CHAPTER 1 Introduction to management MEANING OF MANAGEMENT

CHAPTER– 1 Introduction to management

MEANING OF MANAGEMENT Management is getting the work done through the efforts of others and effective utilization of human and material resources to achieve the enterprise objectives.

The 4 M’s of Management Manpower Machinery Management Money Materials

Difference between Management and Administration No. Administration Management 1 Administration is concerned mainly with determining goals to be achieved and policy working. Management is concerned mainly with implementation of policies. 2 Administration requires conceptual skills Management requires technical skills 3 Oriented more towards the external environment Oriented more towards the internal environment

Management Skills • Three basic kinds of skills 1. Technical Skill - is the ability to use procedures, techniques and knowledge of a specialized field. E. g. surgeon, engineers, accountants. 2. Human Skill – is the ability to work with, understand, and motivate other people as individuals or in groups. 3. Conceptual Skill – is the ability to coordinate and integrate the organization goals and activities.

Managerial Objectives Efficient use of resources Customer Satisfaction Reasonable profits so as to give a fair return on capital invested in bussiness Survival and continuity of business Enhancing goodwill or reputation of the enterprise

Four Management Functions • PLANNING –Defining the organizational purpose and ways to achieve it • ORGANIZING –Arranging and structuring work to accomplish organizational goals • LEADING –Directing the work activities of others • CONTROLLING –Monitoring, comparing, and correcting work performance

Meaning and Definition of Business is exchange (buying and selling) of goods ( like furniture, refrigerator etc. )and services ( Transport , warehousing etc) for making profit. Business uses 4 Ms – Money, Manpower, Machinery, Material. Business involved risk (like changes in– consumer tastes, technology, Government policies). Profit is the reward for risk-taking. The people who consume ( or buy) goods and services are called consumers.

Essentials of Good Business ü Well defined goals or objectives ü Proper planning procedure with up-to-date information ü Proper location so as to ensure low cost and high profits ü Flexible and adaptive management ü Sound organizational structure ü Customer-focused marketing system ü Sound personnel policies

Manager is a person who performs all the 5 functions of management, that is – planning, organising, staffing, directing (or leading) and controlling. Modern Manager • Modern Manager has to perform all the 5 functions of management, that is – planning, organizing, staffing, directing (or leading) and controlling. • But he is not an owner-manager but a hired one ( that means he does not owned the company, and he is doing a job of a manager for a salary in the company)

Business Environment 1. • • • Economic Environment Capital (money, cash) Labour (manpower: availability, quality, and price) Price levels (Inflation) Government tax policies Customers (what customer want and willing to buy) Technology (high productivity, greater variety of goods) Social Environment • Attitudes, desires, expectations, beliefs, and customs of people • Social responsibilities (of the business towards the society) • Ethics (what is right and what is wrong) 2.

3. Political Environment • Attitudes and actions of political and government leaders (may put some restrictions, or may promote business by providing financial assistance) 4. Legal Environment • Law, regulations and court decisions (to protect consumers, workers, community) affects the business

History of Management

Scientific Management is that kind of management through which business is conducted based on facts gained by systematic observation and experiment. The Managers should not stick to old ways but should try scientific tools and techniques, so that best results can be achieved.

History of Management There are many Management Experts who have developed various theories as follows: 1. BABBAGE : Specialization of Labour (when one worker do the same task or work again and again, it will lead to specialization of labour) 2. TAYLOR : Develop a science for each job with standardized and efficient methods. Select Skillful workers Incentives (prizes, bonus for the workers so that they contribute to their best to the organization) Dividing responsibilities

History of Management 4. GILBRETH: Rest pauses after 8 hours (workers take rest after eight hours) 5. GANTT: Work quota system (number of working hours differ from one employee to the other) Bonus ( for more work , giving the worker financial reward i. e. more money) 6. FAYOL: He has developed 14 Principles of Management All managerial tasks are classified as Technical, Financial, Accounting 7. BARNARD: Organizational communication system (success comes where employees accept the authority of others)

History of Management 8. SIMON: He believed that a manager is an administrative man and not an economic man ( manager should lead, select, choose, decide and not only count profit and loss only) 9. OWEN: He was the first to speak about Human Resources ( he cares about the people and not machines) 10. MUNSTERBERG: He was the father of Industrial Psychology ( he studied the application of psychology in work) 11. MAYO: He studied the factors of satisfaction and dissatisfaction to the workers

History of Management 12. FOLLET: He believes in Group Work and Self Control (leads to share power and belief) 13. MASLOW: He believes that a man’s needs could be placed in “hierarchy of needs” 14. Mc. GREGOR: He cares about employee work relationship and he has developed Theory X and Theory Y (Theory X: Workers are lazy and don’t want to work; Theory Y: Workers wants to work and are positive) 15. DRUCKER: He has developed MBO (Management By Objectives) and had contribute a lot in the field of management.