PHILOSOPHY AND

PRINCIPLES OF
MANAGEMENT
ENGINEERING
GRACE A. LLOBRERA-DIAMSE
FACULTY
Management – Overview

► In today’s volatile economies, every organization needs

strong managers to lead its people towards achieving the
business objectives. A manager’s primary challenge is to
solve problems creatively and plan effectively. Managers
thus fulfill many roles and have different responsibilities
within the various levels of an organization.
Management – Overview

► Management began to materialize as a practice during the

Industrial Revolution, as large corporations began to
emerge in the late 19th century and developed and
expanded into the early 20th century. Management is
regarded as the most important of all human activities. It
may be called the practice of consciously and continually
shaping organizations.
What is Management?

► Management is a universal phenomenon. Every individual

or entity requires setting objectives, making plans,
handling people, coordinating and controlling activities,
achieving goals and evaluating performance directed
towards organizational goals. These activities relate to the
utilization of variables or resources from the environment
− human, monetary, physical, and informational.
What is Management?
What is Management?

► Human resources refer to managerial talent, labor (managerial

talent, labor, and services provided by them), monetary resources
(the monetary investment the organization uses to finance its
current and long-term operations), physical resources (raw
materials, physical and production facilities and equipment) and
information resources (data and other kinds of information).
Management is essentially the bringing together these resources
within an organization towards reaching objectives of an
organization.
Management Defined

► Management has been defined by various authors/authorities in various

ways. Following are few often-quoted definitions:
► Management guru, Peter Drucker, says the basic task of management includes both
marketing and innovation. According to him, “Management is a multipurpose organ
that manages a business and manages managers, and manages workers and work.”
► Harold Koontz defined management as “the art of getting things done through and
with people in formally organized groups.”
Management Defined

► All these definitions place an emphasis on the attainment

of organizational goals/objectives through deployment of
the management process (planning, organizing, directing,
etc.) for the best use of organization’s resources.
Management makes human effort more fruitful thus
effecting enhancements and development.
Management Defined

► Management is the process of planning, organizing,

leading, and controlling an organization’s human,
financial, physical, and information resources to achieve
organizational goals in an efficient and effective manner.
Management Defined

► The principles of management are the means by which a manager

actually manages, that is, get things done through
others—individually, in groups, or in organizations.
► Formally defined, the principles of management are the activities
that “plan, organize, and control the operations of the basic elements
of [people], materials, machines, methods, money and markets,
providing direction and coordination, and giving leadership to
human efforts, so as to achieve the sought objectives of the
enterprise.”
Is Management an Art or a Science?

► Like any other discipline such as law, medicine or engineering,

managing is an art – at least that is what most people assume.
Management concepts need to be artistically approached and
practiced for its success. It is understood that managing is doing
things artistically in the light of the realities of a situation.
► If we take a closer look at it, Management, when practiced, is
definitely an art but its underlying applications, methods and
principles are a science. It is also opined that management is an art
struggling to become a science.
Management as an Art

► The personal ingenious and imaginative power of the manager lends

management the approach of an art. This creative power of the
manager enriches his performance skill. In fact, the art of managing
involves the conception of a vision of an orderly whole, created from
chaotic parts and the communication and achievement of this vision.
Managing can be called "art of arts" because it organizes and uses
human talent, which is the basis of every artistic activity.
Management as a Science
► Management is a body of systematized knowledge accumulated and
established with reference to the practice and understanding of general
truth concerning management. It is true that the science underlying
managing is not as accurate or comprehensive as physical sciences (such
as chemistry or biology) which deal with non-human entities.
► The involvement of the human angle makes management not only
complex but also controversial as pure science. Nevertheless, the study of
the scientific elements in management methodologies can certainly
improve the practice of management.
Management as a Science and Art

► Science urges us to observe and experiment a phenomenon, while art

teaches us the application of human skill and imagination to the
same. In order to be successful, every manager needs do things
effectively and efficiently. This requires a unique combination of
both science and art. We can say that the art of managing begins
where the science of managing stops. As the science of managing is
imperfect, the manager must turn to artistic managerial ability to
perform a job satisfactorily.
Management – Role of Managers

► Every organization has

‘Managers’ who are entrusted
with the responsibility of
guiding and directing the
organization to achieve its
goals.
Management – Role of Managers

► Managers administer and coordinate resources effectively and

efficiently to channelize their energy towards successful
accomplishment of the goals of the organization. Managers are
required in all the activities of organizations. Their expertise is vital
across departments throughout the organization.
Role of Managers

► Managers are the primary force in an organization's growth and

expansion. Larger organizations are particularly complex due to
their size, process, people and nature of business. However,
organizations need to be a cohesive whole encompassing every
employee and their talent, directing them towards achieving the set
business goals. This is an extremely challenging endeavor, and
requires highly effective managers having evolved people
management and communication skills.
The Top Management

► The top level executives direct the organization to achieve its

objectives and are instrumental in creating the vision and mission of
the organization. They are the strategic think-tank of the
organization.
Senior Management

► The General Manager is responsible for all aspects of a company. He is

accountable for managing the P&L (Profit & Loss) statement of the
company. General managers usually report to the company board or top
executives and take directions from them to direct the business.
► The Functional Manager is responsible for a single organizational unit or
department within a company or organization. He in turn is assisted by a
Supervisor or groups of managers within his unit/department. He is
responsible for the department’s profitability and success.
Line and Staff Managers

► Line Managers are directly responsible for managing a single

employee or a group of employees. They are also directly
accountable for the service or product line of the company. For
example, a line manager at Toyota is responsible for the
manufacturing, stocking, marketing, and profitability of the Corolla
product line.
► Staff Managers often oversee other employees or subordinates in an
organization and generally head revenue consuming or support
departments to provide the line managers with information and
advice.
Project Managers

► Every organization has multiple projects running simultaneously

through its life cycle. A project manager is primarily accountable for
leading a project from its inception to completion. He plans and
organizes the resources required to complete the project. He will
also define the project goals and objectives and decide how and at
what intervals the project deliverables will be completed.
The Changing Roles of
Management and Managers
► interpersonal relationships. The manager in the
figurehead role represents the organization in all
matters of formality. The top-level manager
represents the company legally and socially to the
outside world that the organization interacts with.
► In the supervisory role, the manager represents his
team to the higher management. He acts as a
liaison between the higher management and his
team. He also maintains contact with his peers
outside the organization.
Mintzberg’s Set of Ten Roles

► Professor Henry Mintzberg, a great management researcher, after

studying managers for several weeks concluded that, to meet the many
demands of performing their functions, managers assume multiple roles.
► He propounded that the role is an organized set of behaviors. He
identified the following ten roles common to the work of all managers.
These roles have been split into three groups as illustrated in the
following figure.
Mintzberg’s Set of Ten Roles
► Interpersonal Role
► Figurehead – Has social, ceremonial and legal responsibilities.
► Leader – Provides leadership and direction.
► Liaison – Networks and communicates with internal and external contacts.
► Informational Role
► Monitor – Seeks out information related to your organization and industry, and
monitors internal teams in terms of both their productivity and well-being.
► Disseminator – Communicates potentially useful information internally.
► Spokesperson – Represents and speaks for the organization and transmits information
about the organization and its goals to the people outside it.
► Decisional Role
► Entrepreneur – Creates and controls change within the organization - solving
problems, generating new ideas, and implementing them.
► Disturbance Handler – Resolves and manages unexpected roadblocks.
► Resource Allocator – Allocates funds, assigning staff and other organizational
resources.
► Negotiator – Involved in direct important negotiations within the team, department, or
organization.
Managerial Skills

► Henri Fayol, a famous management theorist also called as the Father of Modern
Management, identified three basic managerial skills - technical skill, human skill
and conceptual skill.
Technical Skill

► Knowledge and skills used to perform specific tasks. Accountants,

engineers, surgeons all have their specialized technical skills
necessary for their respective professions. Managers, especially at
the lower and middle levels, need technical skills for effective task
performance.
► Technical skills are important especially for first line managers,
who spend much of their time training subordinates and supervising
their work-related problems.
Human Skill

► Ability to work with, understand, and motivate other people as

individuals or in groups. According to Management theorist
Mintzberg, the top (and middle) managers spend their time: 59
percent in meetings, 6 percent on the phone, and 3 percent on tours.
► Ability to work with others and get co-operation from people in
the work group. For example, knowing what to do and being able to
communicate ideas and beliefs to others and understanding what
thoughts others are trying to convey to the manager.
Conceptual Skill

► Ability to visualize the enterprise as a whole, to envision all the

functions involved in a given situation or circumstance, to
understand how its parts depend on one another, and anticipate how
a change in any of its parts will affect the whole.
► Creativity, broad knowledge and ability to conceive abstract
ideas. For example, the managing director of a telecom company
visualizes the importance of better service for its clients which
ultimately helps attract a vast number of clients and an unexpected
increase in its subscriber base and profits.
Other Managerial Skills

► Besides the skills discussed above, there are two other skills that a manager should
possess, namely diagnostic skill and analytical skill.
► Diagnostic Skill: Diagnose a problem in the organization by studying its
symptoms. For example, a particular division may be suffering from high
turnover. With the help of diagnostic skill, the manager may find out that the
division’s supervisor has poor human skill in dealing with employees. This
problem might then be solved by transferring or training the supervisor.
Other Managerial Skills

► Analytical Skill: Ability to identify the vital or basic elements in a

given situation, evaluate their interdependence, and decide which
ones should receive the most attention. This skill enables the
manager to determine possible strategies and to select the most
appropriate one for the situation.
► For example, when adding a new product to the existing product
line, a manager may analyze the advantages and risks in doing so
and make a recommendation to the board of directors, who make the
final decision.
Management – The P-O-L-C Framework

► The primary challenge faced by organizations and managers today is

to creatively solve business problems. The principles of management
are guidelines using which managers can tackle business challenges.
► The principles of management have been categorized into the four
major functions of planning, organizing, leading, and controlling
popularly known as the P-O-L-C framework.
Planning

► Planning is the first and the most important function of management that involves
setting objectives and determining a course of action for achieving those
objectives. Planners are essentially the managers who are best aware of
environmental conditions facing their organization and are able to effectively
analyze and predict future conditions. It also requires that managers should be
good decision makers.
► Planning involves selecting missions and objectives and the actions to achieve
them, it requires decision making, i.e. choosing future courses of action from
among alternatives.
► Planning as a process typically involves the following steps:
► Selection of goals for the organization.
► Establishment of goals for each of the organization’s sub-units.
► Establishment of programs for achieving goals in a systematic manner.
Types of Planning

► Strategic planning involves analyzing competitive opportunities and threats, as

well as the strengths and weaknesses of the organization. It also involves
determining how to position the organization to compete effectively in their
environment.
► Tactical planning is creating the blueprint for the lager strategic plan. These
plans are often short term and are carried out by middle-level managers.
► Operational planning generally covers the entire organization’s goals and
objectives and put into practice the ways and action steps to achieve the strategic
plans. They are very short terms usually less than a year.
Organizing

► Once a manager has created a work plan, the next phase in management cycle is to
organize the people and other resources necessary to carry out the plan.
Organizing should also consider the resources and physical facilities available, in
order to maximize returns with minimum expenditure.
Organizing

► Organizing involves the following steps:

► Creating the organizational structure - The framework of the organization is
created within which effort is coordinated allocating human resources to ensure
the accomplishment of objectives. This structure is usually represented by an
organizational chart, which is a graphic representation of the chain of command
within an organization.
► Making organizational design decisions - Decisions are made about the
structure of an organization.
► Making job design decisions – Roles and responsibilities of individual jobs, and
the process of carrying out the duties is defined.
Organizing

► Organizing at the level of a particular job involves how best to design individual
jobs so as to most effectively utilize human resources. Traditionally, job design
was based on principles of division of labor and specialization, which assumed
that the more narrow the job content, the more proficient the individual
performing the job could become.
Leading

► Organizations as they grow, develop complex structures with an increasing need

for coordination and control. To cope and manage such situations, leadership is
necessary to influence people to cooperate towards a common goal and create a
situation for collective response.
► Personality research and study of job attitudes in Behavioral Science provides
important insight on the need for coordination and control. Thus it becomes
important for leadership to create harmony among individual efforts to
collectively work towards organizational goals.
Leading
Controlling

► Managers at all levels engage in the managerial function of controlling to some

degree. Two traditional control techniques are budget and performance audits. An
audit involves a physical examination and verification of the organization’s
records and supporting documents. A budget audit provides information about
where the organization is with respect to procedures followed for financial
planning and control, whereas a performance audit might try to determine whether
the figures reported are a reflection of actual performance.
Controlling

► Controlling is not just limited to organization’s financial state, but also spans
across areas like operations, compliance with company policies and other
regulatory policies, including many other activities within the organization.
► The management functions thus most effectively cover the broad scope of a
manager’s duties and responsibilities. Though the nature and complexities faced
by businesses have undergone a vast change over the years, the functions of
management remain the same.
Management –
Evolution & Trends
Management – Classical Schools of
Thought
► Management as a practice gained ground when the concept of working together in
groups to achieve common objectives was realized by men. But the study of
management as a systematic field of knowledge began at the advent of the
Industrial Revolution, which ushered in a new era of serious thinking and
theorizing on management.
► To begin with, there is no single universally accepted theory of management. “The
wild array of management theories could even look like a jungle” says Harold
Koontz. However, to help put the different theories in perspective, we shall
discuss them as representing different schools of thought.
Classical School of
Management Thought
Scientific Management and F. W. Taylor

► Scientific management, according to an early definition, refers to “that kind of

management which conducts a business or affairs by standards established by facts
or truths gained through systematic observation, experiment, or reasoning.”
Advocators of this school of thought attempted to raise labor efficiency primarily
by managing the work of employees on the shop floor.
► Frederick Winslow Taylor, who is generally acknowledged as “the father of
scientific management” believed that organizations should study tasks and prepare
precise procedures. His varied experience gave him ample opportunity to have
firsthand knowledge and intimate insight into the problems and attitude of
workers, and to explore great possibilities for improving the quality of
management in the workplace.
Scientific Management and F. W. Taylor

► Formulating his theory based on firsthand experience, Taylor’s theory focused on

ways to increase the efficiency of employees by molding their thought and
scientific management.

► https://youtu.be/vNfy_AHG-MU

► Henry Gantt, an associate of Taylor, developed the Gantt Chart, a bar graph that
measures planned and completed work along with each stage of production. This
visual display chart has been a widely used control and planning tool since its
development in 1910. Following is a sample of Gnat Chart.
► Frank Gilbreth and his wife, Lillian Moller Gilbreth further improvised on
Taylor’s time studies, devising “motion studies” by photographing the individual
movements of each worker. They carefully analyzed the motions and eliminated
unnecessary ones. These motion studies were preceded by timing each task, so the
studies were called “time and motion studies.”
► Applying time and motion studies to bricklaying, the Gilbreths devised a way for
workers to lay bricks that eliminated wasted motion and raised their productivity
from 1,000 bricks per day to 2,700 bricks per day.
Henry Fayol’s Universal Process Theory

► One of the oldest and most popular approaches, Henry Fayol’s theory holds that
administration of all organizations – whether public or private, large or small –
requires the same rational process or functions.
► This school of thought is based on two assumptions:
► Although the objective of an organization may differ (for example, business,
government, education, or religion), yet there is a core management process that
remains the same for all institutions.
► Successful managers, therefore, are interchangeable among organizations of
differing purposes. The universal management process can be reduced to a set of
separate functions and related principles.
https://youtu.be/90qpziPNRnY
Henry Fayol’s Universal Process Theory

► Fayol identifies fourteen universal principles of management, which are aimed at

showing managers how to carry out their functional duties.
Henry Fayol’s Universal Process Theory
Henry Fayol’s Universal Process Theory
Henry Fayol’s Universal Process Theory
Behavioral and Human Relations
Approach
► The criticism of scientific and administrative management approach as advocated
by Taylor and Fayol, respectively gave birth to the behavioral approach to
management. One of the main criticisms leveled against them are their
indifference to and neglect of the human side of the enterprise in management
dealings.
► A good number of sociologists and psychologists like Abraham Maslow, Hugo
Munsterberg, Rensis Likert, Douglas McGregor, Frederick Herzberg, Mary Parker
Follet, and Chester Barnard are the major contributors to this school of thought,
which is further subdivided by some writers into the Human Relations approach
and the Human Behavioral approach.
Elton Mayo and Hawthorne Studies

► Elton Mayo and Hugo Munsterberg are considered pioneers of this school. The
most important contribution to this school of thought was made by Elton Mayo
and his associates through Hawthorne plant of the Western Electric Company
between 1927 and 1932.
Elton Mayo and Hawthorne Studies

► Following are the findings of Mayo and his colleagues from Hawthorne studies:
► Human/social element operated in the workplace and productivity increases were as much
an outgrowth of group dynamics as of managerial demands and physical factors.
► Social factors might be as powerful a determinant of worker-productivity as were financial
motives.
► Management with an understanding of human behavior, particularly group behavior serves
an enterprise through interpersonal skills such as motivating, counseling, leading and
communicating – known as Hawthorne effect.
► Employees or workers are social beings, so it is very important to fit them into a social
system, resulting in a complete socio-technical system in an organization.
Elton Mayo and Hawthorne Studies

► Criticism Following are the criticisms of Hawthorne studies:

► Unreasonably high emphasis on the social or human side as against organizational
needs.
► The approach facilitates exploitation of employees by keeping them satisfied and
happy, manipulating their emotions which in fact, serves the management goal of
increasing productivity.
Management – Modern
Schools of Thought
► This school of thought primarily focuses on the development of each factor of
both workers and the organization. It analyzes the interrelationship of workers and
management in all aspects. System Approach and Contingency Approach are the
two approaches by this school of thought.
Chester Barnard and Social Systems
Theory
► One of the most important contributions to this school has been made by Chester I.
Barnard. His classic treatise entitled "The Functions of the Executive", published
in 1938, is considered by some management scholars as one of the most influential
books published in the entire field of management. Like Fayol, Barnard based his
theories and approach to management on the basis of his first-hand experience as a
top-level executive.
► Fundamentals of System Approach:
► All organizations are a co-operative system.
► As co-operative systems, organizations are a combination of complex physical,
biological, personal and social components, which are in a specific systematic
relationship by reason of the co-operation of two or more persons for at least one
definite end.
► An employee’s role and his co-operation are a strategic factor in achieving
organizational objectives.
Chester Barnard and Social Systems
Theory
► Criticism
► Following are the criticisms that this theory received.
► Long on intellectual appeal and catchy terminology and short on verifiable facts and
practical advice.
► Complex in nature, particularly when it comes to the study of large and complex
organizations.

However, we can conclude that the system approach is an instructive approach and way of
thinking rather than a systematic model of solution to explain the complexities of
managing modern organizations.
Contingency Approach and Recent
Contributions
► The Contingency Management theory evolved out of the System Approach to
managing organizations. According to the Contingency approach, management is
situational; hence there exists no single best approach to management, as
situations that a manager faces is always changing.
► However, situations are often similar to the extent that some principles of
management can be effectively applied by identifying the relevant contingency
variables in the situation and then evaluating them.
Contingency Approach and Recent
Contributions
► Peter F. Drucker, W. Edwards Deming, Laurence Peter, William Ouchi, Thomas
Peters, Robert Waterman, and Nancy Austin are some of the most important
contributors to management thought in recent times. This has emerged perhaps as
the best approach as it encourages management to search for the correct situational
factors for applying appropriate management principles effectively.
► On the basis of the Tom Peters and Robert Waterman’s research focusing on 43 of
America’s most successful companies in six major industries, the following 9
principles of management are embodied in excellent organizations:
Contingency Approach and Recent
Contributions
► Managing Ambiguity and Paradox: The ability of managers to hold two
opposing ideas in mind and at the same time able to function effectively.
► A Bias for Action: A culture of impatience with lethargy and inertia that
otherwise leaves organizations unresponsive.
► Close to the Customer: Staying close to the customer to understand and
anticipate customer needs and wants.
► Autonomy and Entrepreneurship: Actions that foster innovation and nurture
customer and product champions.
► Productivity through People: Treating rank-and-file employees as a source of
quality.
Contingency Approach and Recent
Contributions
► Hands-On, Value-Driven: Management philosophy that guides everyday
practice and shows the management’s commitment.
► Stick to the Knitting: Stay with what you do well and the businesses you know
best.
► Simple Form, Lean Staff: The best companies have very minimal, lean
headquarters staff.
► Simultaneous Loose-Tight Properties: Autonomy in shop-floor activities and
centralized values.
Quality School of Management

► The Quality School of Management (also known as Total Quality Management,

TQM) is a fairly recent and comprehensive model for leading and operating an
organization. The prime focus is on continually improving performance by
focusing on customers while addressing the needs of all stakeholders. In other
words, this concept focuses on managing the entire organization to deliver high
quality to customers.
Quality School of Management

► The quality school of management considers the following in its theory:

► Quality of the Company’s Output: Focus on providing goods and services that
satisfy the customer requirements, which is presumed to be a key to organizational
survival and growth.
► Organizational Structure: Every organization is made up of complex systems of
customers and suppliers and every individual will need to function as both a
supplier and a customer.
► Group Dynamics: Organization should foster an environment of working in
groups. Management should recognize and nurture harmony and efficiency in
these groups, which are the catalysts for planning and problem solving.
Quality School of Management

► Continuous Improvement: Constantly review the company’s policies and

processes. This will lead to specialization and ultimately better outcomes.
► Transparency and Trust: Connect with employees at all levels and create a
culture of trust and stability.
Kaizen Approach

► Kaizen means that everyone is involved in making improvements. Kaizen

(pronounced ky‐zen) is based on the Japanese management concept for
incremental change and improvement.
► The idea of continuous improvement suggests that managers, teams, and
individuals learn from both their accomplishments and their mistakes. It is a
long-term approach to work that systematically seeks to achieve small,
incremental changes in processes in order to improve efficiency and quality.
► While the majority of changes may be small, the greatest impact may be
improvements or changes that are led by senior management as transformational
projects, or by crossfunctional teams as Kaizen events.
► Kaizen Process
► Following are the steps involved in
Kaizen Process.
► Identifying opportunities for
improvement
► Testing new approaches
► Recording the results
► Recommending changes
Reengineering Approach

► Reengineering Approach sometimes called Business Process Reengineering

(BPR), involves a complete rethinking and transformation of key business
processes, leading to strong horizontal coordination and greater flexibility in
responding to changes in the environment. The reengineering approach focuses on
sensing the need to change, anticipating changes, and reacting effectively when it
happens.
► Reengineering Process
► Following are the steps involved in reengineering process.
► Develop business vision and process objectives
► Identify business processes
► Scope and measure existing processes
► Design and build new process prototypes
► Implement and manage changes
Future of Management

► Modern management approaches respect the classical, human resource, and

quantitative approaches to management. However, successful managers recognize
that although each theoretical school has limitations in its applications, each
approach also offers valuable insights that can broaden a manager's options in
solving problems and achieving organizational goals. Successful managers work
to extend these approaches to meet the demands of a dynamic environment.
► Just as organizations evolve and grow, employee needs also change over time;
people possess a range of talents and capabilities that can be developed. In order to
optimize outcomes, organizations and managers, should respond to individuals
with a wide variety of managerial strategies and job opportunities.
► Important aspects to be considered, as the 21st century progresses, include the
following:
► Organizations need to commit to not just meeting customer needs but exceeding
customer expectations through quality management and continuous improvement of
operations.
► Reinvent new methods of process improvements and constantly learn new ways and
best practices from practices in other organizations and environments.
► Organizations must reinvest in their most important asset, their human capital. They
need commit to effectively and positively use human resources by reducing attrition
rates.
► Managers must excel in their leadership responsibilities to perform numerous
different roles.
Thank You!