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  Principles of Management  


Postini Alternative

The terms centralisation and decentralisation, however, are used to give various connotations. The semantic variations range from administrative, physical and functional centralisation to decentralisation.

At the same time, decentralisation is taken to mean separation of facilities, a type of organisation structure, and delegation of decision-making power. Its more common use in management literature, however, shows extent of delegation of authority. Thus, centralisation can be defined as the delegation of authority to the lowest levels of management.

Centralisation and decentralisation describe the manner in which decision-making responsibilities are divided among managers at different levels of managerial hierarchy. Decentralisation is different from delegation of authority. Delegation simply refers to the entrustment of responsibility and authority from one individual to another, decentralisation refers to the systematic delegation of authority in an organisation-wide context. Thus delegation is said to be the process and decentralisation as the result of process. There can neither be absolute centralisation nor absolute decentralisation. The concepts of centralisation and decentralisation are nor absolute decentralisation. The concepts of centralisation an decentralisation are two extreme points in matters of distributing authority in the organisation structure, and in between these two points, there may be a continuum of authority distribution.


Management is an activity process composed of some basic functions, for getting the objective of any enterprise accomplished through the efforts of its personnel. Wherever and whenever objectives are to be achieved through organized and co-operative endeavour, management becomes essential for directing and unifying the group efforts towards a common purpose. As human aims and beliefs are mostly realized through the establishment of diverse associations in our society, management is universally needed for operating all such organisation. Management, viewed as a functional concept, is of equal necessity to the educational religious, charitable and other non-business institutions as it is required for business Organizations. Furthermore, the greatest and the most comprehensive of our social organizations, viz., the Government of all types needs management as others require, perhaps more than all other social organizations. That the Government without requires a management process has been apply pointed out in the statement: A Government without good management is a house built on sand. Put in short, management is an essential accompaniment of all social organizations, and it is to be found everywhere as a distinct, separate and dominate activity. The nature and significance of the activity do not change even if it is called administration in some social in situations and management in others.

Management is the only activating element of any enterprise for getting things done through it personnel. The job of management is to provide dynamic leadership that combines the productive but passive resources into a fruitful organization. Not only does it adapt itself to existing opportunities, restrictions and pressures, but it exercises a positive influence as well as to make the future events favourable for the enterprise. With a view to getting the expected results and seeing that things happen as they should, management has to become a creator of the economy rather then its creature. Management forges ahead through innovations in operating situation and the adoptian of far-sighted planning. It visualize the future, initiates changes and achieves the purpose of any enterprise under highly dynamic conditions. As an activity process, management plans the future course of action, organizes people and their work, directs the operation an controls the performance, and thus ensures the accomplishment of enterprise objectives. Adaptations and innovations permeate through each of these phases of the management process.

Management acts as a creative and invigorating force in the organisation. It creates result that is bigger than the sum total of efforts put in by the group. Management adds real plus value to the operation of any enterprise by enlisting as little extra value out of each person. It provides new ideas, imaginations and visions to the group working an integrates its efforts in such a manner as to account for better results. It ensures a smooth flow of work in the organization by focusing on strong points, neutralizing weak link, overcoming difficulties and establishing team spirit. Management strives to secure the maximum result by the use of minimum resources.


The concept of conflict, being an outcome of behaviors, is an integral part of human life. Wherever there is interaction there is conflict. Conflict can be defined as a disagreement between two or more individuals or groups, with each individual or group trying to gain acceptance of its view or objectives over others. Because people differ in their attitudes, values and goals, conflict among them becomes unavoidable. Accordingly, the management is concerned not so much with eliminating conflict which would be impossible, but to contain ti and manage it for organizational and individual benefit.

The personal conflict is more emotional in nature and reflects feelings, anger, distrust, fear, resentment, clash impersonality, antagonism, tension etc. The organizational conflict, on the other hand, involves disagreements on such factors as allocation of resources, nature of goals and objectives, organizational policies and procedures, nature of assignments and distribution of rewards. This conflict at its worst can lead to unnecessary stress, blockage in communication, lack of cooperation, increased sense of distrust an suspicion and this results in lost friendships and reduced organizational effectiveness.

Conflict has always been considered as undesirable so that is should be avoided when possible and resolved soon if it occurs Both the management school an the administrative school of management relied heavily on developing such organizational structures that would specify tasks, rules, regulations, procedures, authority relationships etc., so that any conflict can be avoided and if there is a conflict then such built-in rules and regulations would identify and correct problems of conflict. The Human Relations School subscribed to similar theory that conflict is avoidable by creating an environment of good will and trust. According to William R.Scott, good human relations can prevent conflicts, whether they are between individual and organizational objectives, between line and staff personnel, between one's ability an authority etc.

The modern management view is not so negative about conflict. It believes that conflict can be helpful and constructive if handled properly. As a matter of fact, moderate level of conflict is helpful in such organizations as Research and Development firms, advertising agencies, public policy groups etc.


In spite of exercising many and varied controls in various areas and segments of the company; the need for overall control arises from realizing the enterprise objectives, co-ordinating the operations of functional, territorial or product units, regulating divisionalized units with separate profit centres and assuring the financial soundness of the company by way of reviewing capital expenditures and influencing profits.


Management after planning, organising, and staffing functions, begins direction function. Till now, in the organisation, suitable persons have come in and they have assumed their positions as created through the organising process.

When various individuals are arranged in the organisational hierarchy, they become superiors and subordinates. All the individuals in the organisation are both superiors and subordinates, except the individuals at the extreme top or at the extreme bottom. A superior manager directs his subordinates as to how and when they have to perform various duties assigned to them. This becomes necessary, as without this direction, human factors in the organisation become inactive, consequently making physical factors useless. This process originates at the top and flows right upto the bottom. Thus, every manager in the organisation gives direction to his subordinates as superior and receives direction as subordinate from his superior.

Direction may be defined as a function of management which is related with instructing, guiding and inspiring human factor in the organisation to achieve organisational objectives. The direction is not merely issuing order and instructions by a superior to his subordinates, but it includes the process of guiding and inspiring them.

More Notes on  DIRECTION 

The modern extent of telecommunications and ease in travel has made the world into one global community. This means that the world is getting smaller and each part of the world is getting closer to the other. Specially, since World War II, people, technology, capital goods and services are crossing international borders like a daily routine. This has given rise to the pursuit of organizational objectives in an international setting transcending the boundaries of nationalism and cultural groupism.

International management, in true international setting, involves management of multinational corporations. It is an aspect of management which involves conducting business and industrial operations in foreign countries and is affected by cultural and national influence.

The True multinationalism involves more than the movements of investment capital or export of goods, and it involves a free flow of capital, technology, goods an services, information and managerial talent.


In modern times, management is based on inter-disciplinary study. Important advances have recently been made in Economics, Accounting, Statistics and Mathematics and in areas directly related to management. The following will be discussed briefly.

1. Managerial Economics
2. Managerial Accounting
3. The Behavioral Sciences in Management
4. Quantitative Techniques in Management
5. Systems Analysis
6. Cybernetics
7. Information Systems & Computers.


Planning is the conscious determination of a further course of action to achieve the desired result. Future events, instead of leaving them to chance, are made to happen in to certain recognized manner through planning. There are several ways in which a particular thing can be done. Planning involves choosing of a course of action from all available alternative for accomplishing the desired results with greatest economy and certainty. Planning sketches a complete mental picture of things yet to happen in the enterprise though the process of looking ahead. The proposed course of action is charted out in greater details with the help of a complex chain of plans like policies, procedures, programmes and budgets focured on objectives of the enterprise.


In management literature, span of management is also called as span of supervision or control. However, the term span of management is more appropriate as compared to its alternatives because span is one of management and not only of control or supervision which are merely a part of management. Span of management is referred to the number of subordinates which can be effectively managed by superior.

A basic question arises: How many subordinates can be managed by a superior ? Is there any ideal number ? Actual spans in business organisation indicate that there is no one best number that can be universally applied; however, the number is to be limited because human capacity is limited. This number has been made. Let us analyse the various approaches in determining ideal span of management.

Classical Approach. The classical approach to the span of management has dealt with generalizations embodying specific number of subordinates for an effective span. These persons have suggested span of upper and top level from three to seven to eight subordinates. However, more recent operational approach has suggested that there are too many variables in management and no exact number can be fixed. The exact number can be fixed. The exact number will depend upon underlying factors, all of which affect the difficulty and time requirement of managing.

Graicunas Theory of Superior-Subordinate Relationships. Perhaps the most influential paper in the past generation was that of V.A. Graicunas, a French Management Consultant, in 1933. This study was not based upon empirical observation, but rather upon theoretical projection by mathematics. He has analysed superior-subordinate relationships and developed a mathematical formula based on the geometric increase in complexities of manging as the number of subordinates increase.


Even since the early twenties, when the classic Hawthorne studies were conducted, behavioural scientists have been focussing on organisations and the management of these organisation, as a legitimate scientific topic. Such scholars as Elton Mayo and his group at Harvard, who were directly influenced by the Hawthorne studies, examined the social factors, including the concept of leadership, as they affect employee satisfaction and motivation. From this group evolved a school of research, generally called the human relations school. George Humans and William Foote White began to study the interactions among people within a group, interactions between groups, and the leadership of a group as important variables that affect both employee's morale and employee productivity. The major contribution of these people was a re-examination of the traditional concepts of organisation in terms of informal groups, employee morale an leadership patterns.

In addition to the human relations school, individually oriented psychologists, such as Abraham Maslow, Chris Argyris, Frederick Herzberg, David McClelland Lyman Porter, Marvin Dunnette and many others, conducted considerable research concerning such concepts as individual needs, the articulation of individual needs, with organisational goals and purposes, intrinsic job factors, leadership styles and general predictors to satisfaction and motivation.

Flowing from these research activities there exists a proliferation of research an principles which re of crucial interest for managers of organisation.

The experiments at the Hawthorne plant of Western Electric in Chicago, USA, began in 1924 and formed the bedrock of the human relations movement. This movement shifted attention away from formal organisation, though it accepted the basic concept of the legitimacy of authority steaming from hierarchical controls. Later, new models, such as the “implicit” bargaining models and power equalization models, did not accept this legitimacy in its totality.


The business environment refers to those conditions and forces in the surroundings of a business enterprise under which business operations are to be carried out effectively and efficiently. The success or failure of a business is considerably influenced by the impact of its environment. The management of the environmental forces is an important task before every businessman of today and suitable decisions are required to be made in respect of various developments going to take place for shaping the survival and growth of business. The business environment includes the economic realities, political situation, social conditions and technological forces. The environment in which an individual or organisation operates has a more or less direct bearing on his or its objectives and functions. This applies to a business organisation as well as it does to any other type of organisation. The proper estimate of the objectives of business and means to achieve them can, therefore, be made only after clearly understanding the environment in which a business firm functions.


Most Americans managers are generally groomed for domestic market and are isolated from the global stage. As Boris Yavitz puts it, “ Unlike European and Asian manager, who grow up expecting to see international service, U.S. executives are required to prepare only for domestic experience, with English as their only language. “

Since the world is getting much smaller and MNCs are becoming a way of life, a manger must have proper orientation towards : foreign people, ideas and resources


In business, there are various theories for making decisions. Various alternatives are evaluated in the context of the organisational objectives. For this evaluation purpose, normally three approaches are considered.

1. Marginal Theory. This approach has been suggested by economists. This emphasises the maximization of profit. The profit is maximum where marginal costs of inputs are equal to marginal revenues from outputs. Marginal cost is the additional cost which is incurred for taking one additional outputs. Marginal cost is the additional cost which is incurred for taking one additional output. Similarly, marginal revenue is earned by selling one additional unit of output. When marginal costs revenues differ, the profit cannot be maximum because, in that case, either more additional revenues can be earned at less additional cost, or additional revenues earned would be less than additional costs. In the first case, profit is maximized by additional output, and in the second case, it is maximized by reduction in output.

2. Mathematical Theory. This theory suggests the decision-making through building mathematical models. The models are constructed taking all factors affecting a decision, With the development of operations research add computers for handling complex mathematical models, this approach is commonly used by large-sized organisations where decision-making problem is very complex. Mathematical techniques have given basis for analyzing difficult situation; however, the role of experience and foresightedness in selecting an alternative cannot all together be avoided. Various techniques such as venture analysis, games theory, probability theory, waiting theory, linear programming, etc., are utilised for decision model building.

3. Psychological Theory. The marginal and mathematical theories emphasise on maximization of profits which is the treatment of a manger as 'economic man'. Some hold the view that good organisations do not want profit maximization, rather they want maximization of satisfaction. Thus, manager is not an economic man, but an administrative man. The former selects best alternative which combines various things. The manager in the latter approach involves in finding out an alternative only when the profits go below the satisfactory level. The satisfactory level may bot be maximum profits.


The nature of guidance and direction varies according to the types of leadership. Leadership may be broadly classified into personal and impersonal, formal and informal as well as into autocratic an democratic.

(a) Personal leadership calls for a direct and face-to-face contact between the leader and his followers in matters of giving guidance and direction. Supervisory managers at the lowest level exercise personal leadership over the working personnel. But leadership of top and middle managers over the rank and file workers becomes impersonal in character because of their lack of direct contact. That is, guiding and directing are effected by top and middle managers through subordinates in the shape of plans, orders and instructions.

(b) Formal leadership is extended to all managerial positions which are officially recognized. But informal leadership arises spontaneously from any group of human beings, and the existence of such leadership may not be known in the formal organization. Informal leadership forms the cement of the informal organization.

(c) Autocratic leadership calls for vesting of the power of decision making in the leader with little or no consultation of subordinates. In contrast, democratic leadership allows employee participation in varying degrees for work accomplishment through common consent or consultation. The techniques of direction are usually moulded by these two types of executive leadership which may exit at any level of management, whether top, middle or bottom.

Autocratic leadership is based upon close supervision, clear and specific instructions and commanding orders of the superior. It encourages quick decision and making prompt action fosters unity of direction, avoids splits into factions and guides the recalcitrant and less competent subordinates towards better work accomplishment. Autocratic leadership relies upon lesser degree of delegation. On the other hand, this type of leadership demoralizes subordinates, retards the growth of their capacity and lowers the quality of plans.

Democratic leadership requires joint action through the mutual support and concurrence of subordinates in the plans. Benefits of democratic leadership include greater employee co-operation, improved formulation of plans because of receiving new ideas and suggestions, better employee morale, greater understanding of orders an instructions, as well as the highest personal growth and development. Shortcomings of democratic leadership are manifested in absence of clear and complete instructions, the fear of unauthorized alteration or modification of the plan and the employee expectation of participation in all phases of decision making.

Fayol's principles of management
Fayol evolved fourteen principles of management which may be briefly stated as follows  Read Full Article Fayol's principles of management
Functions of management
There are four basic functions of management, viz., planning, organization, direction and control.   Read Full Article Functions of management
Managerial job in business
All social institutions, whether they are business or non business ones, require the same process of management of achieving their objectives.  Read Full Article Managerial job in business
Development of management thought
Although the systematic management has a recent origin, the practice of management is as old as human society.   Read Full Article Development of management thought
Classification of Management Thought
Management is old as civilization and it has been of some concern to organized society thought civilized history. Various examples exist today to remind us the result of the organized activities of the past.  Read Full Article Classification of Management Thought
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