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Tag: Management – Concept

  • UGC NET MBA Unit-1

    Management – Concept, Process, Theories and Approaches, Roles and Skills

    1. Meaning and Nature of Management

    Definition:
    Management is the process of planning, organizing, leading, and controlling organizational activities to achieve predetermined goals effectively and efficiently.

    Nature / Characteristics:

    1. Goal-Oriented – focuses on achieving organizational objectives.

    2. Continuous Process – management is ongoing at all levels.

    3. Universal – applicable in all types of organizations.

    4. Integrative Force – unites efforts of individuals.

    5. Dynamic Function – adapts to changes in environment.

    6. Multidisciplinary – draws knowledge from economics, psychology, sociology, etc.

    7. Group Activity – always done through people.

    Levels of Management:

    1. Top Level – Policy making (Board, CEO, MD).

    2. Middle Level – Interprets policies and coordinates (Department Heads).

    3. Lower Level – Supervisory, day-to-day control (Supervisors, Foremen).

    2. Process of Management

    The management process involves a series of interrelated functions:

    1. Planning: Setting objectives and deciding the future course of action.

    2. Organizing: Arranging resources and activities to implement plans.

    3. Staffing: Recruiting, training, and developing human resources.

    4. Directing: Guiding, motivating, and leading subordinates.

    5. Coordinating: Integrating efforts of different departments.

    6. Controlling: Measuring performance and taking corrective actions.

    3. Theories and Approaches of Management

    A. Classical Approach

    1. Scientific Management (F.W. Taylor):

      • Emphasizes efficiency through scientific methods.

      • Principles:

        • Science, not rule of thumb

        • Harmony, not discord

        • Cooperation, not individualism

        • Development of each worker to greatest efficiency

      • Tools: Time and motion study, standardization, differential wage system.

    2. Administrative Management (Henri Fayol):

      • Focused on management functions.

      • 14 Principles: Division of work, Authority, Discipline, Unity of Command, Unity of Direction, Subordination of individual interest, Remuneration, Centralization, Scalar Chain, Order, Equity, Stability of Tenure, Initiative, Esprit de Corps.

    3. Bureaucratic Approach (Max Weber):

      • Focused on structured hierarchy, formal rules, and merit-based promotion.

    B. Neo-Classical Approach

    • Human Relations Approach (Elton Mayo – Hawthorne Studies):
      Emphasized the role of social factors, teamwork, and motivation in productivity.
      Recognized informal groups and worker satisfaction.

    C. Modern Approaches

    1. Systems Approach: Organization as an open system interacting with its environment.

    2. Contingency Approach: “It depends” – management style depends on situation.

    3. Quantitative Approach: Use of mathematical models and statistics for decision-making.

    4. Management Roles and Skills

    A. Mintzberg’s Managerial Roles

    Role Type Roles Examples
    Interpersonal Figurehead, Leader, Liaison Representing firm, motivating employees
    Informational Monitor, Disseminator, Spokesperson

    Collecting and sharing information
    Decisional

    Entrepreneur, Disturbance handler, Resource allocator, Negotiator

    		 Problem-solving and decision-making

    B. Managerial Skills (Katz)

    1. Technical Skills – Knowledge of specific tools and techniques.

    2. Human Skills – Ability to work effectively with people.

    3. Conceptual Skills – Ability to view the organization as a whole.

    5. Management Functions (Detailed)

    Function Description Key Activities
    Planning Deciding objectives and actions in advance. Forecasting, setting goals, policy formulation
    Organizing Arranging resources and defining structure.

    Departmentation, delegation, authority
    Staffing Managing human resources.

    Recruitment, training, performance appraisal
    Coordinating Harmonizing activities of all departments.

    Integration, communication, synchronization
    Controlling Measuring and correcting performance.

    Setting standards, comparing results, corrective action

    6. Communication

    Definition: Process of transmitting information, ideas, and understanding from one person to another.

    Types of Communication:

    • Formal and Informal

    • Upward, Downward, Horizontal, Diagonal

    • Verbal, Non-verbal, and Written

    Communication Process:
    Sender → Message → Channel → Receiver → Feedback → Noise

    Barriers:

    • Physical (noise, distance)

    • Semantic (language issues)

    • Psychological (attitudes, emotions)

    • Organizational (hierarchy, authority gaps)

    7. Decision Making – Concept, Process, Techniques and Tools

    Concept:

    Decision making is the selection of the best alternative from available options.

    Process:

    1. Identify problem

    2. Analyze situation

    3. Generate alternatives

    4. Evaluate alternatives

    5. Choose the best option

    6. Implement the decision

    7. Review and feedback

    A. Techniques of Decision Making

    1. Qualitative Techniques

    Technique Description Use
    Brainstorming Group idea generation without criticism Creative problem-solving
    Nominal Group Technique

    Structured brainstorming with ranking

    		 Policy formulation
    Delphi Technique

    Expert consensus through repeated anonymous feedback

    		 Forecasting
    Heuristics Rules of thumb based on experience

    Quick operational decisions
    Intuition Gut feeling based on experience

    Strategic or emergency decisions
    Participative Decision-Making Involvement of employees

    Motivation and acceptance

    2. Quantitative Techniques

    Technique Meaning Application
    Marginal Analysis Compare marginal cost and marginal benefit Pricing, production level
    Cost–Benefit Analysis Compare all costs and benefits

    Investment decisions
    Break-even Analysis Find no-profit no-loss point

    Sales and cost planning
    Decision Tree Diagram showing alternatives, probabilities, and payoffs

    Risky investments
    Linear Programming Mathematical optimization under constraints

    Resource allocation
    Game Theory Competitive decision-making

    Oligopoly pricing
    Simulation What-if scenario testing

    Risk and finance modeling
    PERT/CPM

    Time and cost analysis for projects

    		 Project management
    Probability Analysis Expected value under risk

    Insurance, investments
    Sensitivity Analysis

    Effect of variable changes on outcomes

    		 Budgeting, project planning

    B. Tools of Decision Making

    Tool Purpose Example
    SWOT Analysis Identify internal strengths, weaknesses, and external opportunities/threats Strategic decisions
    Delphi Method Forecasting expert opinions

    Technological forecasting
    Simulation Models

    Predict outcomes of different scenarios

    		 Financial projections
    Operations Research Models Optimize resource use

    Transportation, assignment
    Brainstorming Sheets

    Record and evaluate creative ideas

    		 Product design
    Decision Matrix

    Compare alternatives on weighted criteria

    		 Vendor selection

    Conditions of Decision Making

    1. Certainty: Outcomes are known.

    2. Risk: Probabilities of outcomes known.

    3. Uncertainty: No information about probabilities.

    Common Decision-Making Errors:

    • Overconfidence Bias

    • Anchoring Bias

    • Confirmation Bias

    • Escalation of Commitment

    • Availability Bias

    8. Organisation Structure and Design

    Meaning:
    The framework that defines roles, responsibilities, authority relationships, and communication channels.

    Types of Structures:

    1. Line Structure: Simple, authority flows top to bottom.

    2. Functional Structure: Based on specialization (e.g., HR, Finance).

    3. Line and Staff Structure: Combines authority and expert advice.

    4. Matrix Structure: Dual authority (project + function).

    5. Project and Network Structures: Temporary, flexible structures for innovation.

    Key Concepts:

    • Authority: Legal right to command.

    • Responsibility: Obligation to perform assigned duties.

    • Delegation: Assigning authority to subordinates.

    • Centralization: Decision-making at top level.

    • Decentralization: Decision-making distributed.

    • Span of Control: Number of subordinates under one manager.

    9. Managerial Economics

    Meaning:
    Application of economic principles to solve managerial problems and improve decision-making.

    Importance:

    • Demand forecasting

    • Pricing decisions

    • Production and cost analysis

    • Profit management

    • Capital budgeting

    10. Demand Analysis

    Concept Description
    Law of Demand Inverse relation between price and quantity demanded.
    Utility Analysis

    Cardinal (measurable) and ordinal (preference-based) satisfaction.
    Indifference Curve

    Different combinations of goods giving same satisfaction.
    Elasticity of Demand

    Responsiveness of demand to change in price, income, etc.
    Demand Forecasting Estimation of future demand using statistical tools.

    11. Market Structures

    Type Firms Product Price Control Example
    Perfect Competition Many

    Homogeneous

    		 None Agriculture
    Monopoly One

    Unique

    		 Complete Railways
    Monopolistic Many

    Differentiated

    		 Limited FMCG
    Oligopoly Few

    Similar/Differentiated

    		 Interdependent Telecom, Airlines

    12. National Income

    Concepts:

    • GDP: Value of goods/services within a country.

    • GNP: GDP + income from abroad – income to foreigners.

    • NNP, NDP, PCI: Derived measures.

    Measurement Methods:

    1. Product Method

    2. Income Method

    3. Expenditure Method

    Difficulties: Non-monetary output, double counting, informal sector.

    13. Inflation

    Meaning: Continuous rise in the general price level.

    Types:

    • Demand-pull

    • Cost-push

    • Creeping, Walking, Galloping, Hyper

    Measurement:

    • CPI (Consumer Price Index)

    • WPI (Wholesale Price Index)

    • GDP Deflator

    Effects:

    • Reduces purchasing power

    • Hurts fixed income groups

    • Encourages speculation

    14. Business Ethics and CSR

    Business Ethics:

    Set of moral principles guiding business behavior.

    Importance: Builds trust, reputation, and long-term success.

    Corporate Social Responsibility (CSR):

    Company’s responsibility toward society beyond profit-making.

    Carroll’s Model:

    1. Economic

    2. Legal

    3. Ethical

    4. Philanthropic responsibilities

    Ethical Dilemmas: Conflict between profit and moral principles.

    15. Corporate Governance

    Meaning: System of rules, practices, and processes by which a firm is directed and controlled.

    Principles:
    Transparency – Accountability – Fairness – Responsibility

    Mechanisms:

    • Board of Directors

    • Audit Committees

    • Independent Directors

    • SEBI Guidelines

    16. Value-Based Organisation

    Definition:
    An organization guided by shared ethical values such as trust, honesty, and transparency.

    Benefits:

    • Strong culture

    • Employee commitment

    • Customer loyalty

    • Long-term sustainability