COURSE OBJECTIVES OF BM&FA

 1. To Include the students regarding the adoption and implementation of management

principles.
 2. To create a focus on the functional organizational structure and its coordination in
organization.
 3. To make the students understand the concepts of economics and managerial
economics.
 4. To develop the skills, abilities and competencies regarding cost reduction in various
producing conditions.
 5. To nurture the students about the financial world of investment decisions.
 Definitions:-

 “Management is the art of getting things done through and with people in formally organized groups”
- Harold Knootz

 “To manage is to forecast and plan, to organize, to command, to coordinate and control” - Henry Fayol
Characteristics/Salient Features (Nature of Management)
 Management is a social process- Management takes place through people. It is the human element
which gives management its special character.
 Management also denotes a body of people involved in decision making.
 Management is action-based.
 Management aims at coordination of activities
 Management is innovative.
 Management aims at achieving predetermined objectives.
 Management is inter-disciplinary.
 Manager has four types of resources the four M’s : men, money material and machines
THE SCOPE OF MANAGENT:

1. Financial Management. Financial management is a top priority for companies as the

effective and proper managing of finances enables them to stay in business and
remain competitive.

2. Marketing Management: Here different marketing activities undertaken in

company’s marketing department.

3. Personnel Management: It involves managing employees / staff in an organinsation.

4. Production Management: Handling the entire production process.

5. Office Management: It involves planning, coordinating, controlling of different

activities in an office environment.
 Significance/Importance of Management

1. It facilitates the achievement of goals through limited resources:

2. Optimum Utilisation of resources: Management facilitates optimum utilisation of available

human and physical resources, which leads to progress and prosperity of a business enterprise.

3. It focus on group efforts:

4. Ensures effective use of managers: Management ensures effective use of managers so that the
benefits of their experience, skills and maturity are available to the enterprise.

5. It Ensures smooth functioning in case of difficulties: Management ensures smooth, orderly and
continues functioning of an enterprise in trouble. It also raises the efficiency, productivity and
profitability of an enterprise.
 FUNCTIONS OF MANAGEMENT:

 Planning
 Organizing: Organizing means arranging ways and means for the execution of a business
plan.
 Staffing
 Directing (Leading):Directing as a managerial function, deals with guiding and
instructing people to do the work in the right manner. (a) Leading (b) Motivating ©
Commutating
 Coordinating
 Reporting
 Budgeting
 Controlling: Controlling is an important function of management. It is necessary in the
case of individuals and departments so as to avoid wrong actions and activities.
SCIENTIFIC MANAGEMENT

 Frederick W. Taylor (1856-1915), developer of scientific management. Scientific management (also called Taylorism or the
Taylor system) is a theory of management that analyzes and synthesizes workflows, with the objective of improving labour
productivity.

Taylor believed that decisions based upon tradition and rules of thumb should be replaced by precise procedures
developed after careful study of an individual at work.
 PRINCIPLES OF SCIENTIFIC MANAGEMENT

1. Replacing rule of thumb with science: Development of Science for each part of men's job (replacement of rule of thumb)
This principle suggests that work assigned to any employee should be observed, analyzed with respect to each and
every element and part and time involved in it.

2. Harmony in group action: Harmony means that a group should work as a unit and contribute to the maximum.

3. Co-operation

4. Maximum output

5. Development of workers
 General approach

1. Shift in decision making from employees to managers

2. Develop a standard method for performing each job

3. Select workers with appropriate abilities for each job

4. Train workers in the standard method previously developed

5. Support workers by planning their work and eliminating interruptions

6. Provide wage incentives to workers for increased output.

CONTRIBUTIONS OF SCIENTIFIC MANAGEMENT:

Scientific approach to business management and process improvement

Importance of compensation for performance

Began the careful study of tasks and jobs.

Importance of selection criteria by management

Features of Scientific Management
 Scientific task setting: F. W. Taylor suggested the introduction of standard task which every
worker is expected to complete within one day (working hours) the task is to be calculated
through careful scientific investigation. For this, work study (i.e. method study and work
measurement study) is essential.
 Planning the task: For performing the task by every worker, Taylor suggested the need of
planning the production activity accurately.
 Scientific selection and training of workers: Taylor suggested the need of scientific
selection of workers for the plant/production activities.
 Standardization: Taylor suggested the importance of standardization of tools and
equipment, materials, conditions of work and speed of machines.
 Specialization: Taylor suggested specialization in the administrative and organizational
setup of the plant He suggested functional foremanship.
The fourteen principles of management created by Henri
Fayol are explained below.

 1. Division of Work-  8. Centralization-

 2. Authority and Responsibility-  9. Scalar Chain-

 3. Discipline-  10. Order-

 4. Unity of Command-  11. Equity-

 5. Unity of Direction-  12.Stability of tenure

 6. Subordination of Individual  13. Initiative-

Interest to organizational interest
 14. Esprit de Corps-
 7. Remuneration-
Human Relations Period (or) Motivational Theory:

 Abraham Maslow’s “Need Hierarchy Theory”:

Abraham Maslow is well renowned for proposing the Hierarchy of Needs
Theory in 1943. This theory is a classical depiction of human motivation. This theory is
based on the assumption that there is a hierarchy of five needs within each individual.
  Physiological needs- These are the basic needs of air, water, food, clothing and
shelter.
 Safety needs- For instance- Job security, financial security, protection from animals, family
security, health security, etc.
 Social needs- It include love, affection, care, belongingness, and friendship.
 Esteem needs- self- respect, confidence, competence, achievement and freedom and external
recognition, power, status.
 Self-actualization need- It explains what you potential to become. It includes the need for
growth and self-contentment. It also includes desire for gaining more knowledge, social-
service, creativity and being aesthetic.
“Theory X and Theory Y” of Douglas McGregor:
In 1960, Douglas McGregor formulated Theory X and Theory Y suggesting two aspects of
human behaviour at work. one of which is negative, called as Theory X and the other is
positive, so called as Theory Y. According to McGregor, the perception of managers on the
nature of individuals is based on various assumptions.

 Assumptions of Theory X  Assumptions of Theory Y

 Some employees consider work as natural as

 Employees are inherently lazy.
play or rest.
 They require constant guidance and  These employees are capable of directing and
support controlling performance on the own.
 Higher rewards make these employees more
 Some time they require even
committed to organization.
coercion and control.
 Give an opportunity, they not only accept
 Given opportunity, they would like responsibility but also look for opportunities to
outperform others.
to avoid responsibility.
 Most of them are highly imaginative, creative,
 They do not show up any ambition and display ingenuity in handling
but always seek security. organizational issues.
Herzberg’s Two-Factor Theory of Motivation
In 1959, Frederick Herzberg, a behavioural scientist proposed a two-factor theory or the motivator-
hygiene theory. According to Herzberg, there are some job factors that result in satisfaction while there
are other job factors that prevent dissatisfaction.

 Hygiene factors- Hygiene factors are those job factors which are essential for existence of motivation at
workplace.
 Pay - It must be equal and competitive to those in the same industry in the same domain.
 Company Policies and administrative policies - They should be fair and clear. It should include flexible
working hours, dress code, breaks, vacation, etc.
 Fringe benefits - The employees should be offered health care plans (mediclaim), benefits for the family
members,
 Physical Working conditions - The working conditions should be safe, clean and hygienic.
 Status - The employees’ status within the organization should be familiar and retained.
 Interpersonal relations - The relationship of the employees with his peers, superiors and subordinates.
 Job Security - The organization must provide job security to the employees.
 Motivational factors- According to Herzberg, the hygiene factors cannot
be regarded as motivators. The motivational factors yield positive
satisfaction.
 Recognition -
 Sense of achievement - The employees must have a sense of
achievement. This depends on the job. There must be a fruit of some sort
in the job.
 Growth and promotional opportunities –
 Responsibility - The employees must hold themselves responsible for the
work. The managers should give them ownership of the work. They
should minimize control but retain accountability.
 Hawthorne Experiments:

Mayo is best known for his work on the project commonly referred to as the
Hawthorne Studies. They were conducted in the Hawthorne plant of Western Electric Company
in the USA between 1927 and 1932. Mayo has drawn various conclusions from these studies.

 Some of the major findings of Hawthorne Studies we as noted below:

 Individual workers must be seen as members of a group.

 The sense of belongings and effective management were the two secrets unfolded by the
Hawthrone experiments.
 Need for status and belongingness to a group were viewed as more important the monetary
incentives or good physical working conditions.
 To seek workers cooperation’s the management should be aware of their social needs and cater to
them.
Leadership Styles:

 Autocratic Leadership

 Democratic Leadership

 Laissez-Faire Leadership

Theories of Leadership:

 The great man theory

 Trait theory

 The behavioral theory

 The transactional theory or management theory

 The transformational theory or relationship theory

 The situational theory