Introduction to Management

Unit I
Contents

• Introduction to Management
• Management-Concept, Nature, Scope
• Evolution of Management Thought
• Classical Theories, Neo-Classical Theories
• Quantitative, System and Contingency Approaches
• Management by Objectives
INTRODUCTION
• ‘Principles of management’ is a baseline management course for students of
management at both post graduate and undergraduate levels.
• A basic knowledge of management principles is very crucial as it provides an
understanding of the core concepts.
• Students of management, therefore, need to learn the basic concepts of
management for developing application-based knowledge of the subject.
• Modern organizations apply management practices to achieve their goals and
objectives. The complexity of businesses has further made it imperative to apply
management practices, without which organizations cannot survive their
competition.
• It is often argued that management knowledge is inbuilt and, hence, it requires
no formal study of theories and concepts. However, this statement can be
refuted. It is important to understand that application-based management
knowledge has its basis in the theoretical understanding of the principles of
management.
• The success of an organization largely depends on the management practices
prevalent in the organization. This course, therefore, introduces the basics of
management. The principles of management provide such basic and
institutionalized knowledge to prepare individuals to take responsibility as
future managers of organizations.
Definition of Management
• “Management identifies a group of people whose job is to direct the
efforts and activities of other people towards common objectives.”
• Management is an art of getting things done.
• Management as a process.
• Management as a group of managers.
• Management as a discipline.
Management is an art of getting things done.
• “ The art of getting things done through and with people in formally
organized groups, It is an art of creating an environment in which
people can perform as individuals and yet to co-operate towards
attainment of group goals.”
Harold Koontz
Management as a Process
• In the words of Henry Fayol - "To manage is to forecast and to plan, to
organise, to command, to co-ordinate and to control".
• Management is the process of effective utilization of human and
material resources to achieve enterprise objectives.
• In the words of George R Terry - "Management is a distinct process
consisting of planning, organising, actuating and controlling
performed to determine and accomplish the objectives by the use of
people and resources".
Management as a Continuous Process
Management as a Discipline
• Management is a multidisciplinary discipline.
• It has drawn heavily from anthropology, psychology, sociology,
economics, etc.
• Management is both an art and a science.
Characteristics of Management
• Goal oriented
• Economic resources
• Distinct process
• Integrative force
• Intangible force
• Results through others
• A Science and an Art
• Multi-disciplinary Subject
• Universal Application
Functions of Management
Significance of Management
• The existence and success of any organisation largely depends on the kind of
management it has. No amount of quality resources is going to help unless they
are put to productive use by efficient management. It is because of this reason
that management is studied as a subject in almost every discipline of study.
• In today’s scenario with globalisation, job specialisation, changing technologies,
new responsibilities of business, consumerism, competition and emphasis on
research and development, the role of management has grown multifold.
• Attainment of Goals
• Stability and Growth Management
• Change and Development
• Efficiency and Effectiveness
Why are Managers Important?
• The reality facing today’s managers is that the world has changed. In work places of all types—restaurants,
offices, retail stores, factories, and the like—managers must deal with changing expectations and new ways
of managing employees and organizing work.
• The first reason managers are important is that organizations need their managerial skills and abilities more
than ever in these uncertain, complex, and chaotic times. As organizations deal with today’s challenges—
the worldwide economic climate, changing technology, ever increasing globalization, and so forth—
managers play an important role in identifying critical issues and crafting responses.
• Another reason managers are important to organizations is that they’re critical to getting things done.
Manager is the person who creates and coordinates the workplace systems and conditions so that others
can perform those task. If work isn’t getting done or isn’t getting done as it should be, he’s also the one who
must find out why and get things back on track.
• Finally, managers do matter to organizations! How do we know that? The Gallup Organization, which has
polled millions of employees and tens of thousands of managers, has found that the single most important
variable in employee productivity and loyalty isn’t pay or benefits or workplace environment; it’s the quality
of the relationship between employees and their direct supervisors.
• What can we conclude from such reports? That managers are important and they do matter!
• A manager is someone who coordinates and oversees the work of other people so that organizational
goals can be accomplished. A manager’s job is not about personal achievement—it’s about helping others
do their work.
How are Managers Different from Non-managerial
employees?
• Nonmanagerial employees
• People who work directly on a job or task and have no responsibility
for overseeing the work of others.
• Ex : Associate and Team members
• Managers
• Individuals in organizations who direct the activities of others.
• A manager is someone who coordinates and oversees the work of
other people so that organizational goals can be accomplished. A
manager’s job is not about personal achievement—it’s about helping
others do their work.
Where Do they Work?
• Organization
• A deliberate arrangement of people brought together to accomplish a specific
purpose.

• Common Characteristics of Organizations

• Goals
• People
• Structure
LEVELS OF MANAGEMENT
• In traditionally structured organizations (which are often pictured as a pyramid because
more employees are at lower organizational levels than at upper organizational levels),
managers can be classified as first-line, middle, or top.
• At the lowest level of management, first-line managers manage the work of
nonmanagerial employees who typically are involved with producing the organization’s
products or servicing the organization’s customers.
• First-line managers may be called supervisors or even shift managers, district managers,
department managers, or office managers.
• Middle managers manage the work of first-line managers and can be found between the
lowest and top levels of the organization. They may have titles such as regional manager,
project leader, store manager, or division manager.
• At the upper levels of the organization are the top managers, who are responsible for
making organization-wide decisions and establishing the plans and goals that affect the
entire organization. These individuals typically have titles such as executive vice
president, president, managing director, chief operating officer, or chief executive officer.
• Not all organizations get work done with a traditional pyramidal form, however. Some
organizations, for example, are more loosely configured with work being done by ever-
changing teams of employees who move from one project to another as work demands
arise.
What do managers do?
• Simply speaking, management is what managers do. But that simple statement
doesn’t tell us much, does it?
• Management involves coordinating and overseeing the work activities of others
so that their activities are completed efficiently and effectively.
• What is Management?
• Management is the process of getting things done effectively and efficiently ,with
and through people.
• Efficiency refers to getting the most output from the least amount of inputs.
Because managers deal with scarce inputs—including resources such as people,
money, and equipment—they’re concerned with the efficient use of those
resources. It’s often referred to as “doing things right”—that is, not wasting
resources.
• Effectiveness is often described as “doing the right things”—that is, doing those
work activities that will help the organization reach its goals
• In successful organizations, high efficiency and high effectiveness typically go
hand in hand.
Three approaches to describe what
managers do: functions, roles, and skills
Mintzberg’s Managerial Roles

Based on Mintzberg, Henry, The Nature of Managerial Work, 1st Edition, © 1980, pp. 93–94
Contd…
• Henry Mintzberg, a well-known management researcher, studied actual managers at work. In his
first comprehensive study, Mintzberg.
• The term managerial roles refers to specific actions or behaviors expected of and exhibited by a
manager.
• When describing what managers do from a roles perspective, we’re not looking at a specific
person per se, but at the expectations and responsibilities that are associated with being the
person in that role.
• 10 roles are grouped around interpersonal relationships, the transfer of information, and
decision making.
• The interpersonal roles are ones that involve people (subordinates and persons outside the
organization) and other duties that are ceremonial and symbolic in nature.
• The three interpersonal roles include figurehead, leader, and liaison. The informational roles
involve collecting, receiving, and disseminating information.
• The three informational roles include monitor, disseminator, and spokesperson.
• Finally, the decisional roles entail making decisions or choices. The four decisional roles include
entrepreneur, disturbance handler, resource allocator, and negotiator
• Evidence generally supports the idea that managers—regardless of the type of organization or
level in the organization—perform similar roles.
CONTD…
• The diverse roles played by managers in discharging their duties have been summarised by Henry Mintzberg in the late
1960s, under three broad headings: interpersonal roles, informational roles and decisional roles. Let us understand them
one by one.
• Interpersonal Role: Three interpersonal roles help the manager keep the organisation running smoothly. Managers play
the figurehead role when they perform duties that are ceremonial and symbolic in nature. These include greeting the
visitors, attending social functions involving their subordinates (like weddings, funerals), handing out merit certificates to
workers showing promise etc. The leadership role includes hiring, training, motivating and disciplining employees.
Managers play the liaison role when they serve as a connecting link between their organisation and others or between
their units and other organisational units. Mintzberg described this activity as contacting outsiders who provide the
manager with information. Such activities like acknowledgements of mail, external board work, etc., are included in this
category.
• Informational Role: Mintzberg mentioned that receiving and communicating information are perhaps the most important
aspects of a manager’s job. In order to make the right decisions, managers need information from various sources.
Typically, this activity is done through reading magazines and talking with others to learn about changes in the customers’
tastes, competitors’ moves and the like. Mintzberg called this the monitor role. In the disseminator role, the manager
distributes important information to subordinates that would otherwise be inaccessible to them. Managers also perform
the spokesperson role when they represent the organisation to outsiders.
• Decisional Role: There are four decision roles that the manager adopts. In the role of entrepreneur, the manager tries to
improve the unit. He initiates planned changes to adapt to environmental challenges. As disturbance handlers, managers
respond to situations that are beyond their control such as strikes, shortages of materials, complaints, grievances, etc. In
the role of a resource allocator, managers are responsible for allocating human, physical and monetary resources. As
negotiators, managers not only mediate in internal conflicts but also carry out negotiations with other units to gain
advantages for their own unit.
CONTD…
• However, the emphasis that managers give to the various roles seems
to change with organizational level. At higher levels of the
organization, the roles of disseminator, figurehead, negotiator, liaison,
and spokesperson are more important; while the leader role (as
Mintzberg defined it) is more important for lower-level managers
than it is for either middle or top level managers.
Management Skills
• Dell Inc. is a company that understands the importance of
management skills.
• It started an intensive five-day offsite skills training program for first-
line managers as a way to improve its operations.
• One of Dell’s directors of learning and development thought this was
the best way to develop “leaders who can build that strong
relationship with their front-line employees.” What have the
supervisors learned from the skills training? Some things they
mentioned were how to communicate more effectively and how to
refrain from jumping to conclusions when discussing a problem with
a worker.
Managerial Skills
• What types of skills do managers need? Robert L. Katz proposed that
managers need three critical skills in managing: technical, human, and
conceptual.
• Technical skills are the job specific knowledge and techniques needed to
proficiently perform work tasks. These skills tend to be more important for
first-line managers because they typically are managing employees who use
tools and techniques to produce the organization’s products or service the
organization’s customers.
• Human skills: involve the ability to work well with other people both
individually and in a group. Because all managers deal with people, these skills
are equally important to all levels of management. Managers with good
human skills get the best out of their people. They know how to
communicate, motivate, lead, and inspire enthusiasm and trust.
• Finally, conceptual skills are the skills managers use to think and to
conceptualize about abstract and complex situations. Using these skills,
managers see the organization as a whole, understand the relationships
among various subunits, and visualize how the organization fits into its
broader environment. These skills are most important to top managers.
Managerial Skills
Important Managerial Skills

Based on “Dear Workforce: We’re Developing Onboarding for New Managers: What Should Be Included?” Workforce Online, March 4, 2010; J. R. Ryan, “The Coming Leadership
Gap: What You Can Do About It,” Bloomberg BusinessWeek Online, December 15, 2009; In-Sue Oh and C. M. Berry, “The Five Factor Model of Personality and Managerial
Performance: Validity Gains Through the Use of 360 Degree Performance Ratings,” Journal of Applied Psychology, November 2009, pp. 1498–1513; and R. S. Rubin and E. C.
Dierdorff, “How Relevant Is the MBA? Assessing the Alignment of Required Curricula and Required Managerial Competencies,” Academy of Management Learning & Education,
June 2009, pp. 208–224.
How Manager’s job changing?
• In today’s world, managers are dealing with global economic and political
uncertainties, changing workplaces, ethical issues, security threats, and
changing technology.
• Employee attitudes and behaviors play a big role in customer satisfaction.
For instance, passengers of Qantas Airways were asked to rate their
“essential needs” in air travel. Almost every factor listed was one directly
influenced by the actions of company employees—from prompt bag gage
delivery, to courteous and efficient cabin crews, to assistance with
connections, to quick and friendly check-ins.
• Managers are recognizing that delivering consistent high-quality customer
service is essential for survival and success in today’s competitive
environment and that employees are an important part of that equation.
• The implication is clear—managers must create a customer-responsive
organization where employees are friendly and courteous, accessible,
knowledgeable, prompt in responding to customer needs, and willing to do
what’s necessary to please the customer.
Changes Facing Managers
Why study Management?

Universal Need for Management

Rewards and Challenges of Being a Manager
Evolution of Management Thought
• The origin of management can be traced back to the days when man
started living in groups. History reveals that strong men organized the
masses into groups according to their intelligence, physical and mental
capabilities.
• Evidence of the use of the well recognized principles of management is to
be found in the organization of public life in ancient Greece, the
organization of the Roman Catholic Church and the organization of military
forces.
• Thus management in some form or the other has been practiced in the
various parts of the world since the dawn of civilization.
• With the on set of Industrial Revolution, however, the position underwent
a radical change. The structure of industry became extremely complex. At
this stage, the development of a formal theory of management became
absolutely necessary. It was against this background that the pioneers of
modern management thought laid the foundations of modern
management theory and practice.
Industrial revolution
• Starting in the late eighteenth century when machine power was
substituted for human power, a point in history known as the
industrial revolution, it became more economical to manufacture
goods in factories rather than at home.
• These large efficient factories needed someone to forecast demand,
ensure that enough material was on hand to make products, assign
tasks to people, direct daily activities, and so forth. That “someone”
was a manager: These managers would need formal theories to guide
them in running these large organizations. It wasn’t until the early
1900s, however, that the first steps toward developing such theories
were taken.
Classical Approach
• Although we’ve seen how management has been used in organized efforts
since early history, the formal study of management didn’t begin until early
in the twentieth century. These first studies of management, often called
the classical approach, emphasized rationality and making organizations
and workers as efficient as possible.
• Management thought focussed on job contents, division of labour,
standardization, simplification and specialization and scientific approach
towards organization.
• Three major theories comprise the classical approach:
• Scientific management (Frederick W. Taylor)
• Bureaucracy (Max Weber)
• Administrative theory (Henri Fayol)
Scientific management (F. W. Taylor)
• F. W. Taylor well-known as the founder of scientific management was
the first to recognize and emphasis the need for adopting a scientific
approach to the task of managing an enterprise.
• Aims
• Increased production
• Quality control
• Cost reduction
• Elimination of waste
• Right men for right work
• Incentives wages
Principles of SM
• Replacement of old rule of thumb
• Scientific selection & training of workers
• Cooperation between labour and management
• Equal division of responsibility
• Maximum output
Techniques of SM
• Scientific setting of fair day’s work
• Work study (Method, Time , Fatigue and Motion study)
• Planning the task
• Setting of wage rate (differential piece wage rate)
• Standardisation of tools, equipment etc
• Scientific selection, training and placement of workers
• Specialization or functional foremanship
• Route clerk Gang boss
• Instruction clerk Speed boss
• Time & cost clerk Repair boss
• Shop disciplinarian Inspector
How today’s managers use scientific management

• Many of the guidelines and techniques that Taylor and the Gilbreths
devised for improving production efficiency are still used in
organizations today.
• When managers analyze the basic work tasks that must be
performed, use time-and-motion study to eliminate wasted motions,
hire the best-qualified workers for a job, or design incentive systems
based on output, they’re using the principles of scientific
management.
Bureaucracy
• Weber developed a theory of authority structures and relations based on an
ideal type of organization he called a bureaucracy—a form of organization
characterized by division of labor, a clearly defined hierarchy, detailed rules
and regulations, and impersonal relationships. He identified three kinds of
authority
• Rational legal authority
• Traditional authority
• Charismatic authority

• Note: Bureaucracy, as described by Weber, is a lot like scientific

management in its ideology. Both emphasized rationality, predictability,
impersonality, technical competence, and authoritarianism. Although
Weber’s ideas were less practical than Taylor’s, the fact that his “ideal type”
still describes many contemporary organizations attests to their importance.
Characteristics of Weber's Bureaucracy
General administrative theory
How today’s managers use general administrative theory
• Several of our current management ideas and practices can be directly traced to
the contributions of general administrative theory. For instance, the functional
view of the manager’s job can be attributed to Fayol.
• In addition, his 14 principles serve as a frame of reference from which many
current management concepts—such as managerial authority, centralized
decision making, reporting to only one boss, and so forth—have evolved.
• Weber’s bureaucracy was an attempt to formulate an ideal prototype for
organizations. Although many characteristics of Weber’s bureaucracy are still
evident in large organizations, his model isn’t as popular today as it was in the
twentieth century.
• Many managers feel that a bureaucratic structure hinders individual employees’
creativity and limits an organization’s ability to respond quickly to an
increasingly dynamic environment.
• However, even in flexible organizations of creative professionals—such as
Microsoft, Samsung, General Electric, or Cisco Systems—some bureaucratic
mechanisms are necessary to ensure that resources are used efficiently and
effectively.
Features of Classical Theory
• Considered formal organization
• Organizational structure
• Organizations as closed system
• Individual efficiency
• Centralization of authority
• Economic rewards
Appraisal of classical theory
• Narrow view of organization
• Assumption of closed system
• Assumption about human behavior
• Economic rewards as main motivators
• Lack of empirical verification
• Lack of universality of principles
• Excessive emphasis on rules and regulations
Neo-Classical Approach
• Human Relations Approach
• Organisation is a social system and the human factor is the most important
element within it.
• The findings were based on “Hawthorne Experiments” and revealed the
importance of social and psychological factors in determining worker’s
productivity and satisfaction.
• This approach put stress on communication, interpersonal relations and
informal groups at the work place.
• Eltom Mayo is generally recognized as the father of the Human Relation
School who conducted the Howthrone experiment along with his
associates.(1927-1932)
Hawthorne Experiment
• Illumination experiment
• Relay Assembly Room Experiment
• Bank Wiring Observation Room Experiment
• Mass Interview Program
Human Relation Approach
• Elton Mayo and his associates conducted their studies in the Hawthorne plant of the western
electrical company, U.S.A., between 1927 and 1930. According to them, behavioural science
methods have many areas of application in management. The important features of the
Hawthorne Experiment are:-
• 1. A business organization is basically a social system. It is not just a techno-economic system.
• 2. The employer can be motivated by psychological and social wants because his behaviour is also
influenced by feelings, emotions and attitudes. Thus economic incentives are not the only
method to motivate people.
• 3. Management must learn to develop co-operative attitudes and not rely merely on command.
• 4. Participation becomes an important instrument in human relations movement. In order to
achieve participation, effective two-way communication network is essential.
• 5. Productivity is linked with employee satisfaction in any business organization. Therefore
management must take greater interest in employee satisfaction.
• 6. Group psychology plays an important role in any business organization. We must therefore rely
more on informal group effort.
Features of Neo Classical Approach
• Social System
• Social Environment
• Informal Organization
• Group Dynamics
• Informal Leader
• Two way Communication
• Non-economic Rewards
Criticism of Neo classical/Human Relation
Approach
• Lack Of scientific Validity
• Limited focus on work
• Over emphasis on group
• Over stretching of human relations
Behavioural approach
• As we know, managers get things done by working with people. This
explains why some writers have chosen to look at management by
focusing on the organization’s people.
• The field of study that researches the actions (behavior) of people at
work is called organizational behavior (OB).
• Much of what managers do today when managing people—
motivating, leading, building trust, working with a team, managing
conflict, and so forth—has come out of OB research.
Features
• Inter disciplinary
• Applied science
• Normative science
• People oriented
• Goal oriented
• Based on system approach
• Based on collection and analysis of relevant data
• Provides insight about human behaviour
• Emphasized the role of motivation, perception, leadership, group
dynamics, organizational change.
How today’s managers use the behavioral approach
• The behavioral approach has largely shaped how today’s
organizations are managed. From the way that managers design jobs
to the way that they work with employee teams to the way that
they communicate, we see elements of the behavioral approach.
• Much of what the early OB advocates proposed and the conclusions
from the Hawthorne studies have provided the foundation for our
current theories of motivation, leadership, group behavior and
development, and numerous other behavioral approaches.
Contemporary approach
• Systems theory
• A system is a set of interrelated and interdependent parts arranged in
a manner that produces a unified whole.
• The two basic types of systems are closed and open.
• Closed systems are not influenced by and do not interact with their
environment. In contrast, open systems are influenced by and do
interact with their environment. Today, when we describe
organizations as systems, we mean open systems.
Quantitative approach
• What exactly does the quantitative approach do? It involves applying statistics,
optimization models, information models, computer simulations, and other
quantitative techniques to management activities. Linear programming, for
instance, is a technique that managers use to improve resource allocation
decisions. Work scheduling can be more efficient as a result of critical-path
scheduling analysis. The economic order quantity model helps managers
determine optimum inventory levels.
• How today’s managers use the quantitative approach
• The quantitative approach contributes directly to management decision making
in the areas of planning and control. For instance, when managers make
budgeting, queuing, scheduling, quality control, and similar decisions, they
typically rely on quantitative techniques. Specialized software has made the use
of these techniques less intimidating for managers, although many still feel
anxious about using them.
Contingency approach
• Management is not (and cannot be) based on simplistic principles to
be applied in all situations. Different and changing situations require
managers to use different approaches and techniques. The
contingency approach (sometimes called the situational approach)
says that organizations are different, face different situations
(contingencies), and require different ways of managing