unit 1

MG 2351- PRINICPLES OF MG 2351- PRINICPLES OF MANAGEMENTMANAGEMENT

Jansons Institute of TechnologyJansons Institute of Technology

UNIT 1 OVERVIEW OF MANAGEMENT

Definition of OrganizationDefinition of Organization

Organization

“An Organization is a social unit or human grouping deliberately structured

for the purpose of attaining specific goals”.

-Amitai Etzioni

Types of Organization

• Organization which benefits of their owners:

All business organizations fall in this category.

• Organization which benefits of their members:

A wide class of unions, cooperatives and clubs.

• Organization which benefits of their clients:

Insurance companies, private schools etc…

• Organization which benefits of their whole society:

Governmental departments, the armed services and police.

Definition of Management - Definition of Management - Science or ArtScience or Art

Management

• “Management is the process of designing and maintaining of an

environment in which individuals working together in groups efficiently

accomplish selected aims”.

-Koontz and weihrich

Management

Levels of Management

What is science?

• The following characteristics are essential for a subject to be recognized as a science.

• The existence of a systematic body of knowledge with array of principles.

• Based on scientific enquiry.

• Principle should be verifiable.

• Reliable basis for predicting future event

What is an art?

• Art means application of skill in finding a desired result

• Management process involves the use of practical knowledge and personal skills.

• Management is creative.

• Application of practical knowledge and certain skills helps to achieve concrete results.

Management is science or an art ?

Management is both of science and art

• Management is a science because it contains general

principles. It is also and art because it requires certain

personal skills to achieve desired results

MANAGEMENT AND MANAGEMENT AND ADMINISTRATIONADMINISTRATION

MANAGEMENT AND ADMINISTRATION

• Administration is concerned with decision-making and policy formulation,

while management is concerned with the execution of what has been laid

down by the administrators.

• Management is the generic term for total process of executive control

involving responsibility for effective planning and guidance of the operations

of an enterprise

MANAGEMENT AND ADMINISTRATION

S.No MANAGEMENT ADMINISTRATION

1 It is the lower level functions It is the higher level functions

2 It refers the employees It refers to the owners of the organization

3 Management is concerned with execution of decision

Administration is concerned with decision making

4 It acts through the organization It acts through the management

5 Management executes these policies into practice Administration lays down broad policies and principles for guidance

Role of ManagerRole of Manager

Role of Manager

• Interpersonal Roles

• Informational Roles

• Decisional Roles

Role of Manager

• Interpersonal Roles

• Leader – Responsible for staffing, training, and associated duties.

• Head – The symbolic head of the organization.

• Liaison -Maintains the communication between all contacts and

informers that compose the organizational network

Role of Manager

• Informational Roles

• Monitor – Personally seek and receive information, to be able to understand the

organization.

• Disseminator – Transmits all import information received from outsiders to the

members of the organization.

• Spokesperson – On the contrary to the above role, here the manager transmits the

organization’s plans, policies and actions to outsiders

Role of Manager

• Decisional Roles

• Entrepreneur – Seeks opportunities. Basically they search for change, respond to it, an

exploit it.

• Negotiator – Represents the organization at major negotiations.

• Resource Allocator – Makes or approves all significant decisions related to the allocation of

resources.

• Disturbance Handler – Responsible for corrective action when the organization faces

disturbances.

Development Management Development Management ThoughtThought

Evolution of Management Taughts

• The origin of management as a discipline was developed in the late 19th century

• The different approaches of management are

• Classical approach

• Behavioral approach

• Quantitative approach

• Systems approach

• Contingency approach

Classical Approach

F.W. Taylor’s scientific Management

F.W. Taylor’s

• Fredrick Winslow Taylor is called “father of scientific management.”

• Taylor approach was based on the basics principles

• Observation and measurement should be used in the Organizations.

• The employees should be scientifically selected and trained

• Due to scientific selection and training of employee has the opportunity of earning a

high rate of pay.

Principles of scientific management (or) Contributions in Scientific Management

1. Separation of planning and doing

2. Functional foremanship

3. Job analysis1. Time study

2. Method study

3. Motion study

4. Fatigue study

5. Standardization

5. Scientific selection and training

6. Financial incentives

7. Economy

8. Mental Revolution

Contributions in Scientific Management (or) Principles of scientific management

• Time and motion study

• Differential Payment

• Drastic reorganization of supervision

• Scientific Recruitment and Training

• Intimate Friendly Cooperation between the Management and Workers

Henry Fayol’s Contribution

Henry Fayol’s

• Henry Fayol, a French industrialist concentrated on that administrative

aspect of scientific management

• Fayol’s Concentrate into two parts of Management

• The first is concerned with the theory of administration in which Fayol divided the

total industrial activities into six categories

• The second is concerned with the fourteen principles of management

Theory of Administration

• Technical (Production, Manufacture)

• Commercial (Buying, Selling, Exchange)

• Financial (Search for and optimum use of capital)

• Security (Protection of property and person)

• Accounting (Balance sheets, Cost statistics)

• Management (Planning, Organizing, Coordinating, Directing, Controlling)

Fourteen Principles of Management (or)Administrative Management

1. Division of work.

2. Authority and Responsibility.

3. Discipline

4. Unity of Command.

5. Unity of Direction.

6. Subordination of individual interest to general interest.

7. Remuneration of personnel

8. Centralization.

9. Scalar chain.

10. Order.

11. Equity.

12. Stability of tenure of personnel. ( Job Security)

13. Initiative

14. Esprit decorps.(Unity)

Administrative Management (or) Fourteen Principles of Management

• Division of Work

• Produces more and better work with the same effort

• Entrusted to specialist in related field

Administrative Management (or) Fourteen Principles of Management

• Authority and responsibility

• The right to give order and power to exact obedience

• Individual who is willing to exercise authority, must also be prepared to bear

responsibility to perform work in the manner desired.

• Discipline

• Absolutely essential for the smooth running of business.

• It means obedience to authority, observance of the rules of service and norms of

performance, respect for agreements, sincere efforts for completing the given job,

respect for superiors.

• Unity of command• Each employee should receive instructions about a particular work from one superior

only

• Unity of direction• Should not pull in different direction. I

• It should follow the organizational goals

• Remuneration

• Centralization• Objective to pursue should be the optimum utilization of all facilities of the personnel

• Scalar chain• Hierarchy of authority from highest to lowest superiors in relation to subordinates at

various levels

• Order• Right place for everything and for every men

• Scientific selection of competent personnel, correct assignment of duties to personnel and good organization

• Equity• Equality of fair treatment

• Results form a combination of kindness and justice

• Initiative• Means freedom to think out and execute plan

• Innovation which is hallmark of technological progress, is possible only where the employees are encouraged to take initiative.

Organization and the Organization and the environmental Factorsenvironmental Factors

Organization and the Environmental Factors

The Organizational Domain

CLASSIFICATION OF ENVIRONMENTAL FACTORS

The Organization &Environment

Political factors

• Tax Policy

• Employment Laws

• Environmental Regulations

• Trade Restrictions And Tariffs

• Political Stability

Economic Factors

• Economic Growth

• Interest Rates

• Exchange Rates

• Inflation Rate

Social Factors

• Health Consciousness

• Population Growth Rate

• Age Distribution

• Career Attitudes

• Emphasis On Safety

Technological Factors

• R&D Activity

• Automation

• Technology Incentives

• Rate Of Technological Change

Managing Globally &Managing Globally &Strategies for International BusinessStrategies for International Business

The Global EnvironmentThe Global Environment• In the past, managers have viewed the global sector as closed.

• Each country or market was assumed to be isolated from others.

• Firms did not consider global competition, exports.

• Today’s environment is very different.

• Managers need to view it as an open market.

• Organizations buy and sell around the world.

• Managers need to learn to compete globally.

Managing Across the Globe: Why?

• Great opportunities in the international market

• Other countries having population explosions

• Strong profit potential

• Growing trend – Across borders business relationships

• Slowdown in industrialized nations

• Growth in newly industrialized and developing countries

Managing Globally -Three perspectives or attitudes

• An Ethnocentric Attitude is the parochialistic (opinions) belief that the best work approaches and practices are those of the home country (the country in which the company’s headquarters are located).

• A Polycentric Attitude is the view that the managers in the host country (the foreign country where the organization is doing business) know the best work approaches and practices for running their business.

• A Geocentric Attitude is a world-oriented view that focuses on using the best approaches and people from around the globe. To be a successful global manager, an individual needs to be sensitive to differences in national customs and practices

MNC VS TNC

Stages of Internationalization

• Global sourcing

• Exporting or Importing

• Licensing and franchising

• Alliance

• Joint Venture

• Foreign subsidiary

MANAGING IN A GLOBAL ENVIRONMENT -CHALLENGES

• The Legal-Political Environment

• The Economic Environment

• The Cultural Environment

• National culture

“Every morning in Africa, a gazelle wakes up and knows it must run faster than a lion or it will be killed. Every morning a lion wakes up and knows that it must outrun the slowest gazelle or it will starve to death. It doesn’t matter whether or not you are a gazelle or lion. When the sun comes up, you better start running.”

Jack Perkowski, Chairman and CEO, ASIMCO Technologies

Management - A

Compiled by

D.Vasanth kumar ,M. Magesh & E PrabakaranAssistant ProfessorJansons Institute of Technology