Principles of Management Lecture Notes

Here is a compilation of notes on the principles of management:- 1. Definition of Management 2. Socio-Economic and Cultural Significance of Management 3. Organisation and Management 4. Nature 5. Dynamics 6. Managerial Acts 7. Process of Management 8. Challenge to Management 9. Theories of Management 10. Levels of Management 11. Management as an Art, a Science or a Profession and few other Notes.

Contents:

1. Notes on the Definition of Management
2. Notes on the Socio-Economic and Cultural Significance of Management
3. Notes on the Organisation and Management 
4. Notes on the Nature of Management
5. Notes on the Dynamics of Management 
6. Notes on the Managerial Acts 
7. Notes on the Process of Management
8. Notes on the Challenges of Management
9. Notes on the Theories of Management
10. Notes on the Levels of Management
11. Notes on Management as an Art, a Science or a Profession
12. Notes on Management as a Profession
13. Notes on the Importance of Management

---

1. Notes on the Definition of Management:

Management is defined as the process of getting things done through the efforts of other people. This often involves the allocation and control of money and physical resources. A manager is not a manager if he works alone, i.e., unless involved in the process of getting things done through others.

Perhaps the most significant factor in determining the performance and process of any organisa­tion is the quality of its management.

The job of managing is likely to become more and more challenging in the 21st century for a number of reasons – rapid growth of the service sector, foreign competition, large number of corporate mergers and acquisitions, restructurings, business process engineering, downsizing, flattening of the pyramid, empowerment and core competencies.

Although the study of mathematics started 5,000 years ago, that of economics 250 years ago, the study of management as a separate discipline is a comparatively recent event. The study of the subject started after the publication of F.W. Taylor’s influential book- Shop Management in 1903, which brought into focus the scientific character of the subject.

But the study of the subject, in the true sense, started with the publication of Peter Drucker’s Practice of Management in 1954. So, management is a young discipline. According to Drucker it is an art, rather than science. While science provides a framework of analysis, art follows certain practices. So, management as a subject has practical bias. It should be more concerned with practice than with theory.

There are many definitions of management. Henri Fayol, in the early twentieth century, defined it as the process of ‘forecasting, planning, organising, commanding, coordinating and controlling’. E. F. L. Brech called it ‘the social process of planning, coordination, control and motivation’.

Writing in the 1980s, Tom Peters defined it as ‘organisational direction based on sound common sense, pride in the organisation and enthusiasm for its works’.

This definition is much broader than the one suggested by Drucker that management is a process. Management is more than a process.

As Richard Pettinger has rightly put it, “management is partly the process of getting things done through people; and partly the creative and energetic combination of scarce resources into effective and profitable activities, and the combination of the skill and talents of the individuals concerned with doing this”.

---

2. Notes on the Socio-Economic and Cultural Significance of Management:

Change in the economy pose both opportunities and problems for managers. In times of continual moderate growth, many organisations enjoy a growing demand for output, and funds are more easily available for plant expansion and other investments. However, when the economy shifts downward (as in a recession), demand plummets, unemployment rises and profits shrink.

Organisations must continually monitor changes in the chief economic indicators to minimise threats and capitalise on opportunities. Some organisations utilise projections of future economic conditions in making such decisions as whether to expand plant facilities or enter new markets.

However, leading economists often differ in their economic projections and many organisations are therefore skeptical about economic forecasting.

i. Political, Legal and Regulatory:

Numerous law$ and a multitude of authorities characterise the political, legal and regulatory forces in the external environment that have an indirect but strong influence on the organisation. More recent laws and judicial decisions have banned the use of polygraphs for employment decisions and restricted an organisation’s right to fire and its options in testing employees for drug use.

Most observers believe that government involvement in organisations will continue, given that people continue to call on government to protect the consumer, preserve the environments and push for an end to discrimination in employment, education and housing. Consequently, many organi­sations monitor governmental and legislative developments to ensure their own compliance with the law.

ii. Cultural and Social:

Cultural and social forces are changes in our social and cultural system that can affect an organisation’s actions and the demand for its products or services. Every nation has a social and cultural system comprising certain beliefs and values.

Environmental interest groups have lobbied for legislation to further limit industries emissions of fossil fuels (gas, coal and oil) that intensify the greenhouse effect — a phenomenon that could produce disastrous changes in the world’s climate.

Organisations should monitor social and cultural forces because these external forces are ex­tremely important to their performance. Interestingly, however, many organisations ignore the potential effects of these indirect forces until they become direct forces. To avoid complacency, managers can adopt principles that commit their organisations to actions defined by society as in accordance with good citizenship.

This heightened sense of concern for the environment has produced a heated debate among all those who have an interest in the environment and that includes nearly everyone with an awareness of world events. Considerable sentiment abounds that organisations must take greater safeguards to protect the environment.

---

3. Notes on the Organisation and Management:

Management is conducted within an organisational framework or within organisations. Organisa­tion may be treated as the context of management. D. S. Pugh describes management as ‘systems of interdependent human beings’. Nobel Laureate H. A. Simon has defined it as a ‘joint function of human characteristics, the task to be accomplished and its environment’.

At different stages of our study we will find that organisations are combinations of resources brought together for a purpose; according to a modern theory — called biological theory — organisations have a life and a permanent identity of their own, and are energized by people.

a. The Concept of Organisation:

At different phases of our lives, each of us is associated with some kind of organisation — a college, a football club, a musical group, a hospital or a business. These organisations do differ from one another in more ways that one. Some, like a giant corporation like General Motors, or the army, may be organised very formally.

Others, like a local football team in a particular locality, may be less formally organised. But irrespective of their differences, all the organisations of which each of us is a member have some basic common features.

The most common element of an organisation seems to be a goal or a purpose. The goals do differ — to win a trophy, to entertain an audience, or to sell a product profitably. But without a goal an organisation will cease to exist. These organisations will also have some programme or method for achieving their goals — to win a certain number of games, to manufacture and advertise a profitable product.

Without a clear idea of what it must do, an organisation is not likely to be effective. Finally, an organisation must be endowed with leaders, managers responsible for helping organisations achieve their goals. In some organisations it is very easy to identify the leader(s).

In others, who the leaders actually are probably will not be that obvious. But an organisation without a manager is like a ship without a rudder. It will have no clear direction.

Any modern society is influenced by managers and their organisations. The term ‘organisation’ is defined as a group of two or more people working together in predetermined fashion to attain a set of goals such as profits, the discovery of knowledge, national defence, or social welfare (manag­ing a charitable trust or dispensary). Different types of organisations pervade our society.

The objective of this title is to bring into focus an important issue: how organisations are managed or, more specifically, how managers can best help their organisations set and achieve their goals.

The stress will be on the so-called formal organisations such as business firms (especially the corporate forms of organisation), hospitals, charitable trusts or religious goods or services to their customers or clients and offer career opportunities to their members.

It is easier to discuss the management of formal organisations for the simple reason that people in such organisations do have certain well-defined responsibilities. Furthermore, in such organisations, the role of the manager will be clear-cut and directly visible.

In fact, whatever be the role of the manager and how formal it may be, all managers in all organisations have the same basic responsibility: to help other members of the organisation set and reach a set of objectives and goals. The major purpose of this title is to enable the reader understand how managers accomplish this task.

b. Defining Management:

Management is basically concerned with ideas, things and people. Since the study of management involves people it is very difficult to define the term ‘management’. In fact, there are various definitions of management. But none has been universally accepted. Fredrick W. Taylor probably first suggested a definition of management.

According to him management is “Knowing exactly what you want (people) to do, and then seeing that they do it in the best and cheapest way”. As we will see throughout this text, however, management is actually a very complex process — much more complex than this definition would seem to suggest. Thus, we have to develop a definition of management that better captures the true nature of the process.

Mary Parker Follett has suggested a simple definition which is very popular. According to her, management is “the art (process) of getting things done through people”. The implication of this definition is simple enough- managers strive to attain their goals “by arranging for others to perform whatever tasks are necessary — not by performing the tasks themselves”.

Management is the use of people and other resources to accomplish organisational objectives.

William F. Glueck has suggested a slightly different definition. According to him, “management is effective utilisation of human and material resources to achieve enterprises’ objectives”.

So management is a (difficult term to define. It has a variety of interpretations and applications — all correct within a given set of parameters.

In the words of L. F. Boone and D. L. Kurtz- “Sometimes it is used to describe the executives and administrators of an organisation, as when one talks of labour-management negotiations. In other cases, it suggests the professional career path aspired to by most business administration students. And, in still other cases, it refers to a system for getting things done”.

H. Koontz and C. Odonell, however, follow a system-type definition. According to them, management is the use of people and other resources to accomplish organisational objectives. This definition is universally applicable, i.e., applicable to all organisational structures, both profit-ori­ented and not-for-profit.

In fact, the process of management is as important to the functioning of Calcutta Medical College or a fire department as it is of Tata Iron and Steel Company.

c. Systems Theory:

Management is perhaps best understood if we apply systems theory. According to systems theory, a modern organisation utilises four basic kinds of resources which are acquired from the environ­ment: human, monetary, physical and information.

Human resources include labour service, en­trepreneurial ability, managerial talent and so forth. Monetary resources are the financial capital used by an organisation to carry on its day-to-day functions as also for its long-term operations. Physical resources include raw materials, production facilities, office building, as also machinery and equipment.

Information resources refer to all type of data needed to make effective decisions. Examples of resources used in a typical manufacturing organisation are listed in Table 1.1.

The manager’s job involves combining and coordinating these various resources to achieve the goals of the organisation.

A manager at Hindustan Motors Ltd., for example, uses the talents of executives and automobile assembly plant workers, profits set aside for reinvestment, existing factory and office premises, and sales forecasts to make decisions regarding the number of cars to be produced and distributed during the next quarter.

How do managers go about combining and coordinating the various kinds of resources? They do it by carrying out four basic managerial functions: planning and decision making, organising, leading and controlling.

So management is a process — a process of combining inputs acquired from the environment to attain organisation goal(s) by performing certain functions.

This point is illustrated in Fig. 1.1 which enables us to suggest the following definition:

Management is essentially the process of planning and decision-making, organising, leading and controlling an organisation’s human, financial, physical and information resources with a view to attaining organisational goals in the best possible way, i.e., in an efficient and effective manner.