Lesson 1-Nature and Concept of Management

NATURE AND
CONCEPT OF
MANAGEMENT
LESSON 1
Peter Drucker
He is an influential Austrian-American author,
mentor and consultant who is considered
the father of modern business
management.
His innovative thinking has revolutionized

today’s theory of business and transformed it into an
actionable and ethical discipline used by progressive
business leaders worldwide. At the core of his approach
to management lies the idea that, to succeed,
businesses need to put the development and well-being
of their people (rather than just the bottom line) first.
Henri Fayol
He was a French Mining Engineer, Mining Executive,

author and director of mines who developed a
general theory of business administration that is
often called Fayolism.
He also known as the
father of modern management
theory.
The process of achieving
company goals effectively and
efficiently by engaging in the four
major functions of planning,
organizing, leading, and
controlling of company’s resources.
The act of getting people together to

accomplish desired goals and objectives
using available resources efficiently and
effectively.
 Resourcing encompasses the deployment and manipulation of human
resources, financial resources, technological resources and natural
resources
 Since organization can be viewed as systems, management

can also be defined as human action, including design, to
facilitate the production of useful outcomes from a system.
 This view opens the opportunity to ‘manage’ oneself, a

pre-requisite to attempting to manage others.
Towards the end of the 20th century, business
management came to consist of six separate branches,
namely:
Nature of Management
dynamic
It is a
It hasmulti
process disciplinary
approach
It is a
science It is an art
What is a PROCESS?
Process is a systematic way of getting things done.
INPUT PROCESS OUTPUT

MANAGEMENT
Management is a process where human
resources and material resources are
brought together to fulfill the objectives of
the organization.
Management is considered a
process because it involves a
series of interrelated functions.
MANAGEMENT
PROCESS
Management process is basically a
process of setting goals and leading
the execution of any type of
activities such as a project or
process. The management process
includesplanning, organizing,
staffing, directing and
controlling functions.
MANAGEMENT as a PROCESS has the ff.
implications:
1) MANAGEMENT AS SOCIAL PROCESS – Management
process involves interaction among people. Goals can be
achieved only when relations between people are productive.
2) MANAGEMENT AS INTEGRATED PROCESS –
Management process brings together human,
physical and financial resources. Management process
also integrates human efforts so as to maintain
harmony among them.
3) MANAGEMENT AS ITERATIVE PROCESS – All managerial functions
are contained within each other, for example, when a manager prepares
plans, he is also laying down standards for control.
4) MANAGEMENT AS CONTINUOUS PROCESS – Management involves

continuous identifying and solving problems, it is repeated again and again.
FUNCTIONS OF MANAGEMENT
Management operates through various functions, often
classified as planning, organizing, staffing, leading/directing,
controlling/monitoring and motivation.
Planning: Deciding what needs to happen in the future (today, next week, next month, next year,
over the next five years, etc.) and generating plans for action.
Organizing: (Implementation) pattern of relationships among workers, making optimum use of

the resources required to enable the successful carrying out of plans.
Staffing: Job analysis, recruitment and hiring for appropriate jobs.

Leading/Directing: Determining what needs to be done in a situation and getting people to do
it.
Controlling/Monitoring: Checking progress against plans
Motivation: Motivation is also a kind of basic function of management, because w/o motivation,
employees cannot work effectively. If motivation does not take place in an organization, then
employees may not contribute to the other functions (which are usually set by top-level
management
ELEMENTS OF MANAGEMENT
PROCESS
Communicating Planning
Staffing Organizing
Achievem
ent of
Objective
s
Directing
Motivating
Controlling Coordinating
PRINCIPLES OF MANAGEMENT
1. Division of Work - Henri believed that segregating

work in the workforce amongst the worker will enhance the quality
of the product. Similarly, he also concluded that the division of
work improves the productivity, efficiency, accuracy and speed of
the workers. This principle is appropriate for both the managerial
as well as a technical work level.
2. Authority and Responsibility -

These are the two key aspects of management.
Authority facilitates the management to work
efficiently, and responsibility makes them
responsible for the work done under their
guidance or leadership.
3. Discipline – Without discipline, nothing can be

accomplished. It is the core value for any project or any
management. Good performance and sensible interrelation
make the management job easy and comprehensive.
Employees good behaviour also helps them smoothly build and
progress in their professional careers.
4. Unity of Command - This means an

employee should have only one boss and follow his
command. If an employee has to follow more than one
boss, there begins a conflict of interest and can create
confusion.
5. Unity of Direction – Whoever is engaged in

the same activity should have a unified goal. This means all
the person working in a company should have one goal and
motive which will make the work easier and achieve the set
goal easily.
6. Subordination of Individual
Interest - There are always all kinds of interests in an
organization. In order to have an organization function
well, Henri Fayol indicated that personal interests are
subordinate to the interests of the organization (ethics).
This refers to the whole chain of command in a company.
7. Remuneration – This plays an important role

in motivating the workers of a company. Remuneration
can be monetary or non-monetary. However, it should
be according to an individual’s efforts they have made.
8. Centralization - In any company, the

management or any authority responsible for the decision-
making process should be neutral. However, this depends
on the size of an organization. Henri Fayol stressed on the
point that there should be a balance between the
hierarchy and division of power.
9. Scalar Chain – Fayol on this principle

highlights that the hierarchy steps should be from
the top to the lowest. This is necessary so that
every employee knows their immediate senior
also they should be able to contact any, if needed.
10. Order - A company should

maintain a well-defined work order to
have a favourable work culture. The
positive atmosphere in the workplace
will boost more positive productivity.
11. Equity – All employees should be treated

equally and respectfully. It’s the responsibility of a
manger that no employees face discrimination.
12. Stability of Tenure–

Organizations should minimize staff turnover and
role changes to maximize efficiency. If people are
secure and good at their jobs, they are happier
and more productive.
13. Initiative – Henri Fayol argued that with this

management principle, employees should be allowed to
express new ideas. This encourages interest and
involvement and creates added value for the company.
Employee initiatives are a source of strength for

the organization according to Henri Fayol. This
encourages the employees to be involved and
interested.
14. Esprit de Corps – It is the responsibility of

the management to motivate their employees and be
supportive of each other regularly. Developing trust and
mutual understanding will lead to a positive outcome and
work environment.
The management principle ‘esprit de corps’ of the

14 principles of management stands for striving for the
involvement and unity of the employees. Managers are
responsible for the development of morale in the
workplace; individually and in the area of communication.
Esprit de corps contributes to the development of

the culture and creates an atmosphere of mutual trust and
understanding.

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NATURE AND

His innovative thinking has revolutionized

He was a French Mining Engineer, Mining Executive,

The act of getting people together to

 Since organization can be viewed as systems, management

 This view opens the opportunity to ‘manage’ oneself, a

Process is a systematic way of getting things done.

INPUT PROCESS OUTPUT

4) MANAGEMENT AS CONTINUOUS PROCESS – Management involves

Organizing: (Implementation) pattern of relationships among workers, making optimum use of

Staffing: Job analysis, recruitment and hiring for appropriate jobs.

1. Division of Work - Henri believed that segregating

2. Authority and Responsibility -

3. Discipline – Without discipline, nothing can be

4. Unity of Command - This means an

5. Unity of Direction – Whoever is engaged in

7. Remuneration – This plays an important role

8. Centralization - In any company, the

9. Scalar Chain – Fayol on this principle

10. Order - A company should

11. Equity – All employees should be treated

12. Stability of Tenure–

13. Initiative – Henri Fayol argued that with this

Employee initiatives are a source of strength for

14. Esprit de Corps – It is the responsibility of

The management principle ‘esprit de corps’ of the

Esprit de corps contributes to the development of

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