MBA 1301 Principles of Management

[Pages:292]SCHOOL OF BUSINESS evsjv`k D>gy? wek?we`?vjq

MBA 1301

Principles of Management

Course Development Team

Writers

Professor Dr. Md. Mainul Islam

University of Dhaka

Dr. Abdul Awal Khan

Ex. Professor & Ex. Dean School of Business

Bangladesh Open University

Editors

Professor Dr. Masud Mahmood

Chittagong University

Dr. Md. Mayenul Islam

Associate Professor in Management School of Business

Bangladesh Open University and

Shaheen Ahmed

Assistant Professor in Management School of Business

Bangladesh Open University

Style Editor

Dr. Md. Mayenul Islam

Associate Professor in Management School of Business

Bangladesh Open University

Co-ordinator

Dean School of Business Bangladesh Open University

This book has been published after being refereed for the students of the School of Business, Bangladesh Open University

MBA 1301

Principles of Management

SCHOOL OF BUSINESS

Bangladesh Open University

evsjv`k D>gy? wek?we`?vjq

MBA 1301

Principles of Management

Published by: Publication, Printing & Distribution Division (PPD), Bangladesh Open University, Gazipur-1705. ? School of Business, Bangladesh Open University, Date of Second Publication: July, 2004. Reprint: July, 2007, November 2009. Computer Compose & Desktop Processing: Md. Abdul Matin & Mohammad Wahiduzzaman Howlader, Cover Design: Monirul Islam, Printed in: Mania Art Press, 53/1 Northbrooke Hall Road, Dhaka-1100. All rights reserved by the School of Business, Bangladesh Open University. No part of this book

can be reproduced in any form without proper permission from the publisher

Principles of Management (MBA 1301)

1. Management - Science, Theory and Practice: Definition of management, its nature and purpose: Managing: Science or art ( The elements of science), Managerial skills and the organizational hierarchy. Functions of managers.

2. The Evolution of Management Thought: Frederick Taylor and scientific management, Followers of Taylor, Fayol. The emergence of behavioral science. The recent contributions to management thought: Changing environment of management, Social and ethical responsibilities of the managers.

3. Planning: Nature, Types and steps of planning, Importance of planning; Nature of objectives, Management by Objectives (MBO); Nature and purpose of strategies and policies. The strategic planning process, Major kinds of strategies and policies, Effective implementation strategies.

4. Decision Making: The importance and limitations of rational decision making, Decision making under certainty, Risks and uncertainty; The systems approach and decision making.

5. The Nature and Purpose of Organizing - Basic Departmentation: Formal and informal organization, Organizational division-the department, The structure and process of organizing, The span of management; Departmentation by time, Enterprise function, Geography, Product, Customer, Matrix organization.

6. Line/Staff Authority and Decentralization: Line and staff concepts, Benefits and limitations of staff: decentralization of authority, Degrees of decentralization, Delegation of authority, Factors determining the degrees of decentralization of authority, Making staff work effective, promoting an appropriate organisation culture, Contingencies in organizing.

7. The Nature and Purpose of Staffing: Definition of staffing, Purpose of staffing, An overview of the staffing functions: Situational factors affecting staffing, Skills and personal characteristics needed by managers, Recruitment, Selection, Promotion, Demotion and transfer.

8. Human factors and Motivation: Human factors in managing, Motivation and motivators; Special motivational techniques.

9. Leadership: Defining Leadership, Ingredients of leadership, Styles and functions of leadership, Trait approach to leadership, Situational or contingency approaches to leadership.

10. Committees and Decision making: The nature of committees, Reasons for using committees, Disadvantages of committees; The plural executive and the board of directors, Misuse of committees, Successful operation of committees.

11. Communication: Definition of communication, The communication process, Barriers and breakdowns in communication; Towards effective communication, Electronic media in communication.

12. The System and Process of Controlling: The basic control process, Initial control points and standards, Control as a Feedback system, Requirement for effective control; Control techniques - The budget, Traditional non-budgetary control devices.

13. Comparative Management: Special features of management Japan, China and Germany.

Preface

Principles of Management is primarily intended for the MBA students of Bangladesh Open University. It is written in modular form and is the first of its kind on management in Bangladesh. The lessons have been so designed that learners find them easy to understand.

The book has thirteen units comprising 42 lessons. We do not claim it to be an original contribution. Rather it should be regarded as a text book of ideas from various renowned authorities in management. We have also quoted from different text books on management usually followed by post-graduate students in our universities. Our endeavour has been to present the lessons in a very lucid manner so that they can be understood and assimilated by an average distance learner of the MBA programme within the stipulated period of a semester.

Each unit is almost equivalent to one chapter of a conventional text book and divided into three to five lessons. Each of them starts with "unit highlights" and ends with one "exercise" and a case study. In fact the lessons are like the lecture notes of a classroom teacher, each with "lesson objectives" to begin with and a "lesson-end assessment", at the end in the form of both essay type and multiple choice questions. We hope that self learners will not find much difficulty in understanding the lessons by themselves and will need only a little help from the tutor.

Because of a severe time constraint, we have had to make do with unit-end cases from conventional text books of western origin. We hope to develop cases extensively in the context of Bangladesh soon so that our MBA students can relate their learning to their immediate environment and reality.

We are grateful to the honorable Vice Chancellor of BOU, who gave us the most needed support for publication of this book. Dr. Masud Mahmood, Professor, Department of English, Chittagong University, has made us indebted by his untiring efforts in editing each and every lesson diligently and meticulously. We also acknowledge with thanks the services of Dr. Md. Mayenul Islam, Associate Professor in Management, School of Business, BOU for editing & style editing. We also thankful to Shaheen Ahmed, Assistant Professor in Management, School of Business, Bangladesh Open University for his best effort and impeccable editing. Our thanks are also due to Mr. A. Matin and Mohammad Wahiduzzaman Howlader, WPO of the School of Business, for doing their very best to complete the task of word processing on schedule.

We shall feel rewarded for our labour if both general readers and self-learners find this book worthwhile and useful.

Md. Mainul Islam Abdul Awal Khan

Contents

Page No.

1

Unit-1: Introduction to Management ............................................ 1 Lesson-1: Definition, Nature and Scope of Management ......................... 3

Lesson-2: Purpose and Importance of Management - Features/

Characteristics of Management - Distinction between

Management, Organisation and Administration ...................... 7

Lesson-3: Managing: Science or Art? The Elements of Science in Managing

............. 11

Lesson-4: Managerial Skills and the Organisational Hierarchy .............. 14

Lesson-5: Management Process

........................ 19

Unit-2: Historical Evolution of Management Thought ........... 27

2

Lesson-1: Theories of Management And History Thereof, Classical School

of Management Thought ........................................................... 29

Lesson-2: Neo-Classical School of Management Thought ........................ 35

Lesson-3: Modern School of Management Thought ................................... 38

3

Unit-3: Planning .................................................................................. 45 Lesson-1: Planning: Meaning, Nature, Importance, Types and Steps .... 47

Lesson-2: The Strategic Planning Process ................................................ 57

Unit-4: Objectives ....................................................................................... 67

4

Lesson-1: Objectives: Definition and Nature of Objectives ...................... 69

Lesson-2: Management by Objective (MBO) ............................................. 71

Unit-5: Decision Making ........................................................................... 77

5

Lesson-1: Decision Making: Nature and Significance of Decision

Making, Rationality in Decision Making, Types of

Decisions, Decision Making Conditions ..................................... 79

Lesson-2: Decision Making: The Process and Managerial Practice,

The Systems Approach and Decision Making ........................... 85

6

Unit-6: Organising ..................................................................................... 93 Lesson-1: Nature, Purpose, Structure, Process and Logic

of Organising, Organisational Level and the Span of

Management ............................................................................... 95

Lesson-2: Departmentation......................................................................... 104

Lesson-3: Line, Staff and Functional Authority ........................................ 115

Lesson-4: Delegation of Authority, Centralization and

Decentralization ......................................................................... 120

Unit-7: Staffing ..........................................................................................133

7

Lesson-1: Nature of Staffing Function, Human Resource Planning,

Systems Approach to Staffing ................................................... 135

Lesson-2: Recruitment and Selection, Promote or Hire, Manager

Selection ...................................................................................... 140

Lesson-3: Training, Training Programs and Management

Development Programs .............................................................. 145

Lesson-4: Performance Appraisal (PA): Meaning and Importance, Types,

Appropriate Method of Appraising Manager ........................... 149

Lesson-5: Job Change: Promotion, Transfer, Demotion ............................ 154

Contents

8

9 10 11 12

13

Page No.

Unit-8 Human Factors and Motivation ...............................................159 Lesson-1: Human Factors in Management, Motivation, Motivation Process, Motivators, Motivating and Satisfaction .....................161 Lesson-2: Basic Assumptions about Motivation and the Nature of People, McGregor's Theory-X and Theory-Y ......................... 165 Lesson-3: Various Leading Theories of Motivation - Their Origin, Strengths and Weaknesses ....................................................... 168 Lesson-4: Special Motivational Techniques .............................................. 180

Unit-9: Leadership .....................................................................................185 Lesson-1: Definition and Nature of Leadership, Qualities/ Ingredients of Leadership ...........................................................187 Lesson-2: Styles/Types of Leadership ........................................................ 191 Lesson-3: Theories of Leadership ............................................................... 197

Unit-10: Committees and Group Decision Making ..............................205 Lesson-1: Definition, Nature and Reasons for Using Committees ............207 Lesson-2: Plural Executive and Board of Directors, Making Committee Successful, Disadvantages and Misuses of Committees ................................................................................. 210

Unit-11: Communication in Organisations ............................................217 Lesson-1: Definition, Process and Purpose of Communication .................219 Lesson-2: Communication in Organisation, Importance of Effective Communication ...........................................................................223 Lesson-3: Causes of Communication Problems, Ensuring Effective Communication, Electronic Media in Communication ..............227

Unit-12: Controlling ....................................................................................235 Lesson-1: Controlling Defined, Steps in the Control Process, Importance of Control in Management ......................................237 Lesson-2: Designing Control System, Control as a Feedback System, Feedforward Control, Techniques of FutureDirected Control ......................................................................... 241 Lesson-3: Making Control Effective, Control Techniques- Budgetary and Non-Budgetary Control Devices ......................................... 245

Unit-13: Comparative Management and Management in Some Selected Countries ......................................................................257

Lesson-1: Comparative Management .........................................................259 Lesson-2: Management in Japan ................................................................266 Lesson-3: Management System of Germany ............................................. 276 Lesson-4: Management in Bangladesh ...................................................... 283

Introduction to Management

1

Unit Highlights

Definition, Nature and Scope of Management Purpose and Importance of Management, Features of Management,

Distinction between Management, Organization and Administration Managing: Science or Art? The Elements of Science in Managing Managerial Skills and the Organizational Hierarchy Management Process

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