Principles Of Management

472 Pages·2012·22.212 MB·English

by  Tripathi

Principles of
Management
Fifth Edition
ABOUT THE AUTHORS
Dr P.C. Tripathi, formerly Professor and Head of the Department of Business Administration, Faculty
of Commerce and Management Studies, Sukhadia University, Udaipur, is an outstanding scholar and
a prolifi c writer in the fi eld of management. Dr Tripathi has attended two short-term courses of IIM
Ahmedabad. He has over thirty years’ experience of teaching MCom and MBA classes. He has also
guided a number of PhD researchers. He is the Founder Director of the Institute of Management Studies,
Rajasthan Vidyapeeth Deemed University, Udaipur. Among his important publications are Personnel
Management and Industrial Relations, Human Resource Development and A Textbook of Research
Methodology in Social Sciences.
Dr P.N. Reddy is the Ex-Professor, Chairman and Dean, Department of Commerce and Management,
Bangalore University. A PhD from Mysore University, he has more than 35 years of experience in
teaching commerce and management subjects. He has published 50 research articles in reputed Indian
and foreign journals and has also authored 25 books in the areas of commerce and management subjects.
Currently, he is Director of KKECS Institute of Management, Bangalore.
Principles of
Management
Fifth Edition
P.C. Tripathi
Ex-Professor, Associate Dean,
and Head of the Department of Business Administration,
Sukhadia University, Udaipur
P.N. Reddy
Ex-Professor, Chairman and Dean,
Department of Commerce and Management
Bangalore University, Bangalore
Tata McGraw Hill Education Private Limited
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P
REFACE TO THE
F E
IFTH DITION
We are extremely happy that our book Principles of Management now enters its fi fth edition. The
strength of the book over the years has been its comprehensive coverage of key topics, its straightfor-
ward writing, up-to-date research base and Indian examples related to the use of various management
concepts. This latest edition should enhance this reputation because it has been thoroughly revised and
updated on the above lines. Let us simply say, we have never put in so much time and effort, and never
made so many changes as we have in this fi fth edition.
ABOUT THE BOOK
The book has 21 chapters. The following is a description of what major points are new, expanded or
updated in the chapters:
Chapter 1,Nature and Functions of Management: New sections on ‘Managerial Effectiveness’, and
‘Skills and Abilities of an International Manager’
Chapter 3,Social Responsibilities of Business: New section on ‘Ethics and Corruption in International
Business,’ expanded description of corporate governance
Chapter 4, Planning: Major section on ‘Strategic Planning Process’
Chapter 5, Decision Making: Expanded description of creativity and innovation
Chapter 6, Business Forecasting and Operations Research: Major sections on ‘Focus Forecasting’
and ‘Linear Programming’
Chapter 7, Organisation: Major sections on ‘Emerging Organisation Structures’ and ‘International
Organisation Structures’ (with expanded description of advantages and disadvantages of combined
base organisation)
vi Preface to the Fifth Edition
Chapter 8, Authority Delegation and Decentralisation: New section on ‘Infl uence’
Chapter 11,Staffi ng: New major sections on ‘Manpower Planning’ and ‘Staffi ng from a Global Perspective’
(with updated description of Manpower Planning in India)
Chapter 12,Training and Development: New sections on ‘Knowledge Management’ and ‘Choosing
the Expatriate Training Method’ (with expanded description of evaluation of training and development,
mentoring and learning organisation)
Chapter 13, Performance Management: Major sections on ‘Appraisal of Organisational Performance’
and ‘Expatriate Performance Appraisal’ with new material on other related topics
Chapter 14, Compensation Plans: New major sections on ‘Company Benefi ts’ and ‘International
Compensation’
Chapter 15, Direction and Supervision: Major sections on ‘Systems Perspective of Motivation’ and
‘Organisational Citizenship Behaviour (OCB)’ with expanded description of Douglas McGregor’s Hot
Stove Rule
Chapter 17,Leadership: New major section on ‘Charismatic and Transformational Leaderships’ with
revised description of the qualities of a leader and leadership style in Indian organisations
Chapter 18, Managerial Control: Minor sections on Gantt Chart, Statistical Process Control,
Benchmarking, etc.
Chapter 19, Organisational Change: Expanded description of the need for change and total quality
management
Chapter 20, Management of Organisational Confl ict and Power Politics: Major sections on the
‘Cause, Tactics and Management of Organisational Politics’ with a description of politics in international
business
Chapter 21, Organisational Climate: Major section on ‘Quality of Worklife and Building Human
Resource Development (HRD) Culture’ and ‘Culture and International Business’
LEARNING AIDS
The fi fth edition of Principles of Management contains a new internal design to make it more ‘reader
friendly’. Each chapter begins with learning objectives. These objectives should help the students
focus better and prepare for what follows in the chapter. Review Questions provided at the end of each
chapter will help the students check their understanding of the key concepts presented. All chapters
have a section entitled “Projects”, which provides projects involving fi eld investigation or other types
of research related to fi rst-hand management issues.
Finally, most chapters include cases, which reinforce the chapter concepts, encourage critical think-
ing to apply the concepts to unstructured or more comprehensive situations and provide opportunities
for discussions and more practical understanding.
Preface to the Fifth Edition vii
INTENDED AUDIENCE
Despite the extensive revision throughout, the purpose and the intended audience of this book remain the
same as in the earlier editions. The book aims at those who wish to take a totally up-to-date, research-
based approach to management. It does not assume the reader’s prior knowledge.
Since the textbook material is comprehensive, the book can effectively be used for both graduate and
post-graduate courses. Students of some undergraduate courses may, however, on fi nding the book too
inclusive, omit certain chapters to bring it within the scope of their desired objectives without ignoring
the unifi ed point of view.
Finally, the book should be useful to the practising managers who want to understand and more
effectively manage their most important asset—their human resources.
ACKNOWLEDGEMENTS
First and foremost, we are extremely grateful to those professors whose experience with the previous
editions has helped get valuable feedback for making this revision. We also acknowledge the following
reviewers for their invaluable feedback: Nidhi Mathur, Institute of Management Technology, Ghaziabad;
Susmita Mukhopadhyay, Vinod Gupta School of Management, Indian Institute of Technology, Kharagpur;
G. S. Venugopal, Amrita Institute of Engineering and Management Sciences, Bangalore; Manodip Ray
Chaudhuri, Future Business School, Kolkata; and Smita Singh, Institute of Management Sciences,
Lucknow. Dr. P.C. Tripathi, who has been carrying out the entire revision work since the fi rst edition,
very much appreciates the entire team at Tata McGraw-Hill, especially Atul Gupta (Senior Production
Executive) who not only improved this edition but was a pleasure to work with. Dr. Tripathi also greatly
appreciates his wife Sarla and now grown-up children and their families who have provided him with
a loving, supportive relationship and the atmosphere needed to complete this project and many others
over the years.
We think we have not reached the end yet. “The best is yet to be achieved.” We will continue to do
our best to improve the content and the coverage of this book in its future editions. We encourage you
to contact Dr. Tripathi at his postal address with your comments or suggestions for improvement.
P.C. Tripathi
(226, Ashok Nagar, Udaipur 313001)
P.N. Reddy

P
REFACE TO THE
F E
IRST DITION
To the extent that management is a science,the principles of management are universal, and transcend
any particular environment. However, the art or practice of management is quite different in differ-
ent environments. Clearly, there are differences of political, legislative, social, cultural, as well as of
economic nature. These differences or variables may act as constraints, limiting the options for the
manager and the organisation. These may also provide opportunities. A good manager, therefore, must
be sensitive to the environment of the place where he is operating. He must learn to make decisions
and to plan, organise and control activity in the environmental perspectives of his own country. The
purpose of this text is to provide this perspective to our readers. Books written by foreign authors
obviously lack this perspective.
This book presents a unifi ed picture of what management is and how it is applied to various forms
of human endeavour in this country. It gives a basic knowledge about managerial functions in the most
useful and organised way. An attempt has been made to eliminate the excessive use of management
jargon which often affects the readability of books on management. Instead, clear and familiar language
has been used to make the subject easily intelligible to the readers.
Although the organisation of the book follows a widely used “management function” approach,
chapters have been designed to stand on their own so that teachers can deal with the various topics in
whatever order they may choose. Chapters 1 and 2 introduce the fi eld of management and the task of
the manager. Chapter 3 gives the background and the major schools of management thought. Chapters
4 and 5 are devoted to planning and decision-making. This is followed by a discussion of two important
techniques and aids in planning and decision-making, namely, business forecasting and operations
research (Chapter 6). The book then turns to the organising function. Chapter 7 gives an overview of
the ways in which work is allocated and organisations are structured. Chapter 8 describes the evolution
and growth of informal organisations. In Chapter 9 the ways in which managers exercise authority
and delegate duties are described. Chapters 10-16 deal with the role of a manager as a leader fi rst,
when employees are recruited and selected, trained and developed (Chapters 10 and 11), when their
x Preface to the First Edition
performance is appraised (Chapter 12) and when they are paid and rewarded (Chapter 13). Chapters 14
and 15 look at the ways in which people are motivated and the modes of communication. A discussion
about leadership is given in Chapter 16. Chapter 17 examines the important subject of control. Chapter 18
describes the social responsibilities of a businessman. Chapter 19 discusses the management of public
enterprises; this chapter has been included on account of the dominant and growing nature of the public
sector in our country and its peculiar managerial, structural and accountability frame.
The material in this book has come from a wide variety of sources. We have drawn freely from
the latest fi ndings, formulations and researches in various areas of management and have attempted
to present an integrated picture of the classical, behavioural, quantitative and contingency approaches.
However, the differences in the underlying values, assumptions and action implications of these
approaches have also been specifi cally pointed out wherever necessary.
Each chapter in this book is accompanied by three study aids, namely, Summary, Review Questions
and Bibliography. A summary at the end of each chapter helps students review the material presented in
that chapter. It contains key information, concepts and defi nitions. The review questions help students
understand better the contents of the chapter. It also gives them an opportunity to use the management
concepts presented in the chapter and to integrate information relating to the topics discussed. A reading
list at the end of each chapter will help readers in their quest for higher knowledge in the fi eld.
One of the most pleasant aspects of writing a book is the opportunity to thank those who have
contributed to it. We are grateful to many of our colleagues who have contributed directly and indirectly
to this text. We are thankful to Dr O.R. Krishnaswami, Professor, Head and Dean of the Commerce and
Management Department, Bangalore University, for his encouragement throughout the project. Finally,
we express our sincere thanks to all those whose work and ideas have helped us in writing this book.
P.C. Tripathi
P.N. Reddy