PRINCIPLES OF MANAGEMENT 1

UNIT - I
( 2 marks)
1. Define Management
“Management is the art of getting things done through and with people in formally
organized groups” - Harold Koontz
It is an art of creating an environment in which people can perform and individuals and can
co-operate towards attainment of group goals”.
2. Specify the skills required for Manager.
 Technical skill
 Human Relation Skill
 Conceptual Skill
 Analytical Skill
 Administrative Skill
3. State the meaning of Espirit decorps
Espirit decorps means union is strength. It is one of the fourteen principles of
management developed by Henry Fayol. Management should not adopt the short
sighted policy of divide rule. It should be convinced that union is strength. He favours
the need for team work and stressed the importance of communication in obtaining it.
4. Describe the meaning of business ethics.
Business ethics refers to implementing appropriate business policies and
practices with regard to arguably controversial subjects. Some issues that come up in a
discussion of ethics include corporate governance, insider trading, bribery,
discrimination, social responsibility, and fiduciary responsibilities.
5. What do you mean by social responsibility?
Social responsibility is a philosophy which states that a business should be
concerned not only with-it performance for profit but also with conferring benefits on
various societal members such as employees, customers, owners and society in general.

UNIT – I
(16arks)
1. Explain the Functions of Management.
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Management is defined as the procedure of organising, directing, planning and controlling the
efforts of organisational members and of managing organisational sources to accomplish
particular goals.

 Planning is the purpose of ascertaining in advance what is supposed to be done and

who has to do it. This signifies establishing goals in advance and promoting a way of
delivering them effectively and efficiently. In an establishment, the aim is the
obtainment and sale of conventional Indian handloom and workmanship articles. They
trade furnishings, ready-mades, household items and fabrics made out of classical
Indian textiles.
 Organising is the administrative operation of specifying grouping tasks, duties,
authorising power and designating resources needed to carry out a particular system.
Once a definite plan has been set for the completion of an organisational intent, the
organising party reviews the actions and resources expected to execute the program. It
ascertains what actions and resources are needed. It determines who will do a distinct
job, where and when it will be done.
 Staffing is obtaining the best resources for the right job. A significant perspective of
management is to make certain that the appropriate people with the apt skills are
obtainable in the proper places and times to achieve the goals of the company. This is
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also called the human resource operations and it includes activities such as selection,
placement, recruitment and coaching of employees

 Directing involves directing, leading and encouraging the employees to complete the
tasks allocated to them. This entails building an environment that inspires employees
to do their best. Motivation and leadership are 2 chief elements of direction. Directing
also includes communicating efficiently as well as managing employees at the
workplace. Motivating workers means simply building an atmosphere that urges them
to want to work. Leadership is inspiring others to do what the manager wants them to
do.
 Controlling is the management operation of controlling organisational achievement
towards the accomplishment of organisational intentions. The job of controlling
comprises ascertaining criteria of performance, computing the current performance,
comparing this with organised rules and taking remedial action where any divergence
is observed. Here management should ascertain what activities and outputs are
important to progress, how and where they can be regulated and who should have the
power to take remedial response.
2. Write down the nature and Characteristics of Management .

 Goal-oriented.
 Universal.
 Integrative Force.
 Social Process.
 Multidisciplinary.
 Continuous Process.
 Intangible
 Art as well as Science.
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Management goal-oriented:
Management is not an end in itself. It is a means to achieve certain goals. Management has no
justification to exist without goals. Also, Management goals call group goals or organizational
goals. The basic goal of management is to ensure efficiency and economy in the utilization of
human, physical and financial resources. The success of management measure by the extent to
which one of the established goals achieved. Thus, management is purposeful.
Management is universal:
Management is an essential element of every organized activity irrespective of the size or type
of activity. Wherever two or more persons engage in working for a common goal, management
is necessary. All types of organizations, e.g., family, club, university, government, army,
cricket team, or business, require management. Thus, management is a pervasive activity. The
fundamental principles of management are applicable in all areas of organized effort. Also,
Managers at all levels perform the same basic functions.
Management is an Integrative Force:
The essence of management lies in the coordination of individual efforts into a team. Also,
Management reconciles the individual goals with organizational goals. As the unifying force,
management creates a whole that is more than the sum of individual parts. Also, It integrates
human and other resources.
Management is a Social Process:
Management is done by people, through people, and for people. It is a social process because
it is concerned with interpersonal relations. The human factor is the most important element in
management. According to Appley, “Management is the development of people not the
direction of things. A good manager is a leader, not a boss. It is the pervasiveness of human
element which gives management its special character as a social process”.
Management is multidisciplinary:
Management has to deal with human behavior under dynamic conditions. Therefore, it depends
upon wide knowledge derived from several disciplines like engineering, sociology,
psychology, economics, anthropology, etc. Also, The vast body of knowledge in management
draws heavily upon other fields of study.
Management is a continuous Process:
Management is a dynamic and on-going process. The cycle of management continues to
operate so long as there is an organized activity for the achievement of group goals.

Management is Intangible:
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Management is an unseen or invisible force. It cannot see but its presence can be felt
everywhere in the form of results. However, the managers who perform the functions of
management are very much tangible and visible.
Management is an Art as well as Science:
It contains a systematic body of theoretical knowledge and it also involves the practical
application of such knowledge. Management is also a discipline involving specialized training
and an ethical code arising out of its social obligations. Based on these characteristics,
management may be defined as a continuous social process involving the coordination of
human and material resources to accomplish desired objectives. It involves both the
determination and the accomplishment of organizational goals.
3. Debate whether the Management is an Arts or Science of Both. .
Management as Art
Management can be recognised as both an art as well as science. Let us know why it is
considered as both science and art.
 Management has a well-defined literature which is needed for gathering knowledge in
the theories and accelerate learning.
 There are several examples of management literature which is available such as Taylors
Scientific Management Theory and Henry Fayol’s 14 principles of Management. These
theories help in learning the various concepts of management.
 Management knowledge can be employed by everyone in their own way, very much
like arts where words can be expressed in form of writing differently by different poets,
and music notes arranged by musicians to present a musical piece, or the use of colours
by a painter to draw vivid paintings.
 Furthermore, managers use the various theories and principles in tackling situations to
make use of management knowledge.
 Arts is all regarding communicating and innovating using creativity such as two artists
will enact the same scene in two different ways. Similarly, two distinct managers will
be managing the situation differently. Sometimes managers can come up with
innovative and fresh ideas to address the situation.
Management as Science

 Science is a methodical discipline and management also shares similar features.

 Like science, management also relies upon theories and principles to address issues that
arise.
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 Management has a separate glossary and terms which it uses to define certain processes.
 Theories in science have been developed after a prolonged observation and repeated
experiments, similarly to some extent management also bases its theories on regular
observation and experiments, such theories will act as guidelines for management in
the long run.
 Scientific theories have universal legality, and in management also we see the principles
are to some extent universally valid, and some can change as per the circumstances.
 Such theories and principles can be used as basic knowledge for instructing the
managers.
Hence Management is an aggregate of both art and science.

4. Discuss the Social Responsibilities of Business to the various Stake holders

The responsibility of business towards different stakeholders are:
Towards consumer
 Production of safe items by maintaining quality standards
 To ensure a regular supply of goods and supply
 To educate consumers regarding the use and content of the product
 To refrain from profiteering. Adulteration, misleading advertisements and
unfair and unscrupulous trade activities
Towards employees
 Providing fair and reasonable compensation and benefits
 Providing safe and good working conditions
 To provide them opportunities for personal growth and development
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 Not to do favouritism and discrimination while appointing, promoting the

employees
 To give them opportunity to participate in management and must respect
their right form unions.

Towards share holders / investors

 To ensure the safety of investment and to maximise the wealth of the
owners
 To ensure fair and regular return on investment
 To give complete information regarding the financial position of the
business
 To make optimum utilisation of firms resources in the interest and for the
benefit of investors.
Towards the Government and Community
 To abide by rules, regulations and laws.
 To pay tax and duties on time
 To give their required contribution in solving social problems
 To co-operate in implementing policies and plans
 To have a good citizen and act according to the accepted values of the
society.
 To protect the environment and maintain natural beauty
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4. What is Henry Foyal’s contribution to the management thoughts?

Division of work;

Specialization helps to “produce more and better work with the same effort” by reducing “the
number of objects to which attention and effort must be directed.”

Authority;

“Authority is not to be conceived of apart from responsibility, that is apart from sanction—
reward or penalty—which goes with the exercise of power”; in other words, having and
exercising authority comes with responsibility and consequences.

Discipline;

“Obedience, application, energy, behavior, and [the respecting of agreements]…is absolutely

essential for the smooth running of business.” That being said, “the state of discipline of any
group of people depends essentially on the worthiness of its leaders”; Fayol states that any
problem with discipline “mostly results from the ineptitude of the leaders.”

Unity of command;

“For any action whatsoever, an employee should receive orders from one superior only…
Should it be violated, authority is undermined, discipline is in jeopardy, order disturbed, and
stability threatened.”

Unity of direction;

A group of activities with the same objective should have one plan and one person in charge.
This is “essential to unity of action, coordination of strength, and focusing of effort.”

Subordination of individual interests to the general interests;

Everyone should work in the combined best interests of everyone involved rather than in their
own best interests.

Remuneration;

Remuneration is dependent on a number of factors, but “it should be fair and, as far as is
possible, afford satisfaction both to the personnel and firm.”

Centralization;
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“The question of centralization or decentralization…is a matter of finding the optimum degree

for the particular [decision/task]” and the capacity and/or preferences of the manager.

Scalar chain (line of authority);

Authority should move from the top down in order to maintain unity of command, but lateral
communication is possible if superiors are aware of and support it.

Order;

Materials must have “a place appointed for each thing and each thing must be in its appointed
place.” Places should also be “suitably arranged” and “well chosen.” This is to avoid “useless
handling, lost time, [and] risk of mistakes.”

Equity;

Managers should “strive to instill [a] sense of equity” throughout their chain of command and
use “equity and equality of treatment” when dealing with employees.

Stability of tenure of personnel;

“Instability of tenure is at one and the same time cause and effect of bad running.” In the case
of personnel, they should be in a position long enough to have time to “render worthwhile
service”; if not, “the work will never be properly done.” But, like all other principles, it’s “a
question of proportion”; tenure can also be too long.

Initiative;

“It is essential to encourage and develop [initiative],” but to also ensure “respect for authority
and for discipline.” “Other things being equal…a manager able to permit the exercise of
initiative on the part of subordinates is infinitely superior to one who cannot do so;”

Esprit de corps.

“Harmony, union among the personnel of a concern, is great strength in that concern” and
“effort…should be made to establish it.”
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UNIT – II

( 2 Marks)

1.Define planning.

“ Planning is the process of deciding in advance what is to be done, who is to do it, how
it is to be done and when it is to be done” -Henry Fayol

2.Explain the meaning of derivative plan.

Derivative plans are the supporting plans, which are formulated for executing the primary plan.
When the primary plan is decided, the next logical step is to formulate the derivative plans.

3.Define decision making

Decision-making is the selection based on some criteria from two or more possible
alternatives. “-—George R.Terry

“Decision-making is the process of identifying and selecting a course of action to solve

a specific problem” - K.M.Bartol and D.C.Martin

4.What is Strategic decisions?

Strategic decision-making is the process of comprehending the interaction of decisions

and their impact on an organization to gain an advantage. Its true power lies in combining the
right decision with the right time

5.What is strategy?

Strategy is an action that managers take to attain one or more of the organization's goals.
Strategy can also be defined as “A general direction set for the company and its various
components to achieve a desired state in the future. Strategy results from the detailed strategic
planning process”.
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UNIT II (16 marks)

1.Explain the process of Planning.

Process of Planning

The process of planning consists of the following steps:

 Establishing objectives:

The first step in the planning process is to identify the goals of the organisation. The
internal as well as external conditions affecting the organisation must be thoroughly examined
before setting objectives. The objectives so derived must clearly indicate what is to be
achieved, where action should take place, who is to perform it, how it is to be undertaken and
when is it to be accomplished. In other words, managers must provide clear guidelines for
organisational efforts, so that activities can be kept on the right track.

 Developing premises:

After setting objectives, it is necessary to outline planning premises. Premises are

assumptions about the environment in which plans are made and implemented. Thus,
assumptions about the likely impact of important environmental factors such as market demand
for goods, cost of raw materials, technology to be used, population growth, government policy,
etc. on the future plans are made. Plans should be formulated by the management, keeping the
constraints imposed by internal as well as external conditions in mind.

 Evaluating alternatives and selection:

After establishing the objectives and planning premises, the alternative courses of
action have to be considered. The pros and cons as well as the consequences of each alternative
course of action must be examined thoroughly before a choice is made.
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 Formulating derivative plans:

After selecting the best course of action, the management has to formulate the
secondary plans to support the basic plan. The plans derived for various departments, units,
activities, etc., in a detailed manner are known as ‘derivative plans’. For example, the basic
production plan requires a number of things such as availability of plant and machinery,
training of employees, provision of adequate finance, etc. To ensure the success of a basic plan,
the derivative plans must indicate the time schedule and sequence of performing various tasks.

 Securing cooperation and participation:

The successful implementation of a plan depends, to a large extent, on the whole-

hearted cooperation of the employees. In view of this, management should involve operations
people in the planning activities.

 Providing for follow-up:

Plans have to be reviewed continually to ensure their relevance and effectiveness. In

the course of implementing plans, certain facts may come to light that were not even thought
of earlier. In the light of these changed conditions, plans have to be revised. Without such a
regular follow-up, plans may become out-of-date and useless. Moreover, such a step ensures
the implementation plans along right lines.

2.Write down the importance of Planning

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Planning is definitely significant as it directs us where to go, it furnishes direction and decreases
the danger of risk by making predictions. The significant advantages of planning are provided
below:

 Planning provides directions: Planning assures that the objectives are certainly
asserted so that they serve as a model for determining what action should be taken and
in which direction. If objects are well established, employees are informed of what the
company has to do and what they need do to accomplish those purposes.
 Planning decreases the chances of risk: Planning is an activity which permits a
manager to look forward and predict changes. By determining in prior the tasks to be
completed, planning notes the way to deal with changes and unpredictable effects.
 Planning decreases overlapping and wasteful activities: Planning works as the
foundation of organising the activities and purposes of distinct branches, departments,
and people. It assists in avoiding chaos and confusion. Since planning guarantees
precision in understanding and action, work is conducted on easily without delays.
 Planning encourages innovative ideas: Since it is the primary function of
management, new approaches can take the form of actual plans. It is the most
challenging project for the management as it leads all planned actions pointing to
growth and of the business.
 Planning aids decision making: It encourages the manager to look into the future and
make a decision from amongst several alternative plans of action. The manager has to
assess each option and pick the most viable plan.
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3.Elaborate on the steps involved in decision making.

Decision-making is an important aspect of management. The decision which is made

today, by the manager, decides how will be the future of the organization. And for a rational and
effective decision, a manager must go through the 7 steps of the process of decision-making.

Step 1: Identification of Problems

The first and most important step of the decision-making process is to identify the main
problems. Problems may arise due to the internal and external factors of an organization.
It is believed that the identification of problems is the completion of half of the decision-making
process. Identifying the problem is similar to diagnosing a disease, which helps in providing
the right medicine to the patients. And when a problem is correctly understood, it becomes easy
to solve.
Step 2: Analysis of Problems
After completing the first step another step of the decision-making process is analysing the
identified problems. For this, a decision-maker has to accumulate all the facts, data, and
information related to problems.
Analysing the problems is a part of the decision-maker to study the main reasons for problems
and their impact on short as well as long-term organizational performance. A quick analysis of
the problem by accumulating all the related facts, data, and information is a must to find out
the actual source of the problem.
Step 3: Development of Alternatives
A problem may have various alternative solutions. The decision-maker has to identify and
study all the possible solutions. A decision-maker should be creative and innovative to identify
all the alternative solutions.
 PRINCIPLES OF MANAGEMENT 15

He can identify alternatives from various sources like records and files of problems, opinions,
and views of experts, discussions with subordinates, creditors, customers, etc.
Step 4: Evaluation of Alternatives
Here every alternative is evaluated and studied in terms of the decision-making process. All
alternatives should be studied by considering the efforts involved and the outcome expected.
Step 5: Selection of Best Alternative
This is the final stage of the decision-making process after the evaluation of various
alternatives. Here the best feasible alternative is being selected. For the best alternative
manager should consider short-term as well as long-term impacts on organizational
performance.
Step 6: Implementation of Alternative
This is the operational part of the decision-making process. A decision can be made by
evaluating the alternatives with the help of available resources but implementing them is quite
difficult. The efficiency of the decision-maker is measured in terms of effective implementation
of the decision.
Step 7: Review of Implementation
Reviewing the implementation means knowing its actual performance it. As decision-making
is a continuous process it is necessary to evaluate the performance from time to time.

4.Describe the types of decision.

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Strategic Decisions and Routine Decisions

As the name suggests, routine decisions are those that the manager makes in the daily functioning
of the organization, i.e. they are routine. Such decisions do not require a lot of evaluation, analysis
or in-depth study. In fact, high-level managers usually delegate these decisions to their
subordinates.
Programmed Decisions and Non-Programmed Decisions

Programmed decisions relate to those functions that are repetitive in nature. These
decisions are dealt with by following a specific standard procedure. These decisions are usually
taken by lower management. For example, granting leave to employees, purchasing spare parts
etc are programmed decisions where a specific procedure is followed.

Non-programmed decisions arise out of unstructured problems, i.e. these are not routine
or daily occurrences. So there is no standard procedure or process to deal with such issues.
Usually, these decisions are important to the organization. Such decisions are left to upper
management. For example, opening a new branch office will be a non-programmed decision.
Policy Decisions and Operating Decisions

Tactical decisions pertaining to the policy and planning of the firm are known as policy
decisions. Such decisions are usually reserved for the firm’s top management officials. They have
a long term impact on the firm and require a great deal of analysis.

Operating decisions are the decisions necessary to put the policy decisions into action.
These decisions help implement the plans and policies taken by the high-level managers. Such
decisions are usually taken by middle and lower management. Say the company announces a
bonus issue. This is a policy decision. However, the calculation and implementation of such bonus
issue is an operating decision.
Organizational Decisions and Personal Decisions

When an executive takes a decision in an official capacity, on behalf of the organization,

this is an organizational decision. Such decisions can be delegated to subordinates. However, if
the executive takes a decision in a personal capacity, that does not relate to the organization in any
way this is a personal decision. Obviously, these decisions cannot be delegated.
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Individual Decisions and Group Decisions

When talking about types of decisions, let us see individual and group decisions. Any
decision taken by an individual in an official capacity it is an individual decision. Organizations
that are smaller and have an autocratic style of management rely on such decisions. Group
decisions are taken by a group or a collective of the firm’s employees and management. For
example, decisions taken by the board of directors are a group decision.

5.Write down the steps to make planning effective.

1. Create climate for planning:
Conducive climate must be provided so that activities proceed smoothly and
systematically and as planned. Planning must not be left to chance. A stepwise sequence needs
to be created so that top managers are able to remove obstacles to planning. This can be
achieved by establishing clear-cut goals, realistic planning premises and offering required
information and appropriate staff assistance at various levels as and when required.
2. Support from the top management:
Since planning is pervasive in nature hence the concept of planning must be started at
the top levels of the organisation. In other words, the planning cannot be initiated until and
unless the top management supports this concept and provides continuous attention. They must
be willing to extend a helping hand, whenever required.
3. Equal Participation:
Plans can only be implemented if the employees acknowledge this concept and are
ready to participate in the whole processes. So, it is necessary to secure acceptance and
commitment from each and everyone in the organisation. One way to increase commitment is
to encourage subordinate’s participation in the planning process. Planning comes alive when
employees are involved in setting goals and determining the means to reach them.
4. Proper communication:
Nothing can be possible in the organisation until and unless there is a proper and a well-
developed communication network hence goals, premises and policies must be properly
communicated to people. People must know what they are supposed to do, when, how and
where. The time limits must also be communicated in advance.
5. Integration:
All the plans that have been formulated must be properly balanced and integrated with
the organisational Mission Statement. They must support each other and should not work at
 PRINCIPLES OF MANAGEMENT 18

cross purposes. Every attempt should be made to ensure that there is minimum wastage of the
efforts and the resources so that the pay-offs of planning are more than the costs involved.
6. Strict monitoring:
Plans must be subjected to regular and appraisal in view of the dynamic nature of the
environment that includes both the internal as well as external changes. The best way to enable
proper monitoring is by keeping the plan flexible to the extent possible.
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UNIT – III
(2-Marks)
1.Explain the meaning of organization
 Organization management refers to the art of getting people together on a common
platform to make them work towards a common predefined goal.
 Organization management enables the optimum use of resources through
meticulous planning and control at the workplace.
2. What is unity of command?
Unity of command means that an employee should receive orders from one superior
only. In other words, it means that no employee should be subjected to the order of more than
one superior. Thus, it stands for single boss for each person or mono-command.
3. What is organizational structure?
An organizational structure is a system that outlines how certain activities are directed
in order to achieve the goals of an organization. These activities can include rules, roles, and
responsibilities. The organizational structure also determines how information flows between
levels within the company.
4. State the meaning of informal organization.
The informal organisation may be defined as “a network of personal and social
relationships that arise spontaneously as people associate with one another in a work
environment. It is composed of all the informal groupings of people within a formal
organisation.”
5.write down the names of theories of organization.
The following are the theories of organization:
 Classical theory
 Human relations approach
 Systems theory
 Contingency theory.
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UNIT – III (16 Marks)

1.Elaborate on the nature of an organization
Nature of Organisation (Characteristics)
Organisation is an effective and necessary instrument for the attainment of predetermined
goals. The following are the main characteristics of organisation.
1. Division of Labour:
The total work to be done is divided into small parts and each work is entrusted to
particular individual. After the division of the total effort into functions and sub-functions,
the next step is to group the activities on the basis of similarity of work Efficiency. So that
the similar type of activities can be grouped together and placed under the name of
department or Sub-department.
Ex: The manufacturing enterprise, its total activities may be divided and grouped under
production, marketing, finance, personnel etc.
2.Co-Ordination:
The people in the organisation are assigned with different functions, but the aim is to
attain organisational goal. So they have to co-ordinate between 1. The employee and his work
2. One employee and another one employee 3. One department and another.
3. Objectives:
Every organisation should have specific and well-defined objectives. Objectives cannot
be accomplished without an organisation. Similarly, the organisation cannot exist for a long
time without objective and goals.
4. Authority - Responsibility relationship:
An organisation structure consists of various positions arranged in a hierarchy with a
clear definition of the authority and responsibility, associated with each position.
5. Communication:
Every organisation has its own method of communication. In organisation group of
persons work together towards the goal. So effective communication is needed between the
people for understanding. The channels of communication may be formal, informal,
downward, upward or horizontal.
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2. Discuss Line Organisation and write down its advantages and

disadvantages
Merits and Demerits of Line Organization
Line Organization represents a direct vertical relationship through which activity flows. It is
also known as scalar or military organisation. The line of authority flows from top to bottom
throughout the organisation. The quantum of authority is highest at the top and reduces at each
successive level down the hierarchy. Every person in the organisation is in the direct chain of
command as shown below. The line of authority consists of an uninterrupted series of authority
steps and forms a hierarchical arrangement. The line of authority not only becomes the avenue
of command to operating personnel, but also provides the channel of communication,
coordination and accountability in the enterprise.

Merits of line organisation:

1. It is very simple to establish and can be easily understood by the employees.

2. There is a clear-cut identification of authority and responsibility relationship.
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3. It ensures better discipline in the enterprise because every individual knows to whom he is
responsible.
4. It facilitates prompt decision making because there is a definite authority at every level. An
executive cannot shift his decision-making to others nor can the blame be shifted.
5. It facilitates unity of command and thus conforms to the scalar principle of organisation.

3.Describe the principles of an Organization.

1. Unity of objectives:
An enterprise strives to accomplish certain objectives. The organisation and every part
of it should be directed towards the attainment of objectives. Every member of the organisation
should be familiar with its goals and objectives. There must be unity of objective so that all
efforts can be concentrated on the set goals. The principle requires objectives to be clearly
formulated and well-understood.
2. Division of work and specialisation:
The entire work in the organisation should be divided into various parts so that every
individual is confined to the performance of a single job. This facilitates specialisation which
in turn leads to efficiency and quality. However, each area of specialisation must be interrelated
to the total integrated system by means of coordination of all activities of all departments.
3. Definition of jobs:
Every position in the organisation should be clearly defined in relation to other positions
in the organisation. The duties and responsibilities assigned to every position and its
relationship with other positions should be so defined that there is no overlapping of functions.
4. Separation of line and staff functions:
Whenever possible, line functions should be separated from staff activities. Line
functions are those which accomplish the main objectives of the company. In many
manufacturing companies, the manufacturing and sales departments are considered to be
accomplishing the main objectives of the business and so are called the line functions. Other
functions like personnel, plant maintenance, financing and legal are considered as staff
functions.
5.Chain of command or scalar principle:
There must be clear lines of Organising authority running from the top to the bottom of the
organisation. Authority is the right to decide, direct and coordinate. The organisation structure
should facilitate delegation of authority. Clarity is achieved through delegation by steps or
levels from the top position to the operating level. From the chief executive, a line of authority
 PRINCIPLES OF MANAGEMENT 23

may proceed to departmental managers, to supervisors or foremen and finally to workers. This
chain of command is also known as scalar principle of organisation.

6.Parity of authority and responsibility or principle of correspondence:

Responsibility should always be coupled with corresponding authority. Each subordinate
must have sufficient authority to discharge the responsibility entrusted to him. This principle
suggests that if a plant manager in a multi plant organisation is held accountable for all activities
in his plant, he should not be subject to seek orders from company headquarters for his day to
day activities.
7.Unity of command:
No one in the organisation should report to more than one line supervisor. Everyone in the
organisation should know to whom he reports and who reports to him. Stated simply, everyone
should have only one boss. Receiving directions from several supervisors may result in
confusion, chaos, conflicts and lack of action.
8. Unity of direction:
According to this principle, a group of activities that have a common goal should be
managed by one person. There should be one head and one plan for a common objective of
 PRINCIPLES OF MANAGEMENT 24

different activities. This facilitates smooth progression towards the achievements of overall
organisational goals.
9. Exception principle:
This principle suggests that higher-level managers should attend to exceptional matters
only. All routine decisions should be taken at a lower level, whereas problems involving
unusual matters and policy decisions should be referred to higher levels.
10. Span of supervision:
The term ‘span of supervision’ means the number of persons a manager or a supervisor
can direct. No manager should be required to supervise more subordinates than he can
effectively manage within the limits of available time and ability. The exact number may vary
according to the nature of the job and the frequency or intensity of supervision needed.
11. Principle of balance:
There should be a proper balance between various parts of the organisation and no
function should be given undue importance at the cost of others. A balance should be
maintained also between centralisation and decentralisation, a span of supervision and lines of
communication, and authority allocated to department and personnel at various levels.
12. Communication:
A good communication network is essential to achieve the objectives of an
organisation. No doubt the line of authority provides channels of communication downward
and upward, still, some blocks in communication occur in many organisation. The confidence
of superior in his subordinates and two-way communication are the factors that unite an
organisation into an effectively operating system.
4. Write down the factors influencing organisational structure.
1. objective of organisation
Organization structure depends on the objectives of the enterprise. The organisation
structure of an organisation with assured market is distinct from the one operating under an
acute competition. The former’s structure is production-oriented while the latter’s is market
oriented.
2.Nature of organisation
Organisation structure tends to be different depending upon its nature. For example, the
organisation of a school.
3.Size of the operation
 PRINCIPLES OF MANAGEMENT 25

Organization structure depends on the size of operations. The organization structure of

a Small or Medium Enterprises (SME) is distinct from Multi National Corporation (MNCs).

4.Attitude of management
The attitude and philosophy of the management plays a role in the organisation
structure.
5.Level of technology absorption
The level of technology absorption varies depending upon the structure of an
organization. The organization structure of an organisation using high capital intensive
technology is quite distinct from the Small Scale Industries (SSIs) using labour intensive
production technology.

5.Types of Organization structure.

Tom Burne and G.M.Stalker, two Britishers classified the organization structure into two
categories, namely mechanistic structure and organic structure.
Mechanistic structure
Activities of an organization are broken into specialized tasks. The objectives for each
individual and unit are precisely defined. There is a hierarchical structure of authority,
communication and control. The main emphasis under this type of structure is on strict
adherence to rules and obedience to superiors. This structure is advisable to stable business
environment.
 PRINCIPLES OF MANAGEMENT 26

Organic structure
This structure puts less emphasis on taking orders from superiors or giving direction to
employees. Members are empowered to communicate freely with one another to obtain
information and dynamic environment.
Mechanistic structure Organic structure
Work is split into specialized task Work is defined in terms of general task
The said tasks are performed by managers in Tasks are adjusted to the needs through
the hierarchy interaction with others connected with
performance
Every thing is hierarchical i.e., control, Structure of authority, communication and
communication and authority control is a network
Decisions are made by the heads of Decisions are made by individuals
department in the hierarchy specialized in a given domain
Communication is vertical from upper Communication is moving in all directions
echelons to lower level functionaries
Communication content is directional Communication takes the form of advice,
suggestion and information
Emphasis on adherence to rules and strict Emphasis is on commitment to organization
obedience to superiors goals and expertise.
 PRINCIPLES OF MANAGEMENT 27

UNIT IV
(2- marks)
1.Write note on power.
Power can be defined as a manager's ability to influence others. A manager obtains his
or her power from both the organization (positional power) and from him or herself (personal
power). The key to successful management lies in using a combination of positional power and
personal power.
2.State the meaning of Authority.
Authority, in simple words, is the right way of commanding subordinates, issuing
orders and instructions, and exacting obedience from the team. It is also the right of the manager
to make decisions. Also, to act or not to act depends on how he perceives the objectives of the
organization.
3.What is consultative direction?
Consultative Direction: Here the superiors in the organization system consults the
decisions with their subordinates or team members, before implementing it or putting it into
action.
4.Write down the meaning of Recruitment.
Recruitment refers to the process of identifying, attracting, interviewing, selecting,
hiring and onboarding employees. In other words, it involves everything from the identification
of a staffing need to filling it. Depending on the size of an organization, recruitment is the
responsibility of a range of workers
5.What is responsibility?
Responsibility refers to the duty of having authority or control over something or
someone. If you are responsible for something, you will be held accountable for the outcome
of what comes from it, as this was your duty.

UNIT IV (16 Marks)

1.Distinguish between authority and responsibility
 PRINCIPLES OF MANAGEMENT 28

BASIS FOR
COMPARISON AUTHORITY RESPONSIBILITY
Meaning Authority refers to the Responsibility denotes duty or
power or right, attached to a obligation to undertake or
particular job or designation, accomplish a task successfully,
to give orders, enforce rules, assigned by the senior or
make decisions and exact established by one's own
compliance. commitment or circumstances.
What is it? Legal right to issue orders. Corollary of authority.
Results from Formal position in an Superior-subordinate relationship
organization
Task of Delegation of authority Assumption of responsibility
manager
Requires Ability to give orders. Ability to follow orders.
Flow Downward Upward
Objective To make decisions and To execute duties, assigned by
implement it. superior.
Duration Continues for long period. Ends, as soon as the task is
accomplished.

2.Explain the principles of direction.

Principles of Directing
1. Maximum Individual Contribution

One of the main principles of directing is the contribution of

individuals. Management should adopt such directing policies that motivate the employees to
contribute their maximum potential for the attainment of organizational goals.
2. Harmony of Objectives

Sometimes there is a conflict between the organizational objectives and individual

objectives. For example, the organization wants profits to increase and to retain its major share,
whereas, the employees may perceive that they should get a major share as a bonus as they have
worked really hard for it.
 PRINCIPLES OF MANAGEMENT 29

Here, directing has an important role to play in establishing harmony and coordination between
the objectives of both the parties.
3. Unity of Command

This principle states that a subordinate should receive instructions from only one superior
at a time. If he receives instructions from more than one superiors at the same time, it will create
confusion, conflict, and disorder in the organization and also he will not be able to prioritize his
work.
4. Appropriate Direction Technique

Among the principles of directing, this one states that appropriate direction techniques
should be used to supervise, lead, communicate and motivate the employees based on their needs,
capabilities, attitudes and other situational variables.
5. Managerial Communication

According to this principle, it should be seen that the instructions are clearly conveyed to
the employees and it should be ensured that they have understood the same meaning as was
intended to be communicated.
6. Use of Informal Organization

Within every formal organization, there exists an informal group or organization. The
manager should identify those groups and use them to communicate information. There should be
a free flow of information among the seniors and the subordinates as an effective exchange of
information are really important for the growth of an organization.
7. Leadership

Managers should possess a good leadership quality to influence the subordinates and make
them work according to their wish. It is one of the important principles of directing.
8. Follow Through

As per this principle, managers are required to monitor the extent to which the policies,
procedures, and instructions are followed by the subordinates. If there is any problem in
implementation, then the suitable modifications can be made.

3.Explain the types of authority.

 PRINCIPLES OF MANAGEMENT 30

Authority in Management

Knowing the meaning of authority is better to understand before the types of authority in
management. Authority is defined as the right to give orders, supervise the work of others and
make certain decisions. Therefore, it is linked with the managerial position to give orders and
expect to follow the orders. Hence in the olden days, it was the basic elements that made the
organizations smoothly working.

Following are the types of authority in management

 Line Authority
 Staff Authority
 Functional Authority

Line Authority

The work of an employee is directed with the help of line authority. It takes the form of an
employer-employee relationship that moves from top to bottom. So certain decisions are made
by the line manager without consulting any other person. In some cases, line managers are
 PRINCIPLES OF MANAGEMENT 31

differentiated from the staff managers by using the word “line”. Hence the manager whose
functions are linked directly with the achievement of organizational objectives is called line
manager.

Staff Authority

Staff authority is possessed by the staff managers. The objectives of the organization determine
the line and staff nature of the functions of any manager. When the size of the organization
becomes larger and larger. Then the line managers feel that they cannot complete their jobs by
the existing skills. Along with experience and knowledge which are not updated accordingly.
Therefore staff authority is generated for the staff whose main purpose is to assist. As well as
support, advise and decrease the work burden of the line managers.

Functional Authority

The functional authority that is also known as functional control. Moreover, included in the
area of the line and staff aspects of HRM. As it is the special authority that is exercised by the
personnel manager in coordinating the personnel activities. Therefore the HR manager here
performs his functions as the right arm of the supreme executive.
Line Vs Staff Authority

Authority is linked with ordering someone, and making certain decisions to direct the work of
others. The subordinate work is directed by the line manager. On the other hand, staff managers
assist line managers in achieving their basic objectives. So, HR managers fall into the category
of staff managers.

Mostly line managers have a responsibility to perform line functions, some staff functions and
coordination functions. The line manager specifies the qualifications required from the
upcoming employees for certain positions in the organization.

4.Emphasise the significance of direction function in an organisation

The importance of directing are as follows:
 Directing Initiates action: Directing sets an organisation into motion, and helps other
managerial functions to initiate and activate. It helps the managers to supervise,
communicate, lead, guide and motivate the subordinates to achieve the organisational
 PRINCIPLES OF MANAGEMENT 32

goals. For example, a superior guides his subordinates and explains the task, which will
help the subordinates to start the work and achieve the goal.
 Directing leads to integrated group activity: The organisational objectives can be
achieved only when individual efforts are integrated. Directing integrates employees’
efforts in such a way that every individual effort contributes to organisational
performance. For example, a leader can convince his subordinates that group efforts will
help to achieve organisational goals.
 Directing attempts to get maximum out of individuals: Directing helps superiors to
realise the potential and identify the capabilities of individuals by motivating and guiding
them. By using the elements of directing, i.e., supervision, motivation, leadership, and
communication, the efficiency of employees can be raised.

 Directing helps to implement changes: Directing helps to introduce changes in an

organisation. Generally, people in an organisation resist changes. Effective
communication, supervision, motivation and guidance help to overcome such resistance
at the workplace. For example, the introduction of a new method of doing a particular
task in a factory is resisted by workers, but when managers explain the purpose, guide
and provide them training and rewards, it can be easily accepted by the workers.
 Directing provides stability and balance in the organisation: Stability and balance are
maintained in an organisation with the help of directing because it fosters cooperation
and commitment amongst employees, and helps to achieve balance amongst various
groups, departments, units, etc. For example, every individual has personal goals, but the
managers integrate the efforts of all the individuals towards the achievement of
organisational goals through guidance, motivation, supervision and communication.
1. Write down the difference between power and authority.
 PRINCIPLES OF MANAGEMENT 33

Basis Authority Power

Authority is derived from formal

positions within the Power can stem from personal
organizational hierarchy. It is qualities, expertise,
Source
granted by the organization based relationships, or control over
on the role and responsibilities resources.
assigned to individuals

Authority is considered legitimate

within the organizational Power may or may not have
structure and is supported by inherent legitimacy and can be
Legitimacy
formal rules and policies. It is based on personal influence or
recognized as the rightful exercise informal networks.
of control and decision-making.

Authority grants individuals the

Power can enable individuals to
right to make decisions within
influence decisions even if they
their defined areas of
Decision- do not have formal authority.
responsibility. It provides a
Making They may use their personal
formal framework for decision-
influence or persuasive skills to
making in line with organizational
shape outcomes.
objectives and policies.

Power can extend beyond formal

Authority typically operates boundaries and impact areas
within a specific scope and is beyond the designated scope of
Scope of
limited to the responsibilities authority. Individuals with power
Influence
associated with the formal can influence decisions, actions,
position. and behaviours of others in
various ways.
 PRINCIPLES OF MANAGEMENT 34

Basis Authority Power

Authority has the inherent ability

to enforce compliance and direct Power may rely more on
the actions of subordinates. It is influence, persuasion, and
Compliance
backed by the formal power to personal relationships to gain
assign tasks, give directives, and compliance from others.
enforce organizational policies.

Authority tends to be more stable

and enduring over time, as it is Power can be more dynamic and
established within the formal can change based on personal
Stability structure of the organization. It relationships, shifting alliances,
remains consistent unless there or changes in organizational
are changes in organizational dynamics.
roles or hierarchies.

Power can influence

Authority establishes a formal relationships beyond formal
relationship between superiors reporting lines. Individuals with
Relationship
and subordinates, defining roles, power can have an impact on the
with
responsibilities, and reporting attitudes, behaviours, and
Subordinates
lines. It provides a clear motivations of others, regardless
framework for accountability. of their formal position in the
hierarchy.
 PRINCIPLES OF MANAGEMENT 35

UNIT – V

2 Marks
1. What is coordination.
Coordination is the function of management which ensures that different departments
and groups work in sync. Therefore, there is unity of action among the employees, groups, and
departments. It also brings harmony in carrying out the different tasks and activities to achieve
the organization's objectives efficiently.
2. What is meant by preliminary control?
Preliminary control, also known as steering control or feed forward control, focuses on
the resources that the organization brings in from the environment. It attempts to monitor the
quality or quantity of these resources before they enter the organization.
3. Define Control
“Control consists in verifying whether everything occurs in conformity, is with the
plans adopted, the instructions issued and principles established. It has for its object to
point out weaknesses and errors in order to rectify them and prevent recurrence.”
- Henry Fayol,
4. What is vertical coordination?
Vertical coordination describes a process whereby teamwork is harnessed in an organization
in order to attain success in a project. This process entails techniques put together by employees
within vertical hierarchical levels to accomplish a task
5. What is operational control?
Operational control involves control over intermediate-term operations and processes
but not business strategies. Operational control systems ensure that activities are consistent
with established plans. Mid-level management uses operational controls for intermediate-term
decisions, typically over one to two years.
 PRINCIPLES OF MANAGEMENT 36

16 Marks

1.Elaborate on the process involved in control

Controlling is a systematic approach of managing and controlling the organisational actions.

The following are the steps involved in the controlling process.
(i) Setting Standards
Setting up of standards involves developing the benchmarks against which the actual
performance is to be measured. The standards can be set in qualitative as well as quantitative
terms. Qualitative benchmarks can be in the form of improving coordination in work, higher
goodwill or increased motivation level of employees, etc. For example, to improve the
motivation level among employees, standard can be set in terms of number of initiatives taken.
Quantitative benchmarks can be in the form of sales targets, units to be produced or time to be
spent on a particular action, etc. For example, in a shirt factory completing 10 pieces a day is a
quantitative target. The standards that are set should be such that they facilitate easy
comparison.
(ii) Measuring Actual Performance
Once the standards are set, the next step is to measure the actual performance of the activities.
This may be done through various techniques such as personal observation, checking the
sample, performance reports, etc. The checking should be done in an exact and reliable manner
so that correct measurement is taken for comparison. Measurement can be done after the
 PRINCIPLES OF MANAGEMENT 37

completion of an activity as well as while it is in progress. For example, while assembling small
parts of a bigger machine, the parts can be checked before assembling. This would ensure the
continuous monitoring of the small parts as well as the final machine.
(iii) Comparing the Performances
Performances once measured are then compared with the set standards. Such a comparison
helps in assessing the deviations in the work. Thereby, it guides the managers in taking the
necessary steps so as to improve the performances. These comparisons are easier when they
are in quantitative terms. For example, efficiency in work in terms of cost incurred can be
measured against the standard cost.
(iv) Analysing Deviation
Every organisation faces deviations when comparing the actual performance with the pre-
developed standards. Thus, it is important to find the deviations that are in the permissible
range. It is said that deviations in key areas should be attended first. For analysing the
deviations the managers generally use 'Critical Point Control' and 'Management by Exception'.
.
• Critical Point Control: An organisation cannot keep a check on all the activities of the
management. Thus, this technique of controlling aims at focussing on only the key result areas
(KRAs) that affect the entire organisation. For example, rise in input cost would be more
important than rise in stationary cost.
• Management by Exception: This technique of management is based on the belief that 'an
attempt to control everything results in controlling nothing'. According to this, only the
essential and significant deviations that are beyond the acceptable limit should be controlled.
For example, if there is a 6 per cent rise in labour cost whereas the permissible limit is just 3
per cent, then, this should be immediately brought into the notice of the management. On the
other hand a 2 percent rise in the cost can be ignored.
Once the deviations are recognised, it is necessary to acknowledge the cause for it. There can
be a number of elements causing deviations in work such as infeasible standards, deficiencies
in process, under utilisation of resources, changes in business environment, etc. Thus, it
becomes important for the management to take into regard the causes for the concerned
deviations.
(v) Corrective Measures
When deviations go beyond the admissible limits, there arises a need for the management to
take corrective actions. This is the last step of controlling which aims at correcting the
deficiencies of the organisation so that the errors do not occur again. For example, if the
 PRINCIPLES OF MANAGEMENT 38

production target was not met duly, appropriate corrective actions such as training the workers
or updating the machinery for working, etc. can be taken.

2.Describe the various techniques of achieving coordination.

Direct Contact: One of the most effective means of achieving coordination is direct contact.
Written communication, modern electronic, mechanical devices, etc., can also be used.
Group Meetings: Group meetings are said to be an effective means of achieving coordination.
At the time of meeting, superior comes into personal contact with those connected with the
actual problems. Such meetings encourage the people to integrate their efforts. Coordination
can be achieved through regular meetings of superiors and subordinates.
Organizational Structure: Coordination can be achieved only when the authority and
responsibility of each and every person are clearly defined. In this connection, it was quoted
by J.O. Shaughnessy as follows
“You cannot always bring together the results of department activities and expect to co-ordinate
them. You must have an organization which will permit inter-weaving all along the line “
In other words, the organizational structure should be designed properly so as to permit
coordination among various activities along the line itself.

Effective Communication: In achieving coordination, effective communication plays a vital

role. Communication greatly helps in coordination. The purpose of communication is to
promote deep understanding among members by bringing and maintaining coordination in
order to achieve the ultimate goals.
Committees: In order to coordinate the various activities, various types of committees may be
appointed. Committees provide the means for synchronizing various efforts. Committees
 PRINCIPLES OF MANAGEMENT 39

develop better understanding and morale among the members. They are greatly advisory in
nature and make use of the best efforts of the members.
The success of the committee depends very much on its composition and the manner in which
it functions. Examples of such committees are – committees on manufacturing methods,
complaint committee, suggestion committee on welfare work, etc.
Staff Meetings: Staff meetings at regular intervals helps in achieving effective coordination
because such meetings provides opportunities for frank discussions and better exchange of
ideas of people from different sections. This infuse a feeling of unity among the members which
makes them to jointly work for the organization.
Effective Leadership: Leader inculcates a feeling of collectivism in the employees and forces
them to work as a team. Individuals within the group, may possess varied interests and multiple
goals. Leader reconciles these conflicting goals and restores equilibrium. A good leader can
achieve coordination at all stages. Hence, effective leadership is essential for achieving
coordination.
Informal Coordination: Many organizations adopt informal means of coordination through
processes of social, unofficial interactions, relationship and mutual adjustments. They are very
often more effective than formal means.
3.Discuss the problems encountered in achieving coordination
Coordination surely makes work and management easier but at the same time, it can also
have some limitations to it. Following are some of the constraints of coordination:

1. Time Constraints: Coordination becomes difficult when different tasks have to be done
within a tight schedule. It could become difficult to make sure that everyone does their
 PRINCIPLES OF MANAGEMENT 40

jobs on time and that the appropriate parties are informed of all the essential information
when there is a lack of time.
2. Communication Barriers: Open and honest communication between team members is
essential for effective coordination. However, when there are communication barriers
such as language, culture, and geography, it can be more difficult for employees to work
together and communicate effectively, which can cause mistakes and delays.
3. Resource Constraints: A lack of funds, personnel, or other resources might make
coordinating efforts challenging. Making schedules for the use of equipment for
everyone’s use when there is only one available can cause difficulty.
4. Conflicting Goals: It can be challenging to coordinate activities when various teams
have conflicting goals or priorities. Finding a balance that benefits both teams, for
example, might be tough when separate teams are focused on difficult objectives.
5. Lack of Trust: Effective teamwork depends on mutual respect and trust. People may be
reluctant to share information when there is a lack of confidence, which can result in
misunderstandings and errors.
6. Resistance to Change: Resistance to change also makes coordination tough. Developing
new strategies for achieving the goal can become problematic when the team members
resist adapting to new processes and technologies.

4.Emphasize the significance of control.

 Accomplishing Organizational Goals:

 PRINCIPLES OF MANAGEMENT 41

Control measures the progress of organizational goals and accentuate deviations, if any,
and lays out the basis for corrective measures. It ensures that the organizational goals
are on track.
 Efficient Use of Resources:
Wastage and spoilage of resources are reduced. For example, in damage control, the
defective products are examined and the production will be modified to reduce errors
and produce error-free products and thereby reducing further wastage of materials.
Thus it ensures that resources are used in the most effective and efficient manner.
 Judges Accuracy of Standards:
The management will be able to verify whether the standards set by the organization
are accurate. According to the changes in the environment, the standards can be
reviewed and revised by exercising control.
 Employee Motivation:
When standards are set by the organization, employees will know beforehand as to what
is expected from them and perform accordingly, based on their performance, they will
be appraised. When control is practised to check the tasks, the performances will be
better and so will be the appraisals which in turn will motivate the employees.
 Ensuring Order and Discipline:
Controlling keeps a close check on the employee’s activities and ensures the activities
are performed honestly. It fosters a sense of discipline and order in the organization.
 Facilitating Coordination in Action:
At every level in the management, the activities of the subordinates will be checked and
coordinated by the managers which lead towards the accomplishment of organizational
goals.