MANAGEMENT

Definition:

John A. Pearce and Richard B. Robinson, Management is the process of optimizing the human, material and financial contributions for the achievement of organizational goals. Mary Parker, Management is the art of getting things done through others.

Nature:

Management as a process Management as an activity Management as a group Management as an economic resources Management is purposeful Management is both a science and an art Management is intangible Management accomplishes results through others

Importance:

Helps in achieving group goals Optimum utilization of resources Reduces costs Establishes a sound organization Maintains equilibrium Essential for prosperity of society

Functions:
A)
1)

Main functions:
Planning: what, when and how to achieve, objective, setting rules and procedures, policies, strategies Organizing: dividing work into convenient tasks, grouping tasks in the form of positions Staffing: Manning the various positions created by organizing Directing: managers communicates subordinates about their expected behavior, guiding and leading them controlling: identification of actual results, comparison with expected result, taking corrective action to match actual results with expected results

2)

3)

4)

5)

Functions:
B) Subsidiary functions:
1) communication: ideas, objectives, instructions, etc., have to be exchanged among the managerial staff 2) Decision-making: managers have to take numerous decisions 3) Innovation: essential in the age of competition. Research and development department to keep pace in the modern technique

Management and Administration:

Management is concerned with the implementation of the policy; it is not directly concerned with goal or target-fixation. Administration is concerned with policy-making; it determines the goal or the targets to be achieved. We can classify management into: Administrative management: primarily concerned with laying down policies and determining goals. Operative management: concerned with implementation of policies for the achievement of the goals.

1)

2)

Types of business organization:

A] SOLE-PROPRIETORSHIP: -contribution of capital -management and control -unlimited liability Advantages: -promptness in decision -easy to start and wind-up -business secrecy -flexibility and independence Disadvantage: -limited skills -unlimited liability -small income -instability

Types of business organization:

B] PARTNERSHIP: -contract or agreement -sharing of profits -sharing of control Advantages: -easy to form -commands larger resources -prompt and correct decision -various skills and talents -sharing of risks Disadvantages: -uncertain existence -disharmony among partners -non-transferability of partnership shares -weak management

Types of business organization:

C] JOIT STOCK COMPANY: -artificial person having an independent legal entity -limited liability -shares freely transferable Advantages: -perpetual existence -large funds -efficient and economical management -effective control by government Disadvantages: -complication of formation -delay in decision -no personal touch with employees -lack of secracy

Types of business organization:

D] CO-OPERATIVE SECTORS: -voluntary association -economic motive -democratic set-up Advantages: -easy formation -open membership -limited liability -stable life Disadvantages: -limited capital -lack of motivation -problems in management -dependence on government

Ethics and social responsibility:

Ethics is the study of rights and of who is or should be benefited or harmed by an action. - it is the study of peoples rights and duties, the moral rules that people apply in making decisions. Ethics and social responsibility are concepts that are fundamentally about the quality of our relationships over time. Social responsibility of business includes the responsibilities towards itself, shareholders, employees, government, customers.

BUSINESS ETHICS:
Application of moral values, accepted character and behavior by the contemporary business world to all business activities, dealings, offers, practices and such other issues. Need of business ethics: - makes the business to realize basic objective of any economic institution - necessary to protect the interest of society - force the business to respect the customers interest - regulates the roles and activities of all players in the business activities - makes the business to balance its confronted roles and social issues like people-oriented management, environmental protection, consumerism, technology development and unemployment, resource utilization.

Four levels of ethical questions:

The individual

Internal policy

stakeholders

society

Tools of ethics:

Values: relatively permanent desires that seem to be good in themselves. Rights: claims that entitle a person to take a particular action. Duties: obligations to take specific steps or obey the law. Moral rules: rules for behavior that often become internalized as moral values. Human relationships: the relationship exists because we need one another for mutual support and to accomplish our goals. Common morality: the body of moral rules governing ordinary ethical problems.

Management Theory:

The scientific management school:

- by Frederick W. Taylor and others between 1890 and 1930, that sought to determine scientifically the best methods for performing any task, and for selecting, training, and motivating workers. - need to increase productivity and to raise efficiency of workers.

Management Theory:

Classical organization theory school:

- An early attempt, pioneered by Henri Fayol, to identify the principles and skills that underlie effective management. - 14 principles: 1. division of labor 2. authority 3. discipline 4. unity of command 5. unity of direction 6. subordination of individual interest to the common good 7. remuneration 8. centralization 9. the hierarchy 10. order

Contd
11. equity 12. stability of staff 13. initiative 14. esprit de corps Max Weber: organization with a legalized formal and hierarchical structure; also refers to the formal structural process within an organization.

The behavioral school:

- A group of management scholars trained in sociology, psychology, and related fields, who use their diverse knowledge to propose more effective ways to manage people in organization. - The Human Relations Movement

The management science school:

- operation approach: mathematical techniques for the modeling, analysis, and solution of management problems.

Recent developments in management theory:

The system approach: view of the

organization as a unified, directed system of interrelated parts. concepts:
- subsystems - synergy - open and closed systems - system boundary - flow - feedback

The contingency approach: view that the

management technique that best contributes to the attainment of organizational goals might vary in different types of situation or circumstances. Also called the situational approach.