Principle Of Management

Unit-1 Introduction to Management

Meaning: - Management is an essential part of any group
activity. It is a primary force within the group or organization
which tends to lead it towards the group goal. Management is
required to plan; organize; co-ordinate & control the affairs of
the organization. It brings the human & material resource
together & motivates people for the achievement of the
objective of the organization. Without management; resources
of production remain resources merely & never become
production. Management is a universal process in all organized,
social & economic activities. Wherever there is human activity
there is management.

Definition: -
1. Mary Parker Follett, ̋Management is the art of getting things
done through others.” Follett describes management as an art
of directing the activities of other persons for reaching
enterprise goals. It also suggests that a manager carries only
a directing function.
2. Henry Fayol, ̋To manage is to forecast and plan, to organize,
to command, to co-ordinate, and control.” Fayol describes
management as a process of five functions such as
planning, organizing, commanding, co-ordaining &
controlling. Modern authors, however, do not view
co-ordination as a separate function of management.
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3. Louis Allen,“Management is what a manager does.” This is a
broad definition linking all the activities of the manager to
the concept of management. Whatever work is undertaken
by a manager forms a part of management.

Nature & Characteristics: -

1) Multidisciplinary- Through management has developed as a
separate discipline but it draws knowledge and concept
form disciplines such as sociology, psychology, economics,
statics, operations research etc. Management integrates
ideas and concepts from these disciplines and uses them for
improving the efficiency of the organization.
2) Management is a group activity- Management is an
essential part of a group activity. As on individual can satisfy
all his desires himself he unites with his fellow beings and
works in an organized group to achieve what he cannot
achieve individually. Wherever there is an organized group
of people working towards a common goal, some types of
management become essential. It makes the people realize
the objective of the group and directs their efforts towards
the achievement of these objectives.
3) Management is goal oriented- Management aims to
achieve economic and social objectives. It exists to achieve
some definite goals or objectives. Group efforts in
management are always directed towards the achievement of
some pre-
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determined goals. It is concerned with the establishment

and accomplishment of these objectives. To quote Theo
 Haimann, “effective management is always management by
objectives.”
4) Management is a factor of production- It is not an end in
itself but a means to achieve the group objectives, just as
land, labour and capital are factors of production and are
essential for the production of goods & services,
management is a factor of production that is required to co
ordinate the other factors of production for the
accomplishment of pre-determined goals.
5) Management is universal in character- Management is
applicable in all types’ organization. Wherever there is
human activity, there is management. The basic principles of
management are of universal application and can be applied
in all organization are whether they are business, social,
religious, cultural, sports, educational, politics or military. As
Socrates has put it, “Over whatever a man may preside, he
will be a good president if he knows what he needs and is
able to provide it whether he has the direction of a chorus, a
family, a city or an army.”
6) Management is a social process- Management consists of
getting things done through others. This involves dealing
with people. The efforts of the human beings have to be
directed, co-ordinate and regulated by management in
Principle Of Management

order to achieve the desired results. It is in this sense that

management is regarded as a social process. Moreover,
management has a social obligation to make optimum use
of scares resources for the benefit of the community as a
whole. In the words of Breech, “Management is a social
process entailing responsibility for the effective and
 economical planning and the regulation of the operation of
an enterprise, in fulfillment of a given purpose or task.”
7) Management is a system of authority- Since management is
a process of directing men to perform a task, authority to
accomplish the work form others is implied in the very
concept of management. Authority is the power to get the
work done from others and to compel them to work in a
certain manner. Management cannot perform in the
absence of authority. In the sense, management is a rule
making and rule-enforcing body. There is a chain of
authority and responsibility among the people working at
different levels of the organization.
8) Management is a dynamic function- Management is a
dynamic function and is has to be performed continuously. It
is constantly engaged in the moulding of the enterprise but
also the alteration of the environment itself so as to ensure
the success of the enterprise. In real sense, it is never ending
function.
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9) Management is an art as well as a science- Management is a

science because it has developed certain principles which
are of universal application. But the result of management
depends upon the personal skills of managers and in this
sense management is an art. The art of management is
essential to make the best use of management science.
Thus, management is both science and art. It should,
however, be noted that the science of management is not as
exact the physical science. It is still in the evolutionary stage,
may be called as an inexact science or social science.
10) Management is a profession- In the present days,
 management is recognized as a profession. It has a
systematic and specialized body of knowledge consisting of
principles, a techniques and laws and can be taught as a
separate discipline or subject. This has also divorced
ownership from management is entrusted in the hands of
professional managers.

Objectives of Management: -
How effectively an organization achieves its objectives (profit
or services) depends upon how effectively it is managed.
Management serves the following objectives to help
organizations meet their goals:
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1. Helps organization achieve its objective- Management helps

in managing the organizations’ to their objectives at
minimum cost. It enables managers to work efficiently, that
is, achieve maximum output at minimum cost. It also aimsto
coordinate the organizational resources(physical, financial &
human) so that human knowledge and expertise can be
geared towards optimum utilization of non-human
resources.
2. Promotes effectiveness- Efficiency means “doing things right”
and effectiveness means “doing the right things.” It means
choosing the most appropriate organizational objectives out
of multiple objectives. Lack of effectiveness or choosing
wrong objectives will result in inefficiency, howsoever hard
managers may work. Management thus, helps to find out the
right thing to do and to concentrate on those things
efficiently.
3. Develops the ability of managers- Managers should not only
be skilled in problem-solving, they should anticipate
problems before they arise. They should take advantage of
opportunities to make their organizations competitive in the
market. Management develops analytical of managers
(problem solving) and the ability to find problems and
exploit gainful business opportunities.
4. Human Welfare- Employees want to satisfy their
physiological (food, clothing, shelter) social and
security
Principle Of Management

needs. Management helps in knowing these needs

and satisfies them through suitable motivators.
5. Social Welfare- Organizations operate in the larger social
system. The performance of business organization largely
affects the welfare of society and through it, the welfare of
the nation. Management develops business organization as
socially acceptable institutions which give gainful
employment to people.
6. Interaction with environment- Business operates in the
larger environment that consists of economic and non
economic variables. Firms secure inputs from the
environment transform them into output and gives them
back to the environment. They survive if they adapt their
plans and policies to the environmental requirements and
change their business operations according to changes in
the environment. Management helps firms to successfully
frame and alter their policies to profitably interact with the
larger environment.
 Importance of Management: -
1. Achievement of Organizational Goals- Management helps
organizations to effectively design their goals and frame
plans and policies to achieve them efficiently.
2. Optimum Utilization of Organizational resources
Management helps the organization utilize itsscares
Principle Of Management

resources (human, physical and financial

resources) efficiently.

Human Resources are the people with their talent,

skill, knowledge, abilities etc.

Physical Resources are the raw material, plant

and machinery required for producing goods and
services.

Financial Resources are the money, funds

needed for meeting short-term & long-term requirements of
raw materials, labour, machinery, add other current and fixed
assets.

3. Develop Analytical and Conceptual Ability of Managers- It

helps to analyze the organizational problem, link them, with
other organizational matters and arrive at solutions geared
towards organizational goals.
4. Balance between Multiple Goals- At a point of time,
managers faces multiple goals which cannot be
simultaneously achieved. Deciding about what is more
important so that scares organizational resources can be
optimally allocated to different organizational goals, is
 facilitated through management.
5. Economic and Social Development- Drucker asserts that
“Developing countries are not underdevelopment, they
are
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undermanaged.” If knowledge of management is transferred

from developed to developing countries, developing
countries will develop their entrepreneurial ability,
managerial excellence, rate of savings, capital formation and
thus, economic and social development.
“Savings and Capital investment do not produce
management and economic development. On the
contrary, management produces economic and social
development, and with it savings and capital investment.”-
Drucker.
6. Coordination between Individual & Organizational Goals
Effective management coordinates individual goals of
people with formal goals of the people with formal goal of
the organization. It motivates employees to put their best
efforts to contribute to organizational goals and through it,
achieve their personal goals.
7. Face Competition- Management helps firms face tough
competition in the contemporary business environment.
Effectively managed business firms outperform those
which are not effectively managed and, thus, capture
bigger share of the market. It helps the organizations adopt
the complex environmental changes and promote their
level of competence.
8. Social Upliftment- Management promotes social
 development by generating and directing human
energies
Principle Of Management

towards the needs of the society such as health care,.

Education, clean environment etc.
9. Reforms Government & Society- Management teaches
respect for individual values, tradition and social culture.
The more the management of an organization believes in
traditions, customs, values and beliefs of the society, the
more that organization is accepted by the society and the
government.
“Management will increasingly be concerned as with
the expression of the basic beliefs and values as with the
accomplishment of measurable results.” ― Drucker
10. Social Innovation- The social & economical development
is more a result of social innovation than technical
innovation. The needs of our society, educare, health care,
clean environment, entrepreneurship, productivity etc. are
fulfilled through role in the social upliftment of society.
11. Foundation to Organization- Clearly defined tasks; their
distribution to people with authority provides foundation to
the organization. It assign right task to the right person to
avoid duplication and confusion in organizational activities.
12. Environment Analysis- management enables an
organization to analyze its strengths and weakness and
relate them with environmental threats and opportunities.
(This is done with the help of SWOT analysis). It helps
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managers to minimize risks and maximize environmental

 opportunities and business gains.
Scope or Branches of Management: -
Management is an all pervasive function since it is
required in all types of organized Endeavour. Thus, its
scope is very large. The following activities are covered
under this scope. • Planning
• Organization
• Staffing
• Directing
• Co-coordinating and
• Controlling.
The operational aspects of business of management,
called the branches of management, are as follows: 1.
Production Management- Production means creation of
utilities. This creation of utilities takes place when raw
materials are converted into finished products. Production
management, then, is that branch of management “Which by
scientific planning and regulation sets into motion that part
of enterprise to which has been entrusted the task of actual
translation of raw material into finished products.” 2.
Marketing Management- Marketing is a sum total of physical
activities which are involved in the transfer of goods and
services and which provides for their physical distribution.
Marketing Management refers to the planning,
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organizing, directing & controlling the activities of

the persons working in the market division of a
business enterprise with the aim of achieving the
organization objectives.
3. Financial Management – Financial Management is
concerned with managerial activities pertaining to the
procurement and utilization of funds or finance for business
purpose. The main function of financial management
include:
• Estimation of capital requirements;
• Ensuring a fair return to investors;
• Determining the suitable sources of funds;
• Laying down the optimum & suitable capitalstructure
for the enterprise;
• Coordinating the operations of various departments;
• Preparation, analysis and interpretation of financial
statements;
• Laying down a proper dividend policy; and
• Negotiating for outside financing.
4. Personnel Management- It is that phase of management
which deals with the effective control and use of
manpower. Effective management of human resources is
one of the most crucial factors associated with the success
of an enterprise. Personnel Management is concerned
with
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managerial and operative functions. Managerial

functions of personnel management includes:
i. Personnel planning;
ii. Organizing by setting up the structure of relationship
among jobs, personnel and physical factors to
contribute towards organization goals;
iii. Directing the employees; and
 iv. Controlling.
The operating functions of personnel management are:
i. Procurement of right kind & number of persons;
ii. Training & development of employees;
iii. Determining of adequate and equitable compensation
of employees;
iv. Integration of the interest of the personnel with that of
the enterprise; and
v. Providing good working conditions & welfare services
to the employees.
5. Office Management- The concept of management when
applied to office is called “Office Management”. It is the
technique of planning, coordinating and controlling
office activities with a view to achieve common business
objective. One of the functions of management is to
organize the office work in such a way that it helps the
Principle Of Management

management in attaining its goals. It works as a

service department for other departments.
Concept of Management: -
The concept of management is as old as human
civilization. Management in today’s context has the most
significant influence on modern life, giving a strong essence
to the very purpose of management. The concept of
management is useful and applicable to all types of
organizations, whether profit-making or service-oriented.
Therefore, it is said that management is a universal
enterprise, educational and health institution, military
organizations, gymkhanas and clubs, trade associations and
 chambers of commerce , etc.
MANAGEMENT Controlling
OUTPUTS
INPUTS
•AIMS
•MEN

•MONEY

•MATERIALS •MACHINES
PROCESS •GOALS

•METHODS •MARKETS

Planning Directing •OBJECTIVES

Organizing

The traditional concept of management was restricted

to the art of getting things done through others. However,
Principle Of Management

according to modern view management is not merely an art of

getting things done through others, but it also covers a wide
spectrum of business related activities.

Management as a Science as well as an Art: -

The controversy with regards to the nature of
management as to whether it is an art or science is very old
and has created a lot of confusion. It is necessary to understand
the real nature of management.

It is an art as it involves an application of knowledge &

skills for the solution of management problems. It is a
science as it is a systematized body of knowledge, consisting
of generally accepted principles.
As an Art: - As art is often regarded as the systematic
application of skill or knowledge in effecting accomplishment of
results. It represents the methods or ways of doing specific
things & indicates how an objective is to be achieved.

The Main Element is:

a. Personal skills
b. Practical knowledge
c. Result-oriented approach
d. Regular practice
e. Creativity.
Principle Of Management

1. Management is an art of dealing with people to

accomplish desired results.
2. Management is concerned with the application of
knowledge & skills
3. Management is result oriented because it is concerned
with accomplishment of objective.
4. Like an artist, Management always tries to attain higher and
higher goals in order to reach the state of absolute
perfection.
5. Management is one of the most creative arts as it is
concerned with getting work done through others.

As a Science: - The word science literally means

knowledge. It is a systematized body of knowledge
acquired by mankind through observation &
experimentation which is capable of verification.
 The Essential Features of Science are as follows:
1. It is a systematized body of knowledge that usesscientific
methods for observations.
2. The principles are evolved on the basis of
continued observations.
3. The principles are exact and have universal applicability to
without any limitations.
Principle Of Management

4. The principles establish a cause and effect relationship

between various factors.
5. The validity of scientific principles can be verified & they
provide a reliable basis for predicting future events.

Let us now apply these features of science to management

to determine whether it qualifies as science?

1. Systematized body of knowledge- Management is viewed

as a science as it is an organized body of knowledge built
up by management practitioners, thinkers and
philosophers over a period of years.
2. Continued Observation- As applied to management,
the principle of management has been developed after
continued observations.
3. Universal Application- In the field of management there
are certain fundamental principles of management
which can be universally applied. In word of Taylor, “The
fundamental principles of management are applicable to
all human activities from our simplest individual actsto
the working of our great corporations.”
4. Cause & Effect Relationship- The principle of management
 also establish cause & effect relationship, e.g., poor
planning & plant layout cause low productivity.
5. Validity & Predictability- The principle of management can
also be verified for their validity. The principle of
Principle Of Management

management have been put to several tests & found to be

valid.
Conclusion:-We have seen above that management has
elements of both art & science. It may not be proper to
term it as pure science or pure art. If fact, it is a science as
well as an art because science and art both
complementary to each other. It may be concluded that
management is a mixture of art and science….

Management-As a Profession:-
Another question that arises in regard to the
nature of management is whether management can be
regarded as a profession or not. To determine this, we
must understand the meaning and special attributes of
profession.
Prof. Dalton E. McFarland lays down the
following criteria or special attributes in a profession: •
The existence of body of specialized knowledge or
techniques.
• Formalized method of acquiring training and
experience.
• The establishment of representative organization
with professionalism as its goal.
• The formation of ethical codes for the guidance of
 conduct.
Principle Of Management

• The charging of fees, based on services, but with

due regards for the priority or service over the
desire for monetary reward.
Let us now apply the above-mentioned
attributes to ascertain the status of management as
a
profession.
1. Body of specialized knowledge and
techniques:- When applied to
management, it has an
organized body of knowledge built up by management
practioners, thinkers and philosophers over the period of
years.
2. Formalized method of acquiring training
and techniques:-
The management science, today, is fully
equipped with formalized method of acquiring the body
of knowledge in theory and practice.
3. Establishment of profession association:-
Professional Management Association
is
being established in most of the countries. In India,
there is All India Management Association with many
local associations affiliated to this. But the main
function of this association is to manage and
co-ordinate the research works in the various areas of
management.
4. Code of conduct:- But in the sphere of management,
there exists no uniform code of conduct. There are no
Principle Of Management

restrictions of licensing on the entry of management

profession and judge from this standpoint, management
cannot be regarded as a profession.
5. Priority of service over economic considerations:-
Management aims as providing maximum
efficiency at the lowest cost so as to serve the interests
of employers, workers, consumers, society and the
nation at large.

Conclusion:- The above discussion shows that

management in some respects qualifies as a profession
but it does not have certain features which generally
constitute a recognized profession. The saying is that
“managers are born, and not made” is no longer valid in
the present days.

ADMINISTRATION V/S MANAGEMENT

There are persons who feel that
administration is a part of management. Various views
point as discussed as such:
1. Administration is different from management:- As
per this view administration is a higher
level activity while management is a lower level activity.
Administration is concerned with the determination of
overall objectives and policies of an enterprise while
Principle Of Management
 management is concerned with planning,
coordinating and controlling of business activities for
attaining the enterprise objective.
2. Administration is a part of management:- Another
view is that administration and
organization are a part of management. Administration
is that part of management which is concerned with the
installation and carrying out of the procedures by which
the programme is laid down and communicated and the
progress of activity is regulated and checked against
plans.
3. Administration and Management are one:-
Some authors are of the view that
administration and management are used
interchangeably and there is no distinction between
the two. In the words of Newman, “management and
administration is a guidance, leadership and control of
the efforts of a group of individuals towards some
common goods.

ORGANIZATION AND MANAGEMENT

According to C.H. Northcott, organization
can be defined as “ the arrangement by which the tasks
are assigned to men and women so that their individual
efforts contribute effectively to some and less clearly
Principle Of Management

defines purpose for which they have been brought

together.”
Management is a very wide term and includes
 organization. Organization is a part of a management, an
essential part. In essence, organization is a foundation
upon which the whole management structure is built. It
has been rightly said, “If management is the brain,
organization is a body of an enterprise.”

Differences between Administration, Management

and Organization.
Administration Management Organization
a) Meaning:- Management is Organization is
Administration is concerned with concerned with
concerned with implementation of classification of the
determination of policies laid down by activities of the
objectives and major the administration. enterprises.
policies of the
enterprises.

b) Components:- Management Organization refers

Administrative staff includes various to the enterprise as
includes board of sectional heads viz., a
directors or chief production whole, i.e., it consists
executive officers managers, sales of administrative and
(CEO) or managing mangers, public managerial staffs of
director (MD) or relation officers, etc. the organization.
president.

c) Anatomy:- It resembles the entire It resembles the nervous

It resembles

Principle Of Management
draftsman. body of human being. system of human body.
 d) Factors Management Organization is
influencing functions are influenced by factors
influenced by factors like nature and size of
functions:-
like organizational organization, grouping
Administrative
policies, degree of of activities, nature of
functions are
delegation and values workflow and formal
influenced by factors
and beliefs of authorities.
like public opinion,
managers.
government policies
as also social and
religious factors.

e) Nature of It is the executive It is an organic

functions:- function of getting function putting
It deals with things done through together
determination of others. different parts of an
major organizational enterprise.
objectives.

f) Factors Management Organizational

influencing decisions are decisions are taken by
influenced by values, managers in their
decisions:-
beliefs and opinions of official capacities, as
Administrative
mangers at the decided by the top
decisions are
different managerial level authority.
influenced by
levels.
external factors like
social, economical
and governmental
factors.

g) Objectives:- It is concerned with It provides the

It is aims at the the performance mechanism for
formulation of aspects of work and corporative and
overall goals and aims at getting things integrated action by
objectives, done through two or more persons
programmes policies others. in any enterprise.
and other plans of
the organization.

h) Set-up:-

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 Administrative work Managerial work is Organization sets up
is mainly looked after delegated to the a machinery for
by the top level middle and lower effecting delegation
executives in the level and securing
organizational set executive. coordination in the
up. organization.

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