3140709

Principles of Economics
and Management

Unit-6
Introduction to
Management
Prof. Vijay M. Shekhat
9558045778
vijay.shekhat@darshan.ac.in

Unit-4 Basic Economic Problems Darshan Institute of Engineering & Technology

1
 Outlines
 Introduction to Management
• Definitions, Nature, Scope
 Management & Administration
• Skills, Types and Roles of managers
 Management Principles
• Scientific principles, Administrative principles,
 Maslow’s Hierarchy of needs theory

Unit: 6 Introduction to Management 2 Darshan Institute of Engineering &

Technology
 Definition of Management given by di erent experts
 According to F.W. Taylor
“Management is an art of knowing what to do, when to do and
see that it is done in the best and cheapest way.”

 According to Mary Parker Follett

“Management is an art of getting things done through people.”

 According to Henri Fayol

“Management is to forecast (estimate), to plan, to organize, to
command, to co-ordinate and control activities of others.”

Unit: 6 Introduction to Management 3 Darshan Institute of Engineering &

Technology
 Scope of Management
1) Production management:
• Production means creation of utilities by converting raw
material into f inal product by various scientif ic methods and
regulations.
• Area of management which deals with production is known
as production management.
2) Marketing management:
• Marketing management involves distribution of the product
to the buyers.

Source: www. prodintec.es Source: www.shutterstock.com

Unit: 6 Introduction to Management 4 Darshan Institute of Engineering &
Technology
 Cont…
3) Finance and accounting management:
• Financial and accounting management deals with managerial
activities related to obtaining and utilization of fund for
business purpose.
4) Personnel / Human resource management:
• Personnel management is the phase of management which
deals with e ective use and control of manpower.

Source: www.fadelsoft.com
Source: www.isdc.edu.in
Unit: 6 Introduction to Management 5 Darshan Institute of Engineering &
Technology
 Nature of Management
1) Management is a science
2) Management is an art

Unit: 6 Introduction to Management 6 Darshan Institute of Engineering &

Technology
 1) Management is a Science
 Science is a systematic body of knowledge based on certain
principles.
 Science knowledge is obtained through the process of
observation, experimentation and testing.
 We can say management is a science by following
arguments:
1) Universally acceptance principles
E.g. Principle of unity of command.
2) Inquiry & Observation
E.g. Principles of henry fayol of fair remuneration. He observed the
fair remuneration to personal helps in creating a satisf ie d work
force.
3) Cause & E ect Relationship
E.g. If workers
Unit: 6 Introduction are given bonuses,
to Management 7 fair wages
Darshan they
Institute will work hard.
of Engineering &
Technology
 Cont…
4) Test of validity & predictability
E.g. Principle of unity of command can be tested by comparing two
persons-one having single boss and one have to report two bosses.
5) Experimentation
E.g. Henry fayol developed principles on certain experiments.

Unit: 6 Introduction to Management 8 Darshan Institute of Engineering &

Technology
 2) Management is an Art
 An art is def in ed as an application of personalized and
general knowledge, how to do things creatively and
skillfully.
 It can be improved through constant practice only.
 We can say management is an art by following arguments:
1) Practical Knowledge
2) Personalized Skill
3) Creative Art
4) Continuous Practice
5) Goal-Oriented

Unit: 6 Introduction to Management 9 Darshan Institute of Engineering &

Technology
 Management v/s Administration.
Management Administration
It is an art of getting things It is concerned with
done through others by formulation of goal, plans &
d i r e c t i n g t h e i r e f fo r t s policies.
towards achievement of
predetermined goals.
It is an executing function. It is a decision making
function.
It decides who will do it & how It decides what is to be done
will do it. & when is to be done.
Technical and Human skills Conceptual and Human skills
required. required.
Middle & lower level function. Top level function.
Unit: 6 Introduction to Management 10 Darshan Institute of Engineering &
Technology
 Types of Managers

Top Management
[Chairman, Board of
Director, CEO,
General Manager]

Middle level
Management
[Head of the
Department, Deputy
Manager]
Lower level
Management
[Supervisors, Inspectors,
Section o cers]
Unit: 6 Introduction to Management 11 Darshan Institute of Engineering &
Technology
 Top Level Management
 The top management is the ultimate source of authority.
 They give more time on planning and coordinating function.
 They control and coordinate the activities of all the
organization.
 They prepare goals, strategic plans and policies for the
organization.
 They also provide directions.
 They also maintain the contacts with outside world.
 E.g. board of directors, CEO, managing director etc.

Unit: 6 Introduction to Management 12 Darshan Institute of Engineering &

Technology
 Middle Level Management
 They devote more time to implement policies and
strategies.
 They make plans for the sub-units of the organization.
 They interpret and explain policies from top level
management to lower level.
 They also send important reports and other important data
to top level management.
 They are also responsible for inspiring lower level
managers towards better performance.
 E.g. branch managers, departmental managers etc.

Unit: 6 Introduction to Management 13 Darshan Institute of Engineering &

Technology
 Lower/ supervisory / operative Level Management
 They are responsible for the quality as well as quantity of
production.
 They communicate workers problems and suggestions to
the higher level and higher level goals and objectives to the
workers.
 They help to solve the grievances of the workers.
 They are responsible for providing training to the workers.
 They arrange necessary materials, machines, tools etc.
 They prepare periodical reports about the performance of
the workers.
 They ensure discipline in the enterprise as well as motivate
workers.
 6E.g.
Unit: supervisors,
Introduction foreman,14section
to Management DarshanofInstitute
ficers,ofsuperintendent
Engineering &
Technology
 Managerial (Management) Skills

Source: www.study.com
Unit: 6 Introduction to Management 15 Darshan Institute of Engineering &
Technology
 Cont…
Top
Management Conceptua
l
Skills

Middle Human
management Skills

Lower Technical
Management Skills

Unit: 6 Introduction to Management 16 Darshan Institute of Engineering &

Technology
 Cont…
 Conceptual Skills
• A conceptual skill is related with top level management.
• It includes creativity, analytical and initiative skills.
• It helps the manager to f ix goals or objective for whole
organization and plan for every situation.
• According to Prof. Daniel Katz
“Con cep t ual skills are m ost ly required by t h e t op level
management because they spend more time in planning,
organizing and problem solving.”

Unit: 6 Introduction to Management 17 Darshan Institute of Engineering &

Technology
 Cont…
 Human Skills
• Human relations skills are also called interpersonal skills
and it is related with all level of management.
• It is an ability to work with people.
• Manager also lead, motivate, direct, communicate and
develop team spirit.
 Technical Skills
• It is capacity to use the dif fe rent tools (machinery) and
techniques in an area in which a person is specialized.
• Technical skills required particularly with lower level
management.

Unit: 6 Introduction to Management 18 Darshan Institute of Engineering &

Technology
 Role of Manager Given by Mintzberg
 These roles can be grouped into three categories
• Interpersonal role
• Informational role
• Decisional role

Interpersonal Provide
Information
cabdeeF

Informational Process
Information
k

Decisional Use Information

Unit: 6 Introduction to Management 19 Darshan Institute of Engineering &

Technology
 Interpersonal Role
1) Figurehead
• The manager is a symbol and represents the organization in
matters of formality.
• He performs o cial duties like:
o The signing of legal documents on behalf of the company.
o Greet visitors and customers.
o Being available for people (agencies) that will only deal with him
because of status and authority.

Unit: 6 Introduction to Management 20 Darshan Institute of Engineering &

Technology
 Cont…
2) Leader
• The leader role is to motivate and direct their subordinates.
• The manager also looks after the interest of his subordinates
and also tries to solve their work related problems.
• He also sets goals for his followers and co-ordinates the
individual goals with the organizational goals.
3) Liaison
• The liaison role is to get connected between organization and
outsiders.
• The manager’s networking skills to maintain internal and
external contacts for information exchange are essential.
• Top level manager uses it to gain favors and information,
while the supervisor uses it to maintain the routine f lo w of
work. Darshan Institute of Engineering &
Unit: 6 Introduction to Management 21 Technology
 Informational Role
1) Monitor
• The manager must establish and maintain information
system by building contacts both within and outside the
organization.
• Training sta and deliver information.
2) Disseminator
• The manager receives, interprets, and transmits external
information through the liaison role into the organization,
and Internal information through the leader role between
subordinates.
3) Spokesperson
• The manager spreads the organization’s information into the
general public, such as customers, suppliers, government
and the press. Darshan Institute of Engineering &
Unit: 6 Introduction to Management 22 Technology
 Decisional Role
1) Entrepreneur
• The manager initiates and plans the controlled change in the
organization through exploiting opportunities or solving
problems and taking action to improve existing operation.
2) Disturbance Handler
• The manager reacts to spontaneous situations and
unpredictable events which pose threats to the organization
and must take action to correct the situation.
3) Resource Allocator
• The manager decides where the organization will expand its
ef fo rts and makes choices on the allocation of resources
such as capital fund, time, materials and manpower.

Unit: 6 Introduction to Management 23 Darshan Institute of Engineering &

Technology
 Cont…
4) Negotiator
• The manager negotiates on behalf of the organization with
other individuals or organizations for a new sales contract or
cooperation agreement.

Unit: 6 Introduction to Management 24 Darshan Institute of Engineering &

Technology
 Responsibilities of CEO
1) Board administration and support
• Advising and informing board members
• Interfacing between board and sta
• Supporting board's evaluation as chief executive.
2) Program, product and service delivery
• Supervises design, marketing, promotion, delivery and quality
of programs, products and services.
3) Financial, tax, risk and facilities management
• Recommends yearly budget for board approval.
• Carefully manages organization's resources within those
budget guidelines according to current laws and regulations.

Unit: 6 Introduction to Management 25 Darshan Institute of Engineering &

Technology
 Cont…
4) Human resource management
• E ectively manages the human resources of the organization
according to current laws and regulations.
5) Community and public relations
• Assures the organization and its mission, programs, products
and services are consistently presented in strong, positive
image to relevant stakeholders.
6) Fundraising (nonprofit-specific)
• Oversees fundraising planning and implementation including:
o Identifying resource requirements.
o Exploring funding sources, and creating policies to approach
them.
o Submitting proposals and administrating fundraising records
and documentation. Darshan Institute of Engineering &
Unit: 6 Introduction to Management 26 Technology
 Scientific Approach of Management
 It is given by Frederick Winslow Taylor (1856-1915).
 He is considered “father of scientific management”.
 It is a classical management approach that emphasizes the
scientif ic study of work methods to improve the ef ficiency
of the workers.
 Elements of scientific approach given by F.W. Taylor are:
1) Scientific task planning
2) Time study
3) Motion study
4) Functional foremanship
5) Standardization
6) Di erential piece rate system
Unit: 6 Introduction to Management 27 Darshan Institute of Engineering &
Technology
 Elements of Scientific Approach
 Scientific Task Planning
• Scientif ic task planning is all about the total amount of work
an average worker can do during a day under normal
conditions.
• Management should decide in advance what work is to be
done, by whom, where and when.
 Time Study
• The time study indicates that minimum time required finishing
a particular job.
• The time study would indicate the time taken by workers to
f in ish particular job is being recorded f ir st and this
information is being used to develop standard time.

Unit: 6 Introduction to Management 28 Darshan Institute of Engineering &

Technology
 Cont…
 Motion study
• Motion study is useful to f ind out best order of activity to do
a particular job to minimize movement of workers.
 Functional Foremanship
• In order to achieve better production control, Taylor has
given the concept of foremanship.
• Where the factory has divided into various department.
• Each department has in-charge of specialist.
• These functional foremanship playing role of specialist and
provide expert advice to workers.

Unit: 6 Introduction to Management 29 Darshan Institute of Engineering &

Technology
 Cont…
 Standardization
• In scientif ic Management standards have to be set well in
advance for the task, materials, work method, quality, time,
cost and working condition etc.
• It helps in simplifying the process of production by reducing
waste, improving quality of product and maximum utilization
of available resources.

Unit: 6 Introduction to Management 30 Darshan Institute of Engineering &

Technology
 Cont…
 Di erential piece rate system
• In order to motivate workers, incentive based wage system
has been developed.
• This concept of piece rate system is based on competence of
workers.
• The co mpetent wo rkers are paid mo re wages than
incompetent one.
• It also encourages incompetent workers to improve their
performance and achieve their standards.

Unit: 6 Introduction to Management 31 Darshan Institute of Engineering &

Technology
 Limitations of Scientific Approach
1) Unfair mechanism
• Scientif ic Management’s main objective is to increase
workers’ productivity but management did not share the
benefits of increased productivity with workers.
2) Depersonalized Work
• Workers have to do work repeatedly.
• These generate monotony and boredom.
3) Un-psychological
• In scientif ic Management there is no specif ic information
given that how wages should be distributed as a result it
becomes un-psychological.

Unit: 6 Introduction to Management 32 Darshan Institute of Engineering &

Technology
 Cont…
4) Unoriginal
• Some people says F. W. Taylor has copied this approach
from someone else’s approach.
5) Unrealistic
• F. W. Taylor has not believed in motivation, f inancial needs
also. That is the reason why this concept is unrealistic.

Unit: 6 Introduction to Management 33 Darshan Institute of Engineering &

Technology
 Business Operation
 According to Fayol, the business operations of an
organization could be divided into six activities.
1) Technical: Producing and manufacturing products.
2) Commercial: Buying, selling and exchange.
3) Financial: Search for an optimal use of capital.
4) Security: Protecting an employees and property.
5) Accounting: Recording and taking stick of costs, profits and
liabilities, maintain balance sheets, and compiling
statistics.
6) Manager ial: Planning, o r ganizing, co mmand ing,
coordinating and controlling.

Unit: 6 Introduction to Management 34 Darshan Institute of Engineering &

Technology
 Principles of Management
 Fourteen principles of management given by Henry Fayol.
1) Division of Work
• Work should be divided with various individual according to
their expertise skills and knowledge in a particular area.
• With division of work it helps individual in acquiring speed,
accuracy in his performance.
• Specialization leads to ef fic iency and ef fe ctiveness for
organization.
2) Authority and Responsibility
• Authority was def ined by Fayol as the right to give orders
and powers to assign duty.
• Responsibility involves being accountable, and is therefore
naturally associated with authority.
Unit: 6• Introduction
Whoever accepts authority
to Management 35 also accepts
Darshan
Technology
Instituteresponsibility.
of Engineering &
 Cont…
3) Unity of Command
• Subordinates should receive orders and be answerable to
one and only one boss at a time.
• Unity of command provides the enterprise of disciplined,
stable and orderly existence.
• It creates melodious relationship between superiors and
sub-ordinates.
4) Unity of Direction:
• According to this principle, ef forts of all the members of the
organization should be directed towards common goal.
5) Subordination of Individual Interests to the General
Interests
• The interests of one person should not take priority over the
intereststoof
Unit: 6 Introduction the organization
Management as a whole.
36 Darshan Institute of Engineering &
Technology
 Cont…
6) Equity
• Eq u ity means al l empl o yees sho u l d b e treated in
organization as equally as possible.
• Equity is combination of fairness, kindness and justice.
7) Order
• This principle is concerned with proper and systematic
arrangement of things and people.
• Arrangement of things is called material order and people
are called social order.
• Material order – there should be safe, appropriate and
specific place for every material or machinery.
• Social order – selection and appointment of most suitable
person on the right place.
Unit: 6 Introduction to Management 37 Darshan Institute of Engineering &
Technology
 Cont…
8) Scalar Chain
• Managers in hierarchies are part of a chain like authority
scale.
• Each manager, from the first line supervisor to the president,
possesses certain amounts of authority.
• Employee will communicate with lower level manager.
• Lower level managers should always keep upper level
managers informed of their work activities.
9) Discipline
• According to Fayol, “Discipline means sincerity, respect of
authority and observance of rules and regulation of the
enterprise”.
• This principle applies that subordinate should respect their
superiors and obey their order.
Darshan Institute of Engineering &
Unit: 6 Introduction to Management 38 Technology
 Cont…
10) Initiative
• Workers should be encouraged to take initiative in the work
assigned to them.
• Fayol advised that management should provide opportunity
to its employees to suggest ideas, experiences and new
method of work.
11) Fair Remuneration
• Fayol suggested that remuneration to be paid to the workers
should be fair, reasonable, satisfactory and rewarding of the
e orts.
• As far as possible remuneration should satisfy employer as
well as employee.
• Fayol also recommended provision of other benefits such as
free education, medical andDarshan
residential facilities to workers.
Institute of Engineering &
Unit: 6 Introduction to Management 39 Technology
 Cont…
12) Stability
• Fayol highlighted that employees should not be moved
frequently, from one job to another.
13) Stability of Tenure of Personnel
• Retaining productive employees should always be a high
priority of management.
• Recruitment and Selection Costs, as well as increased
product-reject rates are usually associated with hiring new
workers.
14) Espirit de Corps
• Management should encourage coordination and generate
good feelings among employees.

Unit: 6 Introduction to Management 40 Darshan Institute of Engineering &

Technology
 Maslow’s Hierarchy of Need Theory

Morality,
Creativity,
Spontaneity,
Problem
Self- Solving etc.
Actualization
Self-esteem,
Esteem Confidence,
achivement etc.
Social Needs/ Friendship, Family etc.
Love
Safety Security of body, employment, resources etc.

Physiological Breathing, Food, Water, Sleep etc.

Needs Darshan Institute of Engineering &
Unit: 6 Introduction to Management 41 Technology
 Physiological Needs
 Physiological needs are those required to sustain life, such
as air, water, nourishment, sleep etc.
 According to Maslow's theory, if such needs are not
satisf ied then one's motivation will arise from the mission
to satisfy them.
 Higher needs such as social needs and esteem are not felt
until one has met the basic needs.

Source: www.pinterest.com
Unit: 6 Introduction to Management 42 Darshan Institute of Engineering &
Technology
 Safety Needs
 Once physiological needs are met, one's attention turns to
safety and security.
 Such needs might be fulf il led by Living in a safe area,
Medical insurance, Job security, Financial reserves.

Source: www.slideshare.net/dhruvkd786/maslows-hierarchy-of-needs-theory
Unit: 6 Introduction to Management 43 Darshan Institute of Engineering &
-47991651
Technology
 Social Needs
 Once a person has met the lower level physiological and
safety needs, higher level needs become important, the
first of which are social needs.
 Social needs are those related to interaction with other
people and may include Need for friends, Need to give and
receive love etc.

Source: www.slideshare.net/sidbarat/maslows-theory-of-
Unit: 6 Introduction to Management Darshan Institute of Engineering &
hierarchy-of-needs
44 Technology
 Esteem Needs
 Once a person feels a sense of "belonging", the need to feel
important arises.
 Esteem needs may be classified as internal or external.
 Internal esteem needs are those related to self-esteem
such as self-respect and achievement.
 External esteem needs are those such as social status and
recognition.
 Maslow later ref ined his model to include a level between
esteem needs and self-actualization: the need for
knowledge and aesthetics.

Source: www.slideplayer.com/slide/8751700/
Unit: 6 Introduction to Management 45 Darshan Institute of Engineering &
Technology
 Self-Actualization
 Self-actualization is the peak of Maslow's hierarchy of
needs.
 It is the journey of reaching one's full potential as a person.
 Unlike lower level needs, this need is never fully satisfied.
 Self-actualized people tend to have needs such as Truth,
Justice, Sense, Importance etc.
 Self-actualized persons have frequent occurrences of peak
experiences, which are energized moments of profound
happiness and harmony.
 According to Maslow, only a small percentage of the
population reaches the level of self-actualization.
Source: www.loopa.co.uk/maslows-hierarchy-of-needs/
Unit: 6 Introduction to Management 46 Darshan Institute of Engineering &
Technology
 Qualities of Leader
1) Proactive vs. Reactive
• The brilliant leader is always thinking three steps ahead.
• Working to his own environment with the goal of avoiding
problems before they arise.
2) Flexible/Adaptable
• How do you handle yourself in unexpected or uncomfortable
situations?
• An ef fe ctive leader will adapt to new surroundings and
situations, doing his/her best to adjust.
3) Respectful
• Treating others with respect will ultimately earn respect.
4) Quiet Confidence
• Be sure of yourself with humble intentions.
Unit: 6 Introduction to Management 47 Darshan Institute of Engineering &
Technology
 Cont…
5) A Good Communicator
• As a leader, one must listen a lot.
• Leader have to understand the needs and desires of others.
• A good leader asks many questions, considers all options,
and leads in the right direction.
6) Enthusiastic
• Excitement is transmittable.
• When a leader is motivated and excited about the cause
people will be more inclined to follow.
7) Open-Minded
• A strong leader will consider all options when making
decisions.
8) Well Educated
Unit: 6 Introduction to Management 48 Darshan Institute of Engineering &
Technology
 Cont…
9) Resourceful
• Utilize the resources available to you.
• If you don't know the answer to something f ind out by asking
questions.
• A leader must create access to information.
10) Rewarding
• An brilliant leader will recognize the ef fo rts of others and
support those actions.
11) Open to Change
• A leader will take into account all points of view and will be
willing to change a policy, program, cultural tradition that is
outdated, or no longer beneficial to the group as a whole.

Unit: 6 Introduction to Management 49 Darshan Institute of Engineering &

Technology
 Cont…
12) Interested in Feedback
• View feedback as a gift to improve.
13) Evaluative
• Evaluation of events and programs is essential for an
organization (group) to improve and progress.
• An brilliant leader will constantly evaluate and change
programs and policies that are not working.
14) Consistent
• Conf id ence and respect cannot be attained without your
leadership being consistent.
• People must have conf id ence that their opinions and
thoughts will be heard and taken into consideration.

Unit: 6 Introduction to Management 50 Darshan Institute of Engineering &

Technology
 Cont…
15) Delegator
• An exceptio nal leader realizes that He/She cannot
accomplish everything on his own.
• A leader will know the talents and interests of people around
him, thus delegating tasks accordingly.
16) Initiative
• A leader should work to be the motivator, an initiator.
• He/she mu st b e a key el ement in the pl anning and
implementing of new ideas, programs, policies, events, etc.

Unit: 6 Introduction to Management 51 Darshan Institute of Engineering &

Technology
 GTU Questions
1. Who is the father of Scientif ic Management? Discuss his
contribution in Theory of Management.
2. Describe principles of management.
3. Explain Maslow’s theory of Hierarchy of Needs with
necessary diagram.
4. Elaborate types of manager.
5. What is management? Elaborate the dif ference between
administration and management.
6. Management is an art. Justify your answer.

Unit: 6 Introduction to Management 52 Darshan Institute of Engineering &

Technology
 Thank
You
Darshan Institute of Engineering & Technology