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  1. 1. Principles of Management UNIT I- Introduction to Management Dr. Mohd Abdul Moid
  2. 2. Introduction Management has existed since the early ages. But only since the 19th century, it has become an organized scientific discipline. 2
  3. 3. Management as a concept till now Antiquities, Middle Ages and 18th Century Concept 3
  4. 4. Antiquity & Middle Ages EXAMPLES FROM EARLY AGES Many humongous tasks have been implemented in the past that make it evident that it would have required all the critical elements of management. From physical structure to currencies to civilisations. ROMANS AND THE EGYPTIANS Looking at projects such as the Egyptian pyramids or the Great Wall of China, it is obvious that a large number of tasks had to be performed which we would today associate with the term management. When thousands of people are involved in a project of this scale, management is needed to plan, organize, and coordinate them 4
  5. 5. 18th Century is when the foundational principles of modern-day management practice were laid down. 5
  6. 6. Adam Smith’s Contribution ▪ Adam Smith in his revered book ‘Wealth of Nations’ ▪ He described in great detail the necessity for specialization and division of labor as a main driver for commercial efficiency. 6
  7. 7. Industrial Revolution In the late eighteenth century, the first industrial revolution led to a continuous replacement of human labor with mechanical power. In Great Britain and the USA.. Late Eighteenth Century Industrialization It meant a transition from an agricultural to an industrial society. In new, large factories, workers were needed to operate the machines and managers were appointed to train employees do to this 7
  8. 8. 19th & 20th Century Management as we know it today has majorly developed into an organised and scientific field of study in this era 8
  9. 9. Scientific School of Thought ▪ The scientific management theory—developed by Frederic Taylor (1911) and the couple Lillian and Frank Gilbreth (1911)— Classical Approach General Administrative Theory ▪ Was influenced primarily by Henri Fayol (1949) and Max Weber (1922), are the two most prominent iterations of the classical approach. 9
  10. 10. 10
  11. 11. The Main Philosophy The main driver was how management principles and techniques can support companies in increasing their efficiency and effectiveness. Principles of Scientific Management 1911 Frederic Taylor first introduced an in-depth analysis of productivity on factory floors. He observed that inefficiency was caused by each worker having a different way of working. 11
  12. 12. Four Principles were developed ▪ Studying work using scientific methods allows managers to determine the most efficient way to execute a task. ▪ Workers are assigned to a task according to their skills and motivation. They receive the appropriate training in order to maximize performance and efficiency. ▪ A worker’s performance is closely monitored and checked against key performance indicators. ▪ The various steps of a production process are divided that allows the manager to focus on time planning 12
  13. 13. Motion studies were defined as“Science of eliminating wastefulness resulting from ill-directed and inefficient motions” Frank & Lilian Gilbreth Motion Studies ▪ They studied work to eliminate inefficient hand- and-body motions and experimented with design and the use of proper tools and equipment to optimize work performance. 13
  14. 14. Henry Fayol 14
  15. 15. Henry Fayol He was the first to identify the five functions that managers perform: planning, organizing, commanding, coordinating, and controlling. The general administrative theory focuses on what managers at all levels do, as well as what constitutes good management practice. Fayol developed 14 principles of management, each founded on one of the following topics 15
  16. 16. Fayol’s Principles of Management 1.Division of work: this increases the output because employees are more efficient 2.Authority and responsibility: authority gives managers the right to give orders 3.Discipline: employees must respect the rules of the organization, for example, mission or vision. 4.Unity of command: employees should only receive orders from one superior. 5.Unity of direction: organizational activities with the same objective should have one plan of action. 6.Subordination of individual interest: the interest of a person or a group should not take precedence over the interests of the 16
  17. 17. Contd. 7.Remuneration of personnel: workers should have a fair wage for their services. 8.Centralization: refers to the degree to which subordinates are involved in decision making. 9.Scalar chain (line of authority): this is the line of authority, from top management to the lowest ranks. Communication should follow this line. 10. Order: people and materials should be systematically arranged to be in the right place at the right time. 11. Equality: employees have to be treated equally— managers should be kind and fair to the subordinates. 12.Stability of tenure of personnel: personnel should not enter and exit the organization frequently. High employee turnover is 17
  18. 18. Contd. 13. Initiative: employees who are allowed to create and execute plans themselves will make greater efforts. 14. Esprit de corps:the promotion of team spirit will foster harmony and unity within the organization. 18
  19. 19. Max Weber & Elton Mayo 19
  20. 20. ▪ Weber developed a theory of authority structures and relationships based on an ideal type of organization with large groups, which he called “bureaucracy”. ▪ One of the most prominent representatives of the behavioral approach is Elton Mayo(1933). ▪ With his famous Hawthorne studies, Mayo showed that productivity increases when the participation level and empowerment of employees is increased 20
  21. 21. “Hawthorne Effect” ▪ A major result of these studies was the notion that monetary incentives had less effect on employee productivity than respect, acceptance, and empowerment. ▪ In this regard, social norms were named as key determinants of the work behavior of the individuals in the group. ▪ The positive change of behavior when managers pay attention to workers was later called the “Hawthorne effect.” 21
  22. 22. TQM (Total Quality Management) ▪ During the Second World War, mathematical and statistical models were developed to solve military problems. ▪ Many of these models proved to also be useful for optimizing business processes and improving decision-making. ▪ The adoption of these models in business became known as the quantitative approach of management (also known as management science). 22
  23. 23. Contd ▪ Later on, in the 1980s and 1990s, the quantitative techniques became the main building blocks for total quality management, which is still widely applied by many businesses today. ▪ Total quality management (TQM) This is a management philosophy with the goal of continuous improvement and responding to customer needs and expectations. 23
  24. 24. Systems Theory and Contingency Theory In 1960s, scientists were not only analyzing an organization from the inside, but also examined how an organization itself interacted with developments an changes in its environment. 24
  25. 25. Contingency Approach ▪ The contingency approach theory deals with the notion that organizations and their units are different and encounter different situations and thus need to behave differently in terms of management strategy (Robbins & Coulter, 2018). ▪ For that, the “if... then” procedure is applied: “if the situation is like this, then the best way to manage the situation is....” 25
  26. 26. What is your image of a Manager? For Business Plans, Marketing Plans, Project Proposals, Lessons, etc Functions Roles and Skills of Managers
  27. 27. We can define manager as“the work activities of others so their activities are completed efficiently and effectively Management itself can be defined as “the organization and coordination of the activities of a business in order to achieve defined objectives,” performed by “the directors and managers who have the power and responsibility to make decisions and oversee an enterprise” In a traditionally organized company, the structure can be shown as a pyramid. This follows the fact that many more people work at the lower levels than at the upper levels. We differentiate between three management levels: first-line, middle, and executive management 27
  28. 28. 28
  30. 30. Manager’s Functions 30 PLANNING Managers set goals and establish the plans necessary to integrate and coordinate related activities. ORGANIZING Managers are responsible for arranging and structuring the work. Managers have to guide and motivate members of an organization toward accomplishing organizational goals. LEADING Managers establish and track organizational performance standards. CONTROLLING
  31. 31. Additional Functions ▪ Environmental scanning- Managers continually look for changes in the business environment. ▪ Customer relations and marketing- Managers have direct contact with current or potential customers. ▪ Community relations- Managers are in constant contact with representatives of other organizations. ▪ Internal consulting- Managers with special expertise work on projects within the company. 31
  32. 32. 32
  33. 33. What are the skills a manager should possess? Traditionally, three types of managerial skills are described as necessary to perform the tasks of a manager Managerial Skills
  34. 34. Three types of skills ▪ Technical skills imply the ability to use tools, procedures, and techniques in a special area. ▪ Human relations skills imply the ability to work with people and understand their motivation and the group processes. ▪ Conceptual skills imply the ability to organize and analyze information in order to improve performance. 34
  35. 35. 35
  36. 36. External Influences ▪ Environment factors ▪ The impact of change in the company environment ▪ Assessing environmental uncertainty ▪ Stakeholder relationship ▪ Internal influence 36
  37. 37. Environment Factors The external environment refers to factors and forces outside of the company which have an influence on the company and its management. 37
  38. 38. 38
  39. 39. Uncertainty Uncertainty can be described as the degree of change and complexity in an organization’s environment 39
  40. 40. 40
  41. 41. Stakeholder’s Relationship Stakeholders are external as well as internal groups, like shareholders, employees, competitors, customers, suppliers, government, social and political action groups, media and press, unions, communities, trade associations, and alliance partners 41
  42. 42. 42
  43. 43. Conclusion