organizations involved in a similar type of business.
Existence of competition helps the business in becoming more dynamic and innovative so as to make
itself better than its competitors. It also sometimes encourages the business to indulge in negative
activities like resorting to unfair trade practices. The responsibilities of business towards its
competitors are
i. not to offer exceptionally high sales commission to distributors, agents etc.
ii. not to offer to customers heavy discounts and /or free products in every sale.
iii. not to defame competitors through false or ambiguous advertisements.
vii. Responsibility towards government
Business activities are governed by the rules and regulations framed by the government. The various
responsibilities of business towards government are:
a. Setting up units as per guidelines of government
b. Payment of fees, duties and taxes regularly as well as honestly.
c. Not to indulge in monopolistic and restrictive trade practices.
d. Conforming to pollution control norms set up by government.
h. Not to indulge in corruption through bribing and other unlawful activities.
viii. Responsibility towards society
A society consists of individuals, groups, organizations, families etc. They all are the members of the
society. They interact with each other and are also dependent on each other in almost all activities.
There exists a relationship among them, which may be direct or indirect. Business, being a part of the
society, also maintains its relationship with all other members of the society. Thus, it has certain
responsibilities towards society, which may be as follows:
a. to help the weaker and backward sections of the society
b. to preserve and promote social and cultural values
c. to generate employment
d. to protect the environment

e. to conserve natural resources and wildlife

f. to promote sports and culture
g. to provide assistance in the field of developmental research on education, medical science,
technology etc.
IX responsibilities of business towards the different interest groups as discussed above.
i. Protection of environment.
ii. Better living conditions like housing, transport, canteen, crèches etc.
iii. Promotion of sports and culture.
iv. Opportunity for better career prospects
v. Regular supply of goods and services
vi. Proper working conditions and welfare amenities
vii. Goods and services at reasonable and affordable price.
viii. Prompt after sales services.
ix. Conservation of natural resources and wildlife.
Business Ethics & Social Values

Ethics refers to conduct and activities of people based on moral principles. Honesty,
truthfulness, compassion, sympathy, feeling of brotherhood etc. are considered ethical. Business can
also be guided by certain moral principles say, running the business without adopting unfair practices,
being honest and truthful about quality of goods, charging fair prices, abiding to laws, paying taxes,
duties and fees to the government honestly. The basic question underlying business ethics is whether
business should aim at earning profit by any means? Obviously, not. Thus, businessmen should charge
only fair price for the goods and services supplied, never sell adulterated products as pure. Indeed
business ethics suggest certain principles to conduct business so as to be morally justified. Just like
social values, business ethics also play a major role while fulfilling social responsibilities.
Every society generally views certain activities, conduct and behaviour of its members to be
undesirable or harmful to others. Similarly, desirable acts and conduct of people are recognized and
appreciated in society. Social values refer to the general recognition in society about which acts are

good and desirable on the part of people and which acts are not. In relation to business, social values
of business may indicate:
a. the characteristics of good business;
b. objectives which are desirable for business to follow; and
c. the manner in which business activities should be conducted in the interest of society.
For example, we consider it bad, if any business indulges itself in selling adulterated goods or charging
higher price or polluting the environment. Thus, social values of the business form the base for social
responsibilities.

Principles of Management by Shafi

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Principles of Management-UNIT-I MBA I semester

Def 5: Management as designing, providing and maintaining a conductive internal environment in

Def 7: Management is the function of (leadership) executive leadership any where.

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 Management at different levels possesses various degrees of authority.

The existence of management ensures proper functioning and running of an enterprise.

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Henry Fayol's principles:-Henry fayol is the father of administrative management.

8. Decentralization\centralization:- Decrease in role of subordinates in decision making is

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Some other principles of Management

Function principles: - There should be division of labour based on functional specialization.

Principles of Bureaucracy:-Max Weber is defined Bureaucracy as the most efficient from of

3) Appointments promotions should be made on the basis on universally criterion. People in

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Management as an art, science as well as profession.

Mc ferland describes a management profession requires the following characteristics,

1. Body of Knowledge: Management knowledge is developed systematically and scientifically

4. Professional Associations: There should be professional associations in order to monitor and

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Administration: Administration is the process of determination of objectives, laying down

According to peter F. Drucker, the term administration is applicable to non-profit

Levels of Management: There are 3 levels in Management,

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1. Top Level Management

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Top Level Management

School of Management Management scientists Element focused

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5. System theory school 1. J.D.Thompson The task of Manager is to maintain a

This approach include three theories they are

Differential payment: - F.W. Taylor suggested differential piece rate system.

Cooperation between workers and management:

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Standardization: Taylor advocated the importance of standardization tools, instruments, working

Henry fayol propounded some important principles of management

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4. Systems approach to management: -

The components of system approach to management are

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FEATURES OF SYSTEMS APPROACH TO MANAGEMENT:- According to Herbert the

(i). dynamic: The process between subsystems within an organization is dynamic.

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6. The decision theory approach:-

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• Human skills could be usefully divided into

 leadership ability within the manager's own unit and

 skill in intergroup relationships:

(a) Recognize the feelings and sentiments which he brings to a situation,

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Relative Significance of Managerial Skills

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Supervisory level Middle mgmt level Top mgmt level

1. Director: Manager gives direction to people working under him. It includes

instructions. Manager has directed the executives towards achieving

2. Motivator: Manager understands likes and dislikes of executives and motivates

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RESPONSIBILTIES OF A PROFESSIONAL MANAGER:

4. Getting co-operation of Employees: Different nature of employees are working in an

6. Better utilization of Resources: Resources of any organization is limited one. An

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The important interpersonal roles of managers are: