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Copyright © 2017 by McGraw Hill Education (India) Private Limited
Principles of Management, 6e
P C Tripathi & P N Reddy
Chapter 1
Nature and Functions of
Management
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 Examine the meaning, importance and nature of management
 Understand the difference between management and
administration
 Describe the functions and roles of a manager
 Outline professional and family managements
 Define international business and identify the skills required of an
international
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Learning Objectives

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Importance Of Management
 Management is a critical element in the economic growth of a
country
 Management is essential in all organized efforts, be it a business
activity or any other activity
 Management is the dynamic, life-giving element in every organization
In the words of Claude S. George, management is:
“the central core of our national as well as personal activities, and the
way we manage ourselves and our institutions reflects with alarming
clarity what we and our society will become.”

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Few Definitions of Management
“Art of getting things done through people.”
Mary Parker Follett
“Consisting of planning, organizing, actuating and controlling,
performed to determine and accomplish the objectives by the use of
people and resources.”
George R. Terry
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Planning
Organizing
Controlling
Directing
Innovating
Representing

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Levels of Management
 Lower (first-line) Level
 Example: Foremen and white collar supervisors
 Middle Level
 Example: Sales managers, plant managers, personnel
managers
 Top Level
 Example: Board chairman, company presidents, the executive
vice-presidents

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Organizational or Business Function
 Management functions should not be confused with organizational
function
 Finance, production, sales and personnel are examples of organizational
function
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Management
function
Production Marketing and
Sales
Finance Personnel
Planning
Organizing
Directing
Controlling
Innovating
Representing
Relationship between Organizational functions and management functions

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Roles of a Senior Manager
 Interpersonal Roles
 Figurehead
 Leader
 Liaison
 Informational Roles
 Monitor
 Disseminator
 Spokesman
 Decisional Roles
 Entrepreneur
 Disturbance Handler
 Resource Allocator
 Negotiator

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Managerial Skills
 A skill is an individual’s ability to perform physical or mental tasks with a
specified outcome. To successfully discharge roles, a manager should possess
three major skills:
i. Conceptual Skill
ii. Technical Skill
iii. Human Relations Skill Skill-mix at Different Management Levels

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Managerial effectiveness
 A manager’s performance can be measured in terms of two concepts:
efficiency and effectiveness.
Peter F Drucker
 Efficiency is the ability of a manager to do something correctly, i.e., at
the lowest possible cost or cost acceptable to the competitive
environment.
 Effectiveness is the ability of a manager to do correct things, i.e.,
achieve high levels of value.
 Efficiency is important, Effectiveness is critical.

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Management and Administration
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Time spent in administrative and managerial functions
at different levels
Management is a
comprehensive generic
term which includes
administration. – E.F.L
Brech and others
Each manager performs both
activities and spends part of
his time administering and
part of his time managing. –
Sheldon, Spreigal, Milwar.

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Management
A Science or an Art ?
Management involves both elements—those of a science and an
art. While certain aspects of management make it a science,
certain others which involve application of skill make it an art.
Managing as practice is an art; the organized knowledge
underlying the practice may be referred to as a science.

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Management – A Profession ?
There is no uniform code of conduct or licensing of managers. Entry to
managerial jobs is not restricted to individual with a special academic
degree only.
“No greater damage can be done to our economy or our society than to
attempt to professionalize management by licensing managers, for
instance, or by limiting access to management to people with special
academic degree.”
Peter Drucker

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Professional Management vs Family Management?
The phrase “professional management” is also sometimes used as an
antithesis to “family management”.
“If people like Sir Jamshetji Tata or Rai Bahadur Gujralmal Modi were to
start their business career again, I would any day put my rupee on them
than the best of the professionals”.
K.K. Birla

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Management of International Business
 International business refers to the business activities that involve the
transfer of resources, goods, services, knowledge, skills or
information across national boundaries.
 Skills and abilities that an international manager must possess for
managing the business are:
 Conceptual, Human Relations and Technical Skills
 Ability to Evaluate Host Country Risk
 Ability to Manage Country Risk
 Ability to Exert Pressure on Home Government

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Management of International Business
 Ability to Obtain Legitimacy
 Knowledge of Legal Environment
 Familiarity with the Host Country’s Culture
 Familiarity with International Monetary System and
International Accounting
 Knowledge of Human Capital Available in the Host Country