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April 8, 2023April 8, 2023 PRINCIPLES OF MANAGEMENTPRINCIPLES OF MANAGEMENT 11

CHAPTER 1 CHAPTER 1

NATURE OF MANAGEMENTNATURE OF MANAGEMENT

April 8, 2023April 8, 2023 PRINCIPLES OF MANAGEMENTPRINCIPLES OF MANAGEMENT22

IntroductionIntroduction A business develops in course of time with

complexities. Management is not only essential to business concerns but also essential to Banks, Schools, Colleges, Hospitals, Hotels, Religious bodies etc. Every business unit has objectives of its own. These objectives can be achieved with the co-operative efforts of several personnel. As E. Demock has rightly said “ the management is not a matter of pressing a button, pulling a lever, issuing orders, scanning P&L statement, promulgating(belief) rules and regulations. Rather it is the power to determine what shall happen to the personalities and happiness of entire people, the power to shape the destiny of a nation and of all the nations which make up the world”


Principle of Management


Meaning of ManagementMeaning of Management

Management is the art of getting things Management is the art of getting things done by a group of people with the done by a group of people with the effective utilization of available resources. effective utilization of available resources. There are various definitions given by There are various definitions given by various management gurus but simply various management gurus but simply management is the process consisting of management is the process consisting of the functions of planning, organizing, the functions of planning, organizing, staffing, directing and controlling the staffing, directing and controlling the operations to achieve specified objectives operations to achieve specified objectives


Features or Characteristics of Features or Characteristics of ManagementManagement

Art as well as scienceArt as well as science Management is an activityManagement is an activity Management is a continuous processManagement is a continuous process Management achieving pre-determined Management achieving pre-determined

objectives:objectives: Organized ActivitiesOrganized Activities Management is a factor of productionManagement is a factor of production Management as a system of activityManagement as a system of activity Management is a disciplineManagement is a discipline Management is a purposeful activityManagement is a purposeful activity Management is a distinct entityManagement is a distinct entity


Features or Characteristics of Features or Characteristics of ManagementManagement

Management aims at maximizing profitManagement aims at maximizing profit Decision – makingDecision – making Management is a professionManagement is a profession Universal applicationUniversal application Management is getting things doneManagement is getting things done Management as a class or a teamManagement as a class or a team Management as a careerManagement as a career Direction and controlDirection and control DynamicDynamic Management is needed at all levelsManagement is needed at all levels Leadership qualityLeadership quality


Characteristics of ManagementCharacteristics of Management

Art as well as science: Management is Art as well as science: Management is both an art of possessing of managing skill both an art of possessing of managing skill by a person and a science because of by a person and a science because of developing certain principles or laws developing certain principles or laws applicable in a place where a group of applicable in a place where a group of activities are co-coordinated.activities are co-coordinated.

Management is an activity: It is a process Management is an activity: It is a process of activity relating to the effective of activity relating to the effective utilization of available resources. utilization of available resources.


Management is a continuous process: The Management is a continuous process: The process of management mainly consists of process of management mainly consists of planning, organizing, directing and controlling planning, organizing, directing and controlling the resources. The resources (men and money) the resources. The resources (men and money) of an organization should be used to the best of an organization should be used to the best advantages of the organization to achieve the advantages of the organization to achieve the objectives.objectives.

Management achieving pre-determined Management achieving pre-determined objectives: The objectives of an organization are objectives: The objectives of an organization are clearly laid down. Every managerial activity clearly laid down. Every managerial activity results in the achievement of objectives fixed results in the achievement of objectives fixed well in advance.well in advance.



Organized Activities : Management is a group of Organized Activities : Management is a group of organized activities. It can be in the form of limited organized activities. It can be in the form of limited company or a small club. All the organizations have company or a small club. All the organizations have an objectives and these objectives is achieved an objectives and these objectives is achieved through systematic way of organized activities.through systematic way of organized activities.

Management is a factor of production : The factors Management is a factor of production : The factors of production includes land, labor, capital and of production includes land, labor, capital and entrepreneurs. Land means a place where entrepreneurs. Land means a place where production is carried on. Labour refers to paid production is carried on. Labour refers to paid employees either skilled, unskilled, semi-skilled, employees either skilled, unskilled, semi-skilled, manager, supervisor and the like. Capital refers to manager, supervisor and the like. Capital refers to the working capital in the form of cash, raw the working capital in the form of cash, raw material and finished goods and fixed capital as in material and finished goods and fixed capital as in the form of plant facilities and production facilities. the form of plant facilities and production facilities. These land, labour and capital can not achieve the These land, labour and capital can not achieve the organizations goals. It can be achieved only by an organizations goals. It can be achieved only by an entrepreneur in case of small organization and by entrepreneur in case of small organization and by management in case of large organizations. management in case of large organizations.




Management as a system of activity : Management as a system of activity : Individuals are foundation of the management. Individuals are foundation of the management. Management ensures the goal congruence Management ensures the goal congruence between individuals and organization between individuals and organization objectives.objectives.

Management is a discipline: The boundaries of Management is a discipline: The boundaries of management are not exact like other physical management are not exact like other physical science. It may be increased by continuous science. It may be increased by continuous discovery of more aspects of business discovery of more aspects of business enterprise.enterprise.

Management is a purposeful activity: Management is a purposeful activity: Management is concerned with objective Management is concerned with objective achievement through planning, organizing, achievement through planning, organizing, staffing, directing, controlling and decision staffing, directing, controlling and decision making. making.



Management is a distinct entity: Management is Management is a distinct entity: Management is distinct from its functional activity. As function distinct from its functional activity. As function is “to do” while management is to “ how to get is “to do” while management is to “ how to get things done”things done”

Management aims at maximizing profit: The Management aims at maximizing profit: The available resources are properly utilized to get available resources are properly utilized to get desired results.desired results.

Decision – making: Decision making arises Decision – making: Decision making arises because there is availability courses of actions. because there is availability courses of actions. The quality of decision taken determines the The quality of decision taken determines the organization performance organization performance



Management is a profession: It posses Management is a profession: It posses the qualities of a profession. the qualities of a profession.

Universal application: The same Universal application: The same principles of management are applicable principles of management are applicable in every type of industry only the in every type of industry only the practice differs from one to another. practice differs from one to another.

Management is getting things done: Management is getting things done: Manager gets things done by others.Manager gets things done by others.

Management as a class or a team: Class Management as a class or a team: Class means group of people having means group of people having homogeneous characteristics to achieve homogeneous characteristics to achieve common objectives. common objectives.



Management as a career: Now a day’s Management as a career: Now a day’s management is developed as a career focused management is developed as a career focused on specialization like Finance, Marketing, on specialization like Finance, Marketing, Systems, Personal etc and they are appointed in Systems, Personal etc and they are appointed in the key posts of the management.the key posts of the management.

Direction and control: Manager directs his Direction and control: Manager directs his subordinates in the performance whenever subordinates in the performance whenever necessary. Direction & control deals with the necessary. Direction & control deals with the activities of human effort. activities of human effort.

Dynamic: The management is not static in the Dynamic: The management is not static in the ever changing fast developing business world ever changing fast developing business world as new techniques are developed and adopted as new techniques are developed and adopted by the management by the management



Management is needed at all levels: Management is needed at all levels: The functions of planning, The functions of planning, organizing, directing, controlling organizing, directing, controlling and decision making is performed and decision making is performed by all the level of organization.by all the level of organization.

Leadership quality: Leadership Leadership quality: Leadership quality is developed in the persons quality is developed in the persons who are working in the top level who are working in the top level management.management.


Functions of ManagementFunctions of ManagementThe important functions of management are as The important functions of management are as

belowbelow PlanningPlanning OrganizingOrganizing StaffingStaffing DirectingDirecting Co-coordinatingCo-coordinating Motivating or actuatingMotivating or actuating ControllingControlling InnovationInnovation RepresentationRepresentation Decision MakingDecision Making CommunicationCommunication


Importance of ManagementImportance of Management Management meets the challenge of changeManagement meets the challenge of change Accomplishment of group goalsAccomplishment of group goals Effective utilization of businessEffective utilization of business Effective functioning of businessEffective functioning of business Resource developmentResource development Sound organization structureSound organization structure Management directs the organizationManagement directs the organization Integrates various interestsIntegrates various interests StabilityStability InnovationInnovation Co-ordination and team spiritCo-ordination and team spirit Tackling problemsTackling problems A tool for personality developmentA tool for personality development


Luther Gullik classifies the functions Luther Gullik classifies the functions of management as of management as

POSDCORB: POSDCORB: Planning, Organising, Staffing, Planning, Organising, Staffing,

Directing, Co-ordinating, Reporting Directing, Co-ordinating, Reporting and Budgeting.and Budgeting.


Importance of ManagementImportance of Management Management meets the challenge of change: In this ever Management meets the challenge of change: In this ever

changing business world, an efficient management saves changing business world, an efficient management saves the business brought by the challenges.the business brought by the challenges.

Accomplishment of group goals: The achievement of Accomplishment of group goals: The achievement of objectives depends upon proper planning of available objectives depends upon proper planning of available resources and quality of decision taken and control made resources and quality of decision taken and control made by the unit.by the unit.

Effective utilization of business: In eight M’s man, money, Effective utilization of business: In eight M’s man, money, materials, machines, methods, motivation, markets and materials, machines, methods, motivation, markets and management, management has control over remaining management, management has control over remaining M’s.M’s.

Effective functioning of business: Ability, experience, Effective functioning of business: Ability, experience, mutual understanding, co-ordination, motivation and mutual understanding, co-ordination, motivation and supervision are the factors for effective functioning of supervision are the factors for effective functioning of business. Management utilizes the abilities of workers business. Management utilizes the abilities of workers and fulfills their executions through motivation and fulfills their executions through motivation techniques.techniques.


Importance of ManagementImportance of Management Resource development: Resources like men, material, Resource development: Resources like men, material,

money and machines are identified and developed by the money and machines are identified and developed by the management.management.

Sound organization structure: Sound organization Sound organization structure: Sound organization structure clearly defines the authority and responsibility.structure clearly defines the authority and responsibility.

Management directs the organization: Management Management directs the organization: Management directs and controls the org.directs and controls the org.

Integrates various interests: Management takes steps to Integrates various interests: Management takes steps to integrate various interests to achieve the objectives of an integrate various interests to achieve the objectives of an organization.organization.

Stability: The fluctuations caused by changing policy of Stability: The fluctuations caused by changing policy of the government, pressures from competitors and the government, pressures from competitors and changing preferences by customers in the business are changing preferences by customers in the business are stabilized by the management. stabilized by the management.


Importance of ManagementImportance of Management Innovation: New ideas are developed by Innovation: New ideas are developed by

management and implemented in the management and implemented in the organization.organization.

Co-ordination and team spirit: Management Co-ordination and team spirit: Management coordinates the activities of different coordinates the activities of different departments and establishes team spirit to departments and establishes team spirit to achieve the objectives.achieve the objectives.

Tackling problems: Good management acts as a Tackling problems: Good management acts as a friend of workers while tackling problems.friend of workers while tackling problems.

A tool for personality development: A tool for personality development: Management gives direction and training to the Management gives direction and training to the workers that help them to raise their efficiency workers that help them to raise their efficiency and productivity and productivity


Administration and ManagementAdministration and Management

There are various opinions of writers There are various opinions of writers for the meaning of administration for the meaning of administration and management. In general, and management. In general, administration is distinguished as a administration is distinguished as a top level function while management top level function while management as a lower level functions as a lower level functions


Difference between Difference between Administration and ManagementAdministration and Management

Sr. No. Basis of Distinction Administration Management

1 Policy and Objectives Determines policy to be followed and decide the objectives to be achieved.

Implements the policy and achieve the objectives.

2 Directing of human efforts Not directly involves in the execution of plan and achievement of objectives.

Directly involves in the execution of plan and achieving objectives.

3 Main functions Planning, organizing and staffing. Direction, motivation and control.

4 Levels of executives Top level executives (owners or board of directors)

Lower level executives( Manager, supervisor and workers)

5 Position Acts as a principal Acts as an agency

6 Knowledge Requires administrative ability more than technical ability

Requires technical ability more than administrative ability.

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