Buisness management *chap 1

DEFINITION

BY- VISHAL SHARMA (21371) 2

Management in business and organizations is an art

that coordinates the efforts of people to accomplish

goals and objectives using available resources

efficiently and effectively. Management

comprises planning, organizing, staffing, leading or

directing, and controlling an organization to

accomplish the goal.

http://en.wikipedia.org/wiki/Business

http://en.wikipedia.org/wiki/Organizations

http://en.wikipedia.org/wiki/Goal

http://en.wikipedia.org/wiki/Planning

http://en.wikipedia.org/wiki/Organizing_(management)

http://en.wikipedia.org/wiki/Staffing

http://en.wikipedia.org/wiki/Leadership

http://en.wikipedia.org/wiki/Control_(management)

http://en.wikipedia.org/wiki/Organization

• IN ANOTHER WAY OF THINKING, MARY PARKER FOLLETT (1868–1933), DEFINED MANAGEMENT AS "THE ART OF

GETTING THINGS DONE THROUGH PEOPLE".


http://en.wikipedia.org/wiki/Mary_Parker_Follett

NATURE/FEATURES OF MANAGEMENT

THE MAIN FEATURES OF MANAGEMENT PRINCIPLES ARE GIVEN BELOW:

UNIVERSAL APPLICATION:• THE PRINCIPLES OF MANAGEMENT ARE UNIVERSAL IN NATURE THAT MEANS THEY CAN BE APPLIED TO ALL TYPES OF

ORGANISATIONS IRRESPECTIVE OF THEIR SIZE AND NATURE. THEIR RESULTS MAY VARY AND APPLICATION MAY BE

MODIFIED BUT THESE ARE SUITABLE FOR ALL KINDS OF ORGANISATIONS.

• FOR EXAMPLE, THE PRINCIPLE OF DIVISION OF LABOUR CAN BE APPLIED TO ALL THE ORGANISATIONS AND RESULTS IN

SPECIALIZATION ALTHOUGH THE DEGREE OF SPECIALIZATION MAY VARY DEPENDING UPON THE NATURE AND SIZE OF THE

ORGANISATION.


2. GENERAL GUIDELINES:• MANAGEMENT PRINCIPLES ARE NOT STATIC OR ABSOLUTE STATEMENTS. THESE CANNOT BE APPLIED BLINDLY

IN ALL THE SITUATIONS. THE APPLICABILITY OF MANAGEMENT PRINCIPLES DEPENDS ON CONDITIONS AND

NATURE OF ORGANISATION.

• THE MANAGER MUST APPLY THESE PRINCIPLES ACCORDING TO THE SIZE AND NATURE OF ORGANISATION

KEEPING IN MIND THE REQUIREMENTS OF THE ORGANISATIONS.

• A MANAGEMENT PRINCIPLE GIVES GUIDELINES TO SOLVE THE PROBLEMS THESE PRINCIPLES DO NOT PROVIDE

READYMADE SOLUTION FOR ALL THE PROBLEMS.

• FOR EXAMPLE, THE PRINCIPLE OF FAIR REMUNERATION INSISTS ON FAIR OR ADEQUATE SALARY TO EMPLOYEE

BUT WHAT AMOUNT OF SALARY IS FAIR DEPENDS UPON THE NATURE, SIZE AND FINANCIAL CAPACITY OF THE

COMPANY.

• FAIR MAY MEAN RS 50,000 P.M. TO A MULTINATIONAL COMPANY AND IT MAY MEAN RS 5000 P.M. TO A SMALL

COMPANY. SO PRINCIPLES DO NOT SPECIFY THE ABSOLUTE AMOUNT TO BE PAID BUT THERE IS RELATIVITY

DEPENDING UPON PAYING CAPACITY OF THE DIFFERENT COMPANIES.


3. EVOLUTIONARY/FORMED BY PRACTICE AND EXPERIMENTS:

• THE MANAGEMENT PRINCIPLES ARE DEVELOPED ONLY AFTER DEEP AND THOROUGH

RESEARCH WORK. THEY ARE NOT DEVELOPED OVERNIGHT OR THEY ARE NOT THE

PERSONAL FEELINGS OF ANY PERSON. PROPER OBSERVATIONS AND EXPERIMENTS ARE

CONDUCTED BEFORE DEVELOPING THEM. THESE ARE THE EXPRESSIONS OF DEEP

EXPERIENCES OF THE LEADERS OF MANAGEMENT THOUGHTS. THEREFORE THEY ARE

EVOLUTIONARY IN NATURE.


4. FLEXIBILITY:

• MANAGEMENT PRINCIPLES CAN BE APPLIED DIFFERENTLY UNDER DIFFERENT CONDITIONS. SOME CHANGES

CAN BE MADE IN APPLICATION OF PRINCIPLES ACCORDING TO THE REQUIREMENT OF THE COMPANY. THESE

ARE NOT SET OF RIGID STATEMENTS. THESE CAN BE MODIFIED BY THE MANAGERS WHO ARE USING THEM.

• FOR EXAMPLE, THE PRINCIPLE OF CENTRALISATION INSISTS ON CONCENTRATION OF POWER AND AUTHORITY

AT TOP LEVEL BUT THE EXTENT AND DEGREE OF CENTRALISATION MAY VARY ACCORDING TO NATURE OF

ORGANISATION AND CENTRALISATION DOES NOT MEAN TOTAL CENTRALISATION, THERE CAN BE USE OF

DECENTRALISATION AT LOWER LEVEL IF ORGANISATION DEMANDS IT.


5. BEHAVIOURAL IN NATURE:

•MANAGEMENT PRINCIPLES ARE FORMED TO GUIDE AND INFLUENCE THE BEHAVIOUR OF

EMPLOYEES. THESE PRINCIPLES INSIST ON IMPROVING RELATIONSHIP BETWEEN

SUPERIOR, SUBORDINATES AND ALL THE MEMBERS OF ORGANISATION. THEY ALSO

ESTABLISH RELATIONS BETWEEN HUMAN AND MATERIAL RESOURCES.

• FOR EXAMPLE, PRINCIPLE OF DISCIPLINE IMPROVES COMMITMENT OF EMPLOYEES

TOWARDS THE ORGANISATION AND PRINCIPLE OF ESPRIT DE CORPS MOULD THE

BEHAVIOUR OF EMPLOYEES TOWARDS TEAM SPIRIT.


6. BASED ON CAUSE AND EFFECT RELATIONSHIP:

•MANAGEMENT PRINCIPLES ARE BASED ON CAUSE AND EFFECT THAT MEANS THESE

PRINCIPLES TELL US IF A PARTICULAR PRINCIPLE IS APPLIED IN A SITUATION, WHAT

MIGHT BE THE EFFECT. ALTHOUGH THESE PRINCIPLES CANNOT STATE PERFECTLY

ABSOLUTE RESULT BECAUSE THESE ARE APPLIED ON HUMAN BEING BUT IT HELPS IN

KNOWING SOME IDEA ABOUT THE EFFECT. WHEN PRINCIPLES ARE APPLIED IN SIMILAR

SITUATION IN DIFFERENT ORGANISATIONS THEN THEIR EFFECTS CAN BE KNOWN WITH

MORE PERFECTION.


7. CONTINGENT:

• MANAGEMENT PRINCIPLES ARE CONTINGENT OR DEPENDENT UPON THE SITUATIONS PREVAILING IN

ORGANISATION. THEIR APPLICATION AND EFFECT DEPEND UPON THE NATURE OF ORGANISATION. THE

APPLICATION OF PRINCIPLE HAS TO BE CHANGED ACCORDING TO THE NATURE, SIZE AND TYPE OF

ORGANISATION.

• FOR EXAMPLE PRINCIPLE OF TEAM SPIRIT IS VERY IMPORTANT FOR AN ORGANISATION WHERE WORK IS

CARRIED OUT BY A GROUP OF PEOPLE WHEREAS IT IS OF NO USE IN THE COMPANIES WHERE WORK IS

PERFORMED BY INDIVIDUAL AND NOT BY A GROUP.


HENRI FAYOL’S 14 PRINCIPLES OF MANAGEMENT


1. DIVISION OF WORK

•SPECIALIZATION ALLOWS THE INDIVIDUAL TO BUILD UP

EXPERIENCE, AND TO CONTINUOUSLY IMPROVE HIS SKILLS.

THEREBY HE CAN BE MORE PRODUCTIVE.


2. AUTHORITY

• THE RIGHT TO ISSUE COMMANDS, ALONG WITH WHICH

MUST GO THE BALANCED RESPONSIBILITY FOR ITS

FUNCTION.


3. DISCIPLINE

• EMPLOYEES MUST OBEY, BUT THIS IS TWO-SIDED:

EMPLOYEES WILL ONLY OBEY ORDERS IF MANAGEMENT PLAY

THEIR PART BY PROVIDING GOOD LEADERSHIP.


4. UNITY OF COMMAND

• EACH WORKER SHOULD HAVE ONLY ONE BOSS WITH NO

OTHER CONFLICTING LINES OF COMMAND.


5. UNITY OF DIRECTION

• PEOPLE ENGAGED IN THE SAME KIND OF ACTIVITIES MUST HAVE THE SAME

OBJECTIVES IN A SINGLE PLAN. THIS IS ESSENTIAL TO ENSURE UNITY AND

COORDINATION IN THE ENTERPRISE. UNITY OF COMMAND DOES NOT EXIST

WITHOUT UNITY OF DIRECTION BUT DOES NOT NECESSARILY FLOWS FROM

IT.


6. SUBORDINATION OF INDIVIDUAL INTEREST

• MANAGEMENT MUST SEE THAT THE GOALS OF THE

FIRMS ARE ALWAYS PARAMOUNT.


7. REMUNERATION

• PAYMENT IS AN IMPORTANT MOTIVATOR ALTHOUGH

BY ANALYZING A NUMBER OF POSSIBILITIES, FAYOL

POINTS OUT THAT THERE IS NO SUCH THING AS A PERFECT

SYSTEM


8. CENTRALIZATION (OR DECENTRALIZATION)

• THIS IS A MATTER OF DEGREE DEPENDING ON THE

CONDITION OF THE BUSINESS AND THE QUALITY OF ITS

PERSONNEL.


9. SCALAR CHAIN (LINE OF AUTHORITY)

• A HIERARCHY IS NECESSARY FOR UNITY OF DIRECTION. BUT LATERAL

COMMUNICATION IS ALSO FUNDAMENTAL, AS LONG AS SUPERIORS KNOW

THAT SUCH COMMUNICATION IS TAKING PLACE. SCALAR CHAIN REFERS TO

THE NUMBER OF LEVELS IN THE HIERARCHY FROM THE ULTIMATE

AUTHORITY TO THE LOWEST LEVEL IN THE ORGANIZATION. IT SHOULD NOT

BE OVER-STRETCHED AND CONSIST OF TOO-MANY LEVELS


10. ORDER

• BOTH MATERIAL ORDER AND SOCIAL ORDER ARE NECESSARY. THE

FORMER MINIMIZES LOST TIME AND USELESS HANDLING OF

MATERIALS. THE LATTER IS ACHIEVED THROUGH ORGANIZATION

AND SELECTION.


11. EQUITY

• IN RUNNING A BUSINESS A ‘COMBINATION OF

KINDLINESS AND JUSTICE’ IS NEEDED. TREATING

EMPLOYEES WELL IS IMPORTANT TO ACHIEVE EQUITY.


12. STABILITY OF TENURE OF PERSONNEL

• EMPLOYEES WORK BETTER IF JOB SECURITY AND CAREER

PROGRESS ARE ASSURED TO THEM. AN INSECURE TENURE AND A

HIGH RATE OF EMPLOYEE TURNOVER WILL AFFECT THE

ORGANIZATION ADVERSELY.


13. INITIATIVE

• ALLOWING ALL PERSONNEL TO SHOW THEIR INITIATIVE IN SOME

WAY IS A SOURCE OF STRENGTH FOR THE ORGANIZATION. EVEN

THOUGH IT MAY WELL INVOLVE A SACRIFICE OF ‘PERSONAL

VANITY’ ON THE PART OF MANY MANAGERS.


14. ESPRIT DE CORPS

• MANAGEMENT MUST FOSTER THE MORALE OF ITS EMPLOYEES. HE

FURTHER SUGGESTS THAT: “REAL TALENT IS NEEDED TO COORDINATE

EFFORT, ENCOURAGE KEENNESS, USE EACH PERSON’S ABILITIES, AND

REWARD EACH ONE’S MERIT WITHOUT AROUSING POSSIBLE JEALOUSIES

AND DISTURBING HARMONIOUS RELATIONS.”


LEVELS OF MANAGEMENT


Meaning of Levels of Management :

• Many managers work in an organisation. However, these

managers do not work at the same level. They work and

operate at different positions. Hierarchy of these

managerial positions is called Levels of Management.



THREE LEVELS OF MANAGEMENT

GENERALLY, THERE ARE THREE LEVELS OF MANAGEMENT, VIZ.,

• ADMINISTRATIVE OR TOP LEVEL OF MANAGEMENT.

• EXECUTIVE OR MIDDLE LEVEL OF MANAGEMENT.

• SUPERVISORY OR LOWER LEVEL OF MANAGEMENT.

• AT EACH LEVEL, INDIVIDUAL MANAGER HAS TO CARRY OUT DIFFERENT ROLES AND FUNCTIONS.



DIAGRAM OF LEVELS OF MANAGEMENT


TOP LEVEL OF MANAGEMENT


The Top Level Management consists of the Board of Directors (BOD) and

the Chief Executive Officer (CEO). The Chief Executive Officer is also

called General Manager (GM) or Managing Director (MD) or President.

The Board of Directors are the representatives of the Shareholders, i.e.

they are selected by the Shareholders of the company. Similarly, the

Chief Executive Officer is selected by the Board of Directors of an

organisation.

http://kalyan-city.blogspot.com/2011/04/what-is-management-definitions-meaning.html

• THE MAIN ROLE OF THE TOP LEVEL MANAGEMENT IS SUMMARIZED AS FOLLOWS :-

• THE TOP LEVEL MANAGEMENT DETERMINES THE OBJECTIVES, POLICIES AND PLANS OF THE ORGANISATION.

• THEY MOBILISES (ASSEMBLE AND BRING TOGETHER) AVAILABLE RESOURCES.

• THE TOP LEVEL MANAGEMENT DOES MOSTLY THE WORK OF THINKING, PLANNING AND DECIDING. THEREFORE, THEY

ARE ALSO CALLED AS THE ADMINISTRATORS AND THE BRAIN OF THE ORGANISATION.

• THEY SPEND MORE TIME IN PLANNING AND ORGANISING.

• THEY PREPARE LONG-TERM PLANS OF THE ORGANISATION WHICH ARE GENERALLY MADE FOR 5 TO 20 YEARS.

• THE TOP LEVEL MANAGEMENT HAS MAXIMUM AUTHORITY AND RESPONSIBILITY. THEY ARE THE TOP OR FINAL

AUTHORITY IN THE ORGANISATION. THEY ARE DIRECTLY RESPONSIBLE TO THE SHAREHOLDERS, GOVERNMENT AND

THE GENERAL PUBLIC. THE SUCCESS OR FAILURE OF THE ORGANISATION LARGELY DEPENDS ON THEIR EFFICIENCY

AND DECISION MAKING.

• THEY REQUIRE MORE CONCEPTUAL SKILLS AND LESS TECHNICAL SKILLS


MIDDLE LEVEL OF MANAGEMENT


The Middle Level Management consists of the Departmental

Heads (HOD), Branch Managers, and the Junior Executives. The

Departmental heads are Finance Managers, Purchase

Managers, etc. The Branch Managers are the head of a branch

or local unit. The Junior Executives are Assistant Finance

Managers, Assistant Purchase Managers, etc. The Middle level

Management is selected by the Top Level Management.

• THE MIDDLE LEVEL MANAGEMENT EMPHASIZE MORE ON FOLLOWING TASKS :-

• MIDDLE LEVEL MANAGEMENT GIVES RECOMMENDATIONS (ADVICE) TO THE TOP LEVEL MANAGEMENT.

• IT EXECUTES (IMPLEMENTS) THE POLICIES AND PLANS WHICH ARE MADE BY THE TOP LEVEL MANAGEMENT.

• IT CO-ORDINATE THE ACTIVITIES OF ALL THE DEPARTMENTS.

• THEY ALSO HAVE TO COMMUNICATE WITH THE TOP LEVEL MANAGEMENT AND THE LOWER LEVEL MANAGEMENT.

• THEY SPEND MORE TIME IN CO-ORDINATING AND COMMUNICATING.

• THEY PREPARE SHORT-TERM PLANS OF THEIR DEPARTMENTS WHICH ARE GENERALLY MADE FOR 1 TO 5 YEARS.

• THE MIDDLE LEVEL MANAGEMENT HAS LIMITED AUTHORITY AND RESPONSIBILITY. THEY ARE INTERMEDIARY

BETWEEN TOP AND LOWER MANAGEMENT. THEY ARE DIRECTLY RESPONSIBLE TO THE CHIEF EXECUTIVE

OFFICER AND BOARD OF DIRECTORS.

• REQUIRE MORE MANAGERIAL AND TECHNICAL SKILLS AND LESS CONCEPTUAL SKILLS.


LOWER LEVEL OF MANAGEMENT

THE LOWER LEVEL MANAGEMENT CONSISTS OF THE FOREMEN AND THE SUPERVISORS. THEY ARE SELECTED BY THE MIDDLE

LEVEL MANAGEMENT. IT IS ALSO CALLED OPERATIVE / SUPERVISORY LEVEL OR FIRST LINE OF MANAGEMENT.

• THE LOWER LEVEL MANAGEMENT PERFORMS FOLLOWING ACTIVITIES :-

• LOWER LEVEL MANAGEMENT DIRECTS THE WORKERS / EMPLOYEES.

• THEY DEVELOPS MORALE IN THE WORKERS.

• IT MAINTAINS A LINK BETWEEN WORKERS AND THE MIDDLE LEVEL MANAGEMENT.

• THE LOWER LEVEL MANAGEMENT INFORMS THE WORKERS ABOUT THE DECISIONS WHICH ARE TAKEN BY THE MANAGEMENT. THEY ALSO INFORM THE

MANAGEMENT ABOUT THE PERFORMANCE, DIFFICULTIES, FEELINGS, DEMANDS, ETC., OF THE WORKERS.

• THEY SPEND MORE TIME IN DIRECTING AND CONTROLLING.

• THE LOWER LEVEL MANAGERS MAKE DAILY, WEEKLY AND MONTHLY PLANS.

• THEY HAVE LIMITED AUTHORITY BUT IMPORTANT RESPONSIBILITY OF GETTING THE WORK DONE FROM THE WORKERS. THEY REGULARLY REPORT AND ARE

DIRECTLY RESPONSIBLE TO THE MIDDLE LEVEL MANAGEMENT.

• ALONG WITH THE EXPERIENCE AND BASIC MANAGEMENT SKILLS, THEY ALSO REQUIRE MORE TECHNICAL AND COMMUNICATION SKILLS.

