PRINCIPLES AND PRACTICE OF MANAGEMENT STUDY NOTES
CONTENT
UNIT ONE: Introduction to management
UNIT TWO: Evolution of management
UNIT THREE: Planning function
UNIT FOUR: Organizing function
UNIT FIVE: Directing- leading function
UNIT SIX: Staffing function
UNIT SEVEN: Control function
UNIT EIGHT: Change management
UNIT NINE: Emerging issues in management
UNIT ONE
INTRODUCTION TO MANAGEMENT.
Management is a universal phenomenon. It is a very popular and widely used term. All
organizations - business, political, cultural or social are involved in management because
it is the management which helps and directs the various efforts towards a definite
purpose.
According to Harold Koontz, ―Management is an art of getting things done through and
with the people in formally organized groups. It is an art of creating an environment in
which people can perform and individuals and can co-operate towards attainment of
group goals.
According to F.W. Taylor, ―Management is an art of knowing what to do, when to do
and to see that it is done in the best and cheapest way.
Management involves creating an internal environment: It is the management which puts
into use the various factors of production therefore; we can say that good management
includes being both being effective and efficient.
Being effective means doing the appropriate task i.e., fitting the square pegs in square
holes and round pegs in round holes. Being efficient means doing the task correctly with
the least possible cost with minimum wastage of resources.
IMPORTANCE OF MANAGEMENT.
1. Encourages Initiative
Management encourages initiative. Initiative means to do the right thing at the right time
without being told or influenced by the superior. The employees should be encouraged to
make their own plans and also to implement these plans. Initiative gives satisfaction to
employees and success to organisation.
2. Encourages Innovation
Management also encourages innovation in the organisation. Innovation brings new
ideas, new technology, new methods, new products, new services, etc. This makes the
organisation more competitive and efficient
PRACTICE OF MANAGEMENT STUDY NOTES PREPARED BY MR ANTONY AMBAI Page 1
,3. Facilitates growth and expansion
Management makes optimum utilization of available resources. It reduces wastage and
increase efficiency. It encourages team work and motivates employees. It also reduces
absenteeism and labour turnover resulting into growth, expansion and diversification of
the organisation.
4. Improves life of workers
Management shares some of its profits with the workers. It provides the workers with
good working environment and conditions. It also gives the workers many financial and
non-financial incentives. All this improves the quality of life of the workers
5. Improves corporate image If the management is good, then the organisation will
produce good quality goods and services. This will improve the goodwill and corporate
image of the organisation. A good corporate image brings many added benefits to the
organisation.
6. Motivates employees
Management motivates employees by providing financial and non-financial incentives.
These incentives increase the willingness and efficiency of the employees. This results in
boosting productivity and profitability of the organisation.
7. Optimum use of resources
Management brings together the available resources. It makes optimum (best) use of these
resources. This brings best results to the organisation.
8. Reduces wastage
Management reduces the wastage of human, material and financial resources. Wastage is
reduced by proper production planning and control. If wastage is reduced then
productivity will increase.
9. It increases efficiency
Efficiency is the relationship between returns and cost. Management uses many
techniques to increase returns and to reduce input costs. Higher efficiency brings many
benefits to the organization e.g better Return on Investment (R.O.I). Return on Capital
Employed (R.O.C.E)
10. Improves total relations
Management improves relations between individuals, groups, departments and between
levels of management. Better relations lead to better team work. Better team work brings
success to the organist
11. Reduces absenteeism and labour turnover
Absenteeism means the employee is absent without permission. Labour Turnover means
the employee leaves the organisation. Labour absenteeism and turnover increases the cost
and causes many problems in the smooth functioning of the organisation. Management
uses different techniques to reduce absenteeism and labour turnover in the organisation.
12. Encourages Team Work.
Management encourages employees to work as a team. It develops a team spirit in the
organisation. This unity brings success to the organisation
PRACTICE OF MANAGEMENT STUDY NOTES PREPARED BY MR ANTONY AMBAI Page 2
,OBJECTIVES OF MANAGEMENT
The main objectives of management are:
1. To Get Maximum Results with Minimum Efforts -The main objective of
management is to secure maximum outputs with minimum efforts & resources.
Management is basically concerned with thinking & utilizing human, material &
financial resources in such a manner that would result in best combination. This
combination results in reduction of various costs.
2.To increasing the Efficiency of factors of Production -Through proper utilization of
various factors of production, their efficiency can be increased to a great extent which
can be obtained by reducing spoilage, wastages and breakage of all kinds, this in turn
leads to saving of time, effort and money which is essential for the growth & prosperity of
the enterprise.
3.To get Maximum Prosperity for Employer & Employees - Management ensures smooth
and coordinated functioning of the enterprise. This in turn helps in providing maximum
benefits to the employee in the shape of good working condition, suitable wage system,
incentive plans on the one hand and higher profits to the employer on the other hand.
4.To get Human betterment & Social Justice -Management serves as a tool for the
upliftment as well as betterment of the society. Through increased productivity &
employment, management ensures better standards of living for the society. It provides
justice through its uniform policies.
PRINCIPLES OF MANAGEMENT
A principle refers to a fundamental truth. It establishes cause and effect relationship
between two or more variables under given situation. They serve as a guide to thought &
actions. Therefore, management principles are the statements of fundamental truth based
on logic which provides guidelines for managerial decision making and actions.
These principles were developed by Father of management i.e., Henry Fayol. These
principles were derived: -
a. On the basis of observation and analysis i.e., practical experience of managers.
b. By conducting experimental studies.
There are the 14 Principles of Management as described by Father of Management i.e.,
Henri Fayol.
1. Division of Labour
Henri Fayol has stressed on the specialization of jobs. Here commended that work of all
kinds must be divided & subdivided and allotted to various persons according to their
expertise in a particular area Subdivision of work makes it simpler and results in
efficiency. It also helps the individual in acquiring speed, accuracy in his performance.
Specialization leads to efficiency & economy in spheres of business
2. Parity of Authority & Responsibility
Authority & responsibility are co-existing. If authority is given to a person, he should also
be made responsible. In a same way, if anyone is made responsible for any job, he should
PRACTICE OF MANAGEMENT STUDY NOTES PREPARED BY MR ANTONY AMBAI Page 3
, also have concerned authority. Authority refers to the right of superiors to get exactness
from their r sub ordinates whereas responsibility means obligation for the performance of
the job assigned.
There should be a balance between the two i.e., they must go hand in hand. Authority
without responsibility leads to irresponsible behavior whereas responsibility without
authority makes the person ineffective.
3. Principle of One Boss.
A subordinate should receive orders and be accountable to one and only one boss at a
time. In other words, a sub-ordinate should not receive instructions from more than one
person because -
- It undermines authority, It Weakens discipline, It Divides loyalty, It Creates confusion,
It Delays and chaos, Escaping responsibilities room is created, Duplication of work
occurs, Overlapping of efforts
Therefore, dual sub-ordination should be avoided unless and until it is absolutely
essential. Unity of command provides the enterprise a disciplined, stable & orderly
existence. It creates harmonious relationship between superiors and sub-ordinates.
4. Unity of Direction
Fayol advocates one head one plan which means that there should be one plan for a group
of activities having similar objectives. Related activities should be grouped together.
There should be one plan of action for them and they should be under the charge of a
particular manager.
According to this principle, efforts of all the members of the organization should be
directed towards common goal. Without unity of direction, unity of action cannot be
Basis Unity of command Unity of direction
Meaning It implies that a sub-ordinate should It means one head, one plan for a
receive orders & instructions from group of activities having similar
only one boss. objectives.
Nature. It is related to functioning of It is related to the functioning of
personnel departments or organization as a
whole
Necessity. It is necessary for fixing responsibility It is necessary for sound organization.
of each subordinate.
Advantage It avoids conflicts, confusion & It avoids duplication of efforts and
chaos. wastage of resources.
Result It leads to better superior sub- ordinate It leads to smooth running of the
relationship. enterprise.
achieved. In fact, unity of command is not possible without unity of direction.
Therefore, it is obvious that they are different from each other but they are dependent on
each other i.e. unity of direction is a pre-requisite for unity of command. But it does not
automatically come from the unity of direction.
5. Equity
PRACTICE OF MANAGEMENT STUDY NOTES PREPARED BY MR ANTONY AMBAI Page 4
CONTENT
UNIT ONE: Introduction to management
UNIT TWO: Evolution of management
UNIT THREE: Planning function
UNIT FOUR: Organizing function
UNIT FIVE: Directing- leading function
UNIT SIX: Staffing function
UNIT SEVEN: Control function
UNIT EIGHT: Change management
UNIT NINE: Emerging issues in management
UNIT ONE
INTRODUCTION TO MANAGEMENT.
Management is a universal phenomenon. It is a very popular and widely used term. All
organizations - business, political, cultural or social are involved in management because
it is the management which helps and directs the various efforts towards a definite
purpose.
According to Harold Koontz, ―Management is an art of getting things done through and
with the people in formally organized groups. It is an art of creating an environment in
which people can perform and individuals and can co-operate towards attainment of
group goals.
According to F.W. Taylor, ―Management is an art of knowing what to do, when to do
and to see that it is done in the best and cheapest way.
Management involves creating an internal environment: It is the management which puts
into use the various factors of production therefore; we can say that good management
includes being both being effective and efficient.
Being effective means doing the appropriate task i.e., fitting the square pegs in square
holes and round pegs in round holes. Being efficient means doing the task correctly with
the least possible cost with minimum wastage of resources.
IMPORTANCE OF MANAGEMENT.
1. Encourages Initiative
Management encourages initiative. Initiative means to do the right thing at the right time
without being told or influenced by the superior. The employees should be encouraged to
make their own plans and also to implement these plans. Initiative gives satisfaction to
employees and success to organisation.
2. Encourages Innovation
Management also encourages innovation in the organisation. Innovation brings new
ideas, new technology, new methods, new products, new services, etc. This makes the
organisation more competitive and efficient
PRACTICE OF MANAGEMENT STUDY NOTES PREPARED BY MR ANTONY AMBAI Page 1
,3. Facilitates growth and expansion
Management makes optimum utilization of available resources. It reduces wastage and
increase efficiency. It encourages team work and motivates employees. It also reduces
absenteeism and labour turnover resulting into growth, expansion and diversification of
the organisation.
4. Improves life of workers
Management shares some of its profits with the workers. It provides the workers with
good working environment and conditions. It also gives the workers many financial and
non-financial incentives. All this improves the quality of life of the workers
5. Improves corporate image If the management is good, then the organisation will
produce good quality goods and services. This will improve the goodwill and corporate
image of the organisation. A good corporate image brings many added benefits to the
organisation.
6. Motivates employees
Management motivates employees by providing financial and non-financial incentives.
These incentives increase the willingness and efficiency of the employees. This results in
boosting productivity and profitability of the organisation.
7. Optimum use of resources
Management brings together the available resources. It makes optimum (best) use of these
resources. This brings best results to the organisation.
8. Reduces wastage
Management reduces the wastage of human, material and financial resources. Wastage is
reduced by proper production planning and control. If wastage is reduced then
productivity will increase.
9. It increases efficiency
Efficiency is the relationship between returns and cost. Management uses many
techniques to increase returns and to reduce input costs. Higher efficiency brings many
benefits to the organization e.g better Return on Investment (R.O.I). Return on Capital
Employed (R.O.C.E)
10. Improves total relations
Management improves relations between individuals, groups, departments and between
levels of management. Better relations lead to better team work. Better team work brings
success to the organist
11. Reduces absenteeism and labour turnover
Absenteeism means the employee is absent without permission. Labour Turnover means
the employee leaves the organisation. Labour absenteeism and turnover increases the cost
and causes many problems in the smooth functioning of the organisation. Management
uses different techniques to reduce absenteeism and labour turnover in the organisation.
12. Encourages Team Work.
Management encourages employees to work as a team. It develops a team spirit in the
organisation. This unity brings success to the organisation
PRACTICE OF MANAGEMENT STUDY NOTES PREPARED BY MR ANTONY AMBAI Page 2
,OBJECTIVES OF MANAGEMENT
The main objectives of management are:
1. To Get Maximum Results with Minimum Efforts -The main objective of
management is to secure maximum outputs with minimum efforts & resources.
Management is basically concerned with thinking & utilizing human, material &
financial resources in such a manner that would result in best combination. This
combination results in reduction of various costs.
2.To increasing the Efficiency of factors of Production -Through proper utilization of
various factors of production, their efficiency can be increased to a great extent which
can be obtained by reducing spoilage, wastages and breakage of all kinds, this in turn
leads to saving of time, effort and money which is essential for the growth & prosperity of
the enterprise.
3.To get Maximum Prosperity for Employer & Employees - Management ensures smooth
and coordinated functioning of the enterprise. This in turn helps in providing maximum
benefits to the employee in the shape of good working condition, suitable wage system,
incentive plans on the one hand and higher profits to the employer on the other hand.
4.To get Human betterment & Social Justice -Management serves as a tool for the
upliftment as well as betterment of the society. Through increased productivity &
employment, management ensures better standards of living for the society. It provides
justice through its uniform policies.
PRINCIPLES OF MANAGEMENT
A principle refers to a fundamental truth. It establishes cause and effect relationship
between two or more variables under given situation. They serve as a guide to thought &
actions. Therefore, management principles are the statements of fundamental truth based
on logic which provides guidelines for managerial decision making and actions.
These principles were developed by Father of management i.e., Henry Fayol. These
principles were derived: -
a. On the basis of observation and analysis i.e., practical experience of managers.
b. By conducting experimental studies.
There are the 14 Principles of Management as described by Father of Management i.e.,
Henri Fayol.
1. Division of Labour
Henri Fayol has stressed on the specialization of jobs. Here commended that work of all
kinds must be divided & subdivided and allotted to various persons according to their
expertise in a particular area Subdivision of work makes it simpler and results in
efficiency. It also helps the individual in acquiring speed, accuracy in his performance.
Specialization leads to efficiency & economy in spheres of business
2. Parity of Authority & Responsibility
Authority & responsibility are co-existing. If authority is given to a person, he should also
be made responsible. In a same way, if anyone is made responsible for any job, he should
PRACTICE OF MANAGEMENT STUDY NOTES PREPARED BY MR ANTONY AMBAI Page 3
, also have concerned authority. Authority refers to the right of superiors to get exactness
from their r sub ordinates whereas responsibility means obligation for the performance of
the job assigned.
There should be a balance between the two i.e., they must go hand in hand. Authority
without responsibility leads to irresponsible behavior whereas responsibility without
authority makes the person ineffective.
3. Principle of One Boss.
A subordinate should receive orders and be accountable to one and only one boss at a
time. In other words, a sub-ordinate should not receive instructions from more than one
person because -
- It undermines authority, It Weakens discipline, It Divides loyalty, It Creates confusion,
It Delays and chaos, Escaping responsibilities room is created, Duplication of work
occurs, Overlapping of efforts
Therefore, dual sub-ordination should be avoided unless and until it is absolutely
essential. Unity of command provides the enterprise a disciplined, stable & orderly
existence. It creates harmonious relationship between superiors and sub-ordinates.
4. Unity of Direction
Fayol advocates one head one plan which means that there should be one plan for a group
of activities having similar objectives. Related activities should be grouped together.
There should be one plan of action for them and they should be under the charge of a
particular manager.
According to this principle, efforts of all the members of the organization should be
directed towards common goal. Without unity of direction, unity of action cannot be
Basis Unity of command Unity of direction
Meaning It implies that a sub-ordinate should It means one head, one plan for a
receive orders & instructions from group of activities having similar
only one boss. objectives.
Nature. It is related to functioning of It is related to the functioning of
personnel departments or organization as a
whole
Necessity. It is necessary for fixing responsibility It is necessary for sound organization.
of each subordinate.
Advantage It avoids conflicts, confusion & It avoids duplication of efforts and
chaos. wastage of resources.
Result It leads to better superior sub- ordinate It leads to smooth running of the
relationship. enterprise.
achieved. In fact, unity of command is not possible without unity of direction.
Therefore, it is obvious that they are different from each other but they are dependent on
each other i.e. unity of direction is a pre-requisite for unity of command. But it does not
automatically come from the unity of direction.
5. Equity
PRACTICE OF MANAGEMENT STUDY NOTES PREPARED BY MR ANTONY AMBAI Page 4
