Assignment (1)

Principles of Management
EM-502

Submitted to
Prof. Dr. M A Mannan
Department of Management Studies
Faculty of Business
University of Dhaka.

Submitted by
Md. Ariful Islam
Semester : Summer
ID No. : 3-10-19-057
Evening MBA Program,
Dept. of Management Studies
University of Dhaka.

Date of Submission: 28th May, 2011.

Administrative Management:
One important branch of two distinct classical management perspectives is administrative
management. The administrative management focuses on managing the total organizations and
on ways to make it more efficient and effective. Prominent administrative theorists were Henri
Fayol, Lyndal Urwick, Max Weber and Chester Barnard.

Areas of Management:
Management can be applied to every aspect of activity of a person or an organization. In the case
of a person’s personal information, knowledge, stress and time, management is much needed. On
the other hand, in case of an organization, management is required for the total sequential
activities of planning, organizing, leading and controlling of available resources for achieving
organizational goals.

Authority:
The right in a position (and, through it, the right of the person occupying the person) to exercise
discretion in making decisions affecting others. It is of course one type of power, but power in an
organizational setting.

Behavioral Management:
The behavioral management focuses on employee behavior in an organization context. The
thought emphasizes individual employee’s attitudes and behaviors of an organization. Prominent
theorists of this thought were Munsterberg (a German psychologist) and Mary Parker Follett.

Business Environment:
The term Business Environment is composed of two words ‘Business’ and ‘Environment’. In
simple terms, the state in which a person remains busy is known as Business. The word Business
in its economic sense means human activities like production, extraction or purchase or sales of
goods that are performed for earning profits.
On the other hand, the word ‘Environment’ refers to the aspects of surroundings. Therefore,
Business Environment may be defined as a set of conditions – Social, Legal, Economical,
Political or Institutional that are uncontrollable in nature and affects the functioning of
organization. Business Environment has two components:

1. Internal Environment
2. External Environment

Centralization:
When a single person controls the affairs of an organization, it is said to be complete
centralization. In small concerns, a single manager can supervise the work of the subordinates
easily, while in a big organization, control is divided among a number of persons to facilitate
operational decision making at various levels. Fayol’s opinion was that there should be a proper
balance between centralization and delegation of authority in an organization.
CEO:
A chief executive officer (CEO, American English), managing director (MD, British
English), or chief executive is the highest-ranking corporate officer (executive) or
administrator in charge of total management of an organization. An individual
appointed as a CEO of a corporation, company, organization, or agency typically
reports to the board of directors.

Classical Management:
One of the first schools of management thought, the classical management theory, developed
during the Industrial Revolution ( a period between 18th to 19th century) when new problems
related to the factory system began to appear. Managers were unsure of how to train employees
(many of them non-English speaking immigrants) or deal with increased labor dissatisfaction, so
they began to test solutions. As a result, the classical management theory developed from efforts
to find the “one best way” to perform and manage tasks.
This school of thought is made up of two branches:
 classical scientific and
 classical administrative management.

Whereas scientific management focused on the productivity of individuals, the classical

administrative approach concentrates on the total organization.

Closed System:
The closed-system approach conceives of the organization as a system of management,
technology, personnel, equipment, and materials, but tends to exclude competitors, suppliers,
distributors, and governmental regulators. This approach allows managers and organizational
theorists to analyze problems by examining the internal structure of a business with little
consideration of the external environment.
Contemporary Management:
Interest in management theory and practice has heightened in recent years as new issues and
challenges have emerged. No new paradigm is formulated which replaces the traditional views,
but managers continue to strive toward a better understanding.
Most contemporary management perspectives have emerged and evolved over the last hundred
years and so. Beginning with the classical management perspective, first developed toward the
nineteenth century, and on through contemporary applied perspectives, managers have an array
of useful techniques, methods, and approaches for solving problems and enhancing the
effectiveness of their organizations.

Controlling:
Controlling is the process of assigning, evaluating, and regulating resources on an ongoing basis
to accomplish an organization's goals. To successfully control an organization, managers need to
not only know what the performance standards are, but also figure out how to share that
information with employees.
Coordinating:
Coordinating requires integration of activities and synchronization of efforts in order to achieve
the objectives of the organization. The heads of different departments should not treat each other
as competitors but should work as organs of one body. As the proper functioning of every organ
of a human body is important for a healthy body, the work of every department is important for
the organization as a whole. Managers should, therefore, see that everybody in the organization
understands its objectives and works in co-operation with others to achieve these objectives. This
function of management is called co-ordination. It consists of harmonizing group effort so as to
achieve common objectives.

Decision-making:
Decision making and problem solving are ongoing processes of evaluating situations or
problems, considering alternatives, making choices, and following them up with the necessary
actions. Sometimes the decision-making process is extremely short, and mental reflection is
essentially instantaneous. In other situations, the process can drag on for weeks or even months.
The entire decision-making process is dependent upon the right information being available to
the right people at the right times.
The decision-making process involves the following steps:
1. Define the problem.
2. Identify limiting factors.
3. Develop potential alternatives.
4. Analyze the alternatives.
5. Select the best alternative.
6. Implement the decision.
7. Establish a control and evaluation system.

Division of Labor:
This principle suggests that work should be assigned to a person for which he is best suited.
Work should be divided into compact jobs to be assigned to individuals. This facilitates
specialization and improves efficiency.

Economic Forces:
Economic forces refer to the nature and direction of the economy in which business operates.
Economic factors have a tremendous impact on business firms. The general state of the economy
(e.g., depression, recession, recovery, or prosperity), interest rate, stage of the economic cycle,
balance of payments, monetary policy, fiscal policy, are key variables in corporate investment,
employment, and pricing decisions.

.
Efficiency:
The efficiency is the achievements of the ends with the least amount of resources where ends
mean the wants or needs. In business organization, efficiency is the achievement of the business
goals or objectives with least amount of physical, human, financial and information resources.

Effectiveness:
Effectiveness in an organization denotes the degree of level of achievement/goal(s).

Employees:
Employees are the individuals known as human resources of an organization who plan, organize,
lead and control the organization’s resources for achieving targeted goal(s).

Empowerment:
In recent years, it has become fashionable to advocate a variety of empowerment approaches.
Empowerment means that employees, managers, or teams at all levels in the organization are
given the power to make decisions without asking their supervisors for permission. However, the
concepts of delegation are also closely related to empowerment.

Entrophy:
Management entropy reveals the efficiency of the internal management of the enterprise
organization Law of diminishing, it pointed out that the energy gradient exists within
the enterprise, namely, energy difference, as a relatively closed isolated system, if an
enterprise and the environment less of information, energy and material exchange,
then the bound from the orderly Development of the disorder and ultimately demise.

Equity:
This principle requires the managers to be kind and just to workers. This promotes a friendly
atmosphere between superiors and subordinates and motivates them to perform their duties
efficiently.

Esprit de corps:
Esprit de corps, a French phrase much used by English writers to denote the common spirit
pervading the members of a body or association of persons.
In management, these French words mean team spirit. Managers should infuse the spirit of team
work and cooperation among the employees. It helps in developing an atmosphere of mutual
trust and a sense of unity.

Ethics:
All persons, whether in business, government, university, or any other enterprise, are concerned
with ethics. In Webster’s Ninth New Collegiate Dictionary, ethics is defined as ‘the discipline
dealing with what is good and bad and with moral duty and obligation’. Business ethics is
concerned with truth and justice and has a variety of aspects, such as the expectations of society,
fair competition, advertising, public relations, social responsibility, consumer autonomy, and
corporate behavior in the home country as well as abroad.

Evaluating:
Evaluating comes from the word evaluation. Evaluation is the comparison of actual (project)
impacts against the decided strategic plans. It looks at the original objectives, at what was
accomplished, and how it was accomplished.

Excellence:
Excellence is a talent or quality which is unusually good and so surpasses ordinary standards. It
is also an aimed for standard of performance.
Executives:
An executive is generally a person responsible for running an organization, although the exact
nature of the role varies depending on the organization.
External Environment:
All outside factors that may affect an organization make up the external environment. The
external environment is divided into two parts:
• The general environment:
• The Task Environment:

Financial Resources:
Out of four essential resources of an organization, financial resource is one of them. Equity or
debt financing of an organization may be exampled as one of the important financial
management tasks for an organization.

Firstk-line managers:
An individual who works under the supervision of a middle manager and is responsible for
managing the daily activities of a group of workers.

Globalization of business:
To be successful in the 21st century, companies must take advantage of information technology-
especially the internet and globalization. Globalization has a pervasive impact on both business
and individuals. Most major business organizations have an international presence. The World
Trade Organization (WTO), an umbrella organization, was established in 1995 to govern
international trade. Despite street protests at WTO meetings, globalization continues. The gains
from globalization not only benefit Western business organizations but also result in higher
incomes for people in other countries, such as china.
Goals:
Goal is the expected benefits in the future. Every business organization has a unique goal or a set
of goals to achieve using available resources. For example, a business organization producing
laptop may target to have an annual production of 600 pieces within their existed resources. This
target of 600 pieces of laptop is their goal.
Hawthrone studies:
The Hawthorne studies were carried out by the Western Electric company at their Hawthorne
plant in the 1920's.The study focused on the use of time and motion studies, in which
management would carefully break down tasks into simple chunks, and then work out the best
way for a worker to execute the chunks. The worker then executed their jobs exactly as they
were told, like automatons.
The Howthrone studies were a series of early experiments that focused on behavior on the work
place. In one experiment involving this group of workers, for example, researchers monitored
how productivity changes as a result of changes in working conditions.

Two things emerged from the initial studies:

(1) The experimenter effect:
The experimenter effect was that making changes was interpreted by workers as a sign
that management cared, and more generally, it was just provided some mental stimulation
that was good for morale and productivity.
(2) Social effect:
The social effect was that it seemed that by being separated from the rest and being given
special treatment, the experimenters developed a certain bond and camaraderie that also
increased productivity.

Human Resources:
‘Human resources’ is a term used to describe the individuals who make up the workforce of an
organization, although it is also applied in labor economics to, for example, business sectors or
even whole nations. Human resources is also the name of the function within an organization
charged with the overall responsibility for implementing strategies and policies relating to the
management of individuals (i.e. the human resources). This function title is often abbreviated to
the initials "HR".

Information resources:
Out of four essential resources such as physical, financial, human and information resources of a
business organization, information resources is one of them. Information resources helps the
managers or the owner or related bodies in decision making by providing necessary feedback of
state of the organization.

Internal Environment:
An organization's internal environment is composed of the elements within the organization,
including owners, board of directors, employees, physical work environment, and culture.

Leading:
Leading is influencing peoples so that they will contribute to organizational and group goals; it
has to do predominantly with the interpersonal aspects of managing. In other words, leading is
establishing direction and influencing others to follow that direction.
Common to all definitions of leadership is the notion that leaders are individuals who, by their
actions, facilitate the movement of a group of people toward a common or shared goal. This
definition implies that leadership is an influence process.
The distinction between leader and leadership is important, but potentially confusing. The leader
is an individual; leadership is the function or activity this individual performs. The word leader is
often used interchangeably with the word manager to describe those individuals in an
organization who have positions of formal authority, regardless of how they actually act in those
jobs. But just because a manager is supposed to be a formal leader in an organization doesn't
mean that he or she exercises leadership.

Levels of management:
There are generally three different levels of managers: first-level managers, middle-level
managers, and top-level managers. These levels of managers are classified in a hierarchy of
importance and authority, and are also arranged by the different types of management tasks that
each role does. In many organizations, the number of managers in every level resembles a
pyramid, in which the first-level has many more managers than middle-level and top-level
managers, respectively. Each management level is explained below in specifications of their
different responsibilities and likely job titles.

• Top-Level Managers:
Typically consist of Board of Directors, President, Vice President, Chief Executive
Officers, etc. These individuals are mainly responsible for controlling and overseeing all
the departments in the organization. They develop goals, strategic plans, and policies for
the company, as well as make many decisions on the direction of the business. In
addition, top-level managers play a significant role in the mobilization of outside
resources and are for the most part responsible for the shareholders and general public.

• Middle-Level Managers:
Typically consist of General Managers, Branch Managers, Department Managers, etc.
These individuals are mainly responsible to the top management for the functioning of
their department. They devote more time to organizational and directional functions.
Their roles can be emphasized as executing plans of the organization in conformance
with the company's policies and the objectives of the top management, they define and
discuss information and policies from top management to lower management, and most
importantly they inspire and provide guidance to lower level managers towards better
performance.

• First-Level Managers:
Typically consist of Supervisors, Section Officers, Foreman, etc. These individuals focus
more on the controlling and direction of management functions. For instance, they assign
tasks and jobs to employees, guide and supervise employees on day-to-day activities,
look after the quantity and quality of the production of the company, make
recommendations, suggestions, and communicate employee problems to the higher level
 above, etc. In this level, managers are the "image builders" of the company considering
they are the only ones who have direct contact with employees.

Management pioneers:
On the basis of two primary thrusts of classical management, noted management pioneers for
scientific management were Frederick Taylor, Frank and Lillian Gilberth, Henry Grandtt, and
Herrington Emerson, and for administrative management were Hemri Fayol, Lyndall Urwick,
Max Weber and Chester Bernard.
Management process:
Management process is the process of a sequential activities of planning, organizing, leading and
controlling of physical, human, financial and information resources in order to achieve future
expected benefit (goals).
Management science:
Management science is the study of management. This study of management emphasizes the use
of mathematics and statistics as an aid in resolving production and operations problems. A major
objective is to provide management with a quantitative basis for decisions.

Management theory:
The theories of management are useful to the practicing managers because a theory is a simple
blue print or a road map guiding the managers achieving organizational goals. The practice of
management started when man first attempted to accomplish goals by working together in
groups. But the systematic study of management began at the advent of the Industrial
Revolution.