10. Management is a universal process in all
organized activities. It is not merely
restricted to factory, shop or office.
Management is an exercise in harmonizing
men, money, machinery, materials and
methods towards fulfilling of set
objectives
11. Management is necessary for a
business firm,
government enterprises,
education ,
health services,
military organizations,
trade associations and so on.
Management refers to those carrying on the activity of
management viz. the managers. All managers in any branch of
business or non-business activities perform those typical functions
of management cycle that is planning – organizing – leading –
controlling.
14. • General guidelines
The principles are guidelines to action but do not provide readymade solution to
all managerial problems as the real business situation are very complex.
15. • Formed by practice and
experimentation
The principles of management are formed by the management
experts through observation and tested through repeated
experimentation.
16. • Flexible
The principles of management are not rigid. They are flexible and can
be modified by the manager as per the given situation so as to achieve
17. • Mainly behavioural
The principles of management aims at influencing behavior of
human being in a desired manner.
18. • Cause and effect relationship
The principles of management seek to establish relationship
between cause and effect so that they can be used in similar
19. • Contingent
The application of principles of management is contigent or
dependent upon the prevailing situation at a particular point of
time.
21. • Provide managers with useful insight into
real world
Principles of management help to provide managers with
useful
understanding of real-world situation, enable them to learn
from
22. • Optimum utilisation of
resources
They ensure optimum utilisation of resources and effective
administration as the principles focuses on scientific work and
23. • Scientific decisions
They facilitate scientific decision making as they
emphasize on logical thinking rather than blind
faith.
24. • Helps in meeting changing
environmental requirements
They help to meet the changing requirements of the
environment to the best advantage of an organization.
26. • Basis for management training,
education
and research
Principles of management helps in increasing knowledge which is
used as the basis for management training, education and research.
29. Practical areas of management
Four major functional areas of management are categorized by
theorists that include :
•Production,
•Finance,
•Marketing and
•Personnel.
33. Management Historical Background
Historical background
Pre scientific management
Early management
Industrial revolution
Management theories
Classical approach
Neo classical approach
Modern approach
34. Robert Owen (1771-1858) : Proposed legislative reforms to
improve working conditions of labor.
Charles Babbage (1792-1871) : perceived that the methods of
science and mathematics could be applied to operations of factories.
Andrew Ure (1778-1857) and Charles Duplin (1784-1873)
: Advocated the study of management.
Henry Robinson (1844-1924) : Emphasized the need to consider
management as separated field of study and the importance of business
skills for running a business.
35. James Watt (1796-1848) and Mathew Robinson (1770-1842) : They were
the sons of the distinguished inventor of the steam engine. They applied
a number of management techniques in their Engineering Factory at
Soho.
Captain Henry Metcalfe (1847-1917) : Metcalfe suggested
"new systems control“.
Metcalfe suggested a system of cards. Under this system managers
prepare two type of cards, i.e., time cards and material cards.
(COUNT…..)
36. EARLY MANAGEMENT
Chanakya also known as kautilya and vishnugupta
Mohenjo daro and harappa.
Ancient Greece.
Organization of the roman catholic church.
Organization of military forces.
Egyptian pyramids, babylonians empire.
Chinese philosophers-selection and staffing.
Rome-crafting and trading
37. INDUSTRIAL REVOLUTION
Industrial Revolution has originated in late-
18th- century in Great Britain
substitution of machine power for human
power.
large organizations required formal
management.
38. Trends of the Industrial
Revolution
Large group of people
working together
People working alongside
machinery
Increasing pace of industry
Companies looking for new
answers
40. The Evolution and Approaches of management can be
categorized into :
•Pre-Scientific Management Era (before 1880),
•Classical management Era (1880-1930),
•Neo-classical Management Era (1930-1950),
•Modern Management era (1950-on word).
41. Classical Management Era’s Approaches
Scientific Management School- Sir Frederick Winslow Taylor
Administrative Management School- Sir Henry Fayol
Bureaucracy Management – Sir Max Weber
42. SCIENTIFIC MANAGEMENT
• Focuses on machine and worker relationship.
• Increases efficiency of product processes.
Major contributors:
F.W.Taylor (1911)- principles of scientific mgmt.
Frank and Lillian Gillbreth (1912-1924)- Time and motion
studies.
Henry Gantt (1910-1915)- project scheduling , the
Gantt chart.
44. “In the past man has been first, in the
future the system must be first.”
- Frederick Taylor
45. ADMINISTARTIVE APPROACH
It focused on principles that could be used by managers to
coordinate the internal activities of organizations.
Henri Fayol (1841-1925)
Managers need specific roles in order to manage work and
workers.
Concerned with making the overall organization
more effective.
Developed theories of what constituted good management
practice.
proposed a universal set of management functions.
Published 14 principles of management.
46.
47. Henri Fayol’s Administrative Science
Systematic Principles to
train managers
Management Activities:
Planning, Organization,
Command, Coordination
and Control
Classical Management Theories
48. - Henri Fayol
“T
o manage is to forecast and plan, to
organize, to command, to coordinate and to
control. T
o foresee and plan means examining
the future and drawing up the plan of action.”
49.
50. BUREAUCRATIC Approach
“Theory of social and economic organization”
Contributor : Max Weber
A formal hierachical structure.
Management by rules.
Organization by task competency
.
Focused mission.
Employment based on technical qualification.
Impersonality
.
51.
52. “Precision, speed, unambiguity, knowledge of
files, continuity, discretion, unity, strict
subordination, reduction of friction and of
material and personal costs - these are raised
to the optimum point in the strictly
bureaucratic administration.”
- Max Weber
54. Human Relation Movement
• Elton Mayo (1880–1949) was an
Australian psychologist, sociologist,
to Harvard University.
went
•
spent most of his career at Harvard
Business School as Professor of Industrial
Research.
•main focus was on the people working in an
organization.
55. Human Relations Movement
•Elton Mayo conducted a research activity in Hawthorne Electric Plant
in 1924 to research effect of physical conditions on productivity called
as Hawthorne Studies.
•Research activities had been conducted between 1924-1930.
Researchers tested the effects of:
Lightning
Heating Job
breaks
Physical arrangements;
57. CHESTER BARNARD
An enterprise can operate efficiently and survive only when the
organization’s goal are kept in balance with the aims and needs of the
individuals working for it.
According to him people come together in formal organizations
to achieve ends they can not accomplish working alone.
Zone of indifference (area of acceptance)
Individual and organizational purpose is kept in balance if manager
understands an employee’s ZoI.
What the employee can do without questioning the manager’s
authority.
58. She introduced new elements, specially in the
new area of human relation and organizational structure.
Follett was convinced that no one could become
a whole person except as a member of a group;
Human relationship with others in organization.
MARY PARKER FOLLETT
59. She called Management as “art of getting things
done through people”
Follett’s “holistic” model of control took into account not
just individuals and groups, but the effect of such
environment factors as politics, economic, and biology.
In her model she gave an idea that management meant
more than just what was happening inside a particular
organization
60. Modern Management Approaches
Systems Management Approach
Contingency Management Approach
Quantitative Management Approach
Decision Theory
Social Systems Approach
61. Organization is a system consisting of four subsystems-
task, structure, people and environment
Subsystems are interconnected and
interdependent
Management regulates and modifies the system
to optimize performance
62. LUDWIG VON BERTALANFFY IS RECOGNIZED
AS THE FOUNDER OF GENERAL SYSTEM THEORY.
SYSTEM: A system is a set of INTERRELATED but
separate parts working towards a common
purpose.
TYPES OF SYSTEMS:
1)Open system.
2)Closed system.
63. Systems Theory
View Organization as a whole operating
in an external environment
It integrates goals of different parts of
the organization( sub systems or
departments) with the organization as a
whole.
Modern Management Theories
64. KEY TERMS
• SUBSYSTEM : parts of system that
depends on each other.
• Internal subsystem.
• External subsystem.
• SYNERGY : cooperation between
subsystems.
• SYSTEM BOUNDARY:separation b/n
internal and external subsystems.
65. COMPONENTS OF A SYSTEM
• Inputs
• Transformation process
• Outputs
• Feedbacks
• environment
67. • Subsystems have proper order and
communication b/n them.
• Decisions are based on impacts on various
subsystems.
68. FEATURES OF SYSTEM APPROACH
• Dynamic
• Adaptive
• Multilevel and multidimensional
• Managers will have a good view
• Gives importance to interdependence of
different parts
• Forecasts consequences and plans actions
69. Quantitative Theory
Use of Mathematical Models
Management Science (PERT
, CPM)
Operations Management (Forecasting,
Inventory)
Management Information System
Decisions are based on data and logic
Modern Management Theories
70. Quantitative techniques are those statistical and
programming techniques, which help decision makers solve
many problems, especially those concerning
business and industry
71. ContingencyTheory
Developed by Joan Woodward,
Industrial Psychologist
a viewpoint that argues that appropriate
managerial action depends on the
particular parameters of the situation.
Modern Management Theories
72. Joan Woodward (1916-
1971)
–“Management and Technology”,
1958, ”Industrial Organization”, 1965
– Studied a large number of firms (100) in
the South Essex area of England in the
1950s
–Found that organizational form varied,
and correlated with production
technology
– Concluded that there was not ”one best
way” to organize – the nature of the
production process would determine
which form that would be most suitable.
73. Contingency approach states that there is “no
one best way” to manage an organisation.
It is also known as situational approach.
“THE BEST W
AY TO ORGANIZE DEPENDS ON
THE NA
TURE OF THE ENVIRONMENT TO
WHICH THE ORGANIZA
TION RELA
TES.” -
William Richard Scott
74. What you do “depends” on the
“situation”.
-internal contingency factors
-external contingency factors
77. Instead of propagating universally applicable
organisation-management principles, this theory tries
to demonstrate that different circumstances require
different organisational structures
What works for one organisation may not work for
the other.
Managers need to understand the key contingencies
that effect the management practice for a given
situation.
78. Contingency theory is designed to provide the manager with the
capabilities to examine numerous possible solutions to a
problem.
Adapting to changing circumstances- No two situations are
absolutely identical, therefore each situation requires its own
unique solution.
To adopt this approach managers must sample all the past and
present ideas, some refer this to the ‘smorgasbord approach’.
79. The way you manage should change depending on the
circumstances.
Sometimes a bureaucratic organization is most effective,
sometimes a more loosely structured one; sometimes a
more classical approach is best, sometimes a more modern
one.
The most effective management style will vary depending
on the type of organization, its size, its environment, and
the particular situation/problem it faces at the time.
81. 81
DECISION THEORY
DECISION MAKING UNDER CERTAINTY : DECISION MAKERS KNOW WITH CERTAINTY
THE CONSEQUENCE OF EVERY ALTERNATIVE OR DECISION CHOICE.
NATURALLY THEY WILL CHOOSE THE ALTERNATIVE THAT WILL RESULT IN
THE BEST OUTCOME.
DECISION MAKING UNDER UNCERTAINTY :
SEVRAL CRITERIA EXIST FOR MAKING
CONDITIONS :
1. MAXIMAX (OPTIMISTIC)
2. MAXIMIN (PESSIMISTIC)
3. CRITERION OF REALISM (HURWICZ)
4. EQUALLY LIKELY (LAPLACE)
5. MINIMAX REGRET
DECISION UNDER THESE
82. MAXIMAX : THE MAXIMAX CRITERION IS USED TO FIND THE ALTERNATIVE THAT
MAXIMISES THE MAXIMUM PAYOFF. FIRST LOCATE THE MAXIMUM PAYOFF FOR EACH
ALTERNATIVE, AND THEN PICK THAT ALTERNATIVE WITH THE MAXIMUM NUMBER. IT
LOCATES THE ALTERNATIVE WITH THE HIGHEST POSSIBLE GAIN : THEREFORE IT IS
CALLED AN OPTIMISTIC DECISION
MAXIMIN : THE MAXIMIN CRITERION IS USED TO FIND THE ALTERNATIVE THAT
MAXIMISES THE MINIMUM PAYOFF OR CONSEQUENCE FOR EVERY ALTERNATIVE.
FIRST LOCATE THE MINIMUM PAYOFF FOR EACH ALTERNATIVE AND THEN PICK THAT
ALTERNATIVE WITH THE MAXIMUM PAYOFF. THIS DECISION CRITERION LOCATES THE
ALTERNATIVE THAT GIVES THE BEST OF THE WORST (MINIMUM) PAYOFFS, AND THUS
IT IS CALLED A PESSIMISTIC DECISION CRITERION. THIS CRITERION GUARANTEES
THAT THE PAYOFF WILL BE AT LEAST THE MAXIMIN VALUE. THOMPSON’S MAXIMIN
CHOICE IS “DO NOTHING”
83. CRITERON OF REALISM (HURWICZ CRITERION)
THE CRITERION OF REALISM IS A COMPROMISE BETWEEN AN OPTIMISTIC AND A
PESSIMISTIC DECISION. A COEFFICIENT OF REALISM (α ) IS USED TO MEASURE
THE DEGREE OF OPTIMISM OF THE DECISION MAKER. THIS COEFFICIENT, α LIES
BETWEEN O AND 1. THE WEIGHTED AVERAGE IS COMPUTED AS FOLLOWS :
WEIGHTED AVERAGE = (α) x (MAXIMUM IN ROW) + (1 – α) x (MINIMUM IN ROW)
EQUALLY LIKELY (LAPLACE) :
THIS CRITERION USES ALL THE PAYOFFS FOR EACH ALTERNATIVE . THIS IS ALSO CALLED
LAPLACE, DECISION CRITERION. THIS CRITERIA FINDS THE AVERAGE PAYOFF FOR EACH
ALTERNATIVE AND SELECT THE ALTERNATIVE WITH HIGHEST AVERAGE. THIS CRITERION
ASSUMES THAT ALL PROBABILITY OF OCCURANCE FOR THE STATE OF NATURES ARE
EQUAL, AND THUS EACH STATE OF NATURE IS EQUALLY LIKELY.
84. MINIMAX REGRET
THIS DECISION CRITERION IS BASED ON OPPORTUNITY LOSS OR REGRET. THE OPPORTUNITY
LOSS OR REGRET IS THE AMOUNT LOST BY NOT PICKING THE BEST ALTERNATIVE IN A GIVEN
STATE OF NATURE. THE FIRST STEP IS TO CREATE THE OPPORTUNITY LOSS TABLE. OPPORTUNITY
LOSS FOR ANY STATE OF NATURE , OR ANY COLUMN, IS CALCULATED BY SUBTRACTING EACH
PAYOFF IN THE COLUMN FROM THE BEST PAYOFF IN THE SAME COLUMN.
85. “The Fundamental Task of Management is to
make people of joint performance through
common goals, common values, the right
structure, and the training and development
they need to perform and respond to change”
- Peter Drucker
86. Management is doing things right,
Leadership is doing the right things
- Peter Drucker
92. Culture – Shared Values and Behaviors, which affect
or conversely are affected by the actions of the
members of the organization
93. The most important contribution of
management in the 20th century was the fifty
fold increase in the productivity of manual
workers in manufacturing…
- Peter Drucker
