Thursday, August 8, 2019

business-studies-xii- NEB note


Concept and meaning of management
Resources are very limited in supply. All resources are to be managed by human. However, human have unlimited wants. Therefore, there are limited resources and unlimited wants and desire. Complete satisfaction is very necessary for better functioning of every aspect of the society. Therefore, for complete satisfaction in life resources are to be managed properly in such a way that human achieve complete utility and benefit simultaneously. Thus, to manage all resources available in such a way that it gives complete satisfaction to human beings is the theoretical meaning of management.

To go on a deeper level, management can be defined as art and skill of getting things done through others is called management. More elaboration is given by George R Terry. According to Terry-“management is the distinct process consisting of planning, organizing, activating, and controlling activities performed to determine and accomplishes the objectives by the use of people and resources.” If we give our attention towards the definition we find that terry perceives the management as a process a systematic way of doing things. The four management activities are included under the process and they are planning, organizing, activating and controlling.

MANAGEMENT = MANAGE+MEN+T (TACTFULLY)
concept of management


Basically, there are 5 concepts of management. They are:

1.  Functional concept

Management basically is the task of planning, coordinating, motivating and controlling the efforts of other towards the goals and objectives of the organization. According to this concept, management is what a manager does (planning, executing, and controlling)

2.  Human relation concept

According to this concept, Management is the art o getting things done through and with people in organized groups. It is the art of creating an environment in which people can perform and individuals could cooperate towards attaining of group goals. It is an art of removing blanks to such performance a way of optimizing efficiency in reaching goals.

3.  Leadership and decision making concept

According to this concept, management is the art and science of preparing, organizing, directing human efforts applied to control the forces and utilize the materials of nature for the benefits to man.

4.  Productive concept

According to this concept, management may be defined as the art of securing maximum prosperity with a minimum effort so as to secure maximum prosperity and happiness for both employer n employee and provide best services thereby.

5.   Integration concept

According to this concept, management is the coordination of human and material resources towards the achievement of organizational objectives as well as the organization of the productive functions essential for achieving stated or accepted economic goal.
These above definition of management, given by different writers and authorities, are found giving different senses. Virtually, the five concepts are found developed by the authorities emphasizing in different aspects. However, it has been realized by many that it will not be fair to define management based upon any one aspect. Management can be taken as process-managerial process or social process either engage in planning, organizing, staffing, directing and controlling or mobilizing the group activities to achieve the corporate goals.

To overcome the limitations of the above concepts, Theo Haimann, the leading management expert has explained three basic concepts of management as under:
Theo Haimann concept of management

a. Management as a process:-

Management is a process. It includes the process of planning, controlling, coordinating, motivating, and staffing. These processes are the series of interrelated sequential functions. Processes refer to accomplish these mentioned activities. Management is the efforts of organizational members to accomplish the organizer’s objectives. This concept is very simple because
i.  It is very simple and very easy to understand
ii.  It indicates functions of management as a process
iii.  It recognizes management as a universal process

b.  Management as a discipline

the term management is used as a subject of instructions. It is a specific branch of knowledge which is studied in campuses and schools like economics, sociology, mathematics, political science etc. the scholars of management have found that the information and management are used in practical life for better functioning. The scope of managenent is being increased day to day as a discipline

c.  Management as a noun:

The word management itself refers as a noun. There are many kinds of employees in an organization . some people are involved in managerial function and some are involved in operating functions. The individuals who manage the organization and departments are managers. As a noun, the term management is used as single name of  managers, board of directors, managing directors, departmental managers etc are included in management.
Thus, theo haiman the leading management expert expiained the meaning and concept of management.

Characteristics of Management

1.  Universality:- management is applied in government as well as non government sectors. It is used in business and other type of organizations. Broadly, the management is applied in society, nations and also houses. In other words the principle of management is applicable in every area. Therefore, management is universal activity
2.  Integrative:- according to size and nature of business organizations, many departments may be establishes. Departments, managers, customers, government, investors, society etc must be integrated for the smooth operation of the organization. Therefore, management is an integrative process.
3.  Goal oriented:- management is the means to achieve organizational goals. Management maximizes efficiency of human effort for the operation of organizational job. The success of management can be accessed on the basis of attainment of organizational goals.
4.  Art and science:- management is the scientific Art. It contains special knowledge, technique and principles. It applies that special knowledge, techniques and principles to practical situations for better results.
5.  Profession:- management is the profession. It has own study mechanism on a whole series of cannons. Policies and laws. It is based on a systematic study curriculum. The management techniques, knowledge and principles are applied in practice. It is necessary to study the full syllabus of management in a states period of time for the managerial job in any organization.
6.  Distinct entity:- management is a distinct activity. It has proved that management is a specialized art and science and only technically qualified people can lead the organization.
7.  Pervasive function:- management is necessary for the success of all levels of management. The principles and methods of management can be applied for the smooth functioning of different departments and operational units. It is applicable for the lower level, middle level and top level management
8.  Group effort:- management directs group efforts to the accomplishment of organizational goal. It is a collective force of group efforts of persons.
9.  Intangible:- management is an intangible activity which cannot be seen. It is bound by a web relationship between levels of employees. It makes and enforces rules for better results. It can be judged by its effectiveness on the basis of objectives
10. Social process:- management is concerned with inter-relations and human behavior. Management creates mutual understanding and cooperation among the employees. Management jobs are related to the human actions.

Management as science, art and profession

Management as a science, it has systematized body of knowledge, concept and principles. Management deals different problems and issues by using quantitative models and decision making techniques and issues by using quantitative models and decision making techniques to arrive at right decisions. As a science management contains concepts, hypothesis, theories, experimentation all verified and tested accordingly to clarify about cause and effect relationship between many facts or events occurred.
→management is systematic body of knowledge with theories, concepts, principles, experiments and functions which are systematically and logically analyzed
→the theories related to management are applicable and used in all types of organization irrespective of size, type, capital and so on. However, the usage and method may vary according to the situation of organization and time.
→all the managerial knowledge and practices are developed through various observations and experiments which are researched and experiment based
→tests of management theories are applied in situational and judgmental cases which help in prediction of future events.
→management is not a pure science but a social science
→management relates itself to cause and effect relationship. Results of modern management are acceptable to all employees. Good and efficient management system enhances the purity in organization.

Management as an art

Management includes the activities of planning, organizing, direction, decision making, regulating and integration of all resources which requires special skill and art. According to Mary Parker,” management is an art of getting things done through others. Management enables a manager to get thongs done through employees.”
→management performs non programmed and non routine work using creativity and innovations
→management accomplishes any job within time and budget to achieve organizational goals with ease.
→managers apply their interest, ability and skills for solving contemporary issues through decisions which ignite their creativity. They can use their skills in field of job performance, solving exceptional issues, forming objectives etc.
→managers must posses practical knowledge not only theoretical acquired from experiences which helps in working according to situation
→managerial activities are practices by using knowledge, ability and skill to solve the problems.

Management as a profession

In general sense, profession means occupation. Occupation is rendering service. Similarly management is a distinct profession backed up by specialization. As a professional activity all management efficient people should have academic qualification and personal qualification from any body. Here profession is not only an occupation of specialized skill but these skills should be applicable in large scale and interest of society as a whole.
→management is a separate discipline which includes research, observations and practice
→management requires formal education and training with updates of professionalism.
→professional managers must be joined in an association that follow rules and regulation according to the objectives set.
→a professional association requires code of conduct to maintain self discipline ethical behavior. Violation of code must be punishable
→organizations should be responsible towards society. An organization gets its birth in a society, lives and grows in a society and finally liquidates or dissolves in a society. Thu, an organization has responsibility towards members of society such as consumer, investors, employees and shareholders.

Management and administration

Management and administration are synonymous:-Henry fayol, Kuntz, O’Donnell, Allen, terry, Newman
→Management is wider term than administration: – Barry Richman, Melvyn Copen
→Management and administration are different functions: – Oliver Sheldon, W.R Spiegel, and Ordway Teed
Management and administration are synonymous:- According to this concept, there is no distinction between management and administration they are twin word rather. The authorities like Henry fayol, Kuntz, O’Donnell, Allen, terry, Newman opine that Management is specialized activity used in social institutions whereas administration is used in government sectors.


Management is wider term than administration:- Management experts of U.K claim that management is wider that administration and it includes higher meaning than that of administration. Barry Richman and Melvyn Copen opine that management includes administration and administration is just an implementing agency.
Management = administration +entrepreneurship


Management and administration are different functions:- Under this concept much focus is given to administration. Administration is higher level activity and is concerned with formulation of broad objectives, mission, purpose and goals of organization. On the other hand, management is meant to execute and regulate the business activities to accomplish the organizational policies. Oliver Sheldon, W.R Spiegel, Ordway Teed opine that administration is determinative function relating to determining major mission considering the public opinion, government policies, social and external factors.


Difference between administration and management

Bases of differences
Administration
Management
Nature
It is thinking or determining function.
It is doing or executive function.
Types of work
It relates with formulation of plans and objectives.
It is operative level.
Level of authority
It is top level activity.
It is operative level activity.
Decision making
It considers public opinion, government policies, social and external factors for taking decisions.
It considers decisions influenced by values, opinions and beliefs.
Status of performer
It consists of investors.
It consists of paid employees.
Use
It is used in government sectors.
It is used in private sectors.
Main functions
Planning and organizing
Directing and controlling
Ability
Requires administrative quality
Requires technical and professional ability

Functions of Management

.  Planning:- planning means the determination what is to be done, how and where is to be done, who is to do it and how the results are to be evaluated. Planning consists of :-
a.  Establishing objectives
b.  Formulating rules and regulations
c.  Developing programs
d.  Scheduling
e.  Budgeting
2.  Organizing:- it means identification and grouping the activities to be performed and dividing them among the individuals and creating authority and responsibility relationships among then for the accomplishment of organizational objectives. It consists of :-
a.  Determination of objectives and identification of activities necessary to achieve the objectives
b.  Delegation of authority and relationship among individuals.
c.  Coordination of activities and assignment of duties.
d.  Division of activities into different units or departments
3.  Staffing:- human resources management is a process consisting of the acquisition, development, motivation and maintenance of human resources. it consists of :-
a.  Manpower planning to determine the quality and quantity of employees required  for the jobs to b done
b.  Recruitment for attracting qualified persons
c.  Selection of best candidate
d.  Placement of the right man for the right job
e.  Training and development to increase new skills, knowledge and competency to do job
f.  Motivation of employees
g.  Evaluation performance of employees
h.  Employees welfare
4.  Directing:- direction embraces those activities which are related to guiding and supervising subordinates .it consists of :-
a.  Supervising the subordinates
b.  Communicating the information
c.  Providing effective leadership
d.  Motivating employees
5.  Controlling:- controlling is the process of monitoring activities to ensure that they are being accomplished as planned and of correcting any significant deviations. It consists of :-
a.  Determination of standard performance
b.  Measurement of actual performance
c.  Compares the actual performance with the standard
d.  Analyzes deviations
e.  Take corrective actions if necessary.

Levels of Management

1.  Top level management:- It includes board of directors, chief executive or general managers , senior strategist, decision making, directors . Corporate level goals, missions and objectives are determined. The major functions of this level are:-
A.  To formulate and determine the objectives and define the goals of the business
B.  To establish policies and prepare plans to attain the goals
C.  To set up an organizational structure to conduct the operations as per the plans
D.  To provide the overall direction in the organization
E.  To assemble the resources necessary for the attainment of the policy and execution of the paln
F.  To control effectively the business operations
G.  To judge and evaluate the results
  2. Middle level management:- It includes departmental managers, divisional heads and section officers. It acts as a bridge between top level management and lower level management. the major functions of this level are:-
A.  To implement the task set up by top management
B.  To implement the policies framed by the top management
C.  To run the organizations effectively and efficiently
D.  To cooperate for the smooth functioning of the organizations
E.  To coordinate between different departments
F.  To recruit , select and train the employees for the better functioning of the departments
G.  To issue the instructions to the lower level management
H.  To motivate the workers and staffs for higher productivity and to reward them.
I.  To lead the departments and build up an organizational spirit
J.  To report and make suitable recommendations to the top level management for the better execution of the plans and policies
  3. Lower level management:- It includes supervisors, foremen and workers. it is also known as supervisory level of management in which the supervisors or foreman like sales officers , account officers etc take responsibilities of the implementation and control of the operational plans developed by the middle level managers. The function of this level are: –
A.  To issue the orders and instruction to the workers to supervise and control the performance
B.  To plan the activities of the sections.
C.  To direct and guide the workers about the work procedures
D.  To provide job training to the workers
E.  To arrange the necessary tools, equipment , materials fro the workers and look after their proper maintenance
F.  To solve the problem of workers
G.  To develop sense of cooperation and high group spirit among the workers
H.  To advise the middle level about the work environment
I.  To inform the unsolved problems of the workers to the middle level management

Chapter 2

Meaning of principle of management

A principle is a rule or belief governing one’s personal behavior. It is a fundamental truth or proposition that serves as the foundation for a system of belief or behavior or for a chain of reasoning.” Principle is a fundamental statement of truth that establishes a cause and effect relationship between two or more variables. Principles are a guide to thought and action. If any principles are applied results are expected. Descriptive principles describe the relationship between variables and prescriptive principles indicate what a person should do for the betterment of his interest to achieve prosperity.
Principle of management is concerned with managerial aspect of organization. It is believed that management is as old as mankind however systematic approaches to management are the outcome of efforts made in 20th century.


Nature of management principles

·  Management principles are flexible and change with change in environment thus cannot be regarded as final truth. Principles should be applied according to need, place time and social culture. Continuous research re to be carried out.


 ·  Management principles are relative and are applied according to the needs of particular organization.
 ·  Management involves the direction of human behavior in an organization which are directed towards regulating human for best result.
  ·  Management principles establish cause and effect relationship. The effects are based on management principles which are based on predictions based upon division of labor which results efficiency. Here division of labor is cause and efficiency is result.
The following are the main reasons which highlight the importance of the principles of Management:
·  Improving efficiency of managers: Management principles serve as a guideline for doing work with greater efficiency. These principles help managers to take a more realistic view of different managerial problems and to direct human behavior effectively. The conscious manager can become more effective by using the established management principles to solve problems.


Importance of principles of management


·  Improving art of management:Management principles help in improving the art of management by suggesting how things should be done to get good results in an efficient manner. These principles provide a means of organizing knowledge and experience in management.


·  Useful for research and practical guidance: The network of management principles represents a key area for conducting research studies. These principles have expanded the horizons of knowledge and promoted further research. These principles have provided new ideas, imagination and vision to the organization.


·  Helpful in management training:Management principles are also needed to train managers. These principles provide a conceptual framework for systematic training and development of future managers. New techniques of management training make training programs more meaningful and efficiency.


·  Useful for spreading knowledge: Management principles are useful for spreading knowledge of management through teaching. The teaching of management principles continues to be an integral part of management education. These principles help to develop an organized body of knowledge by management practitioners, thinkers and philosophers.


·  Evaluating the behavior of managers:Management principles prescribe what one should do to improve things in some ways. These principles attempt to prescribe and evaluate the behavior of the managers of the organization.


·  Attaining social goals: Management principles have helped to attain the social goals by increasing efficiency and productivity in the use of scarce resources. The supply of quality goods at a reasonable price boosts social welfare.

Taylor’s scientific management concept and his contributions

Scientific management concept
Scientific management concept is one of the principles of management and is also known as classical theory. This principle is propounded by Fredrick Winslow Taylor (F.W Taylor) – the father of management. He was born in USA in 1856. He joined Midvale steel company where he worked as a machine shop worker for two years as gang boss for some years and as chief engineer at the age of 28.he also joined Bethlehem steel company where he served for a long time. Later he devoted his time to develop the concept of scientific management.
He noticed that there were much disorder and wastage of human as well as other resources at work place. The managers and staffs had no concept about systematic and efficient performance of task. And all were following traditional ways of doing work. So he tried to remove these problems through the development of new concept. Thus the scientific management concept was developed.

Contributions of F.W Taylor

While working in Midvale Company as a manager Taylor observed that employees were not performing as per their capacity of productivity. And he considered that this condition was occurring because of no care towards the waste. Taylor worked towards the experiments at his work place to increase the worker’s efficiency so that maximum output could be achieved by utilizing effort at maximum level.
1.  Scientific task setting:- Taylor observed that the management does not know exactly the works – pieces of work- volume of works- which are to be performed by the workers during a fixed period of time- which is called working day. In a working day how much work is to be dome by a worker but be fixed by a manager and the task should be set everyday. The process of task setting requires scientific technique. To make a worker do a quantity of work in a working day is called scientific task setting
2.  Differential payment system:- under this system, a worker received the piece rate benefit which will attract the workers to work more for more amount of wages and more incentives would be created to raise the standardization of output to promote the workers to produce more and perform more task than before and utilize waste time to earn more wages.
3.  Reorganization of supervision:- concepts of separation of planning and doing and functional foremanship were developed. Taylor opines that the workers should only emphasize in planning or in doing. There should be 8 foreman in which 4 are for planning and 4for doing. For planning they were route clerk, instruction cord clerk, time and cost clerk and disciplinarian. And for doing they were speed boss, gang boss, repair boss and inspector.
4.  Scientific recruiting and training:-staffs and workers should be selected and employed on scientific basis. Management should develop and train every workers by providing proper knowledge and training to increase their skills and make them effective
5.  Economy:- efficient cost accounting system should be followed to control cost which can minimize the wastages and thoroughly reduced and thus eliminated.
6.  Mental revolution:- Taylor argued that both management and workers should try to understand each other instead of quarreling for profits and benefits which would increase production, profit and benefits.

Principles of scientific management

 Replacing the rule of thumb with science:-it requires scientific study and analysis of each element of job in order to replace the old rule of thumb approach. Only through scientific investigation and standardization better way of work can be developed. Scientific selection of employees requires that decisions to make on facts rather than on opinions and beliefs.
2.  Harmony in group activities:- in the past there was only discord. Taylor has emphasized harmony among employee and employer to attain common goals which could help to contribute to the maximum limit.
3.  Cooperation:- cooperation between management and labor is the major foundation of scientific management. It creates a sense of mutuality through which maximum prosperity can be guaranteed.
4.  Development of employees:- personnel management must be backed up by scientific selection of employees along with proper training to them. Efforts should be made to develop each employee to achieve efficiency and prosperity.
5. Division of responsibility:- introduction of functional foremanship made division of responsibility. Many foremen should be appointed out of which 4 for planning and 4 for doing. In planning they were route clerk, instruction cord clerk, time and cost clerk and disciplinarian. And for doing they were speed boss, gang boss, repair boss and inspector. This promoted division of work which promoted division of responsibility
6.  Maximum output:- Taylor was more concerned with continuous increase in production and productivity. It maximum output is derived from optimum utilization of resources than surely it will bring higher profits and better benefits to the employer and employees.

Advantages and Limitations of scientific management

vantages of scientific management :-
To employees
a.  Better utilization of resources through scientific techniques
b.  Scientific selection and training of employees leads to better workforce which ensures increase in efficiency
c.  Harmonious relationship between the workers and the management
d.  Standardization of tools, materials, techniques , equipments for increasing efficiency
e.  Reduction of production cost
To workers
a.  Opportunity for scientific training and development to increase skills knowledge and competency
b.  Better working conditions
c.  Application of scientific methods and techniques in better working conditions to reduce fatigue
d.  Higher wages to the workers for higher productivity
To society
a.  People get better quality products at lower cost
b.  Increase productivity in the country by utilizing resources properly
c.  Improve standard of living of people through better products
d.  Scientific investigation promotes technological development
Limitations of scientific management: –
a.  It is based upon one best way and is applicable for simple organizations than that for today’s dynamic and complex organization
b.  It focuses on individual performance than group efforts and divides the workers into efficient and inefficient categories
c.  It is focused on specialization and repetition of jobs to increase the productivity which reduces innovation and creativity and promotes monotony
d.  It neglects human factor because it motivates workers to work for monetary benefits rather than human resource development and resources
e.  There is no scope for creativity of employees because they are developed by manager which promotes frustration.

Fayol’s administrative management theory

Henry Fayol was born in 1841 as French. He is the industrialist who developed the administrative theory. He is also known as father of general management. He got his engineering degree and joined a French company as an junior executive in 1860 and senior executive in  1888. He published his classic book on general and industrial administration in 1928, which explained the first complete theory of management. He emphasized on 14 principles of general management and attempted to provide guidance and direction to other management.

Fayol’s management principles

1)  Division of work: – This principle implies on dividing the total task into compact jobs and thus allocating them to different individuals which promotes specialization and efficiency in both technical and managerial level. It helps to acquire speed and accuracy in performance.
2)  Authority and responsibility: – Authority means to give order and power to exert obedience whereas responsibility means obligations to perform work in the manner directed and desired. Authority and responsibility are co existed and leads to responsive behavior and efficiency.
3)  Discipline :- Discipline implies obedience, respect and establishment and regulations which are essential for smooth running of all organizations for good supervision and built in system of reward an punishment
4)  Unity of command: – Subordinates should receive orders from single superior at a time and all subordinates should be accountable to that superior. More superior leads to confusion, delay and so on.
5)  Unity of direction: – One plan must be formulated for a group of activity and all the related activities should be put under one group show that efforts of managers of a single group can be directed towards achievement of common goal.
6)  eSpirit de corps : – This term comprises of two principles namely union is strength and team spirit is most essential. There should be cooperation and team work among members of the organization. The managers should always make effort to ensure harmony among the subordinates.
7)  Equity: – Subordinates should be treated with justice, equity and kindness so that there can not be nepotism and favoritism while selection of workers, treating the workers which helps to promote friendly environment between superior between superior and subordinates.
8)  Centralization: – It implies concentration of authority at the top level. No hard fast rules can be laid down regarding the extension of authority to be retained at the top level. Centralization and decentralization should be proportionately decided.
9)  Scalar chain: – It refers to chain of superior ranging from top to low ranks in a management. It determines the clear line of authority from top to bottom linking managers at all levels. All communication should flow the established chain of command.
10)  Order: – It refers to arrangement of resources in the organization. It implies right place for everything. It stresses upon proper utilization of physical, natural, capital and organizational resources.
11)  Stability of tenure: – It takes time to learn and get a job therefore a reasonable time should be provided to all employees for securing better results and guarantee of service. Stability of employees promotes team work, loyalty to the organization
12)  Initiative: – It means eagerness to initiate action in work related matters without being asked to do so .it is a powerful motivator of human behavior and is a source of strength for the organization.
13)  Remuneration of personnel:- The remuneration payable to employees should be fair and reasonable .management must ensure a fair reward for the work and decide the equitable method of calculating wages
14)  Superiority of organizational interest: – Personal interest must be discarded and general interest must be maintained. Organization is bigger than an individual .therefore the interest of the organization must prevail upon the interest of an individual.

Max Weber principle of bureaucratic theory

Max Weber a German sociologist propounded the theory called principle of bureaucracy – a theory related to authority structure and relations in the 19thcentury. According to him, bureaucracy is the formal system of organization and administration designed to ensure efficiency and effectiveness. He suggested an ideal model for management as bureaucratic approach. He, in the book the theory of social and economic organizations, explained the basic principles of bureaucracy. He gave emphasis on division of labor, hierarchy, detailed rules and impersonal relations.

Principles of  bureaucratic theory

1) Job specialization: – Jobs are divided into simple, routine and fixed category based on competence and functional specialization.

2)  Authority hierarchy: – Officers are organized in a n hierarchy in which higher officer controls lower position holders i.e. superior controls subordinates and their performance of subordinates and lower staff could be controlled.

3)  Formal selection: – All organizational members are to be selected on the basis of technical qualifications and competence demonstrated by training, education or formal examination.

4)  Formal rules and regulations: – To ensure uniformity and to regulate actions of employees, managers must depend heavily upon formal organizational rules and regulations. Thus, rules of law lead to impersonality in interpersonal relations.

5) Impersonality: – Rules and controls are applied uniformly, avoiding involvement with personalities and preferences of employees. Nepotism and favoritism are not preferred.

6) Career orientation: – Career building opportunity is offered highly. Life long employment and adequate protection of individuals against arbitrary dismissal is guaranteed. Here managers are professional officials rather than owners units they manage. They work for a fixed salaries and pursue their career within the organization.

Limitations of bureaucratic theory


1) Informal relationship is not considered: – It does not consider the informal relationships between individuals working in the organizations.

2) Outdated system: – Its system of control and authority are outdated which can’t work in such a changed environment.

3) Inadequate means: – Bureaucratic theory does not posses adequate means resolving differences and conflicts arising between functional groups.


No comments:

Post a Comment