Concepts, Principles and

Functions of Management

Mrs. Bhaumika Sharma

Lecturer, MMIHS
Banasthali, Nepal
 Terms Definition
Organization Group of people works together, a club, business,
institute, hospital etc.
The act of organizing something so it runs
smoothly
The organization of the timetable
Organize To plan and prepare something in an orderly way
To put things in order
Administration The management of a company etc
The government of a country
Administer To be in charge of and manage
To give out
Management As the process by which a co-operative group
direction towards action
Use of people and other resources to accomplish
objectives
 Contd.
Terms Definition
Managers Have an assigned position within the formal
organization
Are expected to carry out specific function
duties and responsibilities
Leader Somebody who leads or who goes first, a person
in charge of a group
leadership Leadership is the process of influencing people to
accomplish goals
Administrator A person who dispenses or administers
something.
Effectiveness Accomplishments of objectives
Efficiency Accomplishments of objectives with minimum
use of resources.
 Concepts of Leader and Manager
Leader Manager
Is visionary in identifying Assess the driving and
need change restricting forces
Is a role model Identifies and
Is sensitive to timing implements strategies
initiatives Seek subordinates input
Is creative in identifying Supports and rewards
solutions Understands future
Individual efforts directions
 Comparison bet. Leadership and Management
Management Leadership
Management is Leadership is the ability to
responsible for various influence the group in
functions such as achieving the goals set by
planning, organizing, the management
leading and controlling, Leadership influence
which are related to the individual which will
total organization contribute to the
Management is concerned attainment of group goals
with the promotion of the Leadership used informal
welfare of the entire power to influence the
organization without group
giving scope to vested Leadership is necessary to
interest. create change
 Comparison bet. Administration &
Management
Administration
Determination of Objectives
Thinking and determinative
functions.
Take major decisions about
over enterprise.
Planning and organizing
functions involved.
It coordinate finance,
production and distribution
Management
Plans and actions
Doing and executive function
Takes decisions within the
framework set by the admin.
Motivating and controlling
functions also involved.
It uses organization for the
achievement of the targets
fixed by administration.
 Administration Versus Management
Administration Management
The process and agency The process and agency,
which is responsible for the which directs and guides the
determination of aims for operations as an organization
which an organization and its in the realizing of established
management are to strive, aims.
which establishes the broad Higher functions of
policies under which they are management includes
to operate and which gives administration.
general oversight to be Two types of management
continuing effectiveness of are there: administrative and
the total operation in operative management.
reaching the objectives
sought.
Fig. Management and Administration
Administration
Hospital Board
Top Level and Executive
Management Director
Hospital Matron

Assistant Matron
Middle Nursing Supervisors
Management

Lower Ward Sisters

Management

Management
 Definition
Management etymology:
Managgaire (italian): means to handle
Manus (latin): handling
Mesnagement (french) and later menagement:
management during 17th and 18th
The term management is used at times to
indicate the process or the functions: planning,
organizing, staffing, directing and controlling.
Term management is also being used as a
discipline, i.e. a body of knowledge and practice
 Contd.
Management can be defined categorizing
under three orientations.
1. Productivity orientation
2. Human relation orientation
3. Process orientation
4. Decision-Making orientation
5. Systems approach
 Productivity Orientation
Management is the art of knowing what you
want to do .in the best and cheapest way.
Frederick W. Taylor (1914), profounder of this
approach
Management is to conduct the affairs of a
business, moving towards its objectives through a
continuous improvement and optimization of
resources via the essential management functions.
Henri Fayol (1917)
Critics: definition ignores the human side, which is
the most important element of management, and
also silent about the process of management.
 Human Relation Orientation
Management is the art of getting things done
through and with informally organized groups,
and it is the art of creating the environment in
which people can perform and individuals could
cooperate towards attaining group goals.
Critics: management thinkers put primary focus
on people and their feelings, not on productivity
or functions. The chief concerns are individuals,
group process, interpersonal relations,
leadership, and communication.
 Process Orientation
Management is the process by which managers create,
direct, maintain and operate purposive organizations
through systematic coordinated cooperative human
efforts. Dalton McFarland (1976)
The distinct process consisting of planning, organizing,
actuating and controlling to determine and accomplish
the stated objectives by the use of human and other
resources. Terry & Franklin (1988)
Critics: this approach embraces human element: the
most important aspect of management, clarifies about
what a manager has to do and why and also clearly
indicates how it is done. The management thinkers
believe that management does not do; it gets others to
do.
 Decision-Making Orientation
Management is simply the process of decision
making and control over the action of human
beings for the express purpose of attaining pre
determined goals.
The management quality is judged by the
quality of decision in diverse situation in the
economic front and amid risks and
uncertainties. Banerjee (1996)
 Contd.
Focuses on managerial decisions. It views
management as a series of decision making.
Concentrates on rational approach to decision
making.
Critics: this orientation is silent about the
process part, a it provides no clues at all as
what the manager needs to know and do.
Ernest Dale (1973)
 Systems Approach
Management is defined as the process of
planning, organizing, directing and controlling
to accomplish the predetermined objectives
effectively through the coordinated use of
human and material resources.
Nursing Management is the process of
working through nursing and other supporting
staff to provide care to patients or clients as
needed by them.
 Contd.
Critics: this approach views an enterprise as a system
composed of a set of interrelated but separate
elements of subsystems working towards
achievement of a common goal. The systems
operations are viewed as procuring inputs and
processing the inputs into outputs.
Physical facilities, human resources, money are the
part of a system; material, energy flow, and
information are the inputs; and management
processes these inputs into outputs in the form of
services, products, and group-satisfaction, and
others.
 Terminology Related to Principles of
Management
Division of work: specialization for all kinds of
works to develop
Authority and responsibility: related authority
flows from responsibility
Discipline: implies obedience and respect of
authority
Unity of command: One employ one boss
Unity of direction: one plan and one head for
a group of activities having one objectives
 Contd.
Subordination: individual interest to general
interest, interest of organization should be
above the interest of individual
Remuneration: a fair and equitable pay to
employees
Centralization: highly centralized power
structure
Scalar chain: all employees are lined with each
others in a hierarchy or superior subordinates
relationship
 Contd.
Order: a place for everything and everything
in its proper place
Equity: sense of kindness and justice
throughout all levels of person
Stability: the tenure of personal job security to
avoid turnover of employee. A union is
strength there should be cohesiveness spirits
Initiative: an encourage subordinates initiate
Esprit de corps: a union is strength; there
should be cohesiveness and term spirit
 Principles of Management
14 principles of management as given by
Henry Fayol (Administrative management
theory) are:
Division of Work: an employee assigned to only
one type of work to increase output which leads to
specialization. The work division should be done
based on efficiency of subordinates.
Authority and Responsibility: authority means
right to give order and power. Responsibility refers
to the obligation to perform the manner desired
and directed by superior authorities in any
management process.
 Contd.
Discipline: the workers should be obedient and
respectful of the organization, and this is
absolutely essential.
Unity of command: one employee should have
only one boss and receive orders for him/her
using one plan
Subordination of Individual Interest to General
Interest: it means supremacy of organizational
goals over interests of individual or a group of
individuals, including that of manager.
 Contd.
Remuneration of Personnel: the price rendered or
remuneration should be fair and satisfactory to
the employees and employer including the
managers justifying the workload, job hazards,
efficiency and quality of performance.
Centralization: decisions are made from the top
(managers). Subordinates should be given enough
authority to do their job properly
Scalar chain (Hierarchy): the line of authority from
top management to lowest ranks represents the
scalar chain. Communications should follow this
chain.
 Contd.
Order: It implies order of things and people.
Placing all required things and materials in
prescribed place i.e. in right place. Working place
should be clean, tidy and safe for employees.
Engagement of right people in the right place.
Equity: It is the combination of kindness and
justice. Employees expect equity from the
management. Employees should be treated fairly
and justly, kindly for devotion and loyalty from
employees in return.
 Contd.
Stability of Tenure of Personnel: For maximum
productivity through efficient workers, a stable
work force with stable tenure is needed.
Initiative: passion, energy and initiative from the
employees of all levels through freedom to think
out a plan and execute it. It motivates people and
increases productivity.
Esprit de Corp: team or organizational spirit i.e.
cohesion among personnel is a great source of
strength in the organization. Managers should
strive to promote team spirit, unity and
organizational communication.
 Function of Management
1. Planning
2. Organizing
3. Leading / directing
4. Controlling
 Planning
Planning is a basic managerial function. It is
setting goals and deciding how to best achieve
them in advance. Planning is predetermining
future and selecting appropriate goals and
actions to achieve them.
The process by which management set
objectives, assess the future, and develop
course of action to accomplish these
objectives.
 Contd.
Planning requires decision making by all levels
of managers
Planning is also to decide in advance about
what to do, how to do, when to do and who is
to do.
A good planning is also required for good
utilization of human and non human
resources to accomplish pre determined goals.
 Contd.
Planning is the core area of all the functions of
management. It is the foundation upon which the
other three areas should be build.
The planning process is ongoing.
There are uncontrollable, external factors that
constantly affect an organization both positively and
negatively.
Depending on the circumstances, these external
factors may cause an organization to adjust its course
of action in accomplishing certain goals. This is
referred to as strategic planning.
 Contd.
During strategic planning, management
analyzes internal and external factors that do
and may affect organization, as well as the
objectives and goals.
From there they determine the organizations
strengths, weaknesses, opportunities and
threats.
In order for management to do this effectively,
planning has to be realistic and comprehensive.
 Organizing
An important function of management.
Also important for performing staffing,
directing and controlling functions.
The process of arranging people and physical
resources to carry out plans and accomplish
the organizational goals.
Its ongoing.
 Organizing involves:
Defining tasks required for achieving goals.
What task to be done?
Grouping the activities in logical pattern
Determining manpower requirement
Establishing authority and responsibility for
each position. Who reports to whom?
Assigning the activities to specific position and
people
 Contd.
Coordinating their activities authority
relations
Organizing efficiency and reducing the
operation cost through avoiding repetition
and duplication of activities.
 Leading
Leading A continuous process of setting
objectives and trying to achieve them through
the efforts of other people.
Leadership is an important function of
management.
Leadership is guiding and influencing people
to achieve goals willingly and enthusiastically
in a given situation.
 Contd.
Leading consists of : Leadership, Motivation
and Communication
Leadership is the ability to influence a group
toward achievement of goals.
Motivation is the acts of stimulating people to
contribute at some higher rate.
Communication consists of conveying
information from top to bottom, bottom to
top and at horizontal and lateral.
 Controlling
Controlling consists of actions and decision,
manager undertaken to ensure actual result.
It ensures the right thing is done in the right
manner and at the right time.
The steps of controlling:
Establishing standards
Measuring actual performance
Finding and analyzing deviations
Corrective action
 Principles of management that will apply in
different situations

Management by objectives
Learning from experience
Division of labor
Substitution of resources
Coordination of work activities
Functions determine structure
Delegation of authority
Management by exception
 Management by Objectives

Deciding and saying what to be accomplished

is setting an objective ( a goal, a purpose, an
end, a target). There are many kinds of
objective.
The management principle that underlies the
comparison of objectives with their
achievement in order to judge effectiveness is
known as Learning from Experience.
 Contd.
When there is a gap between objectives and results
(or achievements), management analyzes why only
the observed results were achieved and why fell
short of the set objectives.
Some causes can be easily remedied, and action is
taken accordingly.
Others cannot be removed in short term and are
then called constraints.
Management learns from this process and uses what
it has learned in its further decisions for achieving its
objectives. This process is sometimes called
feedback.
 Division of Labor

When work is divided, or distributed, among

members of a group, and the work is directed
and coordinated, the group becomes a team.
In a team, and generally then there is
specialization and division of labor, which each
category of staff exercising its own skills
towards achieving the objectives,
management consists in assigning a balanced
proportion of each kind of staff to the work to
be done.
 Contd.
The team approach is the way in which
management attempts to bring about balance
among the different members of the team and
the work they do.
 Coordination of Activities or
Convergence of work
Convergence of work means that the activities
of the various people who do the work come
together in the achievement of objectives
The activities should be designed, assigned
and directed in such a way that they support
each other in moving towards a common goal.
Also implies that working relations-they ways
in which the members of a team interact with
one another-should contribute to the success
of each activity, and thus to general
effectiveness.
 Substitute of Resources

Substitution means replacement

One particular type of substitution of
resources is labour substitution e.g. using
trained ANM or volunteers for tasks formerly
undertaken by professionals.
 Functions Determine Structure

When work is clearly defined, i.e. the function

and duties of individual members of the team
are clearly defined and known to all, the
working relations (the structure) follow.
 Delegation of Authority

Delegation takes place when someone with

authority lends the authority to another
person, conditionally or not, so as to enable
that person to take responsibility when the
need arises.
Also ensure that the decision, once taken, is
made known to all concerned. This is
communication.
 Contd.
Decision should be communicated between
those who make decisions, those who
implement them, and the people affected by
the decisions.
Shortest decision-path: deals with the issue:
who should make which decision? And often
when and where as well. Delegation of
authority is the answer to clarify this.
 Contd.
In such way, decisions are made as close as
possible in time and place to the object of the
decision and to those affected by it.
It saves time and work (e.g. in transmitting
information) and also ensures that decisions
can take full account of the circumstances
which make the decisions necessary and in
which they are put into effect.
 Management by Exception

Management of exception means two things:

First: be selective. Do not become overloaded with
routine and unnecessary information. Keep your mind
available for critical information, on which manager
will be required to act.
Second: make big decisions first. To be overloaded
with petty decisions may result in more important
ones being neglected or what has been called
postponing decisions until they become
unnecessary.
In short, management by exception means
selectivity in information and priority in decision.
 Importance of Management
1. Optimum utilization of resources
2. Competitive strength
3. Cordial organizational relation
4. Motivation of employees
5. Introduction of new techniques
6. Effective management : society gets the
benefits
7. Expansion of business
 Contd.
8. Brings stability and prosperity
9. Develops team spirit
10.Ensures effective use of managers
11.Ensures smooth functioning (raises the
efficiency, productivity and profitability)
12.Reduces turnover and absenteeism
13.Creates sound organisation
 Evolution of Management
Thought
This evolution of management thought can be
studied in the following broad stages:
1. The Classical Theory of Management
(Classical Approach; 1900-1930): It includes
the following three streams of thought:
(i) Bureaucracy,
(ii) Scientific Management; and
(iii) Administrative Management
 Contd.
2. The Neo-classical theory of Management (1930-
1960): It includes the following two streams:
(i) Human Relations Approach and
(ii) Behavioral Sciences Approach
3. The Modern Theory of Management (1960
onwards): It includes the following three
streams of thought:
(i) Quantitative Approach to Management
(Operations Research);
(ii) Systems Approach to Management and
(iii) Contingency Approach to Management.
Thank You