Lecture No 1_Chapter No 1

9/14/2010

1

Prescribed Text Book:

Management: A Global & Entrepreneurial Perspective 12th edition Harold & Heinz

Principles of ManagementPrinciples of Management

Harold & Heinz

Syllabus:

Chapters = 1–2, 4–5, 7–10, 14–16 & 18Total = 12 ChaptersNo of periods available = 10

Lectures BreakdownLectures BreakdownLecNo Chapter(s) Name Chap

No(s) Other Information

1 Management: Science, Theory and Practice 1 Intro - Ground Rules- Book briefing - Marks distribution

2 Management & Society: The External Environment, Social Responsibility and Ethics 2 Assignment No 1

3 Essentials Of Planning and Managing By Objectives 4

4 Strategies, Policies and Planning Premises 5 Submission Assignment No 1

5 Nature Of Organizing, Entrepreneuring & Re-Engineering ---Organization Structure 7 & 8 Assignment No 2

6 Line Staff Authority, Empowerment & Decentralization 9 Mid-Term (First One Hour)

7 Effective Organizing and Organizing Culture -------Human Factors and Motivation 10 & 14

8 Leadership 15 Submission Assignment No 2

9 Committies, Teams And Group Decision Making 16

10 The System, & Process Of Controlling 18

Marks DistributionMarks DistributionSessional Marks 50• Quizzes 10• Assignment 10• Class participation/ Attendance 05• Midterm test 25

E d T E 50End Term Exam 50• Total 100• Pass Percentage 50%

TERM WORKLOAD• Quizzes: 3 – 4 (Avg. will be graded)• Assignments: 2 (Avg. will be graded)• Mid Term Test: October 11 – 16 • End Term Exam: 22 Nov – 01 Dec

Principles of Principles of ManagementManagement

9/14/2010

2

Management: Management: Science, Theory Science, Theory

& Practice& Practice

ChapterChapter

11

Lecture TopicsLecture Topics• Introduction & Definitions

• Terms explanation

• Examples of Managers

• Evolution of Management Subject

• Management Theories

• Management Approaches

• Managerial Functions

Definition 1Manipulation of resources to achieve objectives

Resources: 4Ms Time & Information

ManagementManagement

Resources: 4Ms, Time & Information4Ms: Men, Material, Money, & Machine

Definition 2

The process of getting activities completed efficiently and effectively with and through

ManagementManagement

efficiently and effectively with and through other people.

9/14/2010

3

Definition 3

It is a process of designing and maintaining an environment in which individuals working

ManagementManagement

environment in which individuals, working together in groups, efficiently accomplish

selected aims.

Definition 4

Is the process by which managers create, direct, maintain and operate purposive organizations

ManagementManagement

maintain and operate purposive organizations through coordinated, cooperative human effort.

ManagementManagementDefinition 5

The attainment of organizational goals in an effective and efficient manner through planning, g p g,organizing, staffing, leading, and controlling

organizational resources.

Key WordsKey Words : Management Definitions: Management Definitions

• Resources, Objectives• Efficiently, Effectively, Through Other People.• Designing, Maintaining, Environment, Aims.• Create, Direct, Maintain, Operate, Human

Effort.• Organizational Goals, Planning, Organizing,

Staffing, Leading, Controlling , Resources

9/14/2010

4

Comprehensive DefinitionComprehensive Definition

Management is achievement of organisational goals through the major

functions of planning, organising, t ffi l di d t llistaffing, leading and controlling.

MANAGEMENT FUNCTIONSMANAGEMENT FUNCTIONS

1. Planning

Achievement of organisational goals via:

5. Controlling

3. Staffing

2. Organising

4. Leading

What is an Organization?What is an Organization? What is an Organization?What is an Organization?

• An Organization Defined– A deliberate arrangement of people to

accomplish some specific purpose (that individuals independently could not accomplish p y palone).

• Common Characteristics of Organizations– Have a distinct purpose (goal)– Composed of people– Have a deliberate structure

9/14/2010

5

Management Level and Skills

PRODUCTIVITYProductivity = Output / Input (within time & quality)

EFFECTIVENESS

Productivity – Effectiveness - Efficiency

EFFECTIVENESSTo achieve objectivesobjectives within the available resources

EFFICIENCYTo achieve objectives at the least cost least cost of resources.

Effectiveness & Efficiency in ManagementEffectiveness & Efficiency in Management Goals of All Managers Goals of All Managers

• Aim of business managers:– To make Profit– Long term increase in value of their Common

Stock

9/14/2010

6

What is a What is a SurplusSurplus .. .. ????

• Business Organizations– Profit

• Not-for-Profit Organizationsg– Satisfaction of Needs/ Service

Management: Science or Art ?Management: Science or Art ?

• Science– The organized

knowledgeknowledge

• Art– Practicing

management

The Evolution of Management TheoryThe Evolution of Management Theory Factors Leading to Evolution of Factors Leading to Evolution of Management TheoriesManagement Theories

• Began in the industrial revolution in the late 19th century• Managers of organizations began seeking ways to better

satisfy customer needs.• Large-scale mechanized manufacturing began to

supplanting small scale craft production in the ways insupplanting small-scale craft production in the ways in which goods were produced.

• Social problems developed in the large groups of workers employed under the factory system.

• Managers began to focus on increasing the efficiency of the worker-task mix.

9/14/2010

7

Management TheoriesManagement Theories

•• Scientific Management TheoryScientific Management Theory•• Modern Operational management TheoryModern Operational management Theory•• Behavioral SciencesBehavioral Sciences•• Systems TheorySystems Theory•• Modern Management ThoughtsModern Management Thoughts

Scientific Management TheoryScientific Management Theory

• F.W. Taylor

• Frank and Lillian Gilbreth– Time & Motion Studies

• Henry L. Gantt– Gantt Chart

F.W.F.W. Taylor : Scientific ManagementTaylor : Scientific Management

• 1875• Apprentice• Common Laborer

F• Foreman• Master Mechanist• Chief Engineer•• Father of Scientific Father of Scientific

Management TheoryManagement Theory

Four Principles of Scientific ManagementFour Principles of Scientific Management

• Replacing Rule of Thumb with Science• Obtaining harmony rather than discard in a group• Achieving cooperation rather than chaotic

individualismindividualism• Working for maximum output rather than restricted• Training all workers for fullest extent for their and

company’s highest prosperity

9/14/2010

8

Problems with Scientific ManagementProblems with Scientific Management

• Managers frequently implemented only the increased output side increased output side of Taylor’s plan.– Workers did not share in the increased output.

•• SpecializedSpecialized jobs became very boring, dull.pp j y g– Workers ended up distrusting the Scientific

Management method.• Workers could purposely “under“under--perform.”perform.”

– Management responded with increased use of machines and conveyors belts.

Modern Operational Management TheoryModern Operational Management Theory

• Henry Fayol’s• French Industrialist • Elements of Managementg• Principles of Management •• Father of Modern Father of Modern

Management TheoryManagement Theory

Fayol’s : Elements of ManagementFayol’s : Elements of Management

• Planning• Organising• Commanding (Leading)g ( g)• Coordinating• Controlling

Fayol’s 14 Principles of ManagementFayol’s 14 Principles of Management

• Division of Labor: allows for job specialization.– Fayol noted jobs can have too much specialization leading to poor

quality and worker dissatisfaction.

• Authority and Responsibility– Fayol included both formal and informal authority resulting fromFayol included both formal and informal authority resulting from

special expertise.

• Unity of Command– Employees should have only one boss.

• Line of Authority– A clear chain of command from top to bottom of the firm.

• Centralization– The degree to which authority rests at the top of the organization.

9/14/2010

9

Fayol’s Principles of Management (cont’d)Fayol’s Principles of Management (cont’d)• Unity of Direction

– A single plan of action to guide the organization.

• Equity– The provision of justice and the fair and impartial treatment of all

employees.

• OrderOrder– The arrangement of employees where they will be of the most

value to the organization and to provide career opportunities.

• Initiative– The fostering of creativity and innovation by encouraging

employees to act on their own.

• Discipline– Obedient, applied, respectful employees are necessary for the

organization to function

Fayol’s Principles of Management (cont’d)Fayol’s Principles of Management (cont’d)

• Remuneration of Personnel– An equitable uniform payment system that motivates contributes

to organizational success.

• Stability of Tenure of Personnel– Long-term employment is important for the development of skillsLong term employment is important for the development of skills

that improve the organization’s performance.

• Subordination of Individual Interest to the Common Interest– The interest of the organization takes precedence over that of

the individual employee.

• Esprit de corps– Comradeship, shared enthusiasm foster devotion to the common

cause (organization).

Behavioral SciencesBehavioral Sciences

• Hugo Munesterberg• Walter Dill Scott• Max Weber

Vilf d P• Vilfredo Pareto• Elton Mayo & F. J. Roethlisberger

Behavioral Management TheoryBehavioral Management Theory

• Behavioral Management– Humans are not machines– Some Factors effecting human behaviors

• Working conditions (lighting, conditioning, facilities etc)• Group behaviors• Feelings• Stress elements• Needs• Self Respect – Ego issues

– Focuses on the way a manager should manage to address the behavioral issues of employees

9/14/2010

10

Mayo & Roethlisberger : Hawthorne StudiesMayo & Roethlisberger : Hawthorne Studies

• Studies at the Hawthorne Plant of the Western Electric Company from 1924-1932

• Research of Effects of IlluminationEffects of Illumination• Universities discarded the research• Mayo (Harvard School) & Roethlisberger continued• Result of their studies:• Productivity is affected by:

• Working conditions• Morale/ Motivation• Inter-relationships (Group behavior)

Lessons from the Lessons from the HawthroneHawthrone Studies Studies Behavioral ViewpointBehavioral Viewpoint

• Employees are motivated by social needs and association with others

• Employees’ performance is more a result of peer pressure than management’s incentives andpressure than management s incentives and rules

• Employees want to participate in decisions that affect them

• Managers need to involve subordinates in coordinating their work to improve efficiency

•• Systems TheorySystems Theory–– Open SystemOpen System–– Closed SystemClosed System

•• Modern ManagementModern Management

Systems Theory & Modern ManagementSystems Theory & Modern Management

–– Informal OrganisationInformal Organisation–– Quality Control in JapanQuality Control in Japan–– Japanese Management Practices adaption in USAJapanese Management Practices adaption in USA–– Management by Objectives Management by Objectives –– by Peter by Peter DruckerDrucker–– Many more…..Many more…..

Theories & Approaches : A JungleTheories & Approaches : A Jungle

• Academicians jumped in Management Subject in 50s• Previous contribution mostly from Practitioners• Result of so many academic researchers

• Multiple theories – approaches • New words attached to old practices• New styles given to old cultures

•• First Theories and then ApproachesFirst Theories and then Approaches

•• JungleJungle

9/14/2010

11

Management ApproachesManagement Approaches

Only focus:Only focus:

•• Managerial Roles ApproachManagerial Roles Approachg ppg pp

•• Management Process (Operational) ApproachManagement Process (Operational) Approach

We will only focus on …. !We will only focus on …. !

•• Managerial Roles ApproachManagerial Roles Approach

•• Management Process (Operational) ApproachManagement Process (Operational) Approach•• Management Process (Operational) ApproachManagement Process (Operational) Approach

Managerial Roles ApproachManagerial Roles Approach

• By Mintzberg of McGill Uni• Based on:

––What Managers actually do?What Managers actually do?R h f 05 CEOR h f 05 CEO––Research of 05 CEOsResearch of 05 CEOs

• Conclusion: Managers fill series of 10 Roles:

Managerial Roles ApproachManagerial Roles Approach•• Interpersonal rolesInterpersonal roles

– Figurehead– Leader– Liaison

•• Informational rolesInformational rolesR i i t– Recipient

– Disseminator– Spokesperson

•• Decisional rolesDecisional roles– Entrepreneurial– Disturbance handler,– Resource allocator– Negotiator

9/14/2010

12

INTERPERSONAL ROLEINTERPERSONAL ROLE•• FigureheadsFigureheads: Projecting a set of values,

communicating an image.

•• Leader role: Leader role: Needs to be informed, as well as informing. Leadership skills commonly lacking in managers.

•• Liaison role:Liaison role: Developing channels of communication, especially informal channels with other corporate directors, political connections, media, public figures.

INFORMATIONAL ROLEINFORMATIONAL ROLE•• MonitorMonitor: Sifting, sorting, selecting information (to

help set the agenda)—phone, meetings, memos, social functions, mail, public gatherings.

•• DisseminatorDisseminator: The passing of relevant i f ti t b di tinformation to subordinates.

•• SpokespersonSpokesperson: Has to be able to express it, have solid verbal skills—right message at right time.

DECISIONAL ROLEDECISIONAL ROLE

•• EntrepreneurialEntrepreneurial: Ability to identify opportunities and threats—able to do this in diverse situations—work or leisure.

•• Disturbance handlerDisturbance handler: More information available, more likely correct decision is mademore likely correct decision is made.

•• Resource allocatorResource allocator: To divisions or departments; managers need to have an understanding of what resources are needed for effective functioning (e.g. budget gamesmanship).

DECISIONAL ROLEDECISIONAL ROLENegotiatorNegotiator: Managers need precise and relevantinformation to facilitate this role. Therefore, the bestmanagers:• Place themselves at the centre of a vast network of

contacts that are social, political, occupational, organisational, international.o ga sa o a , e a o a

• Can sift, sort, and select valuable information.

• Have secretaries who network, who filter and edit information to avoid overload.

9/14/2010

13

Management Process/ Operational Management Process/ Operational ApproachApproach

Knowledge of Managerial of

Managementg

Job

Management Process/ Operational ApproachManagement Process/ Operational Approach

Cooperative Social Systems

Group Behavior

Interpersonal behavior

Applied Systems theory

Socio-technical theory

Basic Basic 7-S Frame work

Total Quality Mgt

Managerial Roles

Contingency Theory

Management Science

Relational Decisions

Re-engineering Management Management ScienceScience

System in Operational ApproachSystem in Operational Approach

Transformationprocessinput output

ENVIRONMENT

Organization as a System receives Input, transforms itthrough a Process for Output and Operates in anEnvironment (economic, regulatory and other forces)

Feedback (Reenergizing the system)

System Boundary

Definitions in Systems Approach to ManagementDefinitions in Systems Approach to Management

• Inputs – 4Ms, Technical knowledge & Skills• Outputs – Products/ Services• Transformation Process – Task of Mangers to

transform the inputs into outputs• Stakeholders

ShareholdersShareholdersSociety:Suppliers:Customers:Employees:

• EnvironmentPeople, organizations & other systems, supplying to or receiving from the system

9/14/2010

14

Product/Services,Profits, Customer & Societal satisfaction,

Other Long-term Goals

Man, MachineMaterial,Method,

Measurement

StakeholdersShareholders;Society; Customers;Employees; Suppliers

Communication System in Operational ApproachCommunication System in Operational Approach

Inputs(Goal

Oriented)

Outputs(External

ToOrgnzn.)

Planning

Organizing

Staffing

Leading

Controlling

Stake holder Feedback (reenergizing the system)

EXTERNAL ENVIRONMENT(Opportunities, Constraints)

MANAGEMENT FUNCTIONSMANAGEMENT FUNCTIONS

1. Planning

Achievement of organisational goals via:

5. Controlling

3. Staffing

2. Organising

4. Leading

Selecting missions and objectives as well as the actions to achieve

PLANNINGPLANNING

them, which require decision making.

ORGANISINGORGANISING

Establishing an intentional structure ofroles for people to fill in an organisation.

9/14/2010

15

• Structure• Designing different departments & positions

• Intentional• Formal departments/ chain of command

ORGANISINGORGANISING

p• Roles for people

• Defining directory of duties for all positions• Making sure that all required tasks are definedto departments/ positions

• Very difficult/ critical function for raisinga new organisation

STAFFINGSTAFFING

Filling, and keeping filled, the positions inthe organisation structure.

• FillingFilling• Identifying work force requirements• First time induction of all positions• Right people for the right job

STAFFINGSTAFFING

Right people for the right job• Selecting/ hiring/ placing/ promoting• Career Planning/ compensating/ training

•• KeepingKeeping filledfilled• Ongoing process

LEADINGLEADING

Influencing people so that they will contribute toorganisational and group goals.

9/14/2010

16

• Human beings – Centre of any organisations• Most challenging job – To manage people• Leadership – having followers• People tend to follow those, who satisfy their

LEADINGLEADING

needs

CONTROLLINGCONTROLLING

Measuring and correcting individual andorganisational performance to ensure thatevents conforms to plans.

• Mechanism to keep actions according to plans• To design Referencing and Measuring parameters• Measuring – Recording the performance to adefined scale• Evaluating deviations

CONTROLLINGCONTROLLING

g• Correcting the variations to get back to originalplans