Fundamentals of Management

Part 1: Management Principles Chapter 1: Nature of Management

Fundamentals of Management

During this lecture we will learn:

Concept of management Basic elements of management Nature of the managerial task Modern Approaches to Management
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Definition of Management
Management in business and human organization activity is simply the act of getting people together to accomplish desired goals According to the management guru Peter Drucker, Organization and coordination

of the activities of an enterprise in accordance with certain policies and in achievement of clearly defined objectives
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WHAT IS MANAGEMENT?

An art more than a science

Deductive Method: General to Particular Inductive Method: Particular to General

Inherently social in nature Getting things done through others

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GOALS OF BUSINESS OR MANAGEMENT

Business/economics traditionally defined as based on a sole primary motive of selfinterest

Lead to thinking about profit-maximization as the major goal of enterprise Failed to account for the social nature of business/economics -- inaccurate based on new science
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Is Administration and management same?

Administration refers to the activities of the higher level of the management group who identifies the major aims and policies. Administration is a part of management

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FOUR FUNCTIONS
First stated by Henri Fayol(1841-1925)-French CEO Now stated as 1. 2. 3. 4. Planning Organizing Directing Controlling
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PLANNING & ORGANIZING

Planning -- Setting firms goals plus the way to accomplish them

Organizing -- deciding structure of decision-making
What will be done, by whom, for whom

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DIRECTING & CONTROLLING

Directing-- Motivating employees to achieve firms objectives Controlling -Monitoring progress toward goals Taking corrective action

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Scientific Management

Pioneers tried to find more efficient methods and procedures for control
Aims at investigating every problem and find best possible way to solve the problems using the scientific methods or research
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Scientific Management Contd.

F W Taylor, a management guru, listed different principles to guide management:
Each worker should have a large, clearly defined, daily task Standard conditions are needed to ensure the task is more easily accomplished High payment should be made for successful completion of tasks
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F W Taylors Principles cont:

Taylor also listed new duties of management:
The Development of a true science The Scientific selection, education and development of workmen Friendly close co-operation between management and workers
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Administrative Management
Henry Fayol aimed at developing a science of administration for management He believed managers, at higher levels, are less dependent on technical knowledge and more on a knowledge of administration

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Fayols 14 principles of management:

1. 2. 3. 4. 5. 6. Division of Labor Authority Discipline Unity of command Unity of direction Subordination of Individual Interest to general interest 7. Remuneration or Salary and wages
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Fayols 14 principles of management Contd:

8. Centralization 9. Scalar Chain 10. Order 11. Equity 12. Stability of tenure of personnel 13. Initiative 14. Esprit de corps
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Max Weber (1864 1920)

More concerned with the basics of how enterprises are structured Developed ideas about the structure of the organization that define what we know as bureaucracy (structure and set of regulations in place to control activity, usually in large organizations and government)
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Webers perspectives on Administrative Management are:

Division of labor Hierarchy of authority Formal selection Career managers Formal rules

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Human relations movement and behavioral science

Deals with sciences of mankind and of behavior as individuals and in groups Concerned with problems of fatigue and efficiency at work and

Problems relative to selecting and training employees

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Hawthorne Experiments
Focused toward psychological and behavioral side of employees at work Psychological Experiments of Elton Mayo disclosed or revealed components of the job and work satisfaction Experiments were divided into three phases
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Hawthrone Experiments Contd:

1. Test Room Studies: assesses the effect of single variables upon employee performance 2. Interviewing Studies: consists of employees surveys and interviews 3. Observational Studies: involves studying the normal group working
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Systems approach to management

A system is an organized combination of parts, which forms interactions between the parts and between the system and the environment Gives managers a way of looking at organizations as a complete whole

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System approach contd:

Systems can be divided into two categories:
Deterministic : Behavior can be determined Probabilistic : Behavior can only be estimated

A system includes different elements or systems called sub-systems

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Elements of a system
Sensing system Information coding system Physical processing system Regulating and controlling system Information and storage system Goal setting or policy making system

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Systems Approach Process

Open page no. 21 of the course book

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Todays Manager
Responsible for others and their own work Managers are also:
Mediators of disputes Politicians: Persuade and motivate Diplomats: Representative of companies

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ESSENTIAL SKILLS FOR MANAGERS

1. TECHNICAL SKILLS 2. HUMAN SKILLS

3. CONCEPTUAL SKILLS

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Decisional Roles of Managers

Entrepreneur: Brings new ideas Disturbance Handler: Handles or tackles strikes and lockouts Resource allocator: Allocates or utilizes the companys resources Negotiator: Deals with suppliers and negotiates for prices or for best services

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Entrepreneurship and Intrapreneurship

Entrepreneurship is a process of bringing creative and innovative ideas and implement them by combining factors of production to create wealth and meet a need Intrapreneurship involves bringing new ideas within the organization
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In-class exercise
1. List five desired qualities a manager should have 2. List five desired qualities an employee should have

3. Lets say you are a Businessman or a Business woman, what objectives or goals will you set for your business?
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In-Class exercise contd:

4. Which function of management do you like the most and why?

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