• Introduction to


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    • Abstract: Introduction toManagement Information Systems1. Introduction2. Role and Importance Of Management3. Process of Management4. Organisation Structure and Theory5. Strategic Management of Business

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Introduction to
Management Information Systems
1. Introduction
2. Role and Importance Of Management
3. Process of Management
4. Organisation Structure and Theory
5. Strategic Management of Business
Exercises
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CHAPTER-1
Introduction
1.1 MANAGEMENT INFORMATION SYSTEM ( MIS) CONCEPT
The concept of the MIS has evolved over a period of time comprising many different
facets of the organizational function. MIS is a necessity of all the organizations.
The initial concept of MIS was to process data from the organization and present it in the
for of reports at regular intervals. The system was largely capable of handling the data
from collection to processing. It was more impersonal, requiring each individual to pick
and choose the processed data and use it for his requirements. This concept was further
modified when a distinction was made between data and information. The information is
a product of an analysis of data. This concept is similar to a raw material and the finished
product. What are needed are information and not a mass of data. However, the data can
be analyzed in a number of ways, producing different shades and specifications of the
information as a product. It was, therefore, demanded that the system concept be an
individual- oriented, as each individual may have a different orientation. Towards the
information. This concept was further modified, that the system should present
information in such a form and format that it creates an impact on its user, provoking a
decision or an investigation. It was later realized then even though such an impact was a
welcome modification, some sort of selective approach was necessary in the analysis and
reporting. Hence, the concept of exception reporting was imbibed in MIS. The norm for
an exception.
Was necessary to evolve in the organization. The concept remained valid till and to the
extent that the norm for an exception remained true and effective. Since the environment
turns competitive and is ever changing, fixation of the norm for an exception becomes ka
futile exercise at least for the people in the higher echelons of the organization. The
concept was then evolved that the system should be capable of handling a need based
exception reporting. This need maybe either of an individual or a group of people. This
called for keeping all data together in such a form that it can be accessed by anybody and
can be processed to suit his needs. The concept is that the data is one but it can be viewed
by different individuals in different ways. This gave rise to the concept of DA ‘ABASE,
and the MIS based on the DATABASE proved much more effective.
Over a period of time, when these conceptual developments were taking place, the
concept of the end user computing using multiple databases emerged. This concept
brought a fundamental charge in MIS. The change was decentralization of the system and
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the user of the in formation becoming independent of computer professionals. When this
becomes a reality, the concept of MIS changed to a decision making system. The job in a
computer department is to manage the information resource and leave the task of
information processing to the user. The concept of MIS in today’s world is a system
which handles the databases, databases, provides com-putting facilities to the end user
and gives a variety of decision making tools to the user of the system.
The concept of MIS gives high regard to the individual and his ability to use
information. An MIS gives information through data analysis. While analyzing the data,
it relies on many academic disciplines. These include the theories, principles and
concepts from the Management Science, Psychology and Human Behavior, making the
MID more effective and useful. These academic disciplines are used in designing the
MIS, evolving the decision support tools for modeling and decision - making.
The foundation of MIS is the principles of management and if its practices. MIS
uses the concept of management Information System can be evolved for a specific
objective if it is evolved after systematic planning and design. It calls for an analysis of a
business, management views and policies, organization culture and the culture and the
management style. The information should be generated in this setting and must be useful
in managing the business. This is possible only when it in conceptualized as system with
an appropriate design. The MIS, therefore, relies heavily on the systems theory offers
solutions to handle the complex situations of the input and output flows. It uses theories
of communication which helps to evolve a system design capable of handling data inputs,
process, and outputs with the lest possible noise or distortion in transmitting the
information form a source to a destination. It uses the principles of system Design, Viz.,
an ability of continuous adjustment or correction in the system in line with the
environmental change in which the MIS operates. Such a design help to keep the MIS
tuned with the business managements needs of the organization.
The concept, therefore, is a blend of principle, theories and practices of the
Management, Information and System giving rise to single product known as
Management Information System (MIS). The conceptual view of the MIS is shown as a
pyramid in Fig.1.1.
The Physical view of the MIS can be seen as assembly of several subsystems
based on the databases in the organization. These subsystems range from data collection,
transaction processing and validating, processing, analyzing and storing the information
in databases. The subsystem could be at a functional level or a corporate level. The
information is evolved through them for a functional or a department management and it
provides the information for the management of business at the corporate level. The
physical view of the MIS can be shown as in Fig.1.2.
The MIS is a product of a multi- disciplinary approach to the business
management. It is a product which needs to be kept under a constant review and
modification to meet the corporate needs of the information. It is prescribed product
design for the organization. The MIS differs since the people in two organizations
involved in the same business. The MIS is for the people in the organization. The MIS
model may be the same but it differs greatly in the contents.
The MIS, therefore, is a dynamic concept subject to change, time and again, with
a change in the business management process. It continuously interacts with the internal
and the external environment of the business and provides a corrective mechanism in the
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system so that the change needs of information are with effectively. The MIS, therefore,
is a dynamic design, the primary objectively. The MIS, therefore, is a dynamic design the
primary objective of which is to the information the information for decision making and
it is developed considering the organizational fabric, giving due regard to the people in
the organizational the management functions and the managerial and the managerial
control.
The MIS model of the organization changes over a time as the business passes
through several phases of developmental growth cycle. It supports the management of the
business in each phase by giving the information which is crucial in that phase. Every has
critical success factors in each phase of growth cycle and the MIS model gives more
information on the critical success factors for decision making.
1.2 MIS DEFINITION
The Management Information System (MIS) is a concept of the last decade or
two. It has been understood and described in a number ways. It is also known as the
Information System, the Information and Decision System, the Computer- based
information System.
The MIS has more than one definition, some of which are give below.
1. The MIS is defined as a system which provides information support for decision
making in the organization.
2. The MIS is defined as an integrated system of man and machine for providing the
information to support the operations, the management and the decision making
function in the organization.
3. The MIS is defined as a system based on the database of the organization evolved
for the purpose of providing information to the people in the organization.
4. The MIS is defined as a Computer – based Information System.
Thought there are a number of definitions, all of them converge on one single
point, i.e., the MIS is a system to support the decision making function in the
organization. The difference lies in defining the elements of the MIS. However, in
today’s world MIS a computerized .business processing system generating
information for the people in the organization to meet the information needs decision
making to achieve the corporate objective of the organization.
In any organization, small or big, a major portion of the time goes in data
collection, processing, documenting it to the people. Hence, a major portion of the
overheads goes into this kind of unproductive work in the organization. Every
individual in an organization is continuously looking for some information which is
needed to perform his/her task. Hence, the information is people-oriented and it varies
with the nature of the people in the organization.
The difficulty in handling this multiple requirement of the people is due to a
couple of reasons. The information is a processed product to fulfill an imprecise need
of the people. It takes time to search the data and may require a difficult processing
path. It has a time value and unless processed on time and communicated, it has no
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value. The scope and the quantum of information is individual-dependent and it is
difficult to conceive the information as a well-defined product for the entire
organization. Since the people are instrumental in any business transaction, a human
error is possible in conducting the same. Since a human error is difficult to control,
the difficulty arises in ensuring a hundred per cent quality assurance of information in
terms of completeness, accuracy, validity, timeliness and meeting the decision
making needs.
In order to get a better grip on the activity of information processing, it is necessary to
have a formal system which should take care of the following points:
 Handling of a voluminous data.
 Confirmation of the validity of data and transaction.
 Complex processing of data and multidimensional analysis.
 Quick search and retrieval.
 Mass storage.
 Communication of the information system to the user on time.
 Fulfilling the changing needs of the information.
The management information system uses computers and communication technology
to deal with these points of supreme importance.
1.3 ROLE OF THE MANAGEMENT INFORMATION SYSTEM
The role of the MIS in an organization can be compared to the role of heart in the
body. The information is the blood and MIS is the heart. In the body the heart plays
the role of supplying pure blood to all the elements of the body including the brain.
The heart works faster and supplies more blood when needed. It regulates and
controls the incoming impure blood, processes it and sends it to the destination in the
quantity needed. It fulfills the needs of blood supply to human body in normal course
and also in crisis.
The MIS plays exactly the same role in the organization. The system ensures that an
appropriate data is collected from the various sources, processed, and sent further to
all the needy destinations. The system is expected to fulfill the information needs of
an individual, a group of individuals, the management functionaries: the managers
and the top management.
The MIS satisfies the diverse needs through a variety of systems such as Query
Systems, Analysis Systems, Modeling Systems and Decision Support Systems the
MIS helps in Strategic Planning, Management Control, Operational Control and
Transaction Processing.
The MIS helps the clerical personnel in the transaction processing and answers their
queries on the data pertaining to the transaction, the status of a particular record and
references on a variety of documents. The MIS helps the junior management
personnel by providing the operational data for planning, scheduling and control, and
helps them further in decision making at the operations level to correct an out of
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control situation. The MIS helps the middle management in short them planning,
target setting and controlling the business functions. It is supported by the use of the
management tools of planning and control. The MIS helps the top management in
goal setting, strategic planning and evolving the business plans and their
implementation.
The MIS plays the role of information generation, communication, problem
identification and helps in the process of decision making. The MIS, therefore, plays
a vita role in the management, administration and operations of an organization.
1.4 IMPACT OF THE MANAGEMENT INFORMATION SYSTEM
Since the MIS plays a very important role in the organization, it creates an impact
on the organization’s functions, performance and productivity.
The impact of MIS on the functions is in its management. With a good support,
the management of marking, finance, production and personnel become more
efficient. The tracking and monitoring of the functional targets becomes easy. The
functional, managers are informed about the progress, achievements and shortfalls in
the probable trends in the various aspects of business. This helps in forecasting and
long- term perspective planning. The manager’s attention is brought to a situation
which is exceptional in nature, inducing him to take an action or a decision in the
matter. A disciplined information reporting system creates a structured data and a
knowledge base for all the people in the organization. The information is available in
such a form that it can be used straight away or by blending analysis, saving the
manager’s valuable time.
The MIS creates another impact in the organization which relates to the
understanding of the business itself. The MIS begins with the definition of a data
entity and its attributes. It uses a dictionary if data, entity and attributes, respectively,
designed for information generation in the organization. Since all the information
system use the dictionary, there is common understanding of terms and terminology
in the organization brining clarity in the communication and a similar understanding
an even of the organization.
The MIS calls for a systemization of the business operation for an affective
system design.
A well designed system with a focus on the manger makes an impact on the
managerial efficiency. The fund of information motivates an enlightened manger to
use a variety of tools of the management. It helps him to resort to such exercises as
experimentation and modeling. The use of computers enables him to use the tools
techniques which are impossible to use manually. The ready-made packages make
this task simpler. The impact is on the managerial ability to perform. It improves the
decision making ability considerably.
Since the MIS works on the basic systems such as transaction processing and
databases, the drudgery of the clerical work is transferred to the computerized system,
relieving the human mind for better work. It will be observed that a lot of manpower
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is engaged in this activity in the organization. It you study the individual’s time
utilization and its application; you will find that seventy per cent of the time is spent
in recording, searching, processing and communication. This is a large overhead in
the organization. The MIS has a direct impact on this overhead. It creates an
information- based work culture in the organization.
1.5 MANAGEMENT INFORMATION SYSTEM AND COMPTER
Translating the real concept of the MIS into reality is technically, an infeasible
proposition unless computers are used. The MIS relies heavily on the hardware and
software capacity of the computer and its ability to process, retrieve communicate
with no serious limitations.
The variety of the hardware having distinct capabilities makes it possible to
design the MIS for a specific situation. For example, if the organization needs a large
database and very little processing, a computer system is available for such a
requirement. Suppose the organization has multiple business location at long
distances and if the need is to bring the data at one place, process, and then send the
information to various location, it is possible to have a computer system with a
distributed data processing capability. If the distance is too long, then the computer
system can be hooked through a satellite communication system. The ability of the
hardware to store data and process it at a very fast rate helps to deal with the data
volumes, its storage and access effectively. The ability of the computer to sort and
merge helps to organize the data in a particular manner and process it for complex
lengthy computations. Since the computer is capable of digital, graphic, word image,
voice and text processing, it is exploited to generate information and present it in the
form which is easy to understand for the information user.
The ability of a computer system to provide security of data brings a confidence
in the management in the storage o data on a magnetic media in an impersonal mode.
The computer system provides the facilities such as READ ONLY where you cannot
delete to UPDATE. It provides an access to the selected information through a
password and layered access facilities. The confidence nature of the data and
information can be maintained in a computer system. With this ability, the MIS
become a safe application in the organization.
The software, an integral part of a computer system, further enhances the
hardware capability. The software is available to handle the procedural and
nonprocedural data processing. For example, if you want to use a formula to calculate
a certain result, an efficient language is available to handle the situation. If you are
not use a formula but have to resort every time to a new procedure, the nonprocedural
languages are available.
The software is available to transfer the data from one computer system to
another. Hence, you can compute the results at one place and transfer them to a
computer located at another place for some other use. The computer system being
able to configure to the specific needs helps to design a flexible MIS.
The advancement in computers and the communication technology has the
distance, speed, volume and complex computing an easy task. Hence, designing the
MIS for a specific need and simultaneously designing a flexible and open system
becomes possible, thereby saving a lot of drudgery of development and maintenance
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and maintenance of the system. The concept of user – friendly systems and the end
user computing is possible, making information processing a personalized function.
However, the application of the management principles and practices in today’s
complex business world is possible only when the MIS is based on computer system
support.
1.6 MANAGEMENT INFORMATION SYSTEM AND ACADEMICS
The management’s information system draws a lot of support from other
academic disciplines too. The foundation of MIS is the management theory. It uses
the principles and practices of management while designing the system, ant gives due
regard to the theory of organizational behavior.
It considers the human mind as a processor of information. While designing the
report format and forming communication channels, MIS takes into account the
behavior of the manager as an individual and in a group. It gives due regard to the
personal factors such as bias, thinking with a fixed frame of reference, risk aversion,
strengths and weaknesses.
Another area of academics is operational research. The operational research is
used for developing the models of management and they are then incorporated in the
MIS as decision support systems. The inventory control, queuing theory, and resource
programming are used in the MIS as decision support systems. The network theory is
used for planning and controlling large projects. The application of PER / CPM to a
project planning is now easily possible through the MIS support.
In the area of accounting application, it uses the accounting principles to ensure that
the data is correct and valid. It uses the principles of double entry bookkeeping for
balancing the accounts. It uses the accounting methodology for generating a trial
balance sheet and other books of accounts.
The MIS uses the communication theory in a significant manner. The principle of
feedback is used while designing analysis. Systems. While designing the report
format, attention is paid to avoid noise and distortions in the communication process.
The MIS further relies heavily on the decision methodology. It uses different
mathematical techniques to handle the situation of decision making uses the method
of decision- making under certainty for decision- making and action.
The MIS is based on database structures, viz .hierarchical, network and relational
database have roots in the mathematics and the set theory.
The MIS becomes rich in content and more useful when it becomes more and more a
decision- making or decision- support system. The is possible when it builds decision
making systems in MIS which in turn is possible if it draws tools, techniques,
methods, rules and principles from pure and application science, and use them as an
integral part of the system. The MIS draws data from its own source and uses it in the
application of a variety of tools and techniques to solve the management,
mathematics, and accounting. Psychology, communication theory, operations
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research and probability theory for building processes, methods, and decision –
support systems in designing business application.
1.7 MIS AND THE USER
Every person in the organization is a user of the MIS. The people in the organization
operate at all levels in the hierarchy. A typical user is a clerk, an assistant, an officer,
an executive or a manager. Each of them has a specific task and a role to play in the
management of business. The MIS caters to the needs of all persons.
The main task of a clerk is to search the data, make a statement and submit it to the
higher level. A clerk can use the MIS for a quick search and reporting the same to
higher level. An assistant has the task of collecting and organizing the data, and
conducting a rudimentary analysis of integrating the data from different and
disciplines to analyze it and make a critical comment if anything adverse is found.
The MIS offers the methods and facilities to integrate the data and report the same in
a proper format. An executive plays the role of a decision maker. He is in of
responsibility and accountability a position of a planner and a decision maker. He is
responsible for achieving the target and goals of the organization. The MIS provides
facilities to analyze the data and offers the decision support systems to perform the
task of execution. The MIS provides an action – oriented information.
The manager has a position of responsibility and accountability for the business
results. His management role expands beyond his management function. He is a
strategist and a long-term planner. He is a person with a foresight, an analytical
ability and is expected to use these abilities in the functions of top management. The
MIS provides information in a structured or unstructured format for him to react. The
MIS caters to his constant changing needs of information. The user of the MIS is
expected to be a rational person and the design of the MIS is based on this
assumption.
However, in reality the impact created on individuals by MIS is difficult to explain.
The nature of the impact in a few cases is negative. However, this negative impact
can be handled with proper training and counseling.
It is observed that at lower level, is a sense of insecurity. As the MIS takes away the
drudgery of search, collection, writing and reporting the data, the work vacuum, so
created is not easily filled, thus creating a sense of insecurity. To some extent the
importance of the person is also lost, giving rise to a fear of non-recognition in the
organization.
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At the level of an officer and an executive, the MIS does the job the of data
manipulation and integration. It analyses the data in a predetermined manner. This
means that the knowledge of business is transferred from an individual to the MIS
and is made available to all in the organization. This change arising out of the MIS
creates a sense of being neglected for knowledge, information and advice. The
psychological impact is larger if the person is not able to cope up with this change by
expanding or enriching the job and the position held by him.
The manager holding a position in the top or middle management suffers from fear of
challenge and exposure. The MIS makes these competitors more effective as they
have access to the information and have an ability to interpret. This leads to a
situation where he is afraid that that his position, decision and defense will be
challenged and may be proved wrong sometime. The risk of adverse exposure to the
higher management also increases. The effects so far pointed out are all negative and
they are seen only in few cases.
The positive effects on the individuals at all levels are that they have become more
effective operators. The time and energy which was spent earlier in unproductive
work is now applied for a productive work. Some are able to use their analytical skills
and knowledge with the in formation support for improving their position in the
organization. Managers, having improved their decision – making ability, are able to
handle the complex situations with relative ease. Some are benefited by improving
their performance and being held in high esteem by the higher management.
The enterprising managers are able to use the systems and the models for trying out a
Number of alternatives in a given problem situation. The impact of the MIS on
people
Of the organization is phenomenal as it has made the same body of people
collectively more effective and productive.
The recent major technological advances in communication such as Multimedia,
Imaging. Graphical User Interfaces (GUI), Internet, Web etc. and the ability to access the
data stored at different locations on the variety hardware of platforms would make MIS
more attractive and efficient proposition. An intelligent user of information can
demonstrate the ability of decision making, since his manipulative capability is
considerably increased, with the information now being available on his desktop.
Through the MIS, the information can be used as a strategic weapon to counter the threats
to business, make business more competitive, and bring about the organizational
transformation through integration. A good MIS also makes an organization seamless by
removing all the communication barriers.
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REVIEV QUESTIONS
1) What is the scope of information system and Management Information
system?
2) Give three reasons for using computer for MIS in the organization?
3) Designing an MIS for an organization?
4) Can you think of an MIS which could be user independent and business
dependent?
5) State the difference between MIS and a computer system.
6) Take an organization of your knowledge and give a conceptual view of
MIS and physical view of MIS.
7) State which capabilities of a computer are used in MIS to create an impact.
8) Identify the nature of impact of MIS on people, organization and the
management style.
9) If application science and MIS can be brought together, the MIS design
would be realistic and useful. Discuss.
10) Why is MIS looked upon as a strategic need of management today?
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CHAPTER-2
Role and Importance of Management
2.1 INRODUCTION TO MANAGEMENT
Management as defined by Mary Follett is “the art of getting things done through
people” A manger is defined as a person who achieves the organization’s goals by
motivating others to perform – not by performing himself. Whether management is an
art or a science is a very subjective question. But it can be said without doubt that
modern management in the environment of technology is becoming more of a science
than an art. We define management for the purpose of Management information
Systems as the process of planning, organizing, staffing, coordinating and controlling
the efforts of the members of the organization to achieve common stated goals of the
organization.
In the process of management, a manager uses human skills, material resources and
scientific methods to perform all the activities leading to the achievement of goals.
The management process involves a continuous resolution of conflicts of one kind or
the other which affects the achievement of goals. In the management of any activity, a
manager comes across human conflict, conflict of goals, between alternative
resources, conflict of time, conflict of approach or method and the conflict of choice.
The manager uses a variety of tools, techniques and skills while executing the
management process of planning, organizing, staffing, coordinating and controlling.
An effective way of handling this process is to treat the organization as a system. The
result – oriented management approaches the problem of management through the
system view of the organization.
The key concepts of the system theory used in the management are as follows:
1. A system is a comprehensive assembly of parts becoming an organization to
achieve the stated goals.
2. A system is called OPEN if it has interaction with the environment and
CLOSED if it not have an interaction with the environment.
3. A system is defined, described and understood by the boundaries within
which it performs.
4. The system are subject to entropy, i..e., the tendency to “ run down”. Closed
systems suffer from entropy as they are cut off from the environment, while
open systems interact with the environment and draw upon the support of
resources to maintain a given condition.
5. Systems try to remain in an equilibrium or a steady state by taking recourse to
corrective action. This is possible when the system has its own feedback, i.e.,
an informational input about the state of the system.
The advantage of viewing the management as a system is that it enables us to see
the critical variables, constraints and their interaction with one another. It force
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the manager to look at the situation in such a way that due regard is given to the
consequences arising out of interaction with the related element or subjects. The
process of management explained earlier consists of steps which are relationally
linked and locked with each other.
In the context of the MIS, the systems approach to management is the most
efficient one. The understanding of the basic principle of management theory
evolved the scholars Henri Fayol, Chester Barnard and Alvin Brown is very much
essential. The application of management principles in an environment,
recognizing the specific situation, is the accepted practice of management.
Deviating from the principle to honour the situation and at the same time not
diluting the management principle is the managerial skill. The manager must have
a knowledge of management theory and principle as the skill to use them in a
particular environment.
2.2 APPROACHES TO MANAGEMENT
Frederick W Taylor*, is recognized as the father of scientific management. His
principles can be summarised as follows :
1. Replace the rules of thump with scientific rules.
2. Obtain a harmony in group action.
3. Achieve cooperation of human beings, rather than chaotic individualism.
4. Work for a maximum output .
5. Develop all workers to the possible potential for their own highest possible
prosperity.
Car George Barth, Henry L Gantt, Frank and Lillian Gilberth are the disciples of
Taylor, who promoted the thought of the scientific management.
The French industrialist Henri Fayol** promoted the theory of operational
management. Fayol is of the view that all the activities of an industrial or a
business or a business undertaking can be ____________
* F W Taylor, The Principles of Scientific Management, Harper, New
York, 1911.
** Henri Fayol, General and Industrial Management, translated by Constance
Storrs, London, Sir Isaac Pitman and Sons Ltd, 1949.
Broken into operational functions such as technical, commercial, financial,
security, accounting, and so on. He evolved the principles of operational
management. These are as given in Table 2.1.
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Table 2.1 Principles of Operational Management
Principle Comments
Division of work Efficient handling of work.
Authority and responsibility Pinpoints accountability.
Discipline Adherence to rules, regulations, norms and priorities.
Unity of command Single source directed towards one objective.
Unity of direction Efforts should be directed towards one ob


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