Principles of Management

A program of
Institute of Business Management
Instructor: Navaid M. Khan

All students must carry to the class the course text book
MODERN MANAGEMENT
by
SAMUEL T. CERTO
All those who do not have the text book in the class, there marks will be
deducted

Some Definitions of Management that you need to know for this program

F.W TAYLOR: Management is the art of knowing what you want to do in the best
and cheapest way.
Broadly management is managing people and other resources in the organization
and outside the organization for achieving the mission and objectives of the
organization.
It is nothing but managing people with tact; managing people for achieving targets.
My favorite definition of Management :
The process of attaining organizational goals by effectively and efficiently
planning, organizing, leading, and controlling the organizations human,
physical, financial, and information resources.
Manager: Someone who participates in the management process by planning,
organizing, leading, or controlling the organizations resources.
Entrepreneur: An individual who conceives an idea of what product or service to
offer and launches and runs his business.
Organization: A group of two or more people who work together in a consciously
structured setting to achieve group goals.
Customers: Individuals and organizations that buy the goods and services produced
by an organization
Performance: The degree to which individuals and organizations achieve
organizations goal with effectiveness and efficiency
 Effectiveness: The ability to accomplish the organizations goals
Efficiency: The ability to minimize waste of organizations available resources
Planning: The process of formulating goals and developing ways to achieve it
Organizing: The process of creating a framework for developing and assigning
tasks, obtaining and allocating resources and coordinating work activities to
achieve goals
Leading / Influencing: The process of using influence to motivate others to work
toward accomplishing goals.
Controlling: The process of monitoring and regulating the organizations progress
toward achieving goals.

MANAGEMENT CHALLENGES IN THE TWENTY-FIRST CENTURY

Twenty first century is different from the last century in every way.
1. It is a century of look a like products and services. This has resulted on account
of technological development worldwide. To top it all we have WTO in operation
for last decade. Here we have to work at product/service differentiation and
creating our competitive advantages. We need to do everything better and faster.
2. It is a century where CHANGE dominates our businesses. Change has always
been there ever since Adam and Eve came down on this earth but what makes
twenty first century unique is the speed and quantum of Change which has
multiplied a hundred times. Twenty first century is not about managing Change, it
is about staying ahead of Change. Today we have to learn to do things differently
or do different things.
3. There will be five key words in the twenty first century for all businesses. These
will be:
- QUALITY
- PRODUCTIVITY
- CUSTOMER SATISFACTION
- INNOVATION
- SPEED
All those who are winners in these areas will be the Success stories - others history
or statistics.
Twenty first century will see two kinds of Managers. The Quick Manager and the
Dead Manager - Tom Peters
 Another Success Formula
I learned that the only way you are going to get anywhere in life is to work hard
at it.
If you do, you'll win. If you don't you won't.
We need to have our blue print for success. It is our roadmap. We need to decide
what we have to do, how much we have to do and what not to do. Time is a limited
resource and we should trace where our time is going. Before going to bed, we can
ask the following questions:
- Am I clear on what I want in my life?
- Do I have a strategy to reach what I want?
- Do I have a focus on my goal?
- Am I putting in adequate hours of work in a day?
- Is there anything else I can do to increase the quality of my work?
- Should I work even harder?
- Do I suffer from laziness and lack of enthusiasm?
- What sacrifice I have to make to make my dream come true?

WATCH THESE TWO VIDEOS:

http://www.youtube.com/watch?v=8PdmNbqtDdI&feature=related
http://www.youtube.com/watch?v=PvbG9Sjp97o&feature=channel
and also this
http://www.youtube.com/watch?v=2klgtcm4hB4&feature=related for FUN!

Different perspectives of
Management
1. The Classical Management Perspective
2. The Behavioral Management Perspective
3. Contemporary Management Perspectives
 The Classical Management
Perspective
A set of management theories that focus on increasing the efficiency of the
organization as a whole

SCIENTIFIC MANAGEMENT THEORIES

Focus on one best way to do it. Focuses on rational, scientific study of work
situations to improve employee efficiency.
Fredrick W. Taylor
Steel Mills
Frank Bunker Gilbreth & Lillian Evelyn Moller Brick laying trade
Henry Gant
Pay incentives
Harrington Emerson
Organizational efficiency

Harrington Emerson's Twelve Principles of

Efficiency
1. Clearly defined ideals: Managers must know what they
want to accomplish
2. Common sense: Managers must develop the ability to
differentiate the woods from trees.
3. Competent counsel: Managers must actively seek advice
from knowledgeable others
4. Discipline: Managers should set up the organization so the
employees can obey the rules
5. The fair deal: Managers must seek out justice and fairness
6. Reliable, immediate and adequate records: Managers
should have facts available to them to make decisions
7. Dispatching: Managers should use scientific planning of
each function so the organization as a whole can function
 smoothly and achieve its goals
8. Standards and schedules: Managers must develop
methods for performing their tasks and establish a time to
perform each one
9. Standardized conditions: Managers must maintain a
uniformity of environment
10. Standardized operations: Managers must maintain a
uniformity of method
11. Written standard-practice instructions: Managers must
systematically and accurately reduce each practice to
writing
12. Efficiency-reward: Managers should reward employees
for tasks successfully completed

14 principles of Henry Fayol

1. Division of work: Division of work and specialization produces more and
better work with the same effort.
2. Authority and responsibility: Authority is the right to give orders and the
power to exact obedience. A manager has official authority because of her
position, as well as personal authority based on individual personality,
intelligence, and experience. Authority creates responsibility.
3. Discipline: Obedience and respect within an organization are absolutely
essential. Good discipline requires managers to apply sanctions whenever
violations become apparent.
4. Unity of command: An employee should receive orders from only one
superior.
5. Unity of direction: Organizational activities must have one central
authority and one plan of action.
6. Subordination of individual interest to general interest: The interests of one
employee or group of employees are subordinate to the interests and goals of
the organization. This is necessary to maintain unity and to avoid friction
among the employees
7. Remuneration of personnel: Salaries - the price of services rendered by
employees - should be fair and provide satisfaction both to the employee and
employer.
 8. Centralization: The objective of centralization is the best utilization of
personnel. The degree of centralization varies according to the dynamics of
each organization.
9. Scalar chain: A chain of authority exists from the highest organizational
authority to the lowest ranks.
10. Order: Organizational order for materials and personnel is essential. The
right materials and the right employees are necessary for each organizational
function and activity.
11. Equity: In organizations, equity is a combination of kindliness and justice.
Both equity and equality of treatment should be considered when dealing with
employees.
12. Stability of tenure of personnel: To attain the maximum productivity of
personnel, a stable work force is needed.
13. Initiative: Thinking out a plan and ensuring its success is an extremely
strong motivator. Zeal, energy, and initiative are desired at all levels of the
organizational ladder.
14. Esprit de corps: Teamwork is fundamentally important to an
organization. Work teams and extensive face-to-face verbal communication
encourages teamwork.

The Behavioral Management

Perspective
When individuals are made to feel special their physical and intellectual
performance improves. Psychologists call this the Hawthorne effect.
Successful coaches, fitness trainers, and instructors often use this effect by
providing members of their group with as much support and sense of
importance as possible.
It was found that productivity varied due to other factors such as the weekly
cycle of work or the seasonal temperature, lighting and so the initial
conclusions were overstated and the effect was weak or illusory
Hawthorne experiments brought to light ideas concerning motivational
influences, job satisfaction, resistance to change, group norms, worker
participation, and effective leadership.
 From the leadership point of view today, organizations that do not pay
sufficient attention to people and the deep sentiments and relationships
connecting them are consistently less successful than those that do.
This was the start of Human Relations Movement
ABRAHAM MASLOW
Hierarchy of Needs
Hierarchy of five human motivational needs arranged by ascending order of
importance, developed by Abraham Maslow.
The five ascending needs are

(1) Physiological,
The physiological needs of the organism, those enabling homeostasis, take first
precedence. These consist mainly of:
- the need to breathe
- the need to regulate homeostasis
- the need to eat
- the need to dispose of bodily wastes
(2) Safety Needs
When physiological needs are met, the need for safety will emerge. Safety and
security rank above all other desires. These include:
- Physical security - safety from violence, delinquency, aggressions
- Security of employment
- Security of revenues and resources
- Moral and physiological security
- Familial security
- Security of health
- Security of personal property against crime
(3) Social Needs
After physiological and safety needs are fulfilled, the third layer of human
needs is social. This involves emotionally-based relationships in general, such
as:
- friendship
- love and intimacy
- having a supportive and communicative family
(4) Esteem Needs
All humans have a need to be respected, to have self-respect, and to respect
others. People need to engage themselves in order to gain recognition and
have an activity or activities that give the person a sense of contribution and
self-value, be it in a profession or hobby. Imbalances at this level can result in
low self-esteem, inferiority complexes
(5) Self-Actualization.
Some characteristics of Self Actualized people
- They embrace the facts and realities of the world (including themselves)
rather than denying or avoiding them.
- They are spontaneous in their ideas and actions.
- They are creative.
- They are interested in solving problems; this often includes the problems of
others. Solving these problems is often a key focus in their lives.
- They feel a closeness to other people, and generally appreciate life.
- They have a system of morality that is fully internalized and independent of
external authority.
- They judge others without prejudice, in a way that can be termed objective.
In short, self-actualization is reaching one's fullest potential.
Only unsatisfied needs are motivators. Once a need is satisfied, the next level
emerges as a motivator. Only unsatisfied needs are motivators. Once a need is
satisfied, the next level emerges as a motivator.
Implications for Management of Theory of Hierarchy
(1) Physiological Needs: Provide lunch breaks, rest breaks and wages that are
sufficient to purchase the essentials of life
(2) Safety Needs: Provide a safe working environment, retirement benefits
and job security
(3) Social Needs: Create a sense of community via team based projects
(4) Esteem Needs: Recognizing achievements to make employees feel
appreciated and valued. Offer job titles that convey the importance of position
(5) Self Actualization: Provide employees a challenge and opportunity to
reach their full career potential.

DOUGLAS McGREGOR THEORY X & Y

Theory X
With Theory X assumptions, management's role is to coerce and control
employees.
- People have an inherent dislike for work and will avoid it whenever possible.

- People must be coerced, controlled, directed, or threatened with punishment

in order to get them to achieve the organizational objectives.
- People prefer to be directed, do not want responsibility, and have little or no
 ambition.
- People seek security above all else.
Theory Y
With Theory Y assumptions, management's role is to develop the potential in
employees and help them to release that potential towards common goals.
- Work is as natural as play and rest.
- People will exercise self-direction if they are committed to the objectives
(they are NOT lazy).
- Commitment to objectives is a function of the rewards associated with their
achievement.
- People learn to accept and seek responsibility.
- Creativity, ingenuity, and imagination are widely distributed among the
population. People are capable of using these abilities to solve an
organizational problem.
- People have potential.
Theory A: the American approach
1. Short term employment
2. Individual decision making
3. Individual responsibility
4. Rapid evaluation and promotion
5. Explicit formalized control
6. Specialized career path
7. Segmented concern
Theory J: the Japanese approach
1. Lifetime employment
2. Consensual decision making
3. Collective responsibility
4. Slow evaluation and promotion
5. Implicit inform control
6. Non-Specialized career path
7. Holistic concern
Theory Z: the Modified American & Japanese approach
1. Long term employment (American + Japanese)
2. Consensual decision making (Japanese)
3. Individual responsibility (American)
4. Slow evaluation and promotion (Japanese)
5. Implicit informal control with explicit formalized measures (American +
 Japanese)
6. Moderately Specialized career path (American + Japanese)
7. Holistic concern, including family (Japanese)
Syllabus for First Midterm:
First two chapters from the text book plus all that I have taught in the class
and everything that appears on this website.
My Life principles
• - To succeed you need to be Daring, Different and the First
• - Winnig is not Everything; it is the Only thing!
• - The best way to predict your Future is to Invent it!
• - I shall never be doomed to Mediocrity