MANAGEMENT PRINCIPLES AND

PRACTICES


Management Principles 1
Definition of Management
Management :
On expanding : Manage men tactfully
Manage Men technology
Manage men as team
Manage competencies
Manage objectives (MBO)
Manage men and things (resources physical,
inanimate)
MANAGE f ( RISKS, REWARDS)
Competencies = f (SKATE)
(Men/Women- no discrimination)
Norway will have by 2007, 40% women in all fields, in govt orgs, in corporates
and also in NGOs. This is now made as a law.
Management Principles 2
When it comes to manage people, it is said
that people are enigmatic.
Thus, Management is enigmatic.
Harold Koontz described the present state of
management theory as a jungle.

There can be lots of ambiguity and there will be
no recipe book
Management Principles 3
MANAGEMENT IS A FUNCTION OF :
M = f(RESULTS, FEEDBACK,
RESULTS)
MANAGING THE INTERNAL AND EXTERNAL ENVIRONS
IN THE BIO-ECOSYSTEMS, THROUGH VARIOUS
EFFECTIVE AND EFFICIENT PROCESSES, WITH THE
OBJECTIVE OF ACHIEVING LAID DOWN EXPECTED
RESULTS.
Management Principles 4
All is PEOPLE RESOURCE MANAGEMENT
Why?
Get into discussion mode:
Who Created all that is around us:
Except the sun, the moon, air, ocean, sky, stars, and the
first human being and the first animals/insects
Thereafter the development of clones, artificial
insemination, going on the moon, technological
advancements and moving towards civilization is all
done my people.
Management Principles 5
Definition of Management
By Griffin:
A set of management functions directed at the
efficient and effective utilization of resources
in the pursuit of organization goals.
Management Principles 6
Definition.contd.
By Koontz and Weihrich:
Management is the process of designing and
maintaining an environment in which
individuals working together in groups,
efficiently accomplish selected aims.
Management Principles 7
Peter F. Drucker-Father of Modern
Management
Management is an organ, organs can be
described and defined only through their
functions
Management Principles 8
The difference between Management Principles and
Management Functions:
What should I do (principles) to ensure that I do my
job (functions) with effectiveness and efficiency.
Principles are strategies / processes which enable the
individual to do their functions better to achieve laid
down goals and objectives
GOALS qualitative achievements
Objectives could have a mix of quantitative and
qualitative
Management Principles 9
Terry & Franklin
Management is a distinct process consisting of
activities of planning, organizing, actuating,
and controlling, performed to determine and
accomplish stated objectives with the use of
human beings and other resources.
Management Principles 10
Management Principles 11
Top level
Middle level
Supervisory
level/entry
level
CONCEPTUAL SKILLS
H
U
M
A
N
S
K
ILL
S
TE
CH
NI
CAL
SKI
LLS
Henry Mintzberg
He has categorized these roles into three
groups
interpersonal roles
Informational roles
Decisional roles

Description of each of the roles

Management Principles 12
Interpersonal Roles
A manager serves as a figurehead a symbol;
as a leader, ie., hires, trains, encourages, fires,
remunerates, judges; and as a liaison between
outside contacts and the organizational)
Management Principles 13
Informational roles
A manager serves as a monitor by gathering
information;
As a disseminator of information
As a spokesperson of the organization

Management Principles 14
Decisional Roles
A manager serves as an entrepreneur by being:
An initiator
Innovator
Problem discoverer
Designer of improvement projects
As a disturbance handler of unexpected situations
As a resource allocator and
As a negotiator
Management Principles 15
ALL THE THREE ROLES PUT TOGETHER IS
CALLED AS:

THE MANAGERIAL WORK ACTIVITY APPROACH

Management Principles 16
The whole management process is actually an
integration of the work activity (Mintzberg) and the
management functions
MANAGEMENT FUNCTIONS :
Planning, Organization, Co-ordination, motivation, and
control are Universal.
These functions are performed in all organizations
SMEs, Large, not-for-profit organizations, etc.
Management Principles 17
Definitions
Planning : Management functions that involves the
process of defining goals, establishing strategies for
achieving those goals and developing plans to
integrate and coordinate activities
Organizing: management function that involves the
process of determining what tasks are to be done,
who is to do them, how the tasks have to be
grouped, who reports to whom, and where
decisions are to be made
Management Principles 18
Leading : management functions that involves motivating
subordinates, influencing individuals or teams as they work,
selecting the most effective communicating channels or
dealing with any with employee behavior issues
Controlling : Management functions that involving monitoring
actual performance, compiling actual to standard, and taking
action if necessary
Management process : The set of ongoing decisions and work
activities in which managers engage as they plan, organize,
lead and control.
Management Principles 19
The pyramid to the top
Talk of management levels:
Top level
middle level
Front line supervision
Non-managerial work force
Management Principles 20
Leadership
Blake and Mouton:
R1 ---- R2 ------ R3

R1 = RESOURCES
R2 = RELATIONSHIPS
R3= RESULTS
Management Principles 21
What is leadership?
A sound way of exercising leadership is
through the use of what are called as three Rs
Resources, relationships and results. How a
person operates in this context can make a
difference between organization success and
failure
Management Principles 22
Management Principles 23
5, 5
Middle of the Road
Management
C
O
N
C
E
R
N
F
O
R
P
E
O
P
L
E
CONCERN FOR PRODUCTION
low
Low
High
High
1,9 Country Club
Mgmt
Team Mgmt 9,9
1,1 Impoverished
Mgmt
Authority Compliance 9,1
X & Y axis on a scale of 1 9
THE ;LEADERSHIP GRID : Source: Scientific
Methods Inc.
Management Principles 24
How concerns for Production/People affect
Leadership Style:
1,9 : Country Club Management : Thoughtful attention to the
need of people for satisfying relationships leads to a
comfortable, friendly organization atmosphere and work
tempo.
1,1 : Impoverished Management : Exertion of minimum effort
to get required work done is appropriate to sustain
organizational membership
9,1 : Authority Compliance : Efficiency in operations results
from arranging conditions of work in such a way that human
elements interfere to a minimum degree
9,9 : Team Management : Work accomplishment is from
committed people; interdependence to a common stake in
organization purpose leads to relationships of trust and
respect
9+9 : Paternalistic management :
Reward and approval are granted to people in return
for loyalty and obedience; failure to comply leads to
punishment
OPPORTUNISTIC MANAGEMENT : In this style,
organization performance occurs according to a
system of exchanges, whereby effort is given only for
an equivalent measure of the same. People adapt to
the situation to gain maximum advantage from it. (all
leadership points ie. 1,1; 1,9;, etc., converge at a new
point OPM)
Management Principles 25


THE MOTIVATIONAL DIMENSIONS FOR EACH
STYLE
PLEASE REFER TO LEADERSHIP GRID OF BLAKE
AND MOUTON.
Management Principles 26
Management..
Is based on a systematic body of knowledge-laws,
principles and concepts
And this knowledge is universal
If a manager has this fundamental knowledge
And knows how to apply it to a given situation
He should be able to perform the managerial
functions efficiently and effectively
Management Principles 27
Management
Management Practice is regarded as an art
But, organized knowledge about management
is a science
THUS MANAGEMENT IS BOTH AN ART AND A
SCIENCE
Management Principles 28
Management ..
Is also a profession
Separation of ownership from control
The rules and regulations framed by the govt to
protect citizens from exploitation
The growth of trade union movement
The desired of business leaders for social status
And the
Impetus of the scientific management philosophy
which stresses the need for technically trained
professional managers contributed to the
PROFESSIONALIZATION OF MANAGEMENT.
Management Principles 29
Most important human activities is
managing
Mackenzie King remarked:
Labor cannot do anything without capital,
Capital nothing without labor and neither
Can do anything without the guiding genius of
management.
Management Principles 30
This should have enabled you to understand
what management is at a fundamental level of
definition and understanding..

Any questions
Management Principles 31
Evolution of Management Thought
Give a handout titled:
Early streams of Managerial ideas responding
to situational demands

Put students on discussion mode
Management Principles 32
Schools of Management Thought
It was during the 20
th
century that a
systematic study of management began
Management Principles 33
4 schools of thought
(by: Newman, Summer and Warren)
Productivity approach
Behavioral approach
Rationalistic model approach, and
Institutional approach
Management Principles 34
Hutchisons classifications
Classical management theory
Human behavior theories
Social and political systems approaches
Ecological systems approach and
Rational decision making concepts
Management Principles 35


THE CONTRIBUTORS ON MANAGEMENT
PRICIPLES
Management Principles 36
Charles Babbage (1792-1871)
Benefits of division of labor
Use of science and mathematics
Emphasis on cost reduction
Management Principles 37
Henry R. Towne
Main contribution is :
That he set the climate and atmosphere for the
later application of scientific methods. Of
lesser importance was his plan of gain-sharing
as a system of wage payment.
Management Principles 38
Henry Metcalfe (1847-1917)
In 1885, his pioneering work:
The Cost of Manufacturers and the administration of
Workshops, Public and Private
Theory of Management was based on system and
control
He insisted that all authority should emanate from a
given source, with a flow back to that source of
detailed information concerning expenditures and
accomplishments
Management Principles 39
Henry Laurence Gantt (1816-1919)
Educated from John Hopkins College
Engineer, as draughtsman and later Asst.
engineer
His publications: Work, Wage and Profits
(1910); Industrial Leadership(1916); and
Organizing for Work.(1919)
Management Principles 40
Gantts Thoughts.
Task and Bonus Plan
Daily Balance Chart (Gantt Chart)
Humanizing Science of Management
Important of Leadership
Training of Workers
Social Responsibility of Business
(Also called as : Forerunner of modern industrial
democracy; also called as apostle of industrial
peace)

Management Principles 41
Harrington Emerson (1853-1931)-
Popularizer of scientific management
Principles of Efficiency (12)
1. Clearly define ideal 2. commonsense 3. Competent
Counsel 4. Discipline 5. Fair deal 6. Reliable,
immediate, adequate and permanent records 7.
Dispatching (production scheduling and control
techniques) 8. Standards and schedules 9.
Standardized conditions 10. Standardized
Operations 11. Written standard practice
instructions 12. Efficiency reward
Management Principles 42
According to Ernest Dale, Emerson really
advocated the elimination of waste:
a. Setting definite logical goals for all company
operations and making managers down the
line understand them so that they would not
be seeking private goals of their own
b. Production planning and scheduling and the
use of written standard practices
c. Better utilization of machine and man
Management Principles 43
d. Cost Accounting
e. Standards and specifications for materials
f. Standardization of parts and products as far
as possible
g. A rational approach to capital expenditures
h. Better selection, placement, and fair
treatment of employees and a system of
financial incentives as equitable as possible
Management Principles 44
Frank Bunker Gilbreth (1868-1924) and
Lillian Moller Gilbreth(1878-1972)
FBG: authored: Concrete Systems (1908); Field
System (1908); Motion Study (1911); Power of
Scientific Management (1912); Fatigue Study
(1916); Applied Motion Study (1917, with Lillian
Gilbreth); and Motion study for the Handicapped
(1920)
The Father of Motion Study was a contemporary of
Taylor and Gantt
Management Principles 45
Lillian Moller Gilbreth:Professor of
Management at Purdue University. Her
famous works: The Psychology of
Management (1914) and Quest for the Best
Way (1924)
Management Principles 46
Contributions by Frank Gilbreth
Motion study
Time Study
One best way
Training of personnel
Three position plan of promotion (each worker should be
considered to occupy three positions: a. the job he held
before promotion to his present position b. his present
position and c. the next higher job
Part of his work, then would be teaching the man below him
and learning from the man above him. In this way, he would
qualify for promotion himself and help to provide a successor
to his current job.
Management Principles 47
Contributions of Lillian Gilbreth
It should be noted that FBG was greatly assisted by Lillian
Gilbreth whom he married in 1904
Both of them used motion picture films to analyze and
improve motion sequences
Both developed the process of chart and the flow diagram to
record process and flow patterns used in a work situation
They emphasized written instructions to avoid confusion and
misunderstanding (the white list card system)
The Gilbreths urged tha the POM and motion analysis could
effectively be applied to huge untapped area of self-
management. They started to search into the area of fatigue
and its impact o health and productivity.
Management Principles 48
Robert Owen (UK)-The father of personnel
management
Contributions:
Improvement in Factory and domestic
conditions of his employees
Social reforms (creating model community out
of his mills town; educational reforms)
Owen said that his object was not to be a mere
manager of cotton mills, but to introduce
principles in the conduct of the people.
Management Principles 49


MODERN GURUS - POM
Management Principles 50
Fredrick Taylor
The credit of systematic study and practice of
management goes to FWT, very well known
as FATHER OF SCIENTIFIC MANAGEMENT

Experiments of Taylor
Management Principles 51
Midvale experience
At Midvale Steel Company, he found that individual
workers had their own notions about work and
different workers performed the same task in
different ways
He realized that greater output was possible on the
part of the workers but most of them were engaged
in what he called systematic soldiering.
The solution: the first task of management was to
know what constituted a proper days work
He conducted time studies at Midvale Steel
Company which proved of immense use to him
Management Principles 52
Bethlehem Experiments Pig-Iron
Handling
Taylor was hired by the Bethlehem Steel Company to increase
the output of one of the larger machine shops which had
been a serious production bottleneck
Conclusion: Periodic rests enabled a worker to produce more
than continuous work. By a systematic resting time and
improved methods average productivity was raised from 12.5
tons to 47.5 tons per day.
Taylor began selecting workers and training them in handling
pig-iron
The original crew was 75, this reduced dramatically
The earnings of the crew increased from USD1.15 to USD 1.85
per man per day.
Management Principles 53
Taylors prescription for Managers
responsibilities
Under four heads :
a. They should develop a science for each element of mans work which
replaces the old rule of thumb method
b. They should scientifically select and then train, teach and develop the
workmen
c. They should heartily cooperate with the men so as to ensure
performance of work in accordance with the principles of the science
which have been developed
d. There should be almost equal division of work and responsibility
between management and workmen
Taylor, wanted that management should take the responsibility of planning,
directing and organizing work.
HE DEEMED IT ESSENTIAL TO SEPARATE THE PLANNING OF WORK FROM ITS
EXECUTION, SO THAT EACH INDIVIDUAL COULD WORK AT HIS BEST
EFFICIENCY AND COULD BE COMPENSATED ACCORDINGLY.

Management Principles 54
Taylors Management Principles
Large, daily, defined task
Standard conditions skill sets and tool sets to be
made available with authority along with clear cut
objectives and expectations; this is called as
ACCOUNTABILITY
High Pay for success
Loss in case of failure
Separation of planning from doing the most
valuable insights of TAYLOR
Functional foremanship
Management Principles 55
HENRY FAYOL= Father of Principles of
Management
Division of labor
Authority and Responsibility
Discipline
Unity of command (one boss---subordinate)
Unity of Direction (one head and one plan)
Subordination of Individual Interests to
General Interest (FIRM, FAST AND FAIR)
Management Principles 56
Remuneration of Personnel (Pay by Results; motivational
ESOPS, etc)
Centralization (optimization between centralization and
decentralization; as the human body brain is the
centralized organ)
Scalar Chain This is the chain of superiors ranging
from the ultimate authority to the lowest ranks. THE
ORGANOGRAM
Order: Right man in the right place; competency specific;
man should fit the job and not the other way round; or
else this will be like A SQUARE PEG IN A ROUND HOLE.
Management Principles 57
Stability of tenure of personnel retention of
talent; attrition; turnover of people
Initiative encourage initiative among
subordinates
Esprit-de-Corps : UNION IS STRENGTH; team
work; cohesiveness among the members
Management Principles 58
Fayols Elements of Management
Fayol made a distinction between General
Principles of Management and elements of
Management.
The latter was regarded as functions of
management. Dividing them into:
PLANNING, ORGANIZATION, COMMAND,
COORDINATION AND CONTROL
Management Principles 59
Planning
Planning : most important and difficult managerial function.
Planning meant looking ahead and to foresee both to
assess the future and make provision for it
He considered unity, continuity, flexibility and provision as
the broad features of a good plan of action
A GOOD PLAN IS A PRECIOUS MANAGERIAL INSTRUMENT
A GOOL PLAN ALSO HAS TO BE IMPLEMENTABLE
Management Principles 60
ORGANIZING
Means : to organize a business is to provide it
with everything useful to its functioning, raw
materials, tools, capital, personnel.
Fayol concerned himself both with structure
and process, listing 16 managerial duties and
emphasizing the necessity for clear objectives,
authority, decisions and task
Management Principles 61
COMMAND/DIRECTION
After the organization is formed, it is the mission of
command to set it going.
For every manager, the object of command is to get
the optimum return from all employees of his unit in
the interest of the whole concern
The art of command, according to Fayol, rests on
certain personal qualities and knowledge of general
principles of management
Management Principles 62
COORDINATION
To coordinate is to harmonize all the activities of a concern
so as to facilitate its working and its success
According to him, in a well coordinated enterprise the
following facts are to be observed;
1. Every dept works in harmony with the rest
2. Divisions or sub-divisions in each dept are precisely
informed as to the share they must take in the commercial
task and the reciprocal aid they are to afford one another
3. The working schedule of the various departments and sub-
divisions thereof is constantly attuned to circumstances
Management Principles 63
CONTROL/MEASUREMENT AND FEEDBACK
According to Fayol, control consists in verifying
whether everything occurs in conformity with the
plan adopted, the instruction issued and the
principles established
Its object is to point out weaknesses and errors in
order to rectify them and prevent recurrence.
It operates on everything resources (things),
people and actions
Management Principles 64
Key principles of Mgmt of FAYOL
Unity of command
Unity of direction
Responsibility equal to authority and
Scalar Chain
Management Principles 65
MAX WEBER- THETHEORY OF AUTHORITY
STRUCTURES
There are three factors involved in the understanding
of any organization as under:
The laws and the traditional taboos of the society
Individual leadership (charisma) which is largely
emotional
Bureaucracy, i.e., The mass of administrators who
carried out the laws and policies of the government
Management Principles 66
Three types of authority
Charismatic Authority based on the personal
magnetism of the leader
CHARISMA : PERSONAL QUALITY OR GIT THAT
ENABLES AN INDIVIDUAL TO IMPRESS AND
INFLUENCE MANY OF HIS FELLOWS, A LEADER
DOMINATES DECISION MAKING
Management Principles 67

TRADITIONAL AUTHORITY
In this type of authority system the leader
has authority by virtue of his status that he
has inherited
The extent of his authority is fixed by custom
The officials who carry out the orders are like
household staff of the master
Management Principles 68
Rational-Legal authority = bureaucracy
This authority system dominates, and it is most efficient one
This system is characterized by rationality and legality
The system is rational because the means are expressly
designed to achieve certain specific goals
The org is like a well designed machine with a certain function
to perform, and every part of the machine contributes to the
attainment of maximum performance of that function.
It is legal, because authority is exercised by means of a system
of rules and procedures through the office which the
individual occupies at a particular time
Management Principles 69
BUREAUCRATIC FUNCTIONS ARE:
Regular activities aimed at organizational goals so
that they are distributed as fixed official duties
All activities follow the organizational principles of
hierarchy
Operations receive equal treatment under a
consistent systems of abstract rules
Officials operate as formalistic personalities without
becoming emotionally involved.
Management Principles 70
Lyndall Urwick 6 sets
Principle of Investigation
Principle of Objective
Principle of Organization
Principle of Direction
Principle of Experiment
Principle of Control
(Urwicks principles of management and organization
source: A dictionary of Industrial Administration
edited by John Lee )

Management Principles 71
Urwicks Principles of Organization
This was his main contirbutions to original
thinking in regard to the framework of
management
The principles were modified and published
by AMA
They are :
Management Principles 72
Principle of Objective
(purpose/mission/objectives and vision)
Principle of Specialization : the activities of
every member of any organized group should
be confined, as far as possible, to the
performance of a single function
Principle of coordination: The purpose of
organizing per se, as distinguished from the
purpose of the undertaking, is to facilitate
coordination and unity of effort.

Management Principles 73
Principle of Authority: In every organization group,
the supreme authority must rest somewhere. There
should be a clear line of authority from the supreme
authority to every individual in the group
Principle of Responsibility : The responsibility of the
superior for the acts of his subordinate is absolute
Principle of Definition: The content of each position,
the duties involved, the authority and responsibility
contemplated and the relationships with other
positions, should be clearly defined in writing, and
published to all concerned

Management Principles 74
Principle of Correspondence: in every
position, the responsibility and the authority
should correspond
Principle of Span of Control: No person should
supervise more than five, or at the most six
direct subordinates (reportees) whose work
interlocks
Principle of Balance: The various units of an
organization should be kept in balance
Principle of continuity : Reorganization is a
continuous process, in every undertaking
specific provision should be made for it.

Management Principles 75
George Elton Mayo (1880-1949)
He has been called the founder of the human
relations school.
He became famous on account of the Hawthorne
experiments
These experiments had a significant impact on
management thought, and considerably influenced
the human relations movement.
Experiments conducted in the Hawthorne Plant of
the Western Electric Company in Chicago from
1927 to 1932.
Management Principles 76
Hawthorne studies three general phases
Test Room Studies : the object being to assess the
effect of single variables upon employee
performance. They were experimental in nature
Interviewing Studies: these were largely concerned
with improving employee attitudes and were
psychological in nature
Observations Studies: these were undertaken to
understand and describe the factors influencing the
informal organization of work groups and were
sociological in nature
Management Principles 77
TEST ROOM STUDIES
Illumination Experiments: Two test groups varied effects of
lighting on output vs. no change situation; the results were
that in both the groups the output increased. Conclusion that
environmental factors like lighting may not be the only factor,
there could be other variables
Relay Assembly Test Room Experiments: This study was made
to discover the anomalies of the previous experiments.
Numerous variables were put into action room conditions,
pauses during work, piece-work, work without pauses and
shorter working hours. After 12 week study, the output went
up to a record level
Management Principles 78
Interviewing studies: An interview program of thousands of
workers was conducted with the object of finding out the
attitude of the employees towards their job, working
conditions and supervision
The interviewing program revealed the following points:
a. Merely giving a person an opportunity to talk and air his
grievance has a beneficial effect on his morale
b. Complaints are not necessarily objective statements of
facts. They are often symptoms of more deep-seated
disturbances
c. Workers are influenced in their demands by experience
both inside and outside the factory
d. Worker is satisfied or dissatisfied not in terms of any
objective frame of reference but rather in terms of how he
regards his social status in the firm and what he feels he is
entitled to in the way of rewards
Management Principles 79
Observational studies
The Bank Wiring Observation Group Study constituted the last
phase of Hawthorne studies
It was conducted to investigate the social pattern of a group
of fourteen workers and their associated supervisors
The main point of difference between this study and the
earlier test room studies was that no experimental changes
were planned but efforts were directed to study the group in
its customary functioning
This study revealed that there existed a GROUP NORM in
terms of which the behavior of different individuals was in
some sense being regulated
Management Principles 80
This group was restricting the output on account of various forms of social
pressures
The group had for itself a standard of a days work which was not imposed
upon them, but had apparently been evolved by workmen themselves
The group had various social pressures to see that the workers did not
exceed the group output norm, and nobody attempted to attain official
production targets
Those who attempted to exceed became targets of social disapproval,
verbally or physically
This study showed the importance of informal, social group in business
organization
A member of such a group cared more for the opinion of the group rather
than for financial incentives of the management
IT WAS THE GROUP THAT DECIDED HIS ATTITUDE TO WORK,
MANAGEMENT AND LEVEL OF PRODUCTION
THESE STUDIES FURTHER REAFFIRMED THE IMPORTANCE OF INFORMAL
GROUP IN THE MOTIVATION OF WORKERS.
Management Principles 81
CONCLUSIONS OF HAWTHORNE STUDIES
1. Environmental factors not the sole factors
affecting productivity
2. Worker is not an economic man (not purely
motivated by money alone)
3. Importance of recognition, Security and
Morale
4. Importance of Informal group
5. Importance of total work situation
6. Complaints as symptoms
Management Principles 82
Mary Parker Follett-famed political and
social philosopher
Her main contributions:
Was formulation of principles of human association and organization,
especially in terms of industry
The basis of her philosophy was that one cannot separate work from human
beings
Business is a series of interrelationships between people
Follett pleaded that there is a great need to recognize the motivating desires
of the individual and the group
She said that the basic problem of any organization was that of harmonizing
and coordinating the group efforts to achieve the most efficient effort
towards completing a task
She talked about power, leadership and authority.
Her ideas are as under:
Management Principles 83
Conflicts
Follett said that conflicts have a constructive role to
play in an organization.
Conflicts are not warfares but the appearance of
difference, difference of opinion, of interests.
Conflicts are neither good or bad; if used
constructively their results are god and if used
destructively their results are bad
She suggested that conflicts can be harnessed to the
service of the group much as an engineer uses
friction
Management Principles 84
Three ways to resolve conflicts
Domination (victory of one side over the other. Follett did not advance
this method, because of use of force beyond a certain point lessens
energies and self-respect)
Compromise (This is better than Domination; both sides surrender some
part of what they are demanding, i.e., for a compromise there must be a
mid-point between the needs and desires of both parties on which they
agree, willingly or unwillingly. This method is still commonly
unsatisfactory)
Integration (best way to resolve conflicts; it means combination of what is
best in all view points, i.e, bringing about unity of conflict in which both
sides se a way out which will satisfy their real needs. It resolves conflicts
for good

FOR DETAILS ATTEND A CONFLICT MANAGEMENT CLASS
Management Principles 85
Folletts views on Leadership
It is the role of the leader to educate and train
The leader is responsible for integrative unity
The great leader is one who is able to
integrate the experience of all and use it for a
common purpose
Leadership is not the product of position but
of knowledge
Management Principles 86
Folletts views on Authority and
Responsibility
Authority belongs to the job and stays with
the job
An executive decision is an movement in a
process
Authority and responsibility go with function
Management Principles 87
Folletts views on Co-ordination
CONTROL , Follett, meant fact control rather
than human control, and central control
meant synthesis rather than domination from
the center
The four principles of organization at which
she finally arrived at provided for the need of
four kinds of coordination as the basis of good
management:
Management Principles 88
4 principles of coordination
Coordination by direct contact of the responsible people
concerned. Ideas, ideals, goals and purposes can be easily
stated and understood through direct personal contact and
communication
Coordination should be achieved in early stages of planning
and policy-making. It would be easier to secure the willing
enthusiastic adherence of all concerned to any new principles
and policy if they have participated from the beginning. For
this principle Follett had suggested cross relations between
heads of departments instead of up and down the line
through the chief executive
Management Principles 89
In coordination all factors in a situation are
reciprocally related
Coordination is a continuous process. It
means that coordination should be left to
chance and it is the duty of the coordinator to
strive for it constantly so that the efforts of
the group are directed towards achieving the
common goals
Management Principles 90
Follett on PROFESSIONAL MANAGEMENT
Management can develop as a profession on two bases:
a. Its recognition as a function of or service to the community
b. Application of an accepted and proven body of knowledge and
principles
Managers can become professional by working for long hours and thus
getting satisfaction from work.
According to her, a professional manager has three main jobs:

1. S/he must be loyal to company
2. S/he must inform the public what are good practices and standards
(today it is called Corporate Governance) and
3. S/he must try to extend the boundaries of knowledge in his/her
profession and then pass on his/her extra knowledge for the benefit of
all.
Management Principles 91
CHESTER I. BARNARD (1886-1961)
While Fayol developed the principles of management,
Barnard proved that such principles could be applied in
practice
He defined organization as : a system of consciously
coordinated activities or forces of two or more persons.
He believed people in organization contributed services and
not themselves
Barnard tried to analyze how organization functions as a
living body.
For him, to understand the small organization was to
understand the large organization because all organizations
possess certain common characteristics
Management Principles 92
Elements of Organization
Willingness to cooperate
Common purpose and
Communication
Are the elements of an organization
Management Principles 93
Equilibrium internal and external
Barnard firmly believe that an organization is separate from
the environment in which it operates
The person who contribute services to the orgs has two
distinct roles the personal role and the an organizational
role
He suggested that orgs must maintain internal and external
equilibrium
Internal equilibrium he meant: reward and satisfaction for the
participation; thus the balance between what employees get
out of work (money, status, reward, etc) and what they
contribute (time, worry, discomfort, etc) must be maintained
The relationship of the org to the environment is not static
but functional
Management Principles 94
Acceptance theory of authority
Barnard disagreed with the classical view that
authority transcends from top to bottom
He said that authority transcends from bottom to top
i.e. it is delegated upwards
Authority does not depend on commands, but on a
reciprocal relationship; a communication becomes
authoritative by virtue of its acceptance by a
contributor.
Thus AUTHORITY DEPENDS ON COMMUNICATION
Management Principles 95
A PERSON CAN AND WILL ACCEPT A COMMUNICATION AS
AUTHORITATIVE ONNLY WHEN FOUR CONDITIONS ARE
SIMULTANEOUSLY FULFILLED:
1. S/HE can and does understand communication
2. At the time of his/her decision, he believes that it is not
inconsistent with the purpose of the organization
3. At the time of his/her decision, s/he believes it to be
compatible with his / her personal interest as a whole , and
4. s/he is able, mentally and physically, to comply with it.
Management Principles 96
Zone of Indifference
Barnard developed the concept of zone of indifference.
He believed that the form and nature of the acceptance of the
communication differ and it depends upon the zone of
indifference
Certain orders are acceptable, certain barely acceptable, and
certain orders are unquestionable
Those orders which are unquestionably acceptable lie within
the zone of indifference, ie. They lie within the range that in a
general way was anticipated at the time of undertaking the
connection with their organization
Management Principles 97
Barnards views on Incentives
Incentives are prerequisites of cooperation in any organization. Barnard
was of the view that people in the org do not work for money alone.
Some of the incentive types are:
a. Material or financial inducements
b. Personal opportunities, such as status, power, et
c. Good physical conditions
d. Attractiveness of social conditions
e. General conditions adapted or suitable to the individuals ideas and
attitudes
f. Opportunities for participation
g. Good communication and
h. Opportunities for satisfying perosnal motivation such as pride in work,
sense of adequacy, etc.
Management Principles 98
Executive decisions and functions
The executive who occupies a crucial position in the
organization has three basic functions. They are:
a. Maintaining org communication. It includes determining
the scheme of organization, fostering loyalty in
subordinates and maintaining the informal system
b. Obtaining essential services from individuals: It includes
correct selection of individuals, and provision of the
necessary inducements, maintaining morale (subjective
feeling toward work), providing incentives and sanctions,
supervision and training
c. Formulating purposes and objectives at all levels
Management Principles 99
Barnard on Communication
Principles of Communication:
1. Channels of communication must be definitely known by all
2. These channels must be formally laid down
3. Each channel should be as short as possible
4. Generally communication should go through all stages in
the channel
5. People acting as communication centers (managers) should
be adequate to their tasks
6. Channels of communications should not be interrupted
while the organization is functioning
7. Communications (orders) must come from points where the
necessary authority is known to exist
Management Principles 100
Barnard on Leadership
The real test of the executive or manager is
leadership
Leaders should recognize that low morality
will not sustain leadership long
Management Principles 101
Alfred P. Sloan (1875-1966)
Greatly responsible for the success of General Motors
Sloan regarded two factors as important for the success of a business:
a. Motivation through incentive compensation
b. Opportunity through decentralization
He said that good management rests on a reconciliation of centralization and
decentralization or decentralization with coordination control
Decentralization results in initiative, responsibility, development of personnel,
decisions close to facts, and flexibility.
Coordination results in efficiencies and economies
Authority and responsibility must be congruent and commensurate to each
other
Management Principles 102
Sloans real partnership process with his
executives was done by
a. Utilizing their abilities to the full
b. A fair policy of promotion
c. Offering real incentives
d. By using persuasion rather than command
Management Principles 103
GM PLAN: IN 1920, INDICATES HIS SEVERAL
THOUGHTS
This plan was based on two principles:
a. Decentralization of operation and
b. Centralized staff services to advise the line on
specialized phases of the work, and central
measurement of results to check the exercise of
delegated authority
(staff function = support function; line function =
responsible for the earnings for the corporation.
Thus only line function is SALES AND ALL OTHER
FUNCTIONS INCLUDING MARKETING ARE STAFF
FUNCTIONS.
Management Principles 104
Points emphasized in the PLAN:
a. Relationship of various divisions of a corporation
with one another as well as with the central
organization
b. Status of central organization
c. Coordination of operations of the central
organization with the corporation as a whole
d. Centralization of control of all the executive
functions in the CEO
e. Limit on the number of executives reporting
directly to the President
Management Principles 105
Sloans Principles of Organization
1. Establishment, by the Board of Directors and its
committees, of uniform policies and procedures to govern
the overall operations of all divisions in any area in which
such consistency is judged to be necessary for the best
interests of the corporation as a whole
2. Delegation of full authority, within this framework of
uniform policy and procedures, with corresponding
responsibility for the use of the authority so delegated
3. A continuous flow of ides and information upward and
downward through the management organization, by
means of executive visits, formal reports and frequent
meetings of line and staff executives at all appropriate
levels
Management Principles 106
ABRAHAM H. MASLOW :THE FATHER
OF HUMAN PSYCHOLOGY (1908-1970)
His need based theory of motivation,
published in 1943, laid foundation for
subsequent psychologists (Renis Likert,
Douglas McGregor, Fredrick Herzberg, etc) to
analyze human behavior
Management Principles 107
Maslows Hierarchy of Needs

Management Principles 108
Physiological
Stimulation
Safety & Security
Love, Affection & Social
Self-esteem
Self actualization
Frederick I. Herzberg a noted behaviorist
of USA (1923-
His greatest contributions to management thought : his Two-
Factor Theory, Two-Human Needs Theory, KITA concept, and
illuminating ideas about job loading (vertical and horizontal)
ie is job enrichment
He assumes that the individual is the center of the work-
managerial situation
He said that if anything meaningful was to be found about
motivation, the question of factors-attitudes-effects must be
studied as a whole and not as an isolated item
He believed management is monolithic (huge, massive, single
stone like)
Management Principles 109
MOTIVATION HYGIENE THEORY
Hygiene factors MOTIVATORS
(Environment) (the Job itself)
Policies and administration Achievement
Supervision Recognition for accomplishments
Working conditions Challenging Work
Interpersonal relations Increased responsibility
Money, status,
security
Growth and development
Management Principles 110
Relationship between Maslows and
Herzbergs Theories to Motivation
Management Principles 111
SITUATION
MOTIVES
(NEEDS)
MASLOW
GOAL
(INCENTIVES)
HERZBERG
BEHAVIOR
Douglas M. McGregor-(1906-1964; a social
psychologist)
THEORY X
THEORY Y
Work is inherently distasteful to most people Work is as natural as play, if the conditions are
favorable
Most people are not ambitious, have little desire
for responsibility, and prefer to be directed
Self-control is often indispensable in achieving
organizational goals
Most people have little capacity for creativity in
solving organizational problems
The capacity for creativity in solving
organizational problems is widely distributed in
the population
Motivation occurs only at the psychological and
safety levels
Motivation occurs at the social, esteem, and self-
actualization levels, as well as physiological and
security levels
Most people must be closely controlled and often
coerced to achieve organizational objectives
People can be self-directed and creative at work if
properly motivated
Management Principles 112
David C. McClelland
Best known for his achievement motivation,
his research ranges from personality to
consciousness.
Along with John. W. Atkinson, he developed
the scoring system for the THEMATIC
APPERCEPTION TEST (TAT) which was used in
achievement motivation research
Management Principles 113
McCllellands need theory
Need for power
Need for Affiliation
Need for Achievement
Need for training

Management Principles 114
Henry Mintzberg (1939-
Well known luminary in the field of
management
Dubbed as ICONOCLAST as he rejected
several accepted management practices
He is against the B-schools in USA their
curriculum, case study methods, etc.
Management Principles 115
Contributions-The managerial roles
He grouped ten basic roles performed by
managers into three major classes ( as a result
of detailed research on the activities of five
practicing CEOs):
INTERPERSONAL ROLES
INFORMATIONAL ROLES
DECISIONAL ROLES
Management Principles 116
Interpersonal roles
While performing interpersonal roles,
mangers work as:
1. Figureheads
performing number of routine duties of legal or
social nature; these duties include handling
ceremonies, signing documents required by
law, and officially receiving visitors.
Management Principles 117
Leaders
As leaders, the mangers perform all managerial
activities involving subordinates including
hiring, training and firing. As leaders they are
responsible for motivation and direction of
subordinates
Management Principles 118
Liaison persons
Serving as liaison between outside contacts
(community, suppliers,, etc) and the
organization

Management Principles 119
Informational roles
Mintzberg pointed out that managers function
as nerve centers in which they obtain
information about the environment and their
own organization by monitoring them. The
three informational roles are:
Monitor
Disseminator
spokesperson
Management Principles 120
Montiors : As monitors, managers seek and are presented with
information about the operations for which they are responsible
and bout the environment
Disseminators: they are disseminators of information flowing from
both external and internal sources; Managers pass information
from outside their units to inside and also from one subordinate to
another
Spokesperson: mangers speak on behalf of their units to outsiders.
They transmit information to outsiders on organizations plans,
policies, actions and results and serve as experts on organization's
industry
THESE INFORMATIONAL ROLES PROVIDE A COMMUNICATIONS
NETWORK FOR THE ORGANIZATION.
Management Principles 121
Decisional roles
Four of them as per Mintzberg:
Entrepreneur
Disturbance handler
Resource allocator
negotiator
Management Principles 122
Management Principles 123
As ENTREPRENUEURS : managers are initiators, innovators, problem-
discoverers and designers of improvement projects that direct and control
change in the organization. Thus, entrepreneurial work refers to mangers efforts
to improve the functioning and accomplishments of their organizations

As disturbance handler: managers take corrective action in response to
unforeseen problems such as resignation of subordinates, breakdown of
productive equipment, etc. It is worthwhile to mention that while entrepreneurs,
managers voluntarily take initiative to improve performance, as disturbance
handler
As resource allocator: they are responsible for allocating human, physical, and
monetary resources. MAKING DECISIONS ABOUT HOW LIMITED TIME,
MONEY, MATERISALS, LABOR HOURS AND OTHER RESOURCES WILL BE
APPLIED TO MULTIPLE AND COPETING CLAIMS UPON THEM IN THE
WORK OF RESOUCRCE ALLOCATION ROLE
Mangers as Negotiators: they discuss issues and bargain with other units to gain
advantages for their own units. Mintzberg opines : that negotiation is resource
trading in real-time.
Relationship of Managerial roles and
process
Management Principles 124
ROLE PORCESS
INTERPERSONAL
INFORMATIONAL
DECISIONAL
PLANNING
LEADING
ORGANIZIING
CONTROLLING
PETER F. DRUCKER (1909-2005)
Austrian by birth
Numerous books around 35/36
Drucker is repeatedly preaching a philosophy of management, that of
management by objectives and self-control
He pleaded for creative management instead of bureaucratic
management
He said that managers should go beyond decentralization, and design
principles of taskforce team, simulated decentralization and the systems
organizations
Managers should learn to lead people rather than contain them
He said that the Innovative org the org that resists stagnation rather
than change is a major challenge to management
More and more organizations which are innovative and productive for
society, economy and the individuals should come up
His first line in practice of management The manager is the dynamic,
life-giving element in every business.
Management Principles 125
Jobs of Management
According to Peter Drucker, management has
the following three tasks:
ECONOMIC PERFORMANCE
PRODUCTIVE WORK AND WORKER
ACHIEVEMENT
SOCIAL IMPACT AND SOCIAL RESPONSIBILITIES
Management Principles 126
Business objectives and entrepreneurial
functionsDrucker
There is only one valid definition of business purpose
: to create a customer
According to him, it is the customer who
determines what a business is. It is the customer
alone whose willingness to pay for a good or for a
service converts economic resources into wealth,
things into goods.
CONCEPT OF PROFIT AS THE OBJECT OF BUSINESS
Profit is not the explanation, cause or rationale of
business behavior and business decisions but the
TETST OF THEIR VALIDITY.
Management Principles 127
On Profit.Drucker
The profit motive and profit maximization are, in his
opinion, irrelevant in managing a business.
However, profits are necessary on account of risk in
business
Profit is the test of performance; it is premium for
the risk of uncertainty; profit alone can supply capital
for tomorrows jobs, profit pays for the economic
satisfaction and services of a society
Management Principles 128
As the purpose of business is to create a
customer, the business enterprise has two
functions as under :
1. Marketing
2. Innovation
Rest is cost.
Management Principles 129
Drucker on Objectives
Objectives are not fate; they are direction
They are not commands; they are
commitments
They do not determine the future; they are
means to mobilize the resources and energies
of the business for the making of the future
Management Principles 130
Management Principles 131
The following areas where objectives are to be set:
Marketing; Innovation; Human organization; Financial resources
Physical resources; Productivity; Social responsibility
Profit requirements
OBJECTIVES IN THESE AREAS ENABLE MANGERS TO :
A. ORGANIZE AND EXPLAIN THE WHOLE RANGE OF BUSINESS
PHENOMENA IN A SMALL NUMBER OF GENERAL STATEMENTS
B. TEST THESE STATEMENTS IN ACUTAL EXPERIENCE
C. PREDICT BEHAVIOR
D. APPRAISE THE SOUNDNESS OF DECISIONS WHILE THEY RE STILL
BEING MADE AND
E. ANALYZE THEIR EXPERIENCES AND THUS IMPROVE
PERFORMANCE
MANAGEMENT BY OBJECTIVES AND SELF-
CONTROL
The concept is credited to Drucker and George
S.Odiorne.
The MBO is the central point of discussion in his
book The practice of Mangement-writes :
Management is not just a creature of the economy; it
is a creator as well. And only to the extent to which
it masters the economic circumstances, and alters
them by conscious, directed action, does it really
change. To manage business means, therefore, to
mange by objectives.
Management Principles 132
MBO is a managerial philosophy and
technique that attempts to draw on peoples
needs for achievement, competence and
anatomy by allowing them to set their
objectives, goals, and performance criteria
This concept applies to employees at any
position
Management Principles 133
Why MBO?
The specialized work of the manager
The hierarchy in organizations
The existence of difference in vision in
businesses
Such factors cause conflict and breakdown in the
organization and MBO overcomes these
deficiencies by relating the task for each
manager to the overall goals for he company.
Management Principles 134
WORK OF MANAGER
To set objectives
To organize ie. To analyze the activities,
decisions, and relations needed
To motivate and communicate
To analyze, appraise and measure
performance and
To develop people, including himself
Management Principles 135
In 1950s, Druckers 7 tasks to be performed
by tomorrows manager
He must manage by objectives
He must take more risks and for a longer period
ahead
He must be able to make strategic decision
He msut be ableto build and integrated team
He must be able to communicate information fast
and clearly
He mustbe bale to see the business as a whole and
to integrate his function with it, and
He must be able to relate his product and industry to
the total environment
Management Principles 136
Social responsibilities for Management
The triple bottom line :
Economic profit (profit as by product in a
business process)
Social profit ( giving to the community)
Environmental profit (carbon trading, etc)
Management Principles 137
Warren G. Bennis
Manager Characteristics Leader Characteristics
Administers Innovates
Focuses on systems and structure Focuses on people
Relies on control Inspires trust
Short range view Long range perspective
Asks how and when Asks what and why
Eye on the bottom line Eye on the horizon
Imitates Originates
Accepts status quo Challenges the status quo
Classic good soldier Own person
Does things right Does the right thing
Management Principles 138
Bennis four competencies of leadership
Attention through vision
Meaning through communication
Trust through positioning being predictable,
making your position clear, keeping at it, and
Positive self-regard
Management Principles 139
Chris Argyris Immaturity-Maturity model
Immaturity Maturity
Passive Active
Dependence Independence
Behave in a few ways
Capable of behaving in many ways
Erratic shallow interests
Deeper and stronger interests
Short-time perspective
Long-time perspective (past and
future)
Subordinates position
Equal or superordinate position
Lack of awareness of
self
Awareness and control over self
Management Principles 140
T- Groups
Also known as sensitivity training and
laboratory training. T-Group technique had its
genesis in the late 1940s, largely as a result of
work done by Kurt Lewin and Ronald Lippitt.
Argyris contributed to this concept by making
several clarifications about it.
Management Principles 141
Definition T-Group
T-Group is .a group experience designed to
provide maximum possible opportunity to the
individuals to expose their behavior, give and
receive feedback, experiment with new
behavior and develop an everlasting
awareness and acceptance of self and others.
Management Principles 142
Properties of Organizational effectiveness
Properties leading to Ineffectiveness Properties leading to effectiveness
One part or subset of parts, controls the whole The whole is created and controlled through the
inter-relationship of the parts
Awareness only of random plurality of parts Awareness of pattern among parts
Objectives related only or mainly to parts Objectives related to the whole
Inability to influence core activities whether they
are internally or externally oriented
Ability to influence core activities whether they are
internally or externally oriented
Core activities only influenced by immediate
present
Core activities influenced by past, present and
future
Management Principles 143
Argyris other contributions
Leadership
Intervention theory (OD)
Process consulting: Argyris and Edgar H.
Schein are regarded as chief developers of the
process consulting method
Management Principles 144
Process consulting method
Process consulting regards groups such as teams, task
force, committees or project groups as the basic building
blocks of organization.
Process consulting deals with tasks, conflicts, between
members, work flows, and the processes by which the
group achieves its task
Process consulting analyzes the roles and functions of
group members, group problem-solving-methods,
decision making, the development of group norms, and
the use of leadership and authority
Management Principles 145
Process consultingcontd
The process consultant examines the
processes at work among group members by
using devices such as questionnaires, role
playing session, coaching and counseling
methods, etc.
Management Principles 146
Argyris 4 principles of organization
Task specialization Individuals should concentrate
on a narrow range of task. It increases human skills
and output too
Chain of command (Hierarchy of authority)
Unity of direction Leaders must define and direct
the work of those under them
Span of control administrative efficiency is
increased if there is a limit to the number of people a
leader or supervisor can control
Management Principles 147
William G. Ouchi
Ouchis main contribution to management
thought relates to Theory Z. Contrast
between Japanese and American corporations
leads to identification of the Z theory
Management Principles 148
Z theory
Japanese Corporation American Corporation
Lifetime employment Short-term employment
Slow evaluation and promotion Rapid evaluation and promotion
Non-specialized career points Specialized career points
Implicit control techniques Explicit control techniques
Collective responsibility
Individual responsibility
Concern for the whole
organization
Concern for parts of the
organization
Management Principles 149
Participative Management
Ouchi emphasized participative management and consensus decision-
making, if Theory Z is to work.
Social scientists have described this as a democratic process in which may
people are drawn into shaping of important decisions
The participative process is one of the mechanisms that provides for the
broad dissemination of information and values within the org, and it also
serves the symbolic role of signaling in a unmistakable way the
cooperative intent of the firm
Typically, Theory Z orgs devote a great deal of energy to developing the
interpersonal skills necessary to effective group decision making
In theory Z companies the decision making may be collective, but the
ultimate responsibility for decisions still resides in one individual

Management Principles 150
Tom Peters Seven S Model- developed for
McKinsey & Co
Management Principles 151
Skills
Strategy
Structure
Superordi
nate
Goals
Systems
Style
Staff
7-S framework for change
Structure refers to the organizational structure
Strategy is a plan or course of action leading to the allocation of a firms
scarce resources, over time, to reach identified goals
Systems consist of all the formal and informal procedures that allow the
organization to function
Style is the pattern of substantive and symbolic actions under taken by top
mangers
Staff is another factor. Successful organization view people as valuable
resources who should be carefully nurture, developed, guarded and
allocated.
Skills refer to those activities organizations do best and for which they are
known
Superordinate Goals referred to guiding concepts, values and aspirations
that unite an organization in some common purpose

TOM PETERS ADVOCATED : MBWA
Management Principles 152
Tom Peters books
In search of Excellence
Passion for excellence
Thriving in chaos
And many others
Management Principles 153
Management Principles 154





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