Lalit Rimt Ppm Notes

8/8/2019 Lalit Rimt Ppm Notes

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RIMT-Institute of Management & Computer Technology

Principles and Practices of Management (MB-101)

I) Introduction to Management

Whenever an organized group of people work towards a common goal there is a need for some type of

mgmt. No organisation can run successfully unless there is someone to manage its activities. Mgmt is

required to plan, organize, co-ordinate, & control the affairs of the organisation. Management is

essential in every organized social & economic activity.

Management is a universal Process in all organized social and economic activities. Wherever there is

human activity, there is management. Management is useful in factory, office, government enterprises,

educational institutions, health services, military organizations & so on. A manager applies his

knowledge and skills in a wide variety of enterprises.

MEANING:

The word Management has been used in different ways. Sometimes it is used to mean a group ofmanagerial personnel', it also refers to the process of planning, organizing, staffing, directing,

coordinating and controlling. It is also referred to as a body of knowledge, a practice, a discipline & an

activity.

(Manage+Men+T = Manage + Men + Tactfully))

1. Definitions of Management

According to Mary Parker Follett, Management is the art of getting things done through people.

According to Harold Koontz, Management is the art of getting things done through and with

people in formally organized groups.

According to Louis Allen, Management is what a manager does.

According to F.W.Taylor, Management is the art of knowing what you want to do and then

seeing that it is done in the best and cheapest way.

Koontz & O Donells, Management is the creation & maintenance of an internal environment in

an enterprise where individuals, working in groups can perform efficiently and effectively towards

the achievement of group goals.

Henry Fayol, To manage is to forecast and to plan, to organize, to command, to coordinate & to

control, to foresee and to provide means to examine the future and draw up the plan of action

(POA)

Prepared by Lalit Singla (Assistant Professor in Management, RIMT-IMCT) 1


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According to George Terry, Management is a distant process consisting of planning, organizing,

activating & controlling performance to determine and accomplish the objectives by the use of

human beings and other resources.

According to Peter Drucker, Management is a multi-purpose organ that manages a business,

manages manager and manages workers and work.

According to Herbison and Myers, Management is rule-making and rule-enforcing body, and

within itself it is bound together by a web of relationships between superiors and subordinates.

According toJohn F Mee, Management may be defined as the art of securing maximum results

with a minimum effort so as to secure maximum prosperity and happiness for both the employers

and employee and give the public the best possible service.

According to Mary Cushing Niles, Good Management, or Scientific Management, achieves asocial objective with the best use of Human and Material Energy and time and with satisfaction for

the participants and the public.

According to William Spriegel, Management is that function of an enterprise which concerns

itself with the direction and control over the various activities to attain the business to attain the

business objectives. Management is essential an executive function; it deals particularly with the

active direction of the human effort.

CONCEPTS OF MANAGEMENT

1. Functional Concept Management is what a manager does.

2. Human Relation Concept Management is an art of getting things done through others.

3. Leadership & Decision-making Concept Mgmt is an art & science of decision making

and leadership.

4. Productivity Concept Mgmt is an art of increasing productivity

5. Integration Concept Mgmt is the coordination of human & material resources

Objectives of Management



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1. To run the enterprise smoothly & earn maximum profits: The main objective of

the management is to coordinate all the resources through the process of planning, organizing,

directing and controlling so as to run the enterprise smoothly and earn the maximum profits.

2. Proper utilization of resources: The main objective of management is to use various

resources of the enterprise in a most economic way. The proper use of 5Ms will help a business

to earn sufficient profits.

3. Improving performance: The fixing of objectives of various factors of production

will help the organization in improving their performance.

4. Mobilizing best talent: The employment of experts in various fields will help in

enhancing the efficiency of various factors of production. There should be a proper environment

like better pay scales, proper amenities, and future growth potentialities to attract more people to

join the enterprise.

5. Planning for future: Future plans should take into consideration what is to be done

next. Future performance will depend upon present planning. So planning for future is essential

for every organization.

6. Growth & development of business: Proper planning leads to the growth anddevelopment of business on sound footing which helps in profitable expansion of the business.

7. Better quality goods/services: The aim of the sound management has always been to

produce the better quality products at minimum cost. Thus it tries to remove all types of

wastages in the business.

8. Ensuring regular supply of goods: Regular supply of goods keeps the prices of

goods within permissible limits

9. Minimizing risk element: Mgmt involves the function of forecasting. Though the

exact future can never be predicted yet on the basis of previous experience & existing

circumstances, mgmt can minimize the element of risk.



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10. Discipline and Morale: The mgmt maintains the discipline & boosts the morale of

the individuals by applying the principles of decentralization & delegation of authority. It

motivates the employees through monetary & non monetary incentives. It helps in creating &

maintaining work culture.

2. Nature of Management

1. Multi-disciplinary: Management has grown as a field of study (i.e. discipline) taking the help of

so many other disciplines such as Engineering, Anthropology, Sociology and Psychology. Much

of the management literature is the result of the association of these disciplines. For instance,

productivity orientation drew its inspiration from Industrial Engineering and human relations

orientation from Psychology. Similarly, sociology and operation research have also contributed

to the development of management science.

2. Management is a group activity

3. Management is goal-oriented: Management is a purposeful activity. It coordinates the efforts of

workers to achieve the goals of the organization. The success of management is measured by the

extent to which the organizational goals are achieved. It is imperative that the organizational

goals must be well-defined and properly understood by the managers at various levels.

4. Management is a factor of production (Economic Resource): Management is one of the

factors of production together with land, labor and capital. It is the most critical input in the

success of any organized group activity. It is the force which assembles and integrates other

resources, namely, labor, capital and materials. These factors do not by themselves ensure

production; they require the catalyst of management to produce goods and services required by

the society. Thus, management is an essential ingredient of an organization.

5. Management is universal in character: Management is universal in character. The principles

and techniques of management are equally applicable in the fields of business, education,

military, government and hospital. Henri Fayol suggested that principles of management would

apply more or less in every situation. The principles are working guidelines which are flexible

and capable of adoption to every organization where the efforts of human beings are to be

coordinated.

6. Management is a social process



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7. Management is a system of authority: Management as a team of managers represents a system

of authority, a hierarchy of command and control. Managers at different levels possess varying

degrees of authority. Generally, as we move down in the managerial hierarchy, the degree of

authority gets gradually reduced. Authority enables the managers to perform their functions

effectively.

8. Management is a dynamic function

9. Management is an art as well as science: Management has an organized body of knowledge

consisting of well-defined concepts, principles and techniques which have wide applications. So

it is treated as a science. The application of these concepts, principles and techniques require

specialized knowledge and skills on the part of the manager. Since the skills acquired by the

manager are his personal possession, management is viewed as an art.10. Management is a Profession: Management is very much recognized as a profession. A

professional is a person who has undergone a certain vigorous training to acquire a body of

knowledge and develop certain skills with the objective of rendering a service to society.

Decision forms the essence of management, and this presupposes consideration and judgment

preceding the decisions, as well as facts and data from which to judge.

Professionalism has two basic elements-

(i) the acquisition of certain knowledge and skills

(ii) having the right attitudes

Manager must be aware of his responsibilities to the shareholders, to the employees of the

company, to customers, to society and so on.

11. Distinct Process: Management is a distinct process consisting of functions such as planning,

organizing, staffing, directing and controlling. These functions are so interwoven that it is not

possible to lay down exactly the sequence of various functions or their relative significance. In

essence, the process of management involves decision making and putting of decisions into

practice.

12. Integrative Force: The essence of management is integration of human and other resources to

achieve the desired objectives. All these resources are made available to those who manage.

Managers apply knowledge, experience and management principles from getting the results from



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the workers by the use of non-human resources. Managers also seek to harmonize the

individuals goals with the organizational goals for the smooth working of the organization.

13. Intangible Force: Management has been called an unseen force. Its presence is evidenced by the

result of its efforts orderliness, informed employees, buoyant spirit and adequate work output.

Thus feeling of management is result oriented. One may not see with the naked eyes the

functioning of management but its results are apparently known.

14. Results through others: The managers cannot do everything themselves. They must have the

necessary ability and skills to get work accomplished through the efforts of others. They must

motivate the subordinates for the accomplishment of the tasks assigned to them.

3. Elements/Purpose of Management

1) To determine objects and planning therefore: According to Hynes and Massie,

Management must set objectives. Without objectives management would be difficult if not

impossible. Therefore, the main purpose of management is to determine the objectives of the

organization and plan according to these objectives.

2) To set-up an organization and assign responsibility: According to one of the principles

given by Henry Fayol - : Parity between authority and responsibility, authority and

responsibility should go side by side. A person can be accountable for certain activities only if he

has been given authority for getting the work done. Responsibility and authority should be

commensurate with each other. Fayol viewed that people seek authority and fear responsibility.

But a good leader must have courage to accept responsibility. Authority without responsibility

leads to irresponsible behavior while responsibility without authority makes a person ineffective.

3) To co-ordinate and direct activities: The coordination of various activities of the

business is another important purpose of management. In the absence of coordination, there is

possibility of setting up of different goals by different departments. There should be an orderly

arrangement of group effort and unity of action in the pursuit of a common purpose.

4) To set standards and effect control accordingly: The other purpose of management is

to establish standards of performance. After setting the standards, a manager has to see that

activity is achieving the desired results or not. It means control is essential for achieving the

objectives of an enterprise. Control is a process which enables the management to get its policies



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implemented and take corrective actions if performance is not according to the pre-determined

standards.

5) To motivate and cause cooperation among various factors of production and

organize group of personnel: Land, labor and capital are the factors of the production and are

essential for the production of goods and services. Management is required to motivate and cause

cooperation among these factors of production for the accomplishment of pre-determined goals.

4. Scope of Management

a) Planning

b) Organizing

c) Staffing

d) Directing

e) Co-ordinating &

f) Controlling

By Operational Aspects of business Management

a) Production Management

b) Marketing Management

c) Financial Management

d) Personnel Management and

e) Office Management

f) Hotel Management

g) Hospitality management

h) Tourism management

i) Event management etc.

Aspects of Management

1) Formulation of plans, policies and objectives: The first aspect of management is to set

the objectives of the organization. After setting the objectives, the management has to make the

policies and frame the plans to attain those objectives.

2) Securing men, material, machinery, method and money: The management has to

secure all the 5 Ms for the achievement of the objectives and to put the plans into action.



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3) Putting all of them into operation: Management helps in putting all of the 5 Ms into

operations.

4) Directing and motivating the men at work: The another aspect is to direct and motivate

the employees. The motivation can be through monetary or non-monetary incentives.

5) Supervising and controlling their performance: It helps in supervising the men at work

and keeps a control on their performance.

6) Providing maximum satisfaction and service to employer, employees and public at

large: The management has to provide maximum satisfaction and services to its employers by

attaining all the objectives of the organization at proper time and at least possible cost. It also has

to provide the job Satisfaction to its employees through motivation, incentives, Bonus &

promotion etc. It has also to provide the maximum Satisfaction and services to the public i.e.their customers through high quality goods at low cost, good services or better after sales

services etc.

Function of Management (POSDCORB)

Planning

Organizing

Staffing

Directing

Controlling

Reporting

Budgeting

5. Functions of Manager

1. Manager as a planner As future is uncertain so manager has to plan for the future

so that the objectives of the enterprise can be attained easily.

2. Manager must have an idea of creativity & innovation A manager must thinkof new and creative ideas. He should be an innovator and risk taker in applying those ideas into

practice.

3. He/ She have to set objectives & to adopt corrective measures A manager has

to set the objectives of the whole organization as well as of the various departments.



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4. He/ She must make arrangement for incentives to his workers As bonus,

appreciation and incentives act as motivators to the workers, so a manager must make good

arrangements for the incentives to those workers who perform according to his expectations.

5. Proper environment be created for workers He must create such an

environment for the workers that they can work with 100% of the efficiency.

6. Discipline among workers is essential A manger has to maintain a certain level

of discipline among the workers to avoid any type of disturbance in the organization.

7. Dealing with Conflict in the Workforce There may be conflicts among the

employees or some grievances against management. A manager has to act as an arbitrator in

resolving disputes of employees. He conveys managements views to the employees and takes

notice of their grievances. The employees may demand higher wages, bonus or other benefits.

He tries to settle various disputes so that cordial relations are maintained in the organization.

8. How to hire the Right Employee It is more important to hire a person who has

good interpersonal communicational skills than to find someone who knows your product inside

and out. Why? Because product knowledge can be taught but well communicational skills are

more difficult to find. So it is one of the most important functions of a manger to hire a right

employee at the right time and at the right place.

9. He/ She should be a good leader A manager is responsible for the activities of his

subordinates. He has to act as the leader of the group. He has to set an example of hard work and

dedication so that subordinates follow his directions with respect.

10. He/ She must have capability of the mgmt of people As a manager he must have the

capability and efficiency of managing his employees and make them work for the

accomplishment of organizational objectives.

Importance of Management

Management is the art of securing maximum prosperity with a minimum of effort. In the words of

Koontz n ODonnel, There is no more important area of human activity than management since its

task is that of getting things done through others.



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In case of business enterprise, management is all the more important, because no business can run

on itself, every business needs repeated stimulus which can only be provided by management.

The following points further highlight the importance of management:

1. Achievement of group objectives: It is the management which makes the people realizes the

objectives of the group and directs their efforts towards the achievement of these objectives. It

brings human and material resources together to mobilize the people for the achievement of the

objectives of the organization.

2. Optimum utilization of resources: No business activity can be undertaken without the five

factors of production viz., the land, labor, capital, enterprise and the management. The four

factors may prove ineffective in the absence of the fifth management. It is the management

which makes the optimum utilization of the resources possible.3. Minimization of cost( to combat right competition): In the present days of rising

competition, only those business enterprises can survive which can produce quality goods at the

lowest of costs. Through better planning, sound organization and effective control, management

enables a concern to reduce costs and enables an enterprise to face cut-throat competition.

4. Increased profits: Profits can be increased in any organization either by increasing the sales

revenue or by reducing cost. To increase the sales revenue is beyond the control of an

organization. Management by reducing costs increases its profits and provides opportunities for

future growth and development.

5. Smooth running of business: Management ensures efficient and smooth running of business

through better planning, sound organization, effective control and various tools of management.

6. Provide Innovation: Management provides new ideals, imaginations and visions to the

organization.

7. Change of growth: An enterprise operates in a changing environment. Management moulds

the enterprise in such a changing environment. It moulds not only the enterprise but also alters

the environment itself to ensure the success of the business. In order to meet the challenge of

automation and the complexities of advanced technology also there is a need for the development

of management.



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8. Social benefits: Management is beneficial not only to the business enterprises but to the

society as whole. It raises the standard of living of the people by providing good quality products

and services at the lowest possible cost.

Levels of ManagementTOP MANAGEMENT: The important functions of top level management are:-

To establish the objectives or goals of the enterprise.

To make policies & frame plans to attain the objectives.

To set up an organizational framework to conduct the operations as per plans.

To assemble the resources of money, men, materials, machines & methods to put the plans in

to action.

To exercise effective control over the operations.

To provide overall leadership to the enterprise.

MIDDLE MANAGEMENT: Following are the main functions of middle level management are:-

To interpret the policies chalked out by top mgmt.

To prepare the organizational setup in their own departments for fulfilling the objectives

implied in various buss. Policies.

To recruit & select suitable operative & supervisory staff.

To assign activities, duties & responsibilities for timely implementation of the plans.



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To compile all the instruction & issue them to supervisors under their control.

To motivate personnel to attain higher productivity & to reward them properly.

To cooperate with the other departments for ensuring a smooth functioning of the entireorganization.

To collect reports & information on performance in their departments.

To report to top mgmt.

To make suitable recommendations to the top mgmt for the better execution of plans &policies.

LOWER OR OPERATIVE MANAGEMENT: Following are the functions of lower levelmanagement are:-

Planning of day to day work.



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Arrange various inputs to the workers & to provide with necessary work environment.

Keeping personal touch with employees to ensure discipline & team work.

Supervising & guiding workers.

Sending performance reports to higher mgmt.

Communicating the grievances of lower staff to the higher mgmt.

Management Skills & Roles

Managerial Skills

a) Technical skills

b) Human skills

c) Conceptual skills

d) Decision-making skills

Managerial Roles

a) Interpersonal Relationships

As a figure head

Leadership role

Liason officer

b) Information Processing

Monitoring information

Disseminating information

Organizations spokesman

c) Decision Making

As an entrepreneur

As a conflict handler

As a resource allocator

As a negotiator

Managerial Skills



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a) Conceptual Skills: Conceptual skill is the ability to integrate & coordinate various activities. A

manager needs to have the qualities or skills so as to able to view situations & coordinate various

factors. To take rational decisions, such a competence is necessary.

b) Human Skill: Human skill refers to the ability to work effectively with other

people as an individual & as member of the tea. A manager has to get the things done through

other people & hence he must have human skills or ability to select, motivate, guide, lead, direct,

& control people.

c) Technical Skill: Technical skill is kind of knowledge which involves the use of

equipments, techniques & procedures for the accomplishment of specific tasks. It requires

specialized knowledge & proficiency in the area of the job. Thus, technical skill is the ability to

work in a specified area.

d) Decision Making Skills: Mgmt is the art of decision making. At all levels

managers have to take certain decisions. To be a successful manager, one must have ability to

analyze & examine a problem & also the ability to work out a practical solution for the problem.



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Managerial Roles (By Mintzberg)

Interpersonal Roles

a) The figurehead role (performing ceremonial & social duties as the

organizations representative): As a figurehead manager has to sign various papers for the org,

attend social functions of the subordinates, greet people, speak at functions etc.

b) The leader role: As a leader a manager has to communicate, motivate & activate his

subordinates to work in pursuit of desired goals.

c) The liaison role (dealing with various persons & groups of persons): A manager

has to establish contacts with higher management and subordinates. Similarly he has to keep a

watch on externals environment, competitors strength, government policies etc. He has to

maintain liaison by attending meetings, conferences, functions etc

Informational Roles

a) The monitoring role: Seeks and receives wide variety of special information to

develop a thorough understanding of organization and environment, emerges as nerve centre of

internal and external information about the organization.

b) The disseminator role (passing information to subordinates): Transmits

information received from outsiders or from subordinates to members of the organization.

c) The spokesperson role (transmitting information to those outside the

organization): Transmits information to outsiders on the organizations plans, policies, actions

and results.

Decision Roles



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a) The entrepreneurial roles: Searches the organization and its environment for

opportunities and initiates improvement projects to bring about change; supervises design of

certain projects as well.

b) The disturbance-handler role: Responsible for corrective actions when the

organization faces important, unexpected disturbances.

c) The resource allocator role: Responsible for the allocation of organizational

resources of all kinds.

d) The negotiator role (dealing with various persons & groups of persons):

Responsible for representing the organization at major negotiations.

6. An overview of Planning

A key activity of all managers is planning the work under their direction. Working with each other and

with the people who will carryout the plans, managers clarify objectives and set goals for each

department or sub-division. They establish policies and standard procedure to guide those who do the

work. Managers must develop programs, strategy and schedules. This development can only keep the

work moving towards objectives. The plans have to be changed or readjusted periodically if required

based on new information and changes in Market forces leading to changes in Production programs.

The process of planning is best understood if one first examines the basic stages in making a decision.

These stages are diagnosing the problem, finding good alternative solutions, projecting the result of each

alternative, and finally selecting the action to be taken. Decision-making is not the act of an isolated

individual. It takes place in the organization, which is established fully. Many different persons in the

organization may contribute to the formulation and final selection of the master plan.

7. An overview of Organizing

Once the work of an enterprise grows beyond what a single craftsman can do, organization becomes

necessary. We have to assign the various tasks to different people and to coordinate their efforts. This

process leads to departments and divisions as the enterprise expands, each of which has its particular

mission.A manager must view organization as a social arrangement. Because the organization is

composed of people rather than physical objects. Managerial actions influence the way men respond.

The attitudes of these people are continually shifting and evolving.



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In organizing the objective of getting the work done has to be achieved and at the same time a social

structure has to be built. The social structure helps the needs of the people doing work.

8. An overview of Controlling

Introduction

Once the work of an enterprise grows beyond what a single craftsman can do, organization becomes

necessary. We have to assign the various tasks to different people and to coordinate their efforts. This

process leads to departments and divisions as the enterprise expands, each of which has its particular

mission.

A manager must view organization as a social arrangement. Because the organization is composed of

people rather than physical objects. Managerial actions influence the way men respond. The attitudes of

these people are continually shifting and evolving.

In organizing the objective of getting the work done has to be achieved and at the same time a social

structure has to be built. The social structure helps the needs of the people doing work.

An overview of Controlling

Controlling in a nutshell includes such activities which are designed to compel events to

confi rm to plans . I t includes laying down performance s tandards , Measurement

interpretation and corrective actions.

It involves setting standards/goals. It measures performance against goals and plans,

shows where negative deviation exists, putting in motion actions to correct deviations,

help in accomplishment of plans.

Though the managerial functions can not be restricted to these five activities yet broadly

these five functions are covering most of them. Co-ordination is the essence of manager

ship. It helps in achievement of harmony of individual efforts towards accomplishment of

group goals. Each of Managerial function is an exercise contributing to co-ordination.

9. Is managing a Science or Art?

Management as Science



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Management is science because mgmt principles are universal in nature as like any science principles.

To be called a science the subject should have the following characteristics:-

a) It is systematized body of knowledge Management is viewed as a science as it is

an organized body of knowledge built up by management practitioners, thinkers and

philosophers over a period of years. The principles of management make use of scientific

methods for observation.

b) The Principles are developed after continuous observations the principles of

management have been developed after continued observations. The knowledge of management

has been acquired through continuous and vigorous efforts of many theorists and practitioners

over a period of years.

c) The Principles are exact and have universal applicability without any limitation

Scientific principles represents basic truths and can be applied in all situations and at all times.

There are certain fundamental principles of management that can be universally applied.

d) The Principles established cause and affect relationships b/w various factors

scientific principles established cause and effect relationship between various factors when

applied to management, the principles of management also established cause and effect

relationship. E.g. poor planning and poor layout cause low productivity.

e) The validity of scientific principles can be verified and they provide a reliable

basis for predicting future events Mere knowledge and collection of facts is not science. It is

only when the knowledge so gathered can be verified, it becomes science. The principles of

management can also be verified for their validity by putting to several tests e.g. A subordinate

put under one boss will show better results, than the subordinate who has to follow two or more

bosses.

Management as an Inexact Science

Management is not as exact as science because management deals with the people & it is very difficult

to predict their behavior accurately under different situations & at different times. Thus we can say that

mgmt is inexact science & it belongs to a group of social science like sociology & political science.

Management as a Pure Science Suffers From Following Limitations



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It does not consist of fundamental truths only.

The principles of mgmt do not always have universal applications.

Behavior of human science mgmt cant be predicted.

Mgmt lacks certainty about users.

Management as an Art

Art is often regarded as the systematic application of skill or knowledge in accomplishing the desired

task. If a science is learnt an art is practiced. An art can have the following features:-

a) Personal skills Management is an art as one has to use his personal skill and

knowledge in solving many complicate problems to achieve the enterprise objectives. It is an art

of dealing with people to accomplish desired results.

b) Practical knowledge Management does not merely mean the knowledge of

principle of management rather is the application of this knowledge which makes it effective and

useful.

c) Result-Oriented approach Management is concerned with accomplishment of

objectives and in this sense it has result oriented approach. Regular practice Like an artist, the

management always tries to attain higher and higher goals in order to reach the state of absolute

perfection. This efficiency and effectiveness is attained through regular practice. One cannot be

good manager unless he regularly practices the art of decision making and leadership.

d) Creativity Every art has an element of creativity and in this sense also

management is one of the most creative art as it is concerned with getting work done through

others by motivating them o work and coordinating their activities.

Management-Art As Well As Science



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Management is both art as well as science. It may not be proper science or proper art. Science & art are

complimentary to each other, so management has both of them. The science will have to solve problems

& establish principles which might be apply with the help of art.

10. Ethics in managing and

Meaning & Definition

The term ETHICS generally used to refer to the rules or principles that define right and wrong conduct.

In Websters Ninth New Collegiate Dictionary, ETHICS is defined as the discipline dealing with what

is good and bad and with moral duty and obligation

Ways for applying & Integrating Ethical Concepts

Establishing a company policy regarding ethical behavior or developing code of ethics

Applying an ethics committee to resolve ethical issues

Teaching ethics in management development programs

Types of Managerial Ethics

Archie B. Carroll, an eminent researcher, identify three types of management, depending on the extent

to which their decisions were ethical or moral.

Moral Management

Moral management strives to follow ethical principles and doctrines. Moral managers strive to succeed

without violating ethical standards. Moral managers always seek to determine whether their actions,

decisions, or behavior are fair to themselves as well as to all the others parties involved. In the long run,

moral management approach is likely to be in the best interests of the organization.

Amoral Management

This approach is neither immoral nor moral. It simply ignores ethical considerations. Its mainly of two

types- intentional and unintentional. Intentional amoral mangers do not take ethical issues into

consideration while taking decisions or while taking action. Unintentional amoral managers do not evenconsider the moral implications of their business decisions and actions.

Immoral Management

Immoral management not only ignores ethical concerns, it also actively opposes ethical behavior. It

totally concern with companys profit only. It gives stress on profits and companys success at any cost.

Managers are hardly bothered about others. The basic principle governing immoral management is:



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Can we make money with this action, decision or behavior? Thus, in immoral management ethical

considerations are immaterial.

11. Social responsibility of managersDefinition

According to Keith Davis, It refers to the business mans decision &actions taken to reasons at least

partially beyond the firms direct economic or technical interests.

Factors Responsible For the Realization of Social Responsibility

1. Market forces - in this cut throat competition, a consumer has a wide choice for

selecting the goods. Those producers who do not bother about the paying capacity, preferences and

needs of consumers may not find any market for their products. So market forces are helpful in

making the businessmen aware of their social obligations.

2. Government Intervention A number of legislations are made by the government

to make it obligatory for the businessmen to fulfill his social responsibility. Government fixes and

revises wages and other incentives a business should pay to its employees. There are number of

laws regarding security of workers, controlling pollution, fixing of prices. All such legislations

compel a businessman to work according to the prescribed guidelines.

3. Emergence of professional Managers The system of owner-manger is giving

way to professional people. There is divorce between ownership and management. The job of

management is assigned to professional managers. These managers themselves being employees

have a different approach towards management. They understand the difficulties faced by

employees and tackle them in a compassionate way.

4. Growth of Trade Unions the workers have always been weak in bargaining withmanagement. The development of trade unions has greatly changed the situation. Their strength

has grown with their unity. Now workers know how to bargain for higher wages and better

working conditions.



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5. Public scrutiny The working of business houses is opened to public these days.

The final accounts of every company are filed with the registrar of companies every year and

anybody after paying a nominal fee can study them. The exposure of business to the public has

made it conscious about its roles.

6. It is in the self interest of it By discharging social obligations the business house

is not going to loose in any way. On the contrary it gains in all the walks of its life. These are the

days of competition and public relations. Good and long lasting public relations yield rich

dividends in the long run. Thus a company that involves itself actively in such social causes as aid

to education, urban renewal, opening up better job opportunities to the minorities and women,

training and rehabilitating the disabled and disadvantaged, environmental pollution and so on will

create its image in product, labour and capital markets.

Social Issues for Business

1) No discrimination in employments Women, untouchables and minorities should be given

equal opportunities for getting jobs.

2) Support for educational institutions Business should provide the funds for the

development of educational facilities in the country especially in rural areas.

3) Help for charitable causes Business should spend for the charitable causes where there is

no return to it.

4) Modernizing facilities Business should undertake modernization and technology upgrade

plans on regular basis. Such an exercise helps in increasing production. Modernizing activities

should also help a concern in reducing air and water pollution etc.

5) Controlling use of hazardous products There are some products like tobacco, alcohol,

drugs etc whose use is harmful to the society. These products should be produced and marketed as

per the guidance of the government so that their use is restricted as far as possible.

Social Responsibility of Business/Management towards Various Sections/Stakeholders

Shareholders:



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Paying a reasonable rate of dividend

Ensuring safety of funds

Giving a true and fair accounts

Showing due regards towards the interest of minority of members

Ensuring growth of company

Employees:

Providing fair remuneration to the employees

Providing time to time bonus and incentives to the employees

Providing the safe working conditions to the employees

Fulfilling the basic mental, physical, economic and cultural needs of the employees

Government:

Implementing the economic and social policies of government

Supplying the required information to government departments

Refraining from corrupting public servants

Not to indulge in winning political favors for selfish interests.

Consumers:

Making available the goods and services at a reasonable price

Assuring a good quality of products and services

Providing after sales services to the consumer



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Community/Society:

Ensuring best utilization of the scarce economic resources of the society

Generating maximum employment opportunities

Controlling environmental pollution

Preventing urban congestion

Undertaking program for rural development

Arguments for Social Responsibility of Business

Helps in the long run survival of the buss.

Improves the public image of the company

It is a moral & social commitment of the buss. organization which they should fulfill

It is profitable to the buss. in the longer run

It insures the performance of buss. Obligations towards all stakeholders who has jointly enabled the

buss. Activities to be performed effectively

It helps in avoiding government regulations

Since the buss. Organizations are given the status of citizens they should perform their obligations of

a socially reform citizens

As buss. Concerns have huge surplus they should use it for promoting social benefits

Case against Assuming Social Responsibility

Diverting from business objectives



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Increase in Prices

Influencing social set-up

Lack of understanding

Lack of accountability

It is difficult to measure social responsibility

Lalit Rimt Ppm Notes

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Transcript of Lalit Rimt Ppm Notes