Dr.

Pardeep Kumar

MANAGEMENT

Principles and Applications

According to Minimum Uniform Syllabus for B.Com. Prescribed by

NATIONAL EDUCATION POLICY- 2020

Scan to Preview

3rd Edition

Sultan Chand & Sons

 Mangement:
Principles and
Applications

Dr. Pardeep Kumar

Professor
Department of Commerce
Keshav Mahavidyalaya
University of Delhi, Delhi

SULTAN CHAND & SONS®

Educational Publishers
New Delhi
 SULTAN CHAND & SONS®
Educational Publishers
23, Daryaganj , New Delhi- 110002
Phones : 011-23281876, 23266105, 41625022 (Showroom & Shop)
011-23247051 , 40234454 ( Office)
E-mail : sultanchand74@yahoo.com; info@sultanchandandsons.com
Fax 011-23266357; Website : www.sultanchandandsons.com
Third Edition: 2023
ISBN: 978-93-91820-60-2 (TC-22)
Price: 595

EVERY GENUINE COPY OF THIS BOOK HAS A HOLOGRAM

ces
ovi
0 dit

195 In our endeavour to protect you against counterfeit/fake books, we have pasted a copper hologram
19O5 10950e

50Coof E 50
9 over the cover of this book. The hologram displays the full visual image, unique 3D multi-level, multi-
950

91 50 19′ colour effects of our logo from different angles when tilted or properly illuminated under a single
J

GENUINE ince1950
SULTAN SULTAN SULTA light source, such as 3D depth effect, kinetic effect, pearl effect, gradient effect, trailing effect, emboss
TAN SULTANTANS
NSUL!0000
effect, glitter effect, randomly sparking tiny dots, micro text, laser numbering, etc.
Afake hologram does not display all these effects.
Always askthe bookseller to put his stamp on thefirst page ofthis book.

All Rights Reserved : No part of this book, including its style and presentation, may be reproduced, stored
in a retrieval system, or transmitted in any form or by any means-electronic, mechanical, photocopying,
recording or otherwise without the prior written consent of the Publishers. Exclusive publication,
promotion and distribution rights reserved with the Publishers .
Warning: The doing of an unauthorised act in relation to a copyright work may result in both civil claim for
damages and criminal prosecution.
Special Note: Photocopy or zeroxing of educational books without the written permission of Publishers is
illegal and against Copyright Act. Buying and selling of pirated books is a criminal offence. Publication
ofkey to this is strictly prohibited.
General: While every effort has been made to present authentic information and avoid errors, the author
and the publishers are not responsible for the consequences of any action taken on the basis of this book.
Limits of Liability/Disclaimer of Warranty: The publisher and the author make no representation or
warranties with respect to the accuracy or completeness of the contents of this work and specifically
disclaim all warranties, including without limitation warranties of fitness for a particular purpose. No
warranty may be created or extended by sales or promotional materials. The advice and strategies contained
herein may not be suitable for every situation. This work is sold with the understanding that the publisher
is not engaged in rendering legal, accounting, or other professional services. If professional assistance is
required, the services of a competent professional person should be sought. Neither the publisher nor the
author shall be liable for damage arising herefrom.
Disclaimer: The publisher have taken all care to ensure highest standard of quality as regards typesetting,
proofreading, accuracy of textual material, printing and binding. However, they accept no responsibility
for any loss occasioned as a result of any misprint or mistake found in this publication.
Author's Acknowledgement: The writing of a Textbook always involves creation of a huge debt towards
innumerable author's and publications. We owe our gratitude to all of them. We acknowledge our
indebtedness in extensive footnotes throughout the book. If, for any reason, any acknowledgement has
been left out we beg to be excused . We assure to carry out correction in the subsequent edition, as and
when it is known.

Printed at : Himani Print Solution, Badarpur, New Delhi- 110044

 P Preface

“Good management consists in showing average people how to do the work of superior people.” —
John D. Rockefeller
“Management about persuading people to do things they do not want to do, while leadership is
is
about inspiring people to do things they never thought they could.” — Steve Jobs
The 21st century has brought with it a new workplace, one in which everyone must adapt to a rapidly
changing society with constantly shifting demands and opportunities. The economy has become
global and is driven by innovations and technology and organizations have to transform themselves
to serve new customer expectations. Today’s economy presents challenging opportunities as well as
dramatic uncertainty. The new economy has become knowledge based and is performance driven.
The management practices, theory and rules have also undergone through radical transformations.
The traditional way of managing is changing as the business keeps moving with greater expectation
from the customers, introduction of newer technologies, and the way to handle resources. A new world
order seems to be emerging in 21st century and in accordance business world is changing fastly. Rapid
and diverse transformations in the political dimensions affect the business environment. The nature of
management is changing and soft skills are on the rise. The stock of managers with the sharpest social
and psychological skills is also on the rise because of today’s lean and flat organizational structures.
Today’s businesses require management skills, building alliances, strategic planning and political skills
to survive and stabilize itself in the dynamic environment. Growing market complexities are on the
rise and sharpest skills are required to deal with the market forces. Business organization must learn to
renew and reshape their culture in the light of the growing complexities of the environment to retain
their ability to achieve and sustain the level of performance. In this complex scenario, the application of
management theory and practices has to be applied by high degree of creativeness and innovativeness
on the part of the manager. To become more responsive to the dynamic environment the manager has to
assume new roles and required to use professional services for greater effectiveness. Today’s managers
are fashioned by experience of business and the realities of the workplace. They grow in status and
managerial skills largely got from their encounters with people and problems. Managers must consider
factors such as cultural diversity, social responsiveness and ethical and moral obligations to lead their
organizations successfully. Change is the new normal; we live in a constantly changing environment
and with the emerging world of technology and new ways of doing business, management is constantly
facing issues related to these changes. The book provides insights into all issues and explores global
business challenges and dynamic management practices that require managerial attention. This book
highlights those contemporary challenges and issues in management including Workforce diversity,
performance and rewards perceptions, internationalization, digitalization, values and ethics, democracy
 iv Mangement : Principles and Applications

and Sociocracy, subaltern management ideas from India. The books provides insights into challenges of
21st century by P.F. Drucker, Factors reshaping and redesigning management purposes. A textbook in a
dynamic field such as management must reflect this fact by including the latest concepts and practices.
This streamlined volume covers concepts, principles and applications of management to provide
the readers with a solid foundation for understanding the key aspects of management and to familiarize
with the management theories and practices. The original purpose of the book “Management Principles
and Applications” is to deliver a clear and concise presentation of the basic principles and applications
of management as relevant today. The text of this book is an attempt to provide comprehensive
understanding of the basic concepts and practices of management in all kinds of organization endeavour,
as well as its new features keeping its readers informed of the development and changing trends of
managements. The book adopts a fresh, novel and flexible approach to the study of management. It has
been written in a teach yourself style strictly following a student-friendly approach. There is a logical
flow to the sequencing of topic areas and each chapter of the book is self-contained with appropriate
cross-referencing to other chapters. Selection and ordering of chapters can be varied to suit the demands
of particular courses of study. The book has been written in a simple, concise and comprehensive manner
so that the readers get a better idea about this field. This book has been designed to be an effective
learning tool. Let’s specifically describe some of the pedagogical features. The text presents managerial
concepts and theory related to the fundamentals of planning, leading, organising, and controlling with
a strong emphasis on application. The book is written with a minimum of technical terminology and
the format is clearly structured in accordance with the syllabus of B.Com (H) Core Paper (DSC-1.1)
based on Undergraduate Curriculum Framework (UGCF) for University of Delhi. The contents of the
book have been specially structured and written for B.Com. (Hons), Semester Ist Core Paper based
on Undergraduate Curriculum Framework (UGCF) students of University of Delhi. The syllabus and
guidelines issued by University of Delhi have been kept at the focus while writing this book. Attention
has been focused on the overall plan and sequence of contents between and within chapters for a clearer,
more succinct format.
Pedagogical Foundation
The book adopts structured approach in the writing of the chapters that reduces inconsistencies
throughout and makes selecting topics to match the course syllabus easier for faculty. Each chapter starts
with an illustration how the content of the chapter is vital for understanding managerial applications.
Targeted learning outcomes are listed at the beginning of each chapter and then repeated throughout
the chapter. The learning outcomes connect to the text and the additional resources that accompany
Principles and Applications of Management. After reading each section, students can test their retention
by answering the questions. Hundreds of business examples are provided in the book to bring concepts
clarity. This book is designed to speak to the typical student. A lot of research have been done about
student needs, abilities, experiences, and interests, and then shaped the text around them. The basis
of designing the book is to believe that the real applications found throughout every chapter set the
standard for readability and understanding of key concepts. A textbook is a pedagogical apparatus, and
this book has incorporated a number of features that will enhance student learning and student-teacher
interaction. Each chapter contains learning objectives, side-boxes of short cases, summaries of main
messages, and questions for discussion.
(1) Adequate emphasis has been given to conceptual clarity and application of basic concepts to
satisfy the five learning outcomes: (i). Describe the various levels of management and applicability
Chapter Preface v
P
of management principles. (ii). Evaluate a company’s competitive landscape as per Porter’s
Five-force model. (iii). Demonstrate various types of authority, delegation and decentralization
in authority (iv). Demonstrate various types of leadership styles and identify the motivation
techniques used by leaders. (v). Discuss the impact of emerging issues in management.
(2) The book is designed in accordance with the course of B.Com (H) aims to familiarize the learner
with extant and emerging management theories and practices for reflective and holistic thinking
on management principles and practices.
(3) Understand the evolution of management and apprehend its effect on future managers. Analyse
how organizations adapt to an uncertain environment and decipher decision-making techniques
managers use to influence and control the internal environment. Comprehend the changes
happening in organization structure over time. Analyse the relationship amongst functions of
management. Appreciate the changing dynamics of management practice.
(4) The book illustrates concepts with contemporary examples rather than provide a dry recitation
of facts. In addition to the in-text examples, the book has provided several boxed features that
provide more extensive examples in areas of importance in today’s business environment. Each of
the boxed features described below includes a series of critical thinking questions to prompt the
student to consider the implications of each business strategy.
(5) Learning outcomes in the beginning of each chapter to give a bird’s eye view of the contents and
a practical management in action case study.
(6) This book contains multiple graphical presentations in ever section of every chapter of the book.
Think of graphic concept pages as almost like info-graphics for key concepts in each section. The
important aspects of this book are the use of diagrams, exhibits, tables, and figures to make the
complex topics self-explanatory.
(7) The examples have been given at appropriate places in the book to make the subject more
interesting for the students. The textual matter is liberally interspersed with illustrations taken
from the Indian context. Examples provide an additional elaboration of complex theoretical issue
and offer the students a wider coverage of practical tools to understand the management as a
subject.
(8) Important questions are given at the end of each chapter for students to test their knowledge and
understanding of the topics covered in the chapter. Theory-based text questions enable the readers
to analyse, evaluate and predict the prospects for various management concepts and practices.
(9) The best way to capture student interest is by using a real-world company as the running example
in each chapter. The running examples, case studies and practical exercises at the end of each
chapter provoke the students to think in a creative manner and find novel solutions.
This text book has been strictly designed in accordance with the new syllabus and contains new
features added in New Syllabus of Discipline Specific Core (BCH: DSC- 1.1) Management Principles
and Applications, B.Com (H) 1st Semester The text book presents managerial concepts and theory
related to the fundamentals of planning, organising, directing and controlling with a strong emphasis on
application. Additional footage have been given on new aspects added in NEP Discipline Specific Core
Course: Coordination mechanisms in organizations, Modern constructions of management, Managerial
Competencies, Indian Ethos for Management, Value-Oriented Holistic Management , Learning Lessons
from Bhagvad Gita and Ramayana, Organisational Objective Settings, Decision-making Environment,
Elements of Business Environment: Micro, Meso, and Macro, Industry structure fn Five Forces
Model, ,Business level strategy, Organizational structure and Organograms – traditional and modern
 vi Mangement : Principles and Applications

comparative suitability and changes over time, Network, Virtual and Boundaryless organisation, Formal
and informal interface, Leadership styles and followership, Kelly’s Model of followership, Performing
controlling functions, Measures of controlling and accountability for performance, Management
challenges of the 21st Century, Factors reshaping and redesigning Management purpose, Performance
and Reward Perceptions, Internationalization, Digitalization, Entrepreneurship and Innovation, Values
and Ethics- Case Studies on Indian Corporates like Tata, Bhilwara, IOC and Godrej, Management of
Workforce Diversity, Democracy and Core Principles of Sociocracy, Subaltern Management ideas from
India.
The book is written with a minimum of technical terminology and the format is clearly structured
in accordance with the syllabus of University of Delhi. This edition of Essentials of Management:
An International Perspective integrates theory and practice. While maintaining the global perspective,
many examples and cases illustrate the application of concepts and theories to the Indian environment.
This book is presented in five Modules covering the various aspects of management and includes large
number of illustrations in simplified language. The objective questions are properly classified to facilitate
preparation for examination and are given along with solutions. This book is a unique presentation of
subject matter in an orderly manner.
This text book “Management Principles and Applications” has been specifically designed in
accordance with the Syllabi of B.Com (H) Semester-I (BCH: DSC: 1.1) of the Commerce Department
under Faculty of Commerce & Business Studies based on UGCF.Acomprehensive and updated text book
on “Management Principles and Applications” has been designed by keeping in mind the requirements
of the syllabus of B.Com. (H) Semester 1st BCH: DSC- 1.1; Core Paper Based on Undergraduate
Curriculum Framework (UGCF) for University of Delhi. This book also covers the syllabus of Generic
Elective Paper GE: 3.1, B.Com (H), General Management. This text book is equally important for
professional course. The book is structured in five parts with twenty four chapters.
Unit I: Introduction
Unit II: Planning
Unit III: Organising
Unit IV: Directing and Controlling
Unit V: Salient Developments and Contemporary Issues in Management
The text book covers all the topics included in the new syllabus designed under NEP. This book is
designed to enhance student engagement in three innovative ways. The special features of this book
relate to the chapter-wise coverage of all aspects which are clearly explained, and no effort has been
spared in updating the information. Each chapter begins with an introduction to the topic concerned. The
various aspects of each topic are then explained clearly and concisely in different paragraphs. Questions
are given at the end of each chapter. Practical exercises are given at the end of each chapter. Written
in a simple and easy-to-understandable manner, this book focuses on presenting the concepts and their
applications with great clarity. The text is supplemented with real-life case studies and those from
simulated environments. This book would essentially meet the requirements of the Students of B.Com
(H) Discipline Specific Core Course-I (DSC: BCH-1.1.) Management Principles and Applications based
on Undergraduate Curriculum Framework (UGCF) for University of Delhi.
I gratefully appreciate the valuable contributions of several people who helped me to make this
Edition possible and have been a great source of inspiration and support personally and professionally.
I owe a lot to Prof. PROF. AJAY KUMAR SINGH, Head and Dean, Department of Commerce, Delhi
School of Economics for enlightening me and always being a source of inspiration. I specially express
Chapter Preface vii
P
my deep gratitude to PROF. R. K. SINGH, Department of commerce, Delhi School of Economics, for
their appreciation of my academic pursuits.
I wish to acknowledge the importance of reviews/suggestions/guidance provided by Prof. V. K.
Shrotryia, Prof. Kavita Sharma, Prof. Madan Lal, Prof. Niti Bhasin, Prof. Urvashi Sharma, Prof. Amit
Kumar Singh, Prof. Ashish Chandra, Prof. H. K. Dangi, Prof. Shital Jhunjhunwala, Prof. Abha Shukla,
Prof. Ritu Sapra, and Prof. Sunaina Kanojia for offering valuable suggestions and guidance time to time.
I wish to express my sincere appreciation to the Sultan Chand and Sons Editorial and Production
Team for their superb assistance during the production of the book. I also owe a mighty debt of gratitude
to Mr. G.D. Chaudhary and the entire team for their tireless work and dedication on this edition. I admit
that this book would never have been written without the constant support and encouragement of my
family members.
The present revised edition is an outcome of the feedback received from a large number of
academicians, scholars, faculty members and students. Suggestions and feedback from the teaching
fraternity and the students are earnestly solicited and will be highly appreciated to improve further the
quality of this book.

Author
Dr. Pardeep Kumar
 C Contents

01. Introduction to Management 1

2
3
1.1. Major Perspectives of Management
1.1.1. Management is the Art of Getting Things Done
Through Other People:

4
5
1.1.2. Management is Concerned with Ideas, Things and People
1.1.3. Management is the Effective Utilisation of Human and
Material Resources to Achieve Enterprise Objectives
1.2. Management: Meaning/Concepts and Definitions 6
1.2.1 Effectiveness versus Efficiency 10
1.3. Salient Features of Management 10
1.4. Management vs. Administration 12
1.4.1 Conclusion: Synthesizing of Management and Administration 14
1.5. Nature of Management Art, Science and Profession 15
1.5.1. Management: As an Art 15
1.5.2. Management: The Element of Science 16
1.5.3. Management: A Science or an Art? 18
1.5.4. Management as a Profession: Is Management a Profession? 18
1.6. Importance of Management 21
1.6.1. Importance of Management for Organisations 21
1.6.2. Importance of Management for National Economy 23
Review Questions 26
Case Study 28
02. Coordination Mechanisms in Organisations 31
2.1. Coordination:Meaning and Definition 32
2.2. Nature and Characteristics of Coordination 33
2.3. Coordination and Cooperation 34
2.4. Importance /Need for Coordination 36
2.5. Coordination: The Essence of Management: 37
Why coordination is the Essence of Management
 x Mangement : Principles and Applications

2.6. Principles of Coordination(Requisite for Effective Coordination) 40

2.7. Techniques of Effective Coordination 40
2.8. Limitations in Achieving Coordination 42
2.9. Coordination Mechanism in Organisations 42
Review Questions 45
Case Study 46
03. Management Theories and Approaches 47
(Classical, Neo-Classical and Modern Constructions of Management)
3.1. Classical Theory Base of Management 49
3.1.1. Bureaucratic Approach: Max Weber 50
3.1.2. Scientific Management Theory 54
3.1.3. Administrative Management Approach 60
3.1.4. Taylor and Fayol: A Comparison 65
3.2. Neo-classical Theory/Behavioural Theory Base of Management 66
3.2.1. Hawthorne Experiments/Studies 66
3.2.2. Human Relations Approach 69
3.2.3. Behavioural Science Approach 72
3.2.4. Comparison between Human Relations and Behavioral Science Approach: 74
3.3. Modern Constructions of Management 74
3.3.1. Quantitative Approach 75
3.3.2. Systems Approach 78
3.3.3. Contingency Approach 82
3.3.4. Comparison between System Approach and Contingency Approach 85
Review Questions 85
Case Study 87
04. Managerial Functions,Managerial Roles (Mintzberg) 89
and Competencies
4.1. Managerial Functions: An Overview 90
4.2. InterRelationships of Managerial Functions 94
4.3. Mintzberg’s Managerial Roles: Roles of a Manager 95
4.4. Levels of Management 98
4.5. Management Skills 101
4.6. Managerial competencies 104
4.6.1. What is Managerial Competency 105
4.6.2. Classification of Managerial Competencies 106
4.6.3. The Four Pillars of Managerial Competencies 107
4.6.4. Managerial Competencies Approaches 107
Review
4.6.5. Why
Questions
is managerial competency important? 109
110
Case Study 112
Chapter Contents xi
C
05. Indian Ethos for Management 113
(Value Oriented Holistic Management, Lessons from
Bhagvad Gita and Ramayana)
5.1. Ethics/Indian Ethos in Management: Concepts and Definitions 115
5.2. Features of Indian Ethos 116
5.3. Need and Relevance of Indian Ethos 116
5.4. Salient Ideas and Thoughts of Indian Ethos for Management 118
5.5. Basic Principles of Indian Ethos 118
for Management/ Principles Practiced by Indian Companies
5.6. Comparison of Orientation of Management 119
by Western Approach and Indian Approach
5.7. Concepts of Management Redefined: General/Indian Ethos Definition 120
5.8. Managers Mind set: General/ Indian Ethos Management 121
5.9. Requisites for Indian Ethos 121
5.10. Role of Indian Ethos in Managerial Practices 122
5.11. Value-Oriented Holistic Management 122
5.11.1. What is Holistic Management? 122
5.11.2. Features of Holistic Management 123
5.11.3. Benefits of Holistic Management 123
5.11.4.
5.11.5. What
Need of
is Value-Oriented
Value Based Holistic
Holistic
Management
Management? 124
126
5.12. Value Driven Management/Value Based Management 127
5.12.2.
5.12.1. What is Value
Element of Value
Based
Based
Management?
Management 127
128
5.12.3. Essentials of Value Based Management Process 128
5.12.4. Importance of Value Based Management 129
5.13. Management Lessons From Bhagavad Gita 130
5.14. Management Lessons from Ramayana 136
Review Questions 141
Case Study 143
06. Nature and Process of Planning 145
6.1. Planning:Concept and Meaning 146
6.2. Nature of Planning 147
6.3. Role/Importance of Planning 148
6.4. Steps in the Planning Process 149
6.5. Types of Planning 150
6.6. Limitations of Planning 153
6.7. Making Planning Effective 153
Review Questions 154
Case Study 155
Practical Exercise 156
xii Mangement : Principles and Applications

07. Organisational Objective Setting 157

7.1. Goals and Objective: Meaning 158
7.1.1. Goals: Meaning and Definitions 158
7.1.2. Objectives: Meaning and Definitions 159
7.2. Characteristics of Objectives 160
7.3. Importance of Organisational Objective Setting 162
7.4. Types of Goals and Objectives 163
7.5. Approaches of Organisational Objective Settings 164
7.6. Traditional Approach of Objective Setting 164
7.6.1. Features of Traditional Objective Settings 165
7.6.2. Traditional Objective Settings Process 165
7.6.3. Limitatsion of Traditional Goal Setting 166
(Problems Associated with the Traditional Goal Settings)
7.7. Management
Modern Approach
by Objectives
of Organisational Objective Settings: 166

7.7.1. Features of Management by Objectives MBO 168

7.7.2. Steps in Management by Objective Process 169
7.7.3. Advantages of MBO 171
7.7.4. Disadvantages of MBO 172
Review Questions 173
Case Study 174
Practical Exercise 175
08. Decision Making 177
8.1. Decision-Making: Concept and Definitions 178
8.2. Features or Characteristics of Decision-Making 179
8.3. Decision-Making Conditions/Environment 180
8.4. Types of Decisions 184
8.5. Steps in the Decision-Making Process 186
8.6. Managers Making Decisions 190
8.6.1. Rationality in Decision-Making 190
8.6.2. Making Decision: Bounded Rationality 190
8.7. Group Decision-Making: Concept 191
8.7.1. Advantages of Group Decision- Making 192
8.7.2. Disadvantages (Pitfalls)of the Group Decision Making 192
8.8. 8.8.1.
Techniques
GroupFor
Decision-Making
Individual and Group
Technique
Decision-Making 193
193
8.8.2. Individual Decision-Making Technique 199
8.9. Difference between Individual and Group Decision Making 203
Review Questions 204
Case Study 205
Chapter Contents xiii
C
09. Strategic Planning 207
9.1. Strategy and Strategy Planning: Concept and Meaning 207
9.2. Nature of Strategy/Strategic Planning 208
9.3. Importance of Strategy/Strategic Planning 209
9.4. Planning vis-à-vis Strategy 210
9.5. Levels of Strategy 211
9.6. Types of Business Level Strategies 213
9.7. Industry Structure and Analysis 219
Review Questions 222
Case Study 224
10. Elements of the Business Firm Environment 225
10.1 Environment Meaning 226
10.2. Business Environment: Introduction and its Nature 227
10.2.1. Nature of Business Environment: 227
10.3. Importance of Business Environment 228
10.4. Interaction between Business and Environment 230
10.5. Elements of Environment of Business Firm 231
10.5.1. Micro Environment 232
10.5.2. Meso-Environmental Factors (Intermediate Environment) 235
10.5.3. Macro –Environmental Factors 239
10.6. Environmental Analysis and Diagnosis 242
10.6.1. SWOT Analysis 242
10.6.2. TOWS Analysis 244
Review Questions 246
Case Study 248
11. Nature and Process of Organising 251
11.1. Concept of Organising 252
11.2 Nature and Characteristics of Organising 253
11.3. Steps in the Process of Organising 255
11.4. Purpose and Importance of Organising 256
11.5 Principles of Organsing 257
11.6. Factors Affecting Organisational Design 259
Review Questions 264
Case Study 265
12. Delegation and Decentralisation of Authority 267
12.1. Delegation of Authority: Concept and Nature 268
12.2. Features of Delegation of Authority 269
12.3. Importance of Delegation of Authority 271
xiv Mangement : Principles and Applications

12.4 . Steps in the Process of Delegation of Authority 272

12.5. Difficulties in Delegation ofAuthority 276
12.6. Principles of Delegation of Authority 278
12.7 . Guidelines for Effective Delegation of Authority 279
12.8 . Decentralisation ofAuthority 280
12.9. Measuring the Degree of Decentralisation 281
12.10 Factors Affecting Decentralisation of Authority 282
12.11 . Advantages of Decentralisation 283
12.12. Limitations of Decentralisation 284
12.13 . Making Decentralisation Effective 285
12.14 . Centralisation 286
12.15 . Factors Determining Centralisation of Authority 287
12.16. Advantages of Centralisation 287
12.17 . Disadvantages or Evils of Centralisation 288
12.18 . Distinction between Centralisation and Decentralisation 289
12.19. Distinction between Delegation and Decentralisation 289
Review Questions 290
Case Study 292

13. Departmentalisation 293

13.1 . Departmentalisation : Meaning and Definition 294

13.2. Importance of Departmentalisation 294
13.3 Basis of Departmentalisation 295
13.3.1 . Departmentalisation Based on Functions. 296
13.3.2. Departmentalisation Based on Products 298
13.3.3 . Departmentalisation Based on Geography or Territory 300
13.3.4 . Departmentalisation Based on Customers 303
13.3.5 . Departmentalisation Based on Processes or Equipment 305
13.3.6 Departmentalisation Based on Time 307
13.3.7 . Departmentalisation Based on Numbers 308
13.4 . Factors to be Considered in Departmentation/Choice of 309
a Method of Departmentation
Review Questions 310
Case Study 311

14. Organisational Structure and Organograms 313

14.1 . Organisational Structure : Meaning and Definitions 315

14.2 . Types of Organisational Structure 315
14.3 . Traditional Organizational Structure 316
14.3.1 . Simple Organisation Structure/Line Organisation 316
14.3.2 . Line and Staff Organisation 319
14.3.3 . Functional Organisation Structure 322
14.3.4 . Divisional Organisational Structure 326
Chapter Contents xv
C
14.4. Contemporary/Modern Organisation Structure 328
14.4.1. Team Organisational Structure 328
14.4.2. Project Organisation Structure 332
14.4.3. Matrix Organisation Structure 335
14.4.4. Boundaryless Organisation Structure 340
14.5. Organograms/Organigram/Organisational Chart 344
14.5.1 Features of Organograms/Organisational Charts 345
14.5.2. Principles of Making and Organogram 345
14.5.3. Types of Organogram 346
14.5.4. Merits of Organisation Charts 349
14.5.5. Demerits of Organisational Chart 350
Review Questions 351
Case Study 353
15. Formal Informal Organisation’s Interface 355
15.1. Formal Organisation: Concept and Meaning 357
15.1.1. Features of Formal Organisation 358
15.1.2. Merits of Formal Organisation 359
15.1.3. Demerits of Formal Organisation 360
15.2. Informal Organisation: Meaning and Definitions 360
15.2.1. Features of Informal Organisation 361
15.3. Benefits of Informal Organisation to its Member 362
(Reasons for Creation of Informal Groups)
15.4. Benefits of Informal Organisation to Management 363
15.5. Functions of Informal Organisations 364
15.6. Limitations of Informal Organisation 365
15.7. How does Informal Organisation Affect Formal Organisation? 366
15.8. How to Handle Informal Groups? 367
(How to deal with Informal Organisation?)
15.9. Formal and Informal Organisation’s Interface: 369
Distinction between Formal Organisation and Informal Organisation
Review Questions 371
Case Study 372
16. Motivation 375
16.1. Motivation: Concept and Meaning 376
16.2. Nature of Motivation 378
16.3. Importance of Motivation 379
16.4. Theories of Motivation 381
16.4.1. Maslow’s Need Hierarchy Theory 381
16.4.2. Herzberg’s Two Factor Theory 385
16.4.3. McGregor’s Theory X and Theory Y: 390
16.4.4. Comparison between Maslow and Herzberg Models 393
xvi Mangement : Principles and Applications

16.4.5. McClelland’s Need Theory 397

16.4.6. Alderfer’s ERG Theory of Motivation 399
16.5. Financial and Non-Financial Incentives 401
16.6. Factors Affecting Motivation 403
Review Questions 407
Case Study 409
17. Leadership 413
17.1. Leadership: Meaning and Definitions 414
17.2. Characteristics of Leaderships 416
17.3. Importance of Leadership 417
17.4 Leadership vs. Management 419
17.5. Leadership Styles 422
17.6. Leadership Continuum 432
17.7. Likert’s Management System 434
17.8. Theories
17.9. Managerial
of Leadership
Grid (Blake and Mouton) 435
437
17.9.1. Trait Theory of Leadership 437
17.9.2. Behavioural Theory of Leadership 439
17.9.3. Situational Theory of Leadership 442
17.10. Transactional Leadership 444
17.11. Transformational Leadership 446
17.12. Factors Affecting Leadership 449
17.13. Followership: Concept and Meaning 452
17.13.1. The Effective Follower: Qualities of Effective Followers 453
17.13.2. Robert Kelly’s Model of Followership 454
Review Questions 458
Case Study 461
18. Controlling: Process and Principle 463
18.1. Control: Meaning and Definitions 464
18.2. Nature of Control 466
18.3. Importance of Control 468
18.4. The Control Process: Steps in the Control Process 470
18.5. Inter-relationship between Planning and Controlling 472
18.6. Types of Control 473
18.7. Principles or Requirements of Effective Control 474
18.8. Limitations of Controlling 477
Review Questions 478
Case Study 480
19. Measures of Controlling and Accountability for Performance 481
19.1. Measures of Controlling: Concept 482
19.2. Traditional Control Measures: 483
Chapter Contents xvii
C
19.2.1. Financial Ratios 483
19.2.2. Budgetary Control 485
19.2.3. Return on Investment 491
19.3. Modern Control Measures 493
19.3.1. Economic and Financial Measures 493
19.3.2.
19.3.3. Information
Network Techniques
Controls (PERT/CPM) 501
511
19.3.4. Balanced Scorecard Approach 515
19.3.5. Benchmarking of Best Practices 518
19.4. Accountability for Performance 523
Review Questions 525
Case Study 527
20. Management Challenges Of 21st Century 529
20.1. Management Challenges of 21st Century 531
20.2. Management Challenges for the 21st Century by Peter F. Drucker 540
20.3. Performance
Factors reshaping
and Reward
and redesigning
Perceptions
Management purpose, 547

Review Questions 554

Case Study 555
21. Contemporary Issues in Management: I 557
(Internationalisation and Digitalisation)
21.1. Internationalisation 559
21.1.1. Internationalisation: Meaning 559
21.1.2. Internationalisation, Globalisation and Localisation 559
21.1.3. Reasons for Going International 560
21.1.4. Benefits of Internationalisation 561
21.1.5. International Entry Modes: 562
21.1.6. Challenges of Internationalisation 564
21.1.6. Differences between Internationalisation and Globalisation 566
21.2. Digitalisation 567
21.2.1. What is Digitalisation? 567
21.2.2. Types of Digital Transformation 568
21.2.3. Digital Transformation Drivers and Technologies 570
21.2.4. Benefits of Digitalisation/Why Digitalisation is important 570
21.2.5. Challenges of Digitalisation 575
Review Questions 577
Case Study 577
22. Contemporary Issues in Management: II 581
(Entrepreneurship and Innovation)
22.1. Entrepreneurship 583
22.1.1. Who is Entrepreneur? 583
xviii Mangement : Principles and Applications

22.1.2. What
22.1.3. is Entrepreneurship?
Entrepreneur vs. Intrapreneur 584
585
22.1.4. Entrepreneur vs. Manager 586
22.1.5. Characteristics of Entrepreneurship 587
22.1.6. Types of Entrepreneurs 589
22.1.7. Functions of Entrepreneurship/Entrepreneur 589
22.1.8. Entrepreneurial Process/Steps involved in Entrepreneurial Process 593
22.1.9. Role/Importance of Entrepreneurship in Economic Development 595
22.1.10. Challenges of Entrepreneurship 597
22.2. Innovation 598
22.2.1. What is Innovation? 598
22.2.2. Types of Innovation 599
22.2.3. Innovation Process 602
22.2.4. Role/Importance of Innovation 606
22.2.5. Innovation: Risks and Challenges 608
Review Questions 609
Case Study 610
23. Contemporary Issues in Management: III 613
(Values and Ethics)
23.1. Value 614
23.1.1. What is Value? 614
23.1.2. Characteristics of Values 615
23.1.3. Types of Values 617
23.1.4. Importance of Values 617
23.1.5. Sources of Values 618
23.1.6. Role and Importance of value in Managemen 619
23.2. Ethics 621
23.2.1. Ethics and Business Ethics: Concept and Meaning 621
23.2.2.
23.2.3. Nature
Elements
andofCharacteristics
Business Ethicsand Business Ethics: 622
623
23.2.4. Importance of Business Ethics 623
23.2.5. Determinants of Business Ethics 625
23.2.6. Areas of Business Ethics 626
23.2.7. Ethical and Unethical Behaviour 627
23.2.8. Most Common Unethical Behaviors 629
Review Questions 630
Case Study 630
24. Contemporary Issues in Management: IV 633
(Workplace Diversity, Democracy, Sociocracy and Subaltern
Ideas from India)
24.1. Workplace Diversity 634
Chapter Contents xix
C
24.1.1. What is Workforce Diversity? 634
24.1.2. Challenges Of Diversity In Workplace 635
24.1.3. Benefits Of Diversity In Workplace 636
24.1.4. Importance of Workforce Diversity 637
24.1.5. Management of Workforce Diversity 638
24.2. Democracy 639
24.2.1. What is Democracy? 640
24.2.2. Importance and Benefits of Workplace Democracy 640
24.2.3. Challenges/Demerits of Workplace Democracy 641
24.3. Sociocracy: A New Management System for Better Decisions 643
24.3.1. What is Sociocracy? 643
24.3.2. Core Principles of Sociocracy 645
24.3.3. Elements of Sociocracy 647
24.3.4. Advantages of Sociocracy 648
24.3.5. Challenges/Demerits of Sociocracy 649
24.4. Democracy vs. Sociocracy 650
24.5. Subaltern Management Ideas from India 652
24.5.1. What is Subaltern? 652
24.5.2. Subaltern Studies 652
24.5.3. Subaltern Management Ideas 654
24.5.4. Origins of Subaltern Management Ideas in India 655
Review Questions 657
Case Study 658
25. Appendix 659
(Case studies on Indian Corporates like
Tata, Bhilwara Group, IOC and Godrej)
Case Study 659
Guidline for Case/Analysis Process 660
Steps of Solving Case Study 660
Case Studies on Indian Corporates 662
Case Study No. 1. TATA Group 662
Case Study No. 2. Bhilwara Group 666
Case Study No. 3. Indian Oil Corporation 670
Case Study No. 4. Godrej 675
B Brief Contents

Chapters Pages
1. Introduction to Management 1-30
2. Coordination Mechanisms in Organisations 31 - 46

3. Management Theories and Approaches (Classicial, Neo-Classical and Modern 47-88

Constructions of Management)
4. Managerial Functions, Managerial Roles (Mintzberg) And Competencies 89 - 112

5. Indian Ethos for Management (Value Oriented Holistic Management, Lessons from 113 - 144
Bhagvad Gita and Ramayana)
6. Nature and Process of Planning 145 - 156

7. Organisational Objective Setting 157 - 176

8. Decision Making 177 - 206

9. Strategic Planning 207-224

10. Elements of the Business Firm Environment 225 - 250
11. Nature and Process of Organising 251 - 266

12. Delegation and Decentralisation ofAuthority 267-292

13. Departmentalisation 293 - 312

14. Organisational Structure and Organograms 313354

15. Formal Informal Organisation's Interface 355-374

16. Motivation 375-412
17. Leadership 413-462

18. Controlling: Process and Principle 463 - 480

19. Measures of Controlling and Accountability for Performance 481 - 528

20. Management Challenges Of 2st Century 529-556

21 . Contemporary Issues in Management: I 557 - 580

(Internationalisation and Digitalisation)
22. Contemporary Issues in Management: II 581 - 612
(Entrepreneurship and Innovation)
23. Contemporary Issues in Management: III 613-632
(Values and Ethics)
24. Contemporary Issues in Management: IV 633 -658
(Workplace Diversity, Democracy, Sociocracy and SubalternIdeas from India
A. Appendix 659 - 678
 S Syllabus

UNIVERSITY OF DELHI
B.Com (Hons.)
Discipline Specific Core Course-1 (DSC-1)
Management Principles and Applications
Unit 1: Introduction
Meaning and Importance of Management; Coordination Mechanisms in Organisations; Management
Theories- Classical, Neo-Classical and Modern constructions of Management; Managerial Functions;
Managerial Roles (Mintzberg); Managerial Vompetencies. Indian Ethos for Management: Value-
Oriented Holistic Management; Learning Lessons from Bhagavat Gita and Ramayana.

Unit 2: Planning
Organisational Objective Setting; Decision-making Environment (certainty, risk, uncertainty);
Techniques for Individual and Group Decision-making; Planning vis-à-vis Strategy- Meaning and
Elements of the Business Firm Environment- Micro, Meso, and Macro; Industry structure, Business-
level strategic planning.
Unit 3: Organising
Decentralization and Delegation; Factors Affecting Organisational Design; Departmentalization;
Organisational Structures and Organograms: Traditional and Modern, Comparative Suitability and
Changes Over Time; Formal-informal Organisations’ Interface.
Unit 4: Directing and Controlling
Motivation- meaning, Importance and Factors Affecting Motivation; Leadership- Meaning, Importance
and Factors Sffecting Leadership, Leadership Styles, and Followership. Controlling- Principles of
Controlling; Measures of Controlling and Accountability for Performance.
Unit 5: Salient Developments and Contemporary Issues in Management
Management Challenges of the 21st Century; Factors Reshaping and Redesigning Management
Purpose, Performance and Reward Perceptions- Internationalisation, Digitalisation, Entrepreneurship
& Innovation, Values & Ethics - Case studies on Indian Corporates like Tata, Bhilwara Group, IOC and
Godrej, Workplace diversity, Democracy and Sociocracy, Subaltern management ideas from India.
 About the Book
This text book Management: Principles and Applications has been Dr. Pardeep Kumar
specifically designed in accordance with the Syllabi of B.Com (H) Semester-l
MANAGEMENT
(BCH : DSC : 1.1 ) of the Commerce Department under Faculty of Commerce & Principles and Applications
AccordingtoMinimum UniformSyllabusforB.Com.Prescribedby
NATIONAL EDUCATION POLICY-2020
Business Studies based on UGCF. A comprehensive and updated text book on
Management: Principles and Applications has been designed by keeping in
mind the requirements of the syllabus of B.Com . ( H) Semester 1st BCH : DSC- 3rd Edition
1.1 ; Core Paper Based on Undergraduate Curriculum Framework ( UGCF) for
University of Delhi . This book also covers the syllabus of Generic Elective
Paper GE: 3.1 , B.Com (H) , General Management. This text book is equally
important for professional course . The book is structured in five parts with
twenty four chapters . Sultan Chand & Sons
Unit Introduction
Unit II Planning
Unit III Organising
Unit IV Directing and Controlling
Unit V : Salient Developments and Contemporary Issues in Management
The text book covers allthe topics included in the new syllabus designed under NEP. This book is designed
to enhance student engagement in three innovative ways . The special features of this book relate to the
chapter-wise coverage of all aspects which are clearly explained , and no effort has been spared in updating
the information . Each chapter begins with an introduction to the topic concerned . The various aspects of
each topic are then explained clearly and concisely in different paragraphs . Questions and Practical
exercises are given at the end of each chapter. Written in a simple and easy-to-understandable manner, this
book focuses on presenting the concepts and their applications with great clarity. The text is supplemented
with real-life case studies and those from simulated environments. This book would essentially meet the
requirements of the Students of B.Com (H) Discipline Specific Core Course- I (DSC: BCH- 1.1 .)
Management Principles and Applications based on Undergraduate Curriculum Framework (UGCF) for
Universityof Delhi .

About the Author

Dr. Pardeep Kumar is a Professor in the Department of Commerce at Keshav

Mahavidyalaya , University of Delhi . He has been teaching at the undergraduate and
post-graduate level courses for the last twenty two years. His areas of interest in
teaching and research include Management, Human Resource Management,
Marketing , and Organizational Behaviour. He has been actively involved in research
and consultancy in the areas of Organizational behaviour and management. He has
also presented papers in various National and International Conferences. In addition ,
he has published multiple research articles in leading National and International
Journals . He has authored several professional and text books which have been widely prescribed by
various Universities . He currently serves on the editorial board of the " International Journal of Accounting,
Finance and Risk Management" and Global Education Society and Development.

ISBN 978-93-91820-60-2
Servi
d

e ce Sultan Chand & Sons

Educ

to th
cate

Publishers of Standard Educational Textbooks

of

022
TC
atio
Dedi

23 Daryaganj , New Delhi-110002

Phones (S) : 011-23281876, 23266105, 41625022
n

SULTAN (0): 011-23247051 , 40234454

Email : sultanchand74@yahoo.com
Scan to Visit Us 91789391820602
1950 info@sultanchandandsons.com
·