Principles of Management

1. PRINCIPLES OF
MANAGEMENT
Prepared and presented by: Dr. Himani Raval

2. LAYOUT OF
THE
PRESENTATI
ON
UNIT 1
Meaning
Definition
Concept
Scope & principles of management
Evolution of management thought
Management theories
Classical, Behavioural, system
Contingency and contemporary perspectives of management
Management an Art or science
Management as a profession
Process and levels of management
Introduction to functions of management: POSDCORB

3. MANAGEMENT
• Henry Fayol defined management as, “Management is to forecast, to plan,
to organize, to command, to coordinate and control activities of others.”
• In simple terms, management is a means of organizing and delegating the
work that needs to be done among people who can do it, and then ensuring
that said work is done diligently and timely.
• You will see management in almost all walks of life. Sometimes you will be
managing things without actually realizing it. The simplest example is, being
the class representative. There are so many things a class representative
has to manage. An efficient class representative is the one who knows how
to delegate duties and take command of the situation.

4. MEANING OF POM
Management is the process of getting things done from others to
achieve the goals effectively and efficiently.
Principles of management is what a manager does within the
organization.
This is a traditional approach to management using the leading,
organizing, and controlling approach.

5. DEFINITION
POM are the general guidelines that help organizations to function effectively.
The Principles guide the managers to make rational decisions.
For instance, while ascertaining about the promotion of an employee, a
manager may contemplate seniority, whereas the other may follow the principle
of quality.

6. SCOPE OF
MANAGEMENT
• Subject matter of management
• Planning
• Organizing
• Staffing
• Directing
• Controlling
• Functional areas of management
• Financial management
• Personnel management
• Production management
• Marketing management
• Office management

7. HENRY
FAYOL’
S POM
1. Division of work –
Division of Work, this principle is associated with
specializing the tasks of the employees. The
employees are divided into their specialization and
interest to harness the best result out of them.
2. Authority –
Authority should be known to the whole organization;
the managers should use the authority analytically.
They should maintain a balance of authority over the
organization structure.
3. Discipline –
The organization must maintain the decorum of the
workplace. The employees foremostly must be
disciplined.

8. 4. Unity of command –
Order or command must come from one manager or
the best results.
5. Unity of Direction –
Their goals must be unified and directed. They must
organizational goals.
6. Subordination of Individual Interest to group
Interest –
The employees must be clearly stated about the
firstly. They should be explained that giving priority
goals will automatically secure their individual
CONTINUED

9. 7. Remuneration –
Correct remuneration policy must be initiated in the
must be encouraged with the correct pay scale.
8. Centralization –
The orders must be centralized. Priority orders must come
9. Scalar Chain –
The scalar chain of the organization must be well defined. This
functioning of the organization. As now the employees will
and to whom to be accountable for.
10. Order –
Order must be clear and must avoid any confusions.
CONTINUED

10. CONTINUED
11. Equity –
Equity is mandatory for the organization to work in peace. All the employees
treated fairly.
12. Stability of Tenure of Personnel –
Employees must not have the fear of getting removed from the organization. Also,
must be low.
13. Initiative –
Employees must be capable of initiating newer ideas. They should be challenging
14. Morale –
High morale employees are desired in the workplace to maintain a decent workplace.

11. EVOLUTION OF MANAGEMENT
THOUGHTS
• The classical theory of management: Achieving maximum output, minimum input
• Scientific management theory- F W Taylor
• Process management theory- Henry Fayol
• Bureaucratic management theory- Max Weber
• The neo-classical theory of management: Emphasized the man behind the machines
• Human relations approach to management- Elton Mayo (Hawthorne Experiments)
• Human behavior approach to management- A. H. Maslow, Frederick H., Douglas, McGregor
• The modern theory of management
• Quantitative approach to management
• Systems approach to management
• Contingency approach to management

12. THE CLASSICAL THEORY
OF MANAGEMENT
• Scientific management theory- F W Taylor
• Is concerned essentially with improving the operational efficiency at the
shop floor level.
• Process management theory- Henry Fayol
• Is concerned with the managerial aspect of running the organization.
• Bureaucratic management theory- Max Weber
• It operates in a rational way instead of irrational emotions and
intentions of owners and managers.

13. THE NEO-CLASSICAL
THEORY OF
MANAGEMENT
• Human relations approach to management- Elton Mayo (Hawthorne
Experiments)
• It addresses the human dimension of work such as motivation, conflict,
expectations and group dynamics.
• Human behavior approach to management- A. H. Maslow, Frederick H.,
Douglas, McGregor
• It focused on proving the importance of people for achieving productivity and not
the machines and methods.

14. HAWTHORNE
EXPERIMENTS
• The Hawthorne experiments were first conducted in November, 1924 at Western
Electric Company’s Hawthorne plant in Chicago
• After the tests drew unanticipated results, a research team led by George Elton
Mayo, from Harvard Business School was invited to join the studies in 1927.
• Findings of Hawthorne Experiments
o Employees will also work more efficiently, when they believe that the management is
interested in their welfare.
o When employees are treated with respect and dignity, their performance will improve.
o Financial incentives alone cannot increase the performance. Social and psychological needs
must also be satisfied in order to increase productivity.

15. The modern theory of
management
• Quantitative approach to management
• It refers to the problem solving mechanism with the help of mathematical tools and
techniques.
• Systems approach to management
• It is based on the generalization that everything is interrelated and inter
dependent.
• Contingency approach to management
• It is based on the theory that results differ because situations differ, a technique that
works in one case will not necessarily work in all the cases.

16. 3 LEVELS OF
MANAGEMENT
Top Level: Decides
Middle level: Directs
Lower level: Deals
Rank and File of
workers: Does
BoDs
Policy making body
Supervisors
Supervision and control
Functional heads
Functional planning

17. MANAGEMENT AS AN
ART/SCIENCE/PROFESSIO
N

18. MANAGEMENT
PROCESS

19. FUNCTIONS OF
MANAGEMENT

20. REFERENCES
1. Robbins, S. P., & DeCenzo, A. D. Fundamentals of Management. New Delhi: Pearson Education.
2. 2. Harold Koontz & Heinj Weihrich, (2018) Essentials of Management, 10th Edition, Tata McGraw-Hill
Education, New Delhi.
3. 3. T.Ramasamy (2018) Principles of Management, Himalaya Publishing House, Mumbai.
4. 4. L.M. Prasad, Principle and Practice of Management, Sultan Chand and Sons, 6thedition.
5. 5. Gupta, Sharma and Bhalla; Principles of Business Management; Kalyani Publications; 1st ed.
6. 6. P.C. Tripathi & P.N. Reddy, (2015) Principles of Management, 5th Edition, Tata McGraw-Hill
Education, New Delhi.
7. 7. Singh, “Principles and Practices of Management and Organizational Behaviour, 2016 1st ed, Sage
Publication.
8. 8. P Subba Rao, “Principles of Management, (2018), HPH.

21. CASE STUDY:
THE FRUSTRATED PLANT
MANAGER
Hemant Jha, the plant manager of a manufacturing company,
attended a seminar of four weeks duration, conducted by a reputed
university. The seminar was devoted largely to the topic of executive
decision making.
During the seminar, he was particularly impressed by Professor
Tripathi's lectures on group discussion group decision making.
Professor Tripathi was convinced that employee, if given the
opportunities, could intelligently consider, and then formulate
quality decisions.

22. Returning to the plant at the conclusion of the seminar, Jha decided to practice
some of the principles that he had learned. He called together the 25
employees of his department and told them that the production standard
established several years ago were now too low in the view of the recent
installation of automated equipment. He wanted the employees to decide
among themselves, as a group, what the new standards should be.
Jha believed that employees would doubtlessly establish much higher
standards than the existing ones. But he was amazed when he came to know
that contrary to his belief, the group considered the existing standards as
already too high. And therefore decided to reduce them by 10%. These
standards, Jha knew, were far too low to provide a fair profit on the owner's
investments. Yet it was cleared that his refusal to accept the group decision
would be disastrous. Before taking a further course of action, Jha called
Professor Tripathi at the University for his opinion.

23. Summary:
This case is about a plant manager of a manufacturing company, Mr.
Hemant Jha who attends a seminar for a month which was conducted by
a reputed university. The topic was based on “Executive Decision-
Making". Mr. Hemant liked the topic of group decision and decision-
making so much, that he thought to apply the same formula with his
employee of his department. He wanted his employees to work as a
group and execute the work with innovative standards giving a new
outlook towards work. Unfortunately on the contrary to his belief, the
group considered the existing standards as too high and thus they went
on to reduce it by 10%. These standards, Jha knew, were far too low to
provide a fair profit on the owner's investment. And if he tried to refuse
the group's decision, it would result in a huge disaster and so before
taking any action he decides to revisit the university and asks them
about an opinion to solve his problem.

24. Questions:
1. How could Jha have avoided the present difficulties?
2. If you were a management consultant, what advice would you give to
Mr. Jha?
Conclusion:
So here we conclude that at times the manager should even as an
employee must understand the core value of the standards been given
to employees. If the standards are too high a proper training should be
given to them so that they'll be much active and dynamic to work on new
standards without refusing it. Rather consulting directly to the third-party
the manager must first recognize the problems within the employees
then only he should seek advise regarding his company.

25. ACTIVITIES
• Henry Fayol
• Management
• Forecast
• Plan
• Organize
• Command
• Coordinate
• Control
• Delegating
• Process
• Achieve
• Goals
• Principles
• Manager
• Organization
• Traditional
• Leading
• Guidelines
• Employee
• Quality
• Financial
• Personnel
• Production
• Marketing
• Directing
• Division of work
• Authority
• Discipline
• Unity
• Subordination of Individual Interest
• Remuneration
• Centralization
• Scalar Chain
• Equity
• Morale
• Hawthorne experiments

26. PRESENTATION TOPICS
1. Concept of Management
2. 14 Principles of POM
3. Hawthorne experiments
4. The classical theory
5. The Neo-classical theory
6. The modern Management theory
7. Debate on Management as an Art or Science
8. Functions of Management

28. UNIT 2 LAYOUT:
PLANNING IMPORTANCE
• Planning
• Importance of planning
• Objectives process
• Policies and procedures
• Types of planning
• Decision making
• Process of decision making
• Types of decisions
• Problems involved in decision making

29. CONCEPT OF
PLANNING
• Planning bridges the gap between where we are (present) and
where we want to go (future).
• In simple words, foreseeing the future contingencies and plan for
it to accomplish an objective.
• Before doing something, the manager must form an opinion on
how to work on a specific job.
• It needs holding on to the decisions since it includes selecting a
choice from alternative ways of performance.

30. DEFINITION OF
PLANNING
• “Planning is deciding in advance what to
do, how to do it, when to do it and who is
to do it. Planning, bridges the gap from
where we are to where we want to go.” –
Koontz & O’Donnell
• Planning is the important and primary
function of management.
• It sets all other functions into action.

31. IMPORTANCE OF
PLANNING
• Planning provides directions
• Planning decreases the chances of risk
• Planning decreases overlapping and wasteful activities
• Planning encourages innovative ideas
• Planning aids decision making

32. OBJECTIVES OF
PLANNING
• Micro level: The enterprise level
• Maximum results with minimum inputs
• Ensuring maximum prosperity for employees and employers
• Macro level: The society level
• To contribute to economic growth
• To ensure high standard of living
• To generate employment opportunities
• To maintain healthy industrial relations
• To convert challenges into opportunities

33. PLANNING PROCESS

34. COMPONENTS OF A
PLAN
• Standing plans:
• Standing plans are meant for repeated use or are used as and when the need
arises.
• Examples of standing plans include policies for employee interaction, emergency
operations procedures in the event of a companywide disaster, instructions for
reporting internal issues in the company and regulations regarding what is
allowable and what is prohibited in the business.
• Single use plans:
• Single use plans are meant for one-time use.
• An advertising campaign for a new product launch or an integration plan for a
recent merger or acquisition are examples of a single-use plan.

35. Difference Between
Basis of difference Standing Plan Single-use plan
Time Period
Standing Plans are formulated for a
longer period.
Single-use plans are for a shorter
period and are only worked out in
case of need.
Basis
Standing Plan is based on the main
objective of the organizations
Single-use plans are based on the
standing plan of an organization.
Scope
These plans advise the managers in
particular matters such as sales policy
and price policy.
These plans advise in the matters of
daily routine.

36. STANDING PLANS
Mission
Objectives
Policies
Strategies
Rules
Procedures

37. MISSION & VISION
Mission
• Defines the purpose of the
organization’s existence
• It answers what we are here for
• It talks about the present
• It lists broad goals for which the
organization is formed.
• It is a path
• For e.g. To have happy and satisfied
customers.
Vision
• Defines where the organization wants
to go and what it wants to achieve
• It answers where do we aim to be
• It talks about the future
• It lists where you see yourself some
years from now
• It is a destination
• For e.g. To be the world’s largest online
selling company.

38. SINGLE USE PLANS
Programs Budget Schedule Forecast Project

39. MBO & MBE
Basis MBO MBE
Full Form Management By Objectives Management By Exceptions
Definition
MBO is a process of defining objectives within
an organization so that management and
employee agree to the objectives and
understand what they need to do in the org.
MBE is policy by which management devotes its time
to investigate only those situations in which actual
results differ significantly from planned results.
Decision Making
Employee participation is high on decision
making
Employee Participation is minimal on decision making
Appropriate for Experienced Managers Experienced Executives
https://www.youtube.com/watch?v=K57rvR2nGu0

40. POLICIES AND
PROCEDURES
• Policies are a set of general guidelines. They outline your organization’s plan for
tackling certain issues.
• The purpose of policies is to communicate an organization’s values, philosophy,
and culture. They include, but aren’t limited to, the following:
• What employees can expect from the organization (employee benefits, vacation policy)
• What the company expects from employees (code of conduct, confidentiality
agreements)
• What customers and the community can expect from the organization (customer
service policies)
• Good policy is more than just a list of rules. It should show employees the
purpose behind their jobs and provide ways to measure success.

41. CONTINUED
• Policies set some parameters for decision-making but leave room for flexibility. They show the
“why” behind an action.
• Procedures, on the other hand, explain the “how.” They provide step-by-step instructions for
specific routine tasks. They may even include a checklist or process steps to follow. But at the
very least, your procedures should outline the following information:
• Who is responsible for each task
• What steps need to be taken
• Who the responsible party reports to
• Establishing procedures ensures that employees know what to do and keeps your organization
running smoothly, even when key employees are out of the office.
• For eg. The vacation policy determines how much vacation days an employee is eligible to take.
The procedure lists the steps involved to get the approval.

42. TYPES OF PLANNING
• On the basis of coverage of activities
• Corporate planning
• Functional planning
• On the basis of importance of contents
• Strategic planning
• Operational planning
• On the basis of time dimension
• Long term planning
• Short term planning

43. CONTINUED
• On the basis of approach adopted
• Proactive planning
• Reactive planning
• On the basis of degree of formalization
• Formal planning
• Informal planning

44. DECISION MAKING
• Decision making is the core of planning.
• A manager’s ability is often judged by the decisions that he
makes.
• It is the process by which an individual or an organization selects
one position or action from several alternatives.
• Decision making is the selection based on some criteria from
two or more possible alternatives. – George Terry

45. DECISION MAKING
PROCESS
Identify the
problem
Analyze the
problem
Collecting
information
Identify
alternative
course of
action
Evaluating
alternatives
Choose the
best
alternative
Conversion
of decision
into action
Progressive
review

46. EXAMPLE 1
One of the most typical examples of decision-making in management is
to take a call on production facilities.
As your business expands and demand grows, you will be forced to
increase your production capacity. The next step would be to decide
how much capacity installation is required to meet demand effectively.
You will also need to identify the right equipment for the purpose and
the workforce to run the production processes.
Your decision has to be guided by the fact that the ultimate aim is to
increase production sustainably so that you have the flexibility of
scaling up or down without incurring a high cost.

47. EXAMPLE 2
Imagine you are the CEO of an e-commerce start-up. Your work is expanding and you need to
hire the right resources to help you realize the vision of creating a leading online retail platform.
You would need to hire people who are experienced and proficient in their fields such as
software development, marketing, operations, procurement, and logistics.
Since the business is an online start-up, you won’t need to hire employees who work on the
premises exclusively. You can also get talented, location-independent workers, capable of
delivering the required technical support and services online.
By ensuring an optimal mix of on-site and remote workers, you can easily carry out the functions
in a cost-effective way. Emails and chat communications as well as video interactions can keep
the team spirit going. This will also give you the flexibility of hiring talent that might be scattered
over different geographic locations and can come together digitally to create path-breaking
solutions.

48. TYPES OF DECISIONS
• Programmed and non-programmed decisions (e.g.. Repetitive vs. non repetitive)
• Major and minor decisions (e.g.. Purchase of machine vs. purchase of stationary)
• Routine and strategic decisions (e.g.. Sending samples for investigation vs. capital
expenditure decisions)
• Policy and operative decisions (e.g.. Published policy manuals which form the basis for
day-to-day operations)
• Organizational and personal decisions (decisions pertaining to the organization vs. an
individual)
• Individual and group decisions (decisions taken by an individual vs. taken by group)
• Long term and short term decisions (involves high risk, high investment and longer time
period)

49. PROBLEMS IN DECISION
MAKING
• Incomplete information
• Time constraint
• Complex variables
• Non-Supporting environment
• Dynamic environment
• Incorrect timing
• Human factor
• Involvement of too many people
• Non-acceptance by subordinates

51. UNIT 3 LAYOUT:
ORGANIZING
• Meaning,
• Importance,
• Principles of organizing,
• Span of management,
• Patterns of organization – formal and informal
organizations,
• Common organizational structures;
• Departmentalization,
• Authority- delegation, centralization & decentralization,
• Responsibility – line and staff relationship

52. ORGANIZING IS TO
ARRANGE

53. CONCEPT OF
ORGANIZING
• Organizing is a systematic process of structuring, integrating,
coordinating tasks, goals and activities to resources in order to attain
objectives.
• Organizing involves assigning tasks, grouping tasks into departments,
delegating authority, and allocating resources across the organization.
• During the organizing process, managers coordinate employees,
resources, policies, and procedures to facilitate the goals identified in
the plan.

54. IMPORTANCE OF
ORGANIZING

55. • Promotes specialization and division of labor
• Avoids omissions, overlapping and duplication of efforts
• Clarifies authority-responsibility relationships
• Facilitates staffing
• Facilitates co-ordination
• Establishes communication links
• Increases efficiency of management
• Facilitates management by exception
IMPORTANCE OF
ORGANIZING

56. PRINCIPLES OF
ORGANIZING

57. SPAN OF
MANAGEMENT
• Developed by V. A. Graicunas, a French management consultant
in 1953
• Refers to the number of subordinates, an executive can supervise
effectively
• Also termed as span of supervision, span of control or span of
attention.
• “Span of control refers to the number of people that a manager
can supervise.” Louis Allen

58. TYPES OF SPAN OF
CONTROL
• Wide span of control
It means a single
manager/supervisor oversees a
large number of subordinates.
• Narrow span of control
It means a single
manager/supervisor oversees a
few number of subordinates.

59. FACTORS
INFLUENCING SOC
Factors relating to work Factors relating to a
manager
Factors relating to
subordinates
Nature of work Ability of the manager Ability of subordinates
Quality of allocation of work Time availability for supervision Degree of motivation
Organizational planning Degree of decentralization
Communication system
Availability of staff assistance

60. PATTERNS OF
ORGANIZATION
Formal organisation when the two or more than two persons come together to
accomplish a common objective, and they follow a formal relationship, rules, and
policies are established for compliance, and there exists a system of authority.
Informal Org: which is formed under the formal organisation as a system of
social relationship, which comes into existence when people in an organisation,
meet, interact and associate with each other.

61. Creation Deliberately by top
management.
Spontaneously by members.
Purpose To fulfill, the ultimate objective
of the organization.
To satisfy their social and
psychological needs.
Nature Stable, it continues for a long
time.
Not stable
Communication Official communication Grapevine
Control mechanism Rules and Regulations Norms, values and beliefs
Focus on Work performance Interpersonal relationship
Authority Members are bound by
hierarchical structure.
All members are equal.
Size Large Small
BASIS FOR
COMPARISON
FORMAL ORGANIZATION
INFORMAL
ORGANIZATION

62. COMMON
ORGANIZATIONAL
STRUCTURES
• Line organization: Line
organization structure is the oldest
and simplest form of organization.
• In these organizations, a supervisor
exercises direct supervision over a
subordinate.
• Also, authority flows from the top-
most person in the organization to
the person in the lowest rung.

63. CONTINUED
• Functional organization
• A functional structure is a business structure that is
based on the function of each position within the
business and the knowledge and skills of the team
members that perform each role.
• A functional structure is the one that divides the
major functions of a firm into different groups, for
example, information technology (IT) department,
finance department, marketing department and
production department.

64. CONTINUED
• Line and staff organization
• Line and staff organization is a modification of line organization and it
is more complex than line organization.
• Staff groups are in tasks that provide support to the line groups. Their
work is like that of advisory (legal), service (human resource), or
control (the accounting) groups.
• The power of command always remains with the line executives and
staff supervisors guide, advice and council the line executives.

65. CONTINUED
• Committee organization
• A committee organizational structure chart can be defined as a group
of members who discuss and develop strategic solutions to problems.
• The objective of setting up the Committee is to develop broader
organizational goals, finalize plans, and policies for the organization.
• Such committees are important as the members of the committee
bring rich experiences, expertise, diverse perspectives, and
information which are not one man’s job.

66. CONTINUED
• Matrix organization
• Matrix organizational structures are quite popular, as they emphasize
efficiency, creativity, and innovation. They combine two or more
organizational structures.
• Matrix organizational structures are so named because reporting
relationships resemble a grid (or matrix) rather than the typical
hierarchy.
• Typically team members report to more than one boss: the head of
their department, and the project manager charged with overseeing a
specific initiative.

67. CONTINUED
• Virtual organization
• A virtual organization is a temporary or permanent collection of
geographically dispersed individuals, groups, organizational units,
or entire organizations that depend on electronic linking in order to
complete the production process.
• The term virtual organization implies the novel and innovative
relationships between organizations and individuals. Technology
and globalization both support this particular type of organization.

68. DEPARTMENTALIZATIO
N
• It refers to the grouping of operating tasks into jobs, the combining of jobs into
effective work groups and the combining of groups into divisions often termed as
'Departments'.
• It means the grouping of tasks into departments and sub departments and delegating
of authority for accomplishment of the tasks.
• Basis of departmentation:
Departmentation by function Departmentation by customers
Departmentation by Product/services Departmentation by time
Departmentation by geographical coverage Hybrid organization structure
Departmentation by process

69. BASES OF
DEPARTMENTATION

70. CONTINUED

71. AUTHORITY-
DELEGATION
• The delegation of authority refers to the division of
labor and decision-making responsibility to an
individual that reports to a leader or manager.
• It is the organizational process of a manager
dividing their own work among all their people.
• A quick guide to delegating authority is explained
by the acronym SMARTER
S Specific
M Measurable
A Agreed
R Realistic
T Time bound
E Ethical
R Recorded