Note for Management Concepts and Practices - MCP By moni s

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MB790 Management Concepts and Practices Unit I MB790 MANAGEMENT CONCEPTS AND PRACTICES UNIT I 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 see that it is done in the best and cheapest way”. Management is a purposive activity. It is something that directs group efforts towards the attainment of certain pre - determined goals. It is the process of working with and through others to effectively achieve the goals of the organization, by efficiently using limited resources in the changing world. Of course, these goals may vary from one enterprise to another. E.g.: For one enterprise it may be launching of new products by conducting market surveys and for other it may be profit maximization by minimizing cost. Management involves creating an internal environment: - It is the management which puts into use the various factors of production. Therefore, it is the responsibility of management to create such conditions which are conducive to maximum efforts so that people are able to perform their task efficiently and effectively. It includes ensuring availability of raw materials, determination of wages and salaries, formulation of rules & regulations etc. Therefore, we can say that good management includes both being effective and efficient. Being effective means doing the appropriate task i.e, fitting the square pegs in square J.C.Vijayshree 1

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MB790 Management Concepts and Practices Unit I holes and round pegs in round holes. Being efficient means doing the task correctly, at least possible cost with minimum wastage of resources. Importance of Management:  It helps in Achieving Group Goals - It arranges the factors of production, assembles and organizes the resources, integrates the resources in effective manner to achieve goals. It directs group efforts towards achievement of pre-determined goals. By defining objective of organization clearly there would be no wastage of time, money and effort. Management converts disorganized resources of men, machines, money etc. into useful enterprise. These resources are coordinated, directed and controlled in such a manner that enterprise work towards attainment of goals.  Optimum Utilization of Resources - Management utilizes all the physical & human resources productively. This leads to efficacy in management. Management provides maximum utilization of scarce resources by selecting its best possible alternate use in industry from out of various uses. It makes use of experts, professional and these services leads to use of their skills, knowledge, and proper utilization and avoids wastage. If employees and machines are producing its maximum there is no under employment of any resources.  Reduces Costs - It gets maximum results through minimum input by proper planning and by using minimum input & getting maximum output. Management uses physical, human and financial resources in such a manner which results in best combination. This helps in cost reduction.  Establishes Sound Organization - No overlapping of efforts (smooth and coordinated functions). To establish sound organizational structure is one of the objective of management which is in tune with objective of organization and for fulfillment of this, it establishes effective authority & responsibility relationship i.e. who is accountable to whom, who can give instructions to whom, who are superiors & who are subordinates. Management fills up various positions with right persons, having right skills, training and qualification. All jobs should be cleared to everyone.  Establishes Equilibrium - It enables the organization to survive in changing environment. It keeps in touch with the changing environment. With the change is J.C.Vijayshree 2

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MB790 Management Concepts and Practices Unit I external environment, the initial co-ordination of organization must be changed. So it adapts organization to changing demand of market / changing needs of societies. It is responsible for growth and survival of organization.  Essentials for Prosperity of Society - Efficient management leads to better economical production which helps in turn to increase the welfare of people. Good management makes a difficult task easier by avoiding wastage of scarce resource. It improves standard of living. It increases the profit which is beneficial to business and society will get maximum output at minimum cost by creating employment opportunities which generate income in hands. Organization comes with new products and researches beneficial for society. Evolution of scientific management Scientific Management  The process of approaching various aspects of organizations in a scientific manner using scientific tools such as research, management, and analysis. Scientific Management Theorists  Frederick Taylor  Henry Gannt  Frank and Lillian Gilbreth History of the Era Industrial Age - Migration to cities - Reliance on electricity and gasoline - Changes both on the farm and in factories - Autos, airplanes, movies, and radio became common - 1913 – Federal Reserve System created - WWI begins and Panama Canal opens - 1919-1933 Prohibition - 1920 - Nineteenth Amendment - 1929 - Stock Market Crash Prior to Scientific Management J.C.Vijayshree 3

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MB790 Management Concepts and Practices Unit I  Owner, manager, sales, and front office personnel had little direct contact with production activity.  A “superintendent” was responsible for all planning and staff functions.  Worked with “journeyman” mechanics to try to schedule production. No recognized staff functions.  Work methods were determined by individual mechanics based on personal experience, preference, and what tools were available for the job. “Rule of Thumb” Frederick Taylor  Efficiency Expert in U.S. Steel Industry  Invented New Tool Designs and Handling Methods  Designed Stop-Watch Task Timing  Created Piece-Rate Payment Scheme  Developed Industrial Departments Time Studies and the Piece-Rate System  Studied most efficient worker  Used stop-watch timing to measure each production step  Eliminated any unnecessary movements  Designed standardized instruction cards for employees  Employees paid for meeting the established rate of production Henry Gnatt  Worked with Taylor at Midvale Steel Company  Specialized in incentive wage plans  Introduced a differential piece rate system – Task work with a bonus  Permitted workers to improve the production system  Introduced a bonus for foremen based on the number of their workers who earned bonus J.C.Vijayshree 4