MANAGEMENT

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What
What is
is Management?
Management?
A set of activities

planning and decision making, organizing, leading, and

controlling

directed at an organizations resources

human, financial, physical, and information

with the aim of achieving organizational goals

in an efficient and effective
manner.

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What is a Manager?
Someone whose primary responsibility is to
carry out the management process.
Someone who plans and makes decisions,
organizes, leads, and controls
human, financial, physical,
and information resources.

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Kinds of Managers by Level

Top Managers

The relatively small group of executives who

manage the organizations overall goals, strategy,
and operating policies.

Middle Managers

Largest group of managers in organizations

Implement top managements policies and plans.
Supervise and coordinate lower-level managers activities.

First-Line Managers

Managers who supervise and coordinate the

activities
of operating employees.
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Management in Organizations

Planning
and decision
making

Organizing

Inputs from the environment

Human resources
Financial resources
Physical resources
Information resources

Goals attained
Efficiently
Effectively

Controlling

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Leading

Figure 1.2
The Management Process

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The Management Process

(contd)
Planning and Decision Making

Organizing

Determining how activities and resources are

grouped.

Leading

Setting an organizations goals and selecting a course

of action from a set of alternatives to achieve them.

Getting organizational members to work together to

advance the interests of the organization.

Controlling

Monitoring
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Skills and
the
Manager

Technical Skills
Interpersonal Skills

Fundamental
Fundamental
Management
Management
Skills
Skills

Conceptual Skills
Diagnostic Skills
Communication Skills
Decision-Making Skills
Time-Management Skills

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Fundamental Management
Skills

Technical

Interpersonal

The ability to communicate with, understand, and

motivate both individuals and groups.

Conceptual

Skills necessary to accomplish or understand the

specific kind of work being done in an
organization.

The managers ability to think in the abstract.

Diagnostic

The managers ability to visualize the most

appropriate response to a situation.
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Fundamental Management Skills

(contd)

Communication

Decision-Making

The managers abilities both to convey ideas and

information effectively to others and to receive ideas and
information effectively from others.
The managers ability to recognize and define problems
and opportunities correctly and then to select an
appropriate course of action to solve the problems and
capitalize on opportunities.

Time-Management

The managers ability to prioritize work, to work

efficiently, and to delegate appropriately.

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Management: Science or Art?

The Science of Management

Assumes that problems can be approached using
rational, logical, objective, and systematic ways.
Requires technical, diagnostic, and decision-making
skills and techniques to solve problems.

The Art of Management

Decisions are made and problems solved using a
blend of intuition, experience, instinct, and personal
insights.
Requires conceptual, communication, interpersonal,
and time-management skills to accomplish the tasks
associated with managerial activities.

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CONCEPTS OF MANAGEMENT
DEFINITION:
It is difficult to define Management
because it is looked in to by different scholars
from different way

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The Economist consider Management as a

resource like Land, Labour, Capital and
Organisation.
The Bureaucrats consider it as an authority
The Sociologists consider managers as a part
of the class elite class

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Henry L.Sisk
Defines Management is the coordination of all
resources through the process of Planning,
Organizing, Directing and Controlling in order
to attain stated objectives

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Ralph C.Davis
Defines Management as a function of
Executive Leadership

Peter Drucker
Defines Management as a Multi purpose organ
that manager a business, Manager Mangers
and Managers workers and work.
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Concepts of Management

i.

The terms management has been interrupted

in several ways as below.
Management as an Activity:
It is an activity like playing, studying,
teaching etc. It is an art of getting things
done through the effort of others

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ii. Management as a Process:

It is include the process of Planning,
Organizing, Staffing, Directing and
Controlling functions. As a process the
management includes social process,
integrated process, continuous process and
interactive process

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iii. Management as an Economic Sources:

Management occupies the central place
among other 4 ms Men, Machine, Material
and Money
Man Power
Money

Management

Material

Machine
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Management as a Team
Managers operate at different levels of
authority like top, Middle, Operating etc.
Management is managing all these activities in
a team sprit. Managers have become elite class
in society occupying position with enormous
power and prestige.

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Management as an Academic
Discipline
Management has became a very popular field
of study since offers a very rewarding and
challenging career.

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Management as a group
Management means the group of persons
occupying managerial position like executives,
departmental head, supervisor etc.

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NATURE AND
CHARACTERISTICS OF
MANAGEMENT

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(i) Management as a goal oriented

The main goal of Management is to ensure
efficiency and economy is the utilisation of
human, physical and financial resources

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(ii) Management is Universal

All type of organization like family, club,
university, government, army, cricket team (a)
business, require management

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(iii) Management is an interactive

force
Management reconciles the individual goals
with organizational goals. It integrates human
and other resources

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(iv) Management is a social process

Management is done by the people, through
the people and for the people concerned with
interpersonal relationship. A good manager is a
leader and not a boss

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(v) Management is Multidisciplinary

Management depends up on wide knowledge
derived from several discipline like
engineering, sociology, psychology, economics
etc.

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(vi) Management is a Continuous

process
Management is a continuous process which
continues until the goal is achieved

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(vii) Management is intangible

It is invisible force. It cannot be seen but its
presence can be felt

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(viii) Management Art as well as

Sciences
Management consists of theoretical knowledge
as well as practical application of such
knowledge

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Objectives of Management
(i)

Organisational objectives :- It includes

(a) Reasonable Profit
(b) Survival and solvency of business
(c) Growth and expansion of the enterprise
(d) Improve the Good will and reputation

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(ii) Personal Objectives

(a) Fair remuneration
(b) Reasonable working conditions
(c) Training and Development
(d) Participation is Management
(e) Security of Service

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(iii) Social Objectives

(i) Prompt payment of Taxes
(ii) Conservation of energy
(iii) Preservation of ethical value

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LEVELS OF MANAGEMENT
Board of Director
Managing Director

Top Level

General Manager
Departmental Manager
Middle Level

Deputy Manager
Asst. Manager
Supervisors
Lower Level
Workers

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Figure 1.1
Kinds of Managers by Level
and Area

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Distinction Between Management

and Administration
Oliver Sheldon defines administration as a
function concerned with the determination of
corporate policies, the coordination of finance,
production, distribution, structure under the
ultimate control of the executive

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Distinction Between Management

and Administration (Contd.)
On the other hand Management is concerned
with the executives of policy within the limit
set by the administration. Thus administration
is a thinking process and management as doing
process

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Three points of view

(i)

Administration is different from Management

This view is largely held by American experts.
They held that administration is a higher level
activity while management is a lower level
function. The administration involves decision
making while the management is concerned with
the execution of policies and supervision of work.
According to American school of thought
Administration is superior to management.
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(ii) Administration is a part of

Management
According to European school of thought of
management is inclusive of Administration and
Organisation.
Management is the policy making including planning
and guidance, where as Administration is executive
of above planning. Thus management is planning
agency while administration is an implementation
agency. Thus European just appropriate view of
Americans
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(iii) Administration and Management

are one
Many writers like Henri Fayol, New man
viewed that the management and
administration are one and same used
interchangedly. The term Administration is
more popular in Government and other Public
sector organisation and the term Management
is more commonly used in other business
world.
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iii) Administration and Management

are one (Cont.d)
To solve this conflict of Opinions between
administration and management. Management
classified into
(i) Administrative Management
(ii) Operative Management

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Distinguish Between
Administration and Management
Points of
distinction
1.

Nature

Administration

Management

It is a
It is an executive
determinative or or doing function
thinking function

2. Type of Work

It is concerned
with the
determination of
major

3. Levels of
authority

It is mainly a top It is largely a

level function
middle and lower
42
level function

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It is concerned
with the
implementation of
policies

Distinguish Between
Administration and Management
4. Influence

Decision are
influenced by
Public opinion
and outside forces

Decision influenced
by Objectives and
Policies of the
Company

5. Direction of
Human Efforts

Not directly
concerned

Actively concerned

6. Main
Functions

Planning and
Control are main
functions

Directing and
Organizing are main
functions

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Distinguish Between Administration

and Management
7. Skills required Conceptual and
Human Skills

Technical and
Human Skills

8. Usage

Government and
Public sector

Business
Organizations

9. Illustrations

Commissioner,
Registrar, ViceChancellor,
Governor etc

Managing
Director , General
Manager, Sales
Manager, Branch
Manager etc.

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Meaning of Planning
Planning is the process of deciding in
advance what is to be done, how it is to be
done, where, when and whom.

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According to L.F.Ur Wick

Planning is fundamentally a mental
predisposition to do things is an orderly way,
to think before and to act in the light of the
fact rather than of guesses.

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Features of Planning
a)
b)
c)

d)
e)

f)
g)

Planning is good oriented

Planning is future oriented
Planning is an mental exercise involves creative
thinking
Planning is a primary function
Different planning is required for different levels of
organisation (Pervasiveness)
Planning is Continuous
Planning aims at efficiency
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Importance of Planning
i)
ii)
iii)
iv)
v)
vi)
vii)

Make objectives clear

Helps the organisastion a right path
It reduces risks and uncertainty
It improves efficiency of operation
It provides the basis of control
It facilitate decision making
Effective co-ordination
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Limitation of Planning
i.
ii.

iii.

iv.
v.

Assumptions not fully reliable

The condition under which plans are
implemented may differ from assumed
conditions.
Availability of time is a limiting factor for
planning
Cost involved in planning
Mental attitude
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Steps in Planning

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Principles of Planning
a.
b.
c.
d.
e.

Principles of contribution to objectives

Principles of Pervasiveness
Principles of Limiting factor
Principles of Flexibility
Principles of Navigational change

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Kinds of Planning
a.
b.
c.
d.
e.

Long range Plan

Short range Plan
Strategic Planning
Operational Planning
Functional Planning

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Decision Making
Definition:
According to Lereitner :
Decision Making is a process of identifying
and choosing alternative courses of action in a
manner appropriate to the demand of the
situation

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According to Peter Drucker:

Whatever Manager does, he does through
Decision Making

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Six Steps in Decision Making

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Figure 7.4

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Theories of Decision Making

1.

2.

3.

Marginal Theory : This theory stresses an

profit maximization
Psychological Theory : This theory stresses
on customer satisfaction
Mathematical Theory: This theory arrives
decision making using models like Linear
Programming, Probability etc.

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Problems in Decision Making

1.
2.
3.
4.
5.
6.

Correctness of Decision
Timing of Decision
Effective Communication of Decisions
Participation in Decision Making
Decision Environment
Implementation Decision

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Modern Quantitative Techniques of

Decision Making
1.

Linear programming : It is based on the

assumption that there exist a linear
relationship between the variables.
For Example:
With the help of linear equation, optimum
combination of cost, time and utilization of
time can be compared. The main object of
this techniques is to either maximize benefit
or to minimizes cost
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2. Probability Theory
This statistical device is based on the assumption
that certain things are likely to happen in
future depending on assumed probabilities. Ex.
Pay-off matrices, Decision trees.

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3.Queueing Theory
It is based on the assumption that although
delays are costly, eliminating them may be
even more costly. This techniques may be used
in service organisations hospitals and banks

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4.Simulation
For example : Instead of studying and
analyzing transportation system of Chennai in
a real life, its models can be prepared and real
solution can be simulated to it

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5. Net Work Techniques

The project evaluation and review techniques
(PERT) and critical path method (CPM) are
used for planning, monitoring and
implementing a project

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6. Decision Trees
It is a graphic method used for identifying the
alternatives and risk and outcome associated
with each alternatives

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Delegation
Definition :
According to Haimann Delegation of
authority merely means granting authority to
subordinate to operate within prescribed limits

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The Process of Delegation

1.
2.
3.

Assignment of Duties
Granting of Authority
Creating of Responsibility

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Difference between Authority and

Responsibility
Sales Manager
Branch Manager
Sales Officer
Sales Manager

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Accountability
It is the obligation of a subordinate to report
back to his superior that the job entrusted to
him has been successfully completed

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Centralisation and Decentralisation

According to Henri Fayol Every thing which
goes to increase the subordinates roles is
decentralisation, every thing which goes to
decrease it is centralisation
In centralised administration, the staff depend
on the top management for guidance on all
matters. An organisation is said to be decentralised
where managers at middle and lower levels are
given the authority to take decision on matters
relating to their functions.
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Centralisation and Decentralisation

(Contd.)
For Example :
An organisation having
branches in different cities may be centralised.
Similarly, a company may be decentralised
even things all its officer are located in one
building.

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Merits of Decentralisation
1.
2.
3.
4.
5.
6.
7.

Reduces Burden of Top Executives

Quick Decision
Motivation to Subordinates
Growth and Diversification
Management Development
Diversion of Risk
Effective Supervision and Control
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Demerits of Decentralisation
1.
2.
3.
4.
5.

Cadre of Coordination
Difficult to Control
High cost of operation
Non Availability Talented Managers
External Constraints.

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CONTROLLING

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The Control Process

Establish objectives and standards.

Measure actual performance.
Compare results with objectives and standards.
Take necessary action.

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Establish Objectives and

Standards

There are two types of standards:

Output Standards - measures performance results

in terms of quantity, quality, cost, or time.
Input Standards - measures work efforts that go
into a performance task.

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Measuring Actual Performance

Measurements must be accurate enough to

spot deviations or variances between what
really occurs and what is most desired.
Without measurement, effective control is not
possible.

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Comparing Results with

Objectives and Standards

The comparison of actual performance with desired

performance establishes the need for action.
Ways of making such comparisons include:
Historical / Relative / Engineering
Benchmarking

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Taking Corrective Action

Taking any action necessary to correct or improve

things.
Management-by-Exception focuses managerial
attention on substantial differences between actual
and desired performance.

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Taking Corrective Action

Management-by Exception can save the

managers time, energy, and other resources, and
concentrates efforts on areas showing the
greatest need.
There are two types of exceptions:
Problems - below standard
Opportunities - above standard

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Effective Controls
The Best Controls in Organizations
are

Strategic and results oriented

Understandable
Encourage self-control

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Effective Controls
The Best Controls in Organizations are

Timely and exception oriented

Positive in nature
Fair and objective
Flexible

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Types of Control

Preliminary
Sometimes called the feedforward controls,
they are accomplished before a work
activity begins.
They make sure that proper directions are
set and that the right resources are available
to accomplish them.
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Types of Control

Concurrent
Focus on what happens during the work
process. Sometimes called steering controls,
they monitor ongoing operations and activities
to make sure that things are being done
correctly.

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Types of Control

Postaction
Sometimes called feedback controls, they
take place after an action is completed. They
focus on end results, as opposed to inputs
and activities.

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Types of Controls

Managers have two broad options with respect

to control.
They can rely on people to exercise selfcontrol (internal) over their own behavior.
Alternatively, managers can take direct action
(external) to control the behavior of others.

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Types of Controls

Managers have two broad options with respect

to control.
They can rely on people to exercise selfcontrol (internal) over their own behavior.
Alternatively, managers can take direct action
(external) to control the behavior of others.

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Types of Control

Internal Controls
Allows motivated individuals to
exercise self-control in fulfilling job
expectations.
The potential for self-control is enhanced
when capable people have clear performance
objectives and proper resource support.
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Types of Control

External Controls
It occurs through personal supervision and the use of
formal administrative systems.
Performance appraisal systems, compensation and
benefit systems, employee discipline systems, and
management-by-objectives.

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