Principle and practices of management

1: organizational structure

Defines how jobs and tasks are formally divided, grouped and coordinated
it is a system that defines a hierarchy with in organization it is system that
shows how certain activities are divided or grouped to achieve the goal

Chararteristics/elements

 Work specialization
 Departmentalization
 Span of control
 Chain of command
 Centralization
 Formalization
 Simplicity
 Flexibility
 Levels
 Line and staff relationship
 Types of organization structure

 Functional: according to functions like HR , MARKETING , FINANCE

and production
 Project: formed for project
 Line: it is vertical structure
 Line and staff : line and staff line managers taking decisions and staff
give them consults
 Matrix: one employee two bosses
 Divisional : divided according to customer , geographical location ,
product
 Bureaucratic: strict rules

2:Organisational environment:

it is the set of all elements that surround the organization and effects its
operations.

Types of org environment

 external environment
 Internal environment

External : PESTLE

 Political factors ( tax policies , fiscal policies , trade tarrif )

 economic: factors( inflation and deflation influence the price)
 social factors: like education , culture , life style , demographics,
population
 technological : innovation in technology , automation
 legal factors: rules and regulation of government , laws
 internal environment:

the forces or elements within the organization they are

 owners, board of directors , employees, culture ( behavior of

employees) , vision , mission, leadership , strategy , product and
service

3: coordination and techniques of coordination:

Definition

Harmonizing the activities of an enterprise to facilitate its working and

success

the act of making people to work together in organized way

Techniques of coordination

 direct contact : written communication electronic communication ,

face to face
 group meeting: between superiors and subordinates to solve and
discuss problems
 effective communication:
 commities
 staff meetings
 effective leadership and supervision
 proper chain of command
 managerial integrators: they are specially appointed managers to
coordinate the projects
 group discussions
  liaison officer : he is a special coordinator he facilities unity among
departments

Need for coordination:

 To integrate the efforts of employees

 Internal relation among employees
 To reduce conflict
 Eliminate duplication of activities
 Facilitate smooth functioning
 Goal achievement

4: control and control techniques

Controlling: is process of comparing the actual results with planned (

expected result ) and taking corrective actions when results deviate from
plan.

Control does two tasks : detective ( recognize what is right and what is
wrong ), corrective ( to correct the wrong things

Techniques of controlling:

1 Traditional techniques

Budgetary controlling: the actual income and spending are compared with
planed income and spending

Cost control: to compare actual and planned cost

Special report analysis: investigator investigate the problem , collect

information and prepared detail report
Break even analysis: a point in which total cost is equal to total revenue ,
no profit no loss

Profit and loss techniques: compare actual profit with planned profit

Production and inventory control:

Personal observation: manager control the affairs of the subordinates

Quality control:

Accounting and audit:

2: Modern techniques

Return on investment: profit and investment if ROI is high the financial

performances of business is good and vice versa

MBO:

MIS: accurate information is available and controlling is dine through this

accurate information.

Management audit: auditing the entire management process such as

planning , organizing…..

Social audit: how business discharges its social responsibility

Human resource accounting: to measure the value of human assest.

CPM ( critical path method ) and PERT: it is the engineering methods

which minimize time and cost for the completion of work by selecting most
suitable route:

5: Michael porter five model:

It is a model that identify and analysis five competitive forces that shape
every industry and help to determine the industry’s weakness and strengths

Five forces are

Threat of new entrant:

Bargaining power of a customer:

Bargaining of supplier:

Threat of substitute product:

Existing rivalry:

6: henry Fayol

He is the father of administrative management according to henry Fayol

management is the process of planning , organizing , commanding ,
coordinating and controlling.

He introduced 14 principle to management

DAD U C USSR O I SEE

 Division of work
 Authority and responsibility
 Discipline
 Unity command
 Centralization
 Unity of direction
 Scalar chain
 Remuneration
 Order
 Stability of tenure
 Initiative
 Subordination of individual interest to organizational interest
 equity
 esprit de corps : union is strength

7: system approach

System approach to management attempts to view the organization as a

unified and purposeful system of interrelated parts

Features of management as system

Sub system : a system is made of sub systems

Mutually related parts: all parts are related to each other

Synergy: collective efforts is better than individual effort

Adoptive in nature : system need to be adoptive to any kind of changes

Open system: interact with outside environment

Dynamic system: it is always dynamic

Cooperative in technical:

Multidiciplanary: psychology , sociology , accounting etc

Probabilistic: future in uncertain

Flow and feed back: input transfer to output

 8:Social Responsibility of Management

Definition

Is the obligation and commitment of management to take steps for

protecting and Improving society welfare along with protecting their own
interest
1. To owners (Regular return on capital, healthy financial position, good
image at market)
2. To employees (Fair selection, fair wages, comfortable working
conditions)
3. To consumers (supply foods at reasonable price, provide sales and
service, no false advertisement, quality goods)
4. To community (prevent environmental pollution, provide emplacement
opportunities, promotions of education)
5. To Government (complying with all rules and regulations, paying taxes,
executing government contracts, fulfilling all govt. requirements)

9:Functions of Managers

1. Planning
2. Organising
3. Directing
4. Controlling
5. Decision Making
6. Learding
7. Reporting
8. Budgeting
9. Staffing
10. Setting Objectives
11. Motivating

Skills of Mangers

1. Good communication
2. Good organization
3. Team building
4. Leadership
5. Ability to deal with changes effectively
6. Domain knowledge

Roles of manager
1: Figure head role: welcoming guests and signing legal documents
2: leadership role of manager (to lead the subordinates)
3: monitor role of manager: monitoring the activities of subordinates
4: disseminator role: to disseminate information to his subordinates,
peers and superiors
5: spokesman role: to represent the organization to the outsiders
6: entrepreneurial role: to create and innovate
7: corrective role: to correct the performances of employees
8: resource allocate role:
9: negotiator role: negotiate with insiders(loyalty) and outsiders(seeking
facilities from government)
Scientific Management (Taylor)

Definition:- Knowing exactly what you want men to do and seeing that they
do it in the best and cheapest way.

Tools Of Scientific Management

1. Separation of planning and doing

2. Functional Foremanship (people based on specialisation of function)
3. Job Analysis (Time, motion(study of movements which are involved in
doing job) and Fatigue(amount of rest required in completing the work))
4. Standardisation (using top standard tools and equipment for increasing
the speed of work)
5. Scientific Selection and training
6. Financial Incentives
7. Economy (introducing of the cost system to reduce the cost)
8. Mental Revolution (Mutual understanding b/w managers and workers)

Principles of Scientific Management

1. Replacing role of thumb with science (precision in determining any

aspect of work not on estimation)
2. Harmony in group/cooperation
3. Division of work
4. Maximum output
5. Scientific Development/training of work
Component of Planning

1. Objectives
2. Policies
3. Procedures
4. Strategy
5. Programme
6. Project
7. Rule
8. Schedule
9. Budget

Steps of Planning

1. Analysing business environment

2. Establishing objectives
3. Setting planning premises
4. Identifying alternatives
5. Evaluating alternatives
6. Selecting best alternative
7. Formulating secondary plan
8. Implementing of plan
9. Reviewing the result and feedback
Nature of management

1. Multidisciplinary (includes knowledge of various disciplines such as

economics, stats, maths, ecology etc)
2. Mangement is dynamic
3. Management in science
4. Goal oriented
5. Universal process
6. Management is group activity
7. Its a profession
8. It is social process
9. It is ongoing process
Scope of Management

1. Subject matter of management (planning, organising, directing etc)

2. Functional areas of management (financial management, HR
management, production management, maintenance management,
marketing management and operation management)
3. Universal Application
4. Decision making
5. Developing strategies
What do you mean by Decision Tools?