PRINCIPLES OF MANAGEMENT (BMC103)

Unit-1st AKTU 1st Year

MS.DIKSHA SIROHI

DEPARTMENT FOR MASTER OF COMPUTER APPLICATIONS

MANAGEMENT

Management is the process of getting things done effectively and efficiently with and
through other people. It's a universal function found in all types of organizations, from a small
business to a large corporation or a non-profit. The core purpose of management is to achieve
organizational goals by using resources in the best possible way.

Peter F. Drucker: "Management is a multi-purpose organ that manages a business and manages
managers and manages worker and work." Drucker's definition points to the complex and
layered nature of management, which is involved at every level of an organization.

Henri Fayol: "To manage is to forecast and to plan, to organize, to command, to coordinate and
to control." Fayol, considered a father of modern management theory, defined management
through its core functions. His framework is still a foundational concept in the study of
management.

Core Needs for Management

1. Achieving Goals: Management is the mechanism for setting clear objectives and
developing a plan to accomplish them. It translates the broad vision of an organization
into specific, actionable steps, ensuring everyone is working toward the same end.
2. Efficient Resource Utilization: Every organization has limited resources (e.g., people,
money, time, and equipment). Management is needed to allocate these resources
optimally, minimizing waste and maximizing output.
3. Coordination and Integration: As organizations grow, different departments and teams
can become siloed. Management provides the framework to coordinate their efforts,
ensuring smooth communication and cooperation to avoid conflicts and redundancies.
4. Adaptability to Change: The business environment is dynamic, with constant changes
in technology, markets, and competition. Managers are crucial for identifying these
changes, developing strategies to adapt, and guiding the organization through transitions.
They help the company stay competitive and resilient.
5. Employee Motivation and Development: Management is fundamentally about leading
people. It's needed to create a positive work environment, motivate employees, resolve
conflicts, and provide opportunities for growth and development. This leads to higher
morale, productivity, and retention.
6. Risk Mitigation: Managers are responsible for identifying potential risks—from
financial to operational—and developing strategies to prevent or minimize their impact.
This proactive approach ensures the stability and long-term survival of the organization.
Scope

Financial Management: Deals with the planning, organizing, and controlling of the
organization's financial resources. Key activities include budgeting, capital expenditure
decisions, and financial analysis.

Human Resource Management (HRM): Focuses on managing the organization's most

valuable asset: its people. This includes recruitment, training and development, compensation,
and employee relations.

Marketing Management: This area involves the processes of identifying customer needs
and wants, creating value, and promoting products or services. It includes market research,
advertising, sales, and public relations.

Production/Operations Management: This is concerned with the efficient transformation of

inputs (raw materials, labor, capital) into outputs (goods and services). It covers activities like
production planning, quality control, and supply chain management.

Strategic Management: This is at the highest level of management. It involves setting long-
term goals and determining the overall direction of the organization to maintain a competitive
advantage in the market.

The process of management is a continuous cycle of interconnected functions that managers

perform to achieve organizational goals. This process is typically broken down into four core
functions: planning, organizing, leading, and controlling.

Define a Management Process

Management is a process that brings together limited human and material resources and pushes
individuals to work toward a common objective. It is a continuous series of complementing
activities rather than a one-time act.

A management process, in simple terms, is a well-defined method for setting goals, planning,
and controlling the execution of any operation. It’s a collection of interconnected processes or
functions that help an organisation achieve its goals. These activities include, but are not limited
to, the following: a procedure or a project (project management system) (process management
system, sometimes referred to as the process performance measurement and management
system).

The management process is the responsibility of an organization’s senior management. This is

not always the case for all management processes; for example, the project manager may be
responsible for carrying out a project management process.
 Salient Features of a Management Process

The following features characterise a management process:

1. Management is Highly Aspirational

The accomplishment of predetermined goals is an important part of the management process. It’s
a tool for achieving predetermined goals and objectives. There is no reason to have a
management process in place if it has no purpose. Every action done by an organization’s
management should be directed toward achieving a certain goal. The completion of
predetermined objectives is a measure of a company’s leadership performance.

2. Management is Omnipresent

Management is prevalent in today’s environment. All organisations, whether they be clubs,

governments, militaries, or businesses, require an effective management system. The
fundamental management principles apply to all aspects of an organisation. Every day, managers
at all levels do the same critical functions. The management process is a global notion because of
this constant necessity.

3. Managing is a Continuous Process

Management is not a one-time event; it is a continual process. Management is a continuous

activity because of the continuing desire to attain various organisational goals.

4. Management is an abstract concept

Management isn’t visible, and it can’t be felt in the same way. Only the accomplishments of
management can be evaluated, and a well-managed organisation can be compared to one that has
been poorly managed.

5. Management is Social in Nature

Because it requires human relationships, management is a social activity. As a result of opposing

social values and cultures, the human element is the most important ingredient in the
management process. It is a function that changes society, preserves the community, and
promotes the community’s long-term goals.

6. Management is Versatile

Human reactions in ambitious conditions are the subject of management. Management requires
knowledge and skills from a variety of disciplines, including sociology, psychology, engineering,
 economics, anthropology, mathematics, and others. This feature contributes to managing a
complex experience.

7. Management is Conditional

There are various options available. The best appropriate manner of accomplishing any work is
determined by the current situation. Due to the situation, it’s probable that management isn’t
doing things correctly. Accountability is essential for successful managers.

8. Management is a Team Effort

Individual efforts are synchronised with those of the team. The management function cannot be
managed by a single person. All managerial actions, such as goal formulation, plan and policy
development, implementation, and follow-up, are the result of a concerted effort by a group of
individuals who envisage the future of an organisation.

9. Management is a type of administration

Management is concerned with the administration and management of people’s activities in

order to achieve set goals. Management is often referred to as the process of setting, defining,
and achieving the goals of a human group.

Functions of Management

1. Planning

Planning is the foundational step of management. It involves setting goals and deciding on the
best course of action to achieve them. This function is about looking ahead and creating a
blueprint for the future.

Forecasting: Predicting future trends and events.

Objective setting: Defining specific, measurable, achievable, relevant, and time-bound

(SMART) goals.

Strategy development: Creating a long-term plan to achieve the objectives.

Policy and procedure creation: Establishing guidelines and rules for employees to follow.
2. Organizing

Organizing involves structuring the work, allocating resources, and assigning tasks to ensure
that the plans can be executed effectively. It's about building the framework within which the
work will be done.

Task division: Breaking down a large project into smaller, manageable tasks.

Resource allocation: Assigning financial, material, and human resources to different

tasks.

Authority delegation: Granting managers and employees the authority needed to

perform their duties.

Structure design: Creating an organizational chart that shows the hierarchy and
relationships between departments and individuals.

3. Leading

Leading is the human-centered function of management. It involves motivating, inspiring, and

guiding employees to work enthusiastically toward the organization's goals. This is where
managers influence their team's behavior and performance.

Motivation: Encouraging employees to perform at their best.

Communication: Sharing information and feedback clearly and effectively.

Conflict resolution: Managing disagreements and promoting a positive work

environment.

Supervision: Overseeing the day-to-day work of employees.

4. Controlling

Controlling is the final, but equally important, step in the management process. It involves
monitoring performance, comparing it against the set goals, and taking corrective action when
needed. This function ensures that the organization stays on track and resources are used
efficiently.
 Standard setting: Establishing performance benchmarks.

Performance measurement: Evaluating actual performance against the standards.

Analysis: Identifying the causes of any deviations.

Corrective action: Implementing changes to bring performance back in line with the
goals.

Henri Fayol was a French mining engineer and management theorist who is widely considered
the "Father of Modern Management." In his 1916 book Administration Industrielle et
Générale, he outlined 14 principles of management that he believed were essential for effective
and efficient organizational operations. These principles provide a framework for administrative
management and remain relevant in today's business world.

Fayol's 14 Principles of Management

1. Division of Work: Specializing tasks and assigning them to individuals based on their
skills to increase efficiency and productivity.
2. Authority and Responsibility: Managers must have the authority to give orders, and this
authority comes with the responsibility to ensure the work is done well.
3. Discipline: A well-disciplined work environment requires clear rules, good leadership at
all levels, and fair consequences for violations.
4. Unity of Command: An employee should receive orders from and be accountable to
only one direct superior to avoid confusion and conflicting instructions.
5. Unity of Direction: All activities with the same objective should be directed by a single
manager using a single plan to ensure coordinated effort and harmony.
6. Subordination of Individual Interest to General Interest: The goals of the
organization must take precedence over the personal interests of any single employee or
group.
7. Remuneration: Employees should be paid a fair wage for their work to keep them
motivated and satisfied. This includes both monetary and non-monetary compensation.
8. Centralization: This principle refers to the degree to which decision-making authority is
concentrated at the top. Fayol argued for a balance between centralization and
decentralization, depending on the specific situation.
9. Scalar Chain: There should be a clear, unbroken line of authority and communication
from the top to the bottom of the organization's hierarchy. Fayol did, however, propose
the "Gang Plank" as a way to allow communication between employees at the same
level to speed things up in an emergency, bypassing the formal chain.
 10. Order: There should be a designated place for every person and every material in the
organization to promote efficiency and avoid waste.
11. Equity: Managers should be kind, fair, and just to all employees. Treating all workers
with fairness and respect fosters trust and loyalty.
12. Stability of Tenure of Personnel: High employee turnover is inefficient and costly.
Management should strive to provide a stable work environment and reduce unnecessary
turnover.
13. Initiative: Managers should encourage and allow employees to take initiative and
suggest new ideas. This fosters creativity and a sense of ownership.
14. Esprit de Corps: Management should promote unity, team spirit, and harmony among
employees to build a positive and cohesive organizational culture.

F.W Taylor established four scientific management principles, stating that work deserved
systematic observation and studies.
The Scientific Management Principles by Taylor were based on the following theories:
 The replacement of rule-of-thumb methods with scientific study of tasks.
 The scientific method of selecting and training workers rather than leaving the training to them.
 Provision of a detailed set of instructions to enhance the performance of all workers.
 Equal division of work between workers and managers.

1. Science, Not Rule of Thumb

 Taylor stated that work should be done based on science, not traditional practices.
 Every task should be analyzed and the method with the most efficiency should be used.
 Instead of letting the workers decide, how to perform the work, management should be studying
the intensity of the work and standardizing it for them.

2. Harmony, Not Discord

 Cooperation between management and workers is essential.

 He emphasized fair wages and incentives to induce motivation among workers.
 He encouraged better communication between the workers and management to create a positive
work environment.
 3. Cooperation, Not Individualism

 Sportsmanship is essential to maintain efficiency, team work gets work done easier and faster.
 The division of responsibilities among each worker with proper guidance and training.
 He argued that managers should provide guidance and training to workers rather than have them
do it independently.

4. Development of Workers to Their Maximum Potential

 The selection of employees is based on their abilities and potential.

 To get maximum productivity workers need to be trained for the work in which they will show
the maximum potential.
 A company with workers trained in their specialized skills gives better performances overall.

Conclusion

The theories put forward by Taylor were first criticized for being too mechanical and not favored
by workers around. However, modern management techniques are based on his principles.

 Increase in productivity and efficiency.

 Incentive-based pay to all the workers.

Hawthorne studies in management

Hawthorne studies in management: a look at the human element in the workplace

The Hawthorne Studies, conducted at the Western Electric Hawthorne Works in Chicago
between 1924 and 1932, were a series of experiments investigating the impact of workplace
conditions on worker productivity. Initially focused on the effects of physical factors like
lighting, the research soon unearthed the significant influence of social and psychological
elements on employee output and morale.
 1. The Hawthorne effect and its implications

The studies discovered the "Hawthorne Effect", a phenomenon where individuals tend to alter
their behavior, often increasing productivity, simply because they are aware they are being
observed or studied. This highlighted that worker performance isn't solely tied to tangible factors
like wages or physical environment.

2. Impact on management

The Hawthorne Studies revealed several critical insights:

 Social factors matter: Employee morale, motivation, and productivity are significantly influenced
by social dynamics within the workplace, such as group norms, peer pressure, and supervisor
relationships.

 Human relations are vital: Treating workers with attention, recognition, and involvement fosters
a sense of belonging and value, leading to increased job satisfaction and productivity.

 Beyond economic incentives: While financial rewards play a role, the studies showed that social
needs and psychological factors are equally, if not more, important in motivating employees.

These findings sparked the Human Relations Movement in management theory, challenging the
purely rational and economic focus of earlier approaches like scientific management. This
paradigm shift emphasized a more human-centered approach to management, recognizing
workers as individuals with complex needs and emotions, not just cogs in a machine.

3. Legacy and relevance

The Hawthorne Studies spurred further research into organizational psychology and continue to
influence modern management practices. The importance of employee engagement, open
communication, teamwork, and a supportive work environment are all direct descendants of the
insights gained from these pioneering experiments.

4. Criticisms and limitations

Despite their profound impact, the Hawthorne Studies have faced criticism, including:

 Limited scope and generalizability: The studies were conducted in a single industrial setting,
raising questions about whether the findings apply to all types of organizations and contexts.

 Methodological flaws: Critics argue that the studies lacked proper control groups and may have
suffered from observer bias, potentially exaggerating the impact of social and psychological
factors.
 However, even with these limitations, the Hawthorne Studies remain a cornerstone of
organizational behavior and management theory, underscoring the critical role of human factors
in the workplace. They continue to remind us that fostering a positive and supportive
environment, where employees feel valued and respected, is crucial for achieving both individual
well-being and organizational success.

QUALITIES OF AN EFFICIENT MANAGEMENT

Effective management combines

efficiency (doing things right) with effectiveness (doing the right things). This balance is
crucial for achieving an organization's goals while optimizing the use of its resources.

Core management qualities

 Clear and effective communication: Great managers excel at both giving and receiving
information. They provide transparent explanations of goals, expectations, and changes, and are
also active listeners who make their employees feel heard and valued.

 Strong leadership skills: Efficient managers do more than supervise—they inspire and motivate
their teams toward a shared vision. This involves providing guidance, direction, and support, and
empowering employees to take ownership of their work.

 Decisiveness: Managers are responsible for making informed and timely decisions that affect
their teams. Good decision-making requires analyzing a situation, weighing potential outcomes,
and acting with confidence to keep projects on track.

 Delegation: Rather than micromanaging, efficient managers trust their team members by
delegating tasks based on individual strengths and expertise. This approach develops employee
skills, fosters autonomy, and allows the manager to focus on higher-level tasks.

 Accountability: An effective manager takes responsibility for both their own actions and the
team's outcomes. By admitting mistakes and focusing on solutions, they build trust and set an
example for the team.

Interpersonal qualities
 Emotional intelligence and empathy: Emotionally intelligent managers understand their own
feelings and can perceive the emotions of their team. This allows them to manage conflicts
constructively, be compassionate, and build strong relationships.

 Respect for others: Excellent managers build a healthy and inclusive work environment by
valuing and respecting each employee's unique contributions and perspective. This fosters trust,
mutual support, and cohesion.
 Growth mindset: An efficient management approach promotes continuous learning and
development for both the manager and their team. Managers with a growth mindset view
challenges as opportunities to learn and improve.

Organizational and strategic qualities

 Organization and time management: These skills are critical for managing multiple projects
and teams simultaneously. An organized manager prioritizes tasks, manages resources wisely,
and sets realistic deadlines. Effective time management sets a positive example for the team and
minimizes stress.

 Adaptability and resilience: In a constantly changing business environment, efficient managers

are flexible and open to new ideas. They can guide their teams through transitions, learn from
mistakes, and quickly adjust strategies to address new challenges.

 Goal-oriented mindset: Efficient management involves setting clear, measurable, and realistic
goals using frameworks like SMART (Specific, Measurable, Achievable, Relevant, and Time-
bound). These goals help align individual contributions with the company's overall vision and
objectives.