Transcript
Why study management theory?
1. Guides management decision
-Comes out of Practice
Assumption
Relationships
2. Provides a stable focus for understanding what we experience
-We get ideas about organizations and the people
-1908 Henry Ford- Apostle of mass production
- First model took 121/2 hours
- 12 Years later in 1920 - one per minute
-In 1925 Model T was rolling off one every 5 seconds
Henry Ford born in 1863 grew in Michigan when he died in 1945 he was worth $600 million.
3. Theories makes us challenge
- to keep learning
4. Theories area sources of ideas
- Alfred Sloan vs Henry Ford
5. Coherent Group of assumption put forth to explain the relationship between two or more observable facts and to provide a sound basis for predicting future events.
Evolution of management theory
Three established school
Scientific
- Classical
Organizational
- Behavioral
- Management science school
Historically not replaced - layered
- supplemented
Frederick TAYLOR- [1856-1915]
1. Development of a true science of management to identify the best way
2. Scientific selection of workers
3. Scientific education and development
4. Initiate friendly cooperation
between management and workers
Contribution
“ Production” miracle
Use for fast food industry to training of surgeons
Use rational approach to solve
Problem Solving – balanced – no emotions
Limitations
Human being are assumed rational, motivated.
Productivity to profitability
Labour
exploitation
Customers
Henri Fayol[1841-1925]
• Disprove managers were/are born and they are made
• Divide business operations functionally:1. Technical2. Commercial3. Financial4. Security5. Accounting6. Management
14 Principles
1. Division of Labour-Specialise
2. Authority- Right to give orders
3. Discipline
4. Unity of Command
5. Unity of Direction
6. Subordination of individual goal to common
7. Remuneration
8. Centralization:Retain Central Authority
9. Hierarchy- Neat box10. Orderliness: materials
and people at the right place
11.Equity- Fair, firm, friendly
12. Stability of staff13. Initiative- freedom
conceive & carry out14. Esprit-de-corps
Bureaucracy Max Weber (1864-1920)
• A bureaucratic managerial style
• Rationally thought out
• Emphasize technical competence for evaluation
• Good for large organisations, Ford benefited, GM, GE, Xerox trusted it
Main characteristics are
• Rules and regulations
• Impersonality
• Division of labor
• Hierarchical structure
• Life long career
• Rationality
Believes in authority – charisma sound’s legal
• Compliance based
- ideal for governments
- inflexible
inhibits productivity
Behavioural school
Organisation is people
Classical school – ‘people side’ neglected
Use sociology psychology and related fields to purpose more effective ways to manage people.
Hawthorne Experiments
1. Sympathetic supervision reinforced motivation – Employee works harder if they believed that management was concerned about their welfare and special attention was paid
2. The social environment of employees have a positive influence on productivity
• Work is dull
• Coworkers influence
• Shared antagonism
• Peer pressure, group pressure has a stronger influence
From HR to Behavioral Sciences
What motivates people?
Maslow’s Theory:• Physiological Needs• Safety Needs• Social Needs• Esteem Needs• Self-Actualization
Douglas McGregor• Theory X- Work is
distasteful, Motivate by force, money, Power, Praise- Stick
• Theory Y- Public is inherently motivated to do good work - Carrot
Scientific system approach
Organization as a limited purposeful system composed of inter related parts.
Neo Human relations
From a rational man
- motivated by fear
understand they are emotional, intuitive,
creative
We all like to think ourselves as winners
Shared values : Peters & Robert Waterman
Eight attributes of excellence1. A bias for ACTION
2. Close to the customer
3. Autonomy and entrepreneurship
4. Productivity through people
5. Hands on value driven
6. Stick to the knitting
7. Simple form, lean staff
8. Simultaneous loose tight properties
If treated well
- enhanced responsiveness
- respond to opportunities
Not replacement parts like a machine part in a corporate machine.
- continuous retraining – automate increased flexibility
Labors concern for job security
- eg. Lucas TVS
Skills
Strategy
Structure
Systems
Style
Staff
Shared Values
McKINSEY 7-S FRAMEWORK
SYSTEMS APPROACH• Organization considered as unified
purposeful system composed of interrelated parts.
- Activity of one affects the others- meshed – integrated – coordinated made up of subsystem
- those that make up the whole system.
Each subsystem works independently.
SYNERGY
• Whole is greater than the sum of its parts as separate departments cooperate and interact, they become more productivity than if they each were to WORKWORK in ISOLATION.ISOLATION.
Open system Interacts with environment
- automobile plant
CLOSED SYSTEM – Does not
A prison or church
External Environment
INPUT
HUMAN
CAPITAL
LAND Process
BLDG transformation
EQUIPMENT
Technology
Information Feedback
OUTPUT• GOODS• SERVICES• OTHERS
Managers plays dominant role
- in inputs
- in transformation process
- uses feedback continual to improve inputs/ transformation
University system vs fast food joint
High Performance
- Japanese management idea
- TQM
- Re engineering
- Bench marking
- Learning Organisation
Management DefinedProcess of working with and through others to achieve organizational objectives in a changing environment.
Derailed• Problem with interpersonal• Failure to meet business objectives• Failure to build & lead a team.• Inability to change and adapt during a transition
Effectiveness and efficiency
• Do right things• Choose right goals• Concentrate resources
and efforts on them• The job gets done
but…..
• Do things right• Limited Resources
are underutilized or wasted.
Balanced emphasis
The job gets
done and
……….
Limited resources are not
wasted
Achieving organizational objectives
Getting the most of limited resources
Balance effectiveness
efficiency
Working with &through others
Key Aspects
Management Process
- Planning
- decision making
- organising
- staffing
-communicating
- motivating
- leading
-controlling
Managerial Roles: ten roles Figurehead ceremonial. Leader The liason role;
communicating particularly with external, horizontal and vertical
Informational Role (securing information above the operation
The disseminator
- to subordinates The Spokesperson role
- external
Decision role The entrepreneur role The disturbance handler The resource allocator The negotiator
- dealing with others.
HumanCapitalManagerialTechnological
EmployeesConsumersSuppliersGovernmentShareholdersCommunity
Basis of Management Theory
Planning
Organising
Role of managerScientificOrgn. theorySystems theoryBureaucraticContingency
InputsClaimants
-Interpersonal-Informational-Decision
Actuating
Controlling
Outputs
Products
Motivation
Leadership
Communication
Staffing
ServicesProfits
Satisfaction
Goal integration
Management Levels
First line – supervisors
Middle Managers – responsible for other managers operating employees
Top Managers
Overall management
Skills
Technical/procedural
Human skills
Conceptual
Conceptual
Human
Technical
Company’s Mission
the … - specific purpose
1.Clear usually from the start becomes hazy over a period of time
- need clarity when business grows
2. Unclear at the start- emerges as you learn
3.Mission becomes irrelevant
Being aware of opportunityIn light of :
Setting objectives or goals where we want to be And what we want to accomplish and when ?
The market, competitionWhat customers want ?
Our strengthsOur weaknesses
Considering planning premisesIn what environment – internal or external
Will our plans operate?
Identifying Alternatives What are the most promising alternatives to
accomplishing our objectives?
Comparing Alternatives In Light of Goals Sought
which alternatives will give us the best chance of meeting our goals at the lowest cost
and highest profit
Choosing an Alternative
Selecting the course of action we will pursue
Formulating supporting plans to buy equipmentsbuy materials
hire and train workersdevelop a new product
Numberizing plans by making budgets develop such budgets as:
-volume and price of sales -operating expenses
-expenditure for capital equipment
Peter Drucker1. What business are you in?
2. Who is our customer?
3. What value is delivered to the customer?
4. What business are we going to the in?
5. What business ought we be in?
The building blocks
- history of the organisation
values and policies
- current preferences of management-who pilot
e.g.……Nagar – Alcohol- Environment considerations- Resources
- distinctive competence
Mission statement reflects the – corporate philosophy
- identify
- character and
- image
It should feasible
precise –clear
motivating – distinctive
and strategic
ONGC: to stimulate, continue and
accelerate efforts to develop and maximise contribution of the energy sector to the economy of the country
INDAL: to be most innovative, diversified aluminum company.
Bank of Madura: a vibrant bank committed to excellence in performance through customer satisfaction.
BARC – to attain self sufficiency in Atomic energy programme
We are energy business
We are in baby business
We are in the business of cool clean an
ACC: to strive to maintain leadership in the cement industry
Four Steps in Planning
Step 1
Step 2
Step 3
Step 4
Establish a goal or set of goals
Define the present situation how far are we from the present goalsWhat are the resources available for reaching the goals
Identify the aids and barriers to the goals
Develop a plan or set of actions for reaching goals
The Hierarchy of Plans
MISSION STATEMENT
STRATEGIC PLANS
Operational Plans
Commitment principle
- materials
- capital equipment
- recruitment engineering
- new product development
- plant
- production facilities
- financing
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