PRINCIPLES OF MANAGEMENT

(ME3104D) Dr. Jacob Koshy

[email protected]

C2 slot: Mon@ 4 PM, Tue@ 3 PM, Wed@ 2 PM (C2+ on Fri @ 1 PM)

ME3104D PRINCIPLES OF MANAGEMENT
Total hours: 39

Module 1: (15 hours)

Introduction to management, classical, neo-classical and modern management theories, Levels of
managers and skill required. Management process – planning – mission – objectives – goals – strategy –
policies – programmes – procedures. Organizing, principles of organizing, organization structures,
Directing, leadership, motivation, Controlling.

Module 2: (11 hours)

Concept of productivity and its measurement; Competitiveness; Decision making process; decision making
under certainty, risk and uncertainty; Decision trees; Models of decision making.

Module 3: (13 hours)

Introduction to functional areas of management, Operations management, Human resources management,
Marketing management, Financial management, entrepreneurship, business plans, corporate social
responsibility, patents and Intellectual property rights.

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ME3104D PRINCIPLES OF MANAGEMENT
References:
1. H. Koontz, and H. Weihrich, Essentials of Management: An International Perspective. 8th ed.,
McGraw-Hill, 2009.

2. R. W. Griffin, Management: Principles and Applications, Cengage Learning, 2008.

3. P. Kotler, K. L. Keller, A. Koshy, and M. Jha, Marketing Management: A South Asian Perspective.
14th ed., Pearson, 2012.

4. M. Y. Khan, and P. K. Jain, Financial Management, Tata-McGraw Hill, 2008.

5. R. D. Hisrich, and M. P. Peters, Entrepreneurship: Strategy, Developing, and Managing a New

Enterprise, 4th ed., McGraw-Hill Education, 1997.

6. E. B. Roberts, Entrepreneurs in High Tech-Lessons from MIT and beyond, Oxford University Press,
1991

7. D. J. Sumanth, Productivity Engineering and Management, McGraw-Hill Education, 1985.

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What is Management?
Management is both a universal human activity and a distinct occupation.

Management as a universal human activity occurs whenever people take

responsibility for an activity and consciously try to shape its progress and
outcome.
Management as a distinct role develops when activities previously
embedded in the work itself become the responsibility not of the
employee, but of owners or their agents.

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Definitions of management
“Management is the process of planning, organizing, leading and
controlling the work of organization members and of using all
available organization resources to reach stated organizational goals.”
—James A. Stoner, et al. (Professor, Gabelli School of Business Administrations)
“Management involves coordinating and overseeing the work
activities of others so that their activities are completed efficiently
and effectively.” —Stephen P. Robbins (Professor, San Diego State University)
“Management is the process of designing and maintaining an
environment in which individuals working together in groups
efficiently accomplish selected aims.” —Harold Koontz and Heinz
Weihrich
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Definitions of management
“Management is the process consisting of planning, organizing,
actuating, and controlling, performed to determine and accomplish the
objectives by the use of people and resources.” —George R. Terry (first book
titled ‘Principles of Management’; Book Award)

“Management is the process undertaken by one or more persons to

coordinate the activities of other persons to achieve results not
attainable by any one person acting alone.” —Thomas N. Duening and
John M. Ivancevich
“To manage is to forecast and to plan, to organise, to command, to co-
ordinate and to control”
— Henri Fayol (Mining Engineer → Trainee Manager → Mine Manager → Managing Director)
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Dimensions of management
Productivity orientation: Primarily concerned with increasing productivity

Human-relations orientation: Emphasize people and relationships

Decision-making orientation: Decision making as the primary function

Leadership orientation: Leadership is the essence of management

Process orientation: This concept views management as a process.

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Characteristics of management
Management is a process involving a series of activities
• Planning
• Organizing
• Directing

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Characteristics of management
Management is a process involving a series of activities
• Planning
• Organizing
• Directing
• Goal-directed activities
• Decision-making activity: Effects and consequences felt in the future
• Involves effective integration and utilization of physical and human
resources towards goal accomplishment
• Group activity: Getting work done through others

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Characteristics of management
An extensive activity practiced at different levels of an organization
Classified as
• Top
• Middle
• Lower (first line) level of management
Universal in character (business, charity, military, sport, political etc.)
requires management of its affairs

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Characteristics of management
An extensive activity practiced at different levels of an organization
Classified as
• Top
• Middle
• Lower (first line) level of management
Universal in character (business, charity, military, sport, political etc.)
requires management of its affairs

Management is a dynamic activity performed continuously in organizations.

It reshapes itself depending upon the trends and developments in its environment.

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Levels of Management
• The term Levels of Management refers to a line of demarcation between various
managerial positions in an organization
• The number of levels in management increases when the size of the business and
work force increases and vice versa
• The level of management determines a chain of command, the amount of
authority & status enjoyed by any managerial position

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Levels of Management

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Levels of Management
The lower (or first line) management group is made up of foremen and white collar
supervisors.
Middle management includes sales managers, plant managers, personnel managers
and many other department heads.
Top management consists of the board chairman, the company presidents, the
executive vice presidents.

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Managerial skills
Technical skills. Managers must have the ability to use the tools, procedures, and
techniques of their special areas. An accountant must have expertise in accounting
principles, whereas a production manager must know operations management.

Human relations skills. Human relations skills involve the ability to work with
people and understand employee motivation and group processes. These skills allow
the manager to become involved with and lead his group.

Conceptual skills. These skills represent a manager’s ability to organize and analyze
information in order to improve organizational performance. They include the ability
to see the organization as a whole and to understand how various parts fit together to
work as an integrated unit.

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Skills for different management levels

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Functional Management

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Production Management
Production managers plan, supervise, coordinate and control the resources and
activities required to produce goods in a cost-effective manner.
Responsibilities include:
• Production scheduling
• Staffing machines
• Materials procurement
• Development and maintenance of quality standards
• Implementation of quality enhancement programmes.

They coordinate production-related activities with other departments, supervise and

motivate their subordinates and also review their performances. They act as the link
between the top management and first-line managers including supervisors.

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Production Management
Production managers plan, supervise, coordinate and control the resources and
activities required to produce goods in a cost-effective manner.
Responsibilities include:
• Production scheduling
• Staffing machines
• Materials procurement
• Development and maintenance of quality standards
• Implementation of quality enhancement programmes.

They coordinate production-related activities with other departments, supervise and

motivate their subordinates and also review their performances. They act as the link
between the top management and first-line managers including supervisors.
In a nutshell, they ensure that quality goods are produced within the prescribed time limit.
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Marketing Management
Marketing management is concerned with planning, directing, coordinating and
controlling the activities that promote goods and services.
Responsibilities include
• Conceptualizing new products
• Determining product prices
• Channel development and
• Product promotion

Activities include estimating manpower requirements, training and motivating sales

staff and evaluating their performance, conducting market research, product positioning
and differentiation and managing customer relations.
In general, they focus on promoting goods and services to meet the business goals of the organization

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Financial Management
Financial managers are concerned with the arrangement and allocation of funds.
Responsibilities include
• Implementing firm’s financial goals
• Implementing Budgets and
• Increasing the efficiency of the firm’s financial operations
• Liaison between organization and lending financial institutions

Activities such as financial analysis and planning, fund and asset management,
investment decision, payroll preparation and taxation. They supervise preparation of
financial reports such as the income statement and balance sheet.

They fulfil the organizational goals by controlling the cost of funds and optimizing fund utilization

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Human Resource Management
HR managers act as liaison between the top management and the employees of
different departments.
Some specialized functions such as
• Manpower planning
• Recruitment and selection
• Training and development
• Integration
• Performance evaluation
• Compensation fixation
• Maintenance of employee welfare and discipline
• Safety and health of all employees, grievance identification and redressal

Ensure the wellbeing of the employees at work from their joining to their exit from the organization
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Management Process or Functions

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Planning
• Planning helps an organization in formulating clear-cut objectives and determining
the best course of action for achieving them.
• It involves steps such as the analysis of the existing environment, forecasting the
future scenario, formulating specific objectives and goals, and determining the
resources and activities required for goal accomplishment.
• Planning is generally considered to be the foremost function in the management
process because of its critical role in deciding the success of the organization.
• Planning is carried out by all managers at all levels. It forms the basis and provides
direction for other managerial functions such as organizing, directing and
controlling.

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Organizing
• Organizing is a vital step in converting plans into action by putting in place the
necessary structure and resources.

More specifically, organization as a management function involves the following steps:

• Determination of the activities of the enterprise keeping in view its objectives
• Classification of such activities into convenient groups for the purpose of division
• Assignment of these groups of activities to individuals
• Delegation of authority and fixing of responsibility for carrying out assigned duties
• Coordination of these activities and authority relations throughout the organization

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Staffing
• Operation of recruiting the employees by evaluating their skills and knowledge
before offering them specific job roles accordingly
• Measures work activities, how many labor hours are needed, and how employee
time is spent
• The guiding principle of the staffing function is the selection of the right person at
the right time for the right position at the right cost.
• Managers may perform the staffing function jointly with the human resource
managers or alone in the absence of an exclusive HR department.
• Even large organizations with exclusive HR departments widely involve line
managers in the staffing function. This is because of their good knowledge of the
jobs, job holders and job environment in their own department.
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Leading/ Directing

• Influencing people so that they will contribute to organizational and group goals
• Effective managers also need to be effective leaders. As good leaders, managers
should influence, inspire and motivate their subordinates as they work.
• Leading essentially involves activities like directing, communicating with and
motivating the employees. Managers should also establish an encouraging work
environment that keeps the individual and group morale up.
• The efficacy of leadership usually depends on a manager’s own personal traits and
also the situation involved.

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Controlling
• Controlling involves verification of the efficiency of the individuals and groups in
accomplishing the organizational plans and goals by means of follow-up measures.
• It ensures that all the activities are carried out by the subordinates as per the plans
formulated, instructions issued and procedures established.
• The steps involved in the controlling process are:
(i) developing standards of performance in the form of objectives and goals,
(ii) measuring the actual performance of subordinates,
(iii) comparing the actual performance with standards to assess the deviations and
(iv) initiating necessary corrective and preventive actions in the case of negative
deviation or deficit in actual performance.

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Organisational functions and management functions

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Time spent in managerial functions

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References
• Essentials of Management – Harold Koontz, Heinz Weihrich
• Essentials of Management – David Boddy
• Principles of Management – Dipak Kumar Bhattacharyya
• Principles of Management – Pravin Durai
• Principles of Management – P. C. Tripathi, P. N. Reddy
• Principles of Management – Openstax Resources

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