Principle of managment

PPRINCIPLESRINCIPLES OFOF MMANAGEMENTANAGEMENT

MGT-201MGT-201

Instructor’s NameInstructor’s Name

HAMMAD TAHIRHAMMAD TAHIR DIRECTOR EDCDIRECTOR EDC

BIZTEKBIZTEK--IINSTITUTE OF NSTITUTE OF BBUSINESS & USINESS & TTECHNOLOGY ECHNOLOGY

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CCORPORATEORPORATE L LESSONSESSONS

So, we will be going through change

Here’s three lessons from large corporations to help you survive change….

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So, the rabbit sat on the ground below the crow, and rested.

CORPORATE CORPORATE LESSON 1LESSON 1

A crow was sitting on a tree, doing nothing all day.

A small rabbit saw the crow, and asked him, "Can I also sit like you and do nothing all day long?”The crow answered: "Sure, why not.”

All of a sudden, a fox appeared,

Jumped on the rabbit... and ate it.

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CORPORATE CORPORATE LESSON 1LESSON 1

Moral of the story is….Moral of the story is….

To be sitting and doing nothingTo be sitting and doing nothingyou must be sitting very, very high up.you must be sitting very, very high up.

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"I would love to be able to get to the top of that tree," sighed the turkey, "but I haven't got the energy.”

CORPORATE LESSON 2CORPORATE LESSON 2

A turkey was chatting with a bull.

"Well, why don't you nibble on some of my droppings?" replied the bull. They're packed with nutrients."

The turkey pecked at a lump of dung and found that it actually gave him enough strength to reach the first branch of the tree.

The next day, after eating more dung, he reached the second branch.

Finally after a fortnight, there he was proudly perched at the top of the tree.

Soon he was spotted by a farmer

Who promptly shot the turkey out of the tree.

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CORPORATE LESSON 2CORPORATE LESSON 2

Moral of the story:Moral of the story:

Bullshit might get you to the top, but it won't keep you there.

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CORPORATE LESSON 3CORPORATE LESSON 3

A little bird was flying south for the winter.

It was so cold, the bird froze and fell to the ground in a large field.

While it was lying there, a cow came by

and dropped some dung on it.

As the frozen bird lay there in the pile of cow dung, it began to realize how warm it was. The dung was actually thawing him out!

He lay there all warm and happy, and soon began to sing for joy.

A passing cat heard the bird singing and came to investigate.

Following the sound, the cat discovered the bird under the pile of cow dung, and promptly dug him out and ate him!

PURR....

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TTHEHE M MORALORAL OFOF T THISHIS W WHOLEHOLE S STORYTORY A ARE:RE:

1.Not everyone who drops shit on you is your enemy.

2.Not everyone who gets you out of shit is your friend.

3.And when you're in deep shit, Keep your mouth shut.

MANAGEMENT FMANAGEMENT FROMROM W WHENHEN? ?

The Evolution of The Evolution of Management Management

Thought & The Thought & The Patterns of Patterns of

Management Management AnalysisAnalysis

MMEANINGEANING OFOF M MANAGEMENTANAGEMENT

There are FOUR primary views of There are FOUR primary views of Management:Management:

1.1. Management is a ProcessManagement is a Process

2.2. Management is a DisciplineManagement is a Discipline

3.3. Management is a Human ActivityManagement is a Human Activity

4.4. Management is a CareerManagement is a Career

DEFINITIONSDEFINITIONS

MANAGEMENT: The planning, organizing, leading, and MANAGEMENT: The planning, organizing, leading, and controlling of human and other resources to achieve controlling of human and other resources to achieve organizational goals effectively and efficiently.organizational goals effectively and efficiently.

ORGANIZATIONAL PERFORMANCE: A measure of how ORGANIZATIONAL PERFORMANCE: A measure of how efficiently and effectively a manager uses resources to efficiently and effectively a manager uses resources to satisfy customers and achieve organizational goals.satisfy customers and achieve organizational goals.

EFFICIENCY: A measure of how well or productively EFFICIENCY: A measure of how well or productively resources are used to achieve a goal.resources are used to achieve a goal.

EFFECTIVENESS: A measure of the appropriateness of EFFECTIVENESS: A measure of the appropriateness of the goals an organization is pursuing and of the degree the goals an organization is pursuing and of the degree to which the organization achieves those goals.to which the organization achieves those goals.

What is What is MANAGEMENT?MANAGEMENT?

Management is the process of designing Management is the process of designing and maintaining an environment which and maintaining an environment which individuals, working together in groups, individuals, working together in groups, efficiently accomplish selected aims.efficiently accomplish selected aims.

Business Management is a set of Business Management is a set of processes that help organizations processes that help organizations optimize business performance. It is optimize business performance. It is focused on business processes such as focused on business processes such as planning and forecasting.planning and forecasting.

MMANAGEMENTANAGEMENT CCOMESOMES FFROMROM

Management" (from Old French Management" (from Old French management "the art of conducting, management "the art of conducting, directing", from Latin directing", from Latin Manu agereManu agere "to lead by the hand"). One can also "to lead by the hand"). One can also think of management functionally, think of management functionally, as the action of measuring a as the action of measuring a quantity on a regular basis and of quantity on a regular basis and of adjusting some initial plan, and as adjusting some initial plan, and as the actions taken.the actions taken.

DDEVELOPMENTEVELOPMENT O OFF MMANAGEMENTANAGEMENT

4000 BC4000 BC BC years (Before BC years (Before Capitalization)Capitalization)

Slave Labor.Slave Labor.

1-500 AD1-500 AD Classical Era (Greeks & Classical Era (Greeks & Alexander)Alexander)

Self production.Self production. Artisan Production.Artisan Production.

500 – 1300 AD.500 – 1300 AD. Early ages of Capitalism.Early ages of Capitalism. Crafts & Guilds.Crafts & Guilds.

1300 – 1500 1300 – 1500 AD.AD.

Protestant CapitalismProtestant Capitalism Rise of Trade.Rise of Trade.

1500 – 1776.1500 – 1776. Mercantilism.Mercantilism. Rise of Trade.Rise of Trade.

1776 – 18901776 – 1890 Industrial Capitalism New Industrial Capitalism New WorldWorld

Factory Production.Factory Production.

1890 – 19331890 – 1933 Financial CapitalismFinancial Capitalism Revolution in England.Revolution in England.

1933 – 19501933 – 1950 National CapitalismNational Capitalism American Contribution.American Contribution.

1950 To Date1950 To Date Managerial CapitalismManagerial Capitalism Second RevolutionSecond Revolution

The Classical ERA Contributors are:The Classical ERA Contributors are:

Frederick Taylor.Frederick Taylor. Max Weber.Max Weber. Frank Lillian Gilbert.Frank Lillian Gilbert. Henri Fayol.Henri Fayol. Chester Barnard.Chester Barnard.

CCLASSICALLASSICAL EERARA OOFF HHISTORICALISTORICAL EEVOLUTIONVOLUTION OOFF MMANAGEMENTANAGEMENT

TTHEHE CCLASSICALLASSICAL PPERSPECTIVEERSPECTIVE

Frederick W. Taylor designed a 4-step MethodFrederick W. Taylor designed a 4-step Method

1.1. It begins with breaking the job into its smallest pieces. It begins with breaking the job into its smallest pieces. 2.2. The second step is to select the most qualified employees The second step is to select the most qualified employees

to perform the job and train them to do it. to perform the job and train them to do it. 3.3. Next, supervisors are used to monitor the employees to Next, supervisors are used to monitor the employees to

be sure they are following the methods prescribed. be sure they are following the methods prescribed. 4.4. Finally, continue in this fashion, but only use employees Finally, continue in this fashion, but only use employees

who are getting the work done. who are getting the work done.

Scientific ManagemenScientific Managementt focuses on ways to focuses on ways to improve the performance of individual improve the performance of individual workers. Some of the major contributors are: workers. Some of the major contributors are:

1856 - 19121856 - 1912

BureaucracyBureaucracy

Max WeberMax Weber (1864-1920), known as the Father of Modern (1864-1920), known as the Father of Modern Sociology, analyzed Sociology, analyzed bureaucracybureaucracy as the most logical and as the most logical and rational structure for large organizations. Bureaucracies are rational structure for large organizations. Bureaucracies are founded on legal or founded on legal or rational authorityrational authority which is based on law, which is based on law, procedures, rules, and so on. Efficiency in bureaucracies comes procedures, rules, and so on. Efficiency in bureaucracies comes from:from:

1.1.Clearly defined and specialized functions.Clearly defined and specialized functions.2.2.Use of legal authority.Use of legal authority.3.3.Hierarchical form. Hierarchical form. 4.4.Written rules and procedures.Written rules and procedures.5.5.Technically trained bureaucrats. Technically trained bureaucrats. 6.6.Appointment to positions based on technical expertise. Appointment to positions based on technical expertise. 7.7.Promotions based on competence.Promotions based on competence.8.8.Clearly defined career paths. Clearly defined career paths.

FFRANKRANK (1868-(1868-1924)1924)

LLILLIANILLIAN G GILBRETH ILBRETH (1878-1972)(1878-1972)

Frank GilbertFrank Gilbert, known as the Father of , known as the Father of Time and Time and Motion StudiesMotion Studies, filmed individual physical labor , filmed individual physical labor movements.  This enabled the manager to break movements.  This enabled the manager to break down a job into its component parts and down a job into its component parts and streamline the process. streamline the process.

Lillian GilbertLillian Gilbert, was a psychologist and author of , was a psychologist and author of The Psychology of Work. In 1911 Frank Gilbreth The Psychology of Work. In 1911 Frank Gilbreth wrote wrote Motion StudyMotion Study and in 1919 the couple and in 1919 the couple wrote wrote Applied Motion StudyApplied Motion Study. .

HHENRYENRY GGANTTANTT (1861-1919)(1861-1919)

Henry GanttHenry Gantt developed the Gantt Chart, which is used developed the Gantt Chart, which is used for scheduling multiple overlapping tasks over a time for scheduling multiple overlapping tasks over a time period. period.

He focused on motivational schemes, emphasizing the He focused on motivational schemes, emphasizing the greater greater Effectiveness of Rewards for Good WorkEffectiveness of Rewards for Good Work (rather than penalties for poor work). (rather than penalties for poor work).

He developed a He developed a Pay Incentive SystemPay Incentive System with a with a guaranteed guaranteed Minimum wageMinimum wage and and Bonus SystemsBonus Systems for for people on people on Fixed WagesFixed Wages.. Also, Gantt focused on the Also, Gantt focused on the importance of the qualities of leadership and importance of the qualities of leadership and management skills in building effective industrial management skills in building effective industrial organizations organizations

AADMINISTRATIVE DMINISTRATIVE MMANAGEMENTANAGEMENTHHENRI ENRI FFAYOLAYOL (1841--1925)(1841--1925)

Administrative managementAdministrative management emphasizes the emphasizes the manager and the functions of management. manager and the functions of management. HENRI HENRI FAYOLFAYOL (1841--1925), known as the Father of (1841--1925), known as the Father of “Modern Management”, was a French industrialist “Modern Management”, was a French industrialist who developed a framework for studying who developed a framework for studying management. management.

He wrote He wrote General and Industrial ManagementGeneral and Industrial Management. His . His five functions of managers were Plan, Organize, five functions of managers were Plan, Organize, Command, Coordinate, and Control. Command, Coordinate, and Control.

HHENRI ENRI FFAYOLAYOL (1841-1925),(1841-1925),

His Fourteen Principles of Management His Fourteen Principles of Management included:included:

Authority and Authority and responsibilityresponsibility

CentralizationCentralization

Division of workDivision of work Scalar chainScalar chain

DisciplineDiscipline OrderOrder

Unity of commandUnity of command EquityEquity

Unity of directionUnity of direction Stability of tenure of personnelStability of tenure of personnel

SubordinationSubordination InitiativeInitiative

Remuneration of Remuneration of personnelpersonnel

Esprit de corps (union is Esprit de corps (union is strength). strength).

CCHESTERHESTER BBARNARDARNARD (1886-1961)(1886-1961) When When Chester BarnardChester Barnard retired as the CEO of New Jersey Bell Telephone, he retired as the CEO of New Jersey Bell Telephone, he recorded his insights about management in his book, recorded his insights about management in his book, Functions of the Functions of the ExecutiveExecutive. .

He developed the concepts of He developed the concepts of Strategic PlanningStrategic Planning and the and the Acceptance Acceptance TheoryTheory of authority. of authority.

Strategic PlanningStrategic Planning is the formulation of major plans or strategies, which is the formulation of major plans or strategies, which guide the organization in pursuit of major objectives. Barnard taught that the guide the organization in pursuit of major objectives. Barnard taught that the three top functions of the executive were: three top functions of the executive were: 1.1.Establish and maintain an effective communication system, Establish and maintain an effective communication system, 2.2.Hire and retain effective personnel, and Hire and retain effective personnel, and 3.3.Motivate those personnel.  Motivate those personnel.  

His His Acceptance Theory of AuthorityAcceptance Theory of Authority states that managers only have as states that managers only have as much authority as employees allow them to have. The acceptance of authority much authority as employees allow them to have. The acceptance of authority depends on four conditions. depends on four conditions. 1.1.Employees must understand what the manager wants them to do. Employees must understand what the manager wants them to do. 2.2.Employees must be able to comply with the directive. Employees must be able to comply with the directive. 3.3.Employees must think that the directive is in keeping with organizational Employees must think that the directive is in keeping with organizational objectives. objectives. 4.4.Employees must think that the directive is not contrary to their personal Employees must think that the directive is not contrary to their personal goals.goals.

HHISTORICALISTORICAL EEVOLUTIONVOLUTION

OOFF MMANAGEMENTANAGEMENT1.1. Adam Smith:Adam Smith:

Smith Conducted that division of Labor Raises productivity by Smith Conducted that division of Labor Raises productivity by increasing each increasing each worker’s skillsworker’s skills and dexterity by and dexterity by saving timesaving time that is commonly lost in changing that is commonly lost in changing tasks.tasks.

2.2. Charles Babbage:Charles Babbage:

It reduces the time for learning job.It reduces the time for learning job. It reduces the waste of material during the learning stage.It reduces the waste of material during the learning stage. It allows for the attainment of high skills levels.It allows for the attainment of high skills levels. It allows a more careful matching of people’s skills and physical abilities It allows a more careful matching of people’s skills and physical abilities

with specific tasks.with specific tasks.

3.3. Robert Owen:Robert Owen:

He proposed was a utopian workplace that would reduce the suffering of the He proposed was a utopian workplace that would reduce the suffering of the working class. He was more that 100 years ahead of his time when he working class. He was more that 100 years ahead of his time when he agreed, in 1825 for regulated hours of work for all, agreed, in 1825 for regulated hours of work for all, child labor laws, public child labor laws, public laws, public education, company furnished meals at worklaws, public education, company furnished meals at work, and business , and business involvement in community projects.involvement in community projects.

TTHEHE HHAWTHORNEAWTHORNE SSTUDIESTUDIES

Harvard Business School researchers, Harvard Business School researchers, T.N. T.N. WhiteheadWhitehead, , Elton Mayo, and George HomansElton Mayo, and George Homans, , were led by were led by Fritz Roethlisberger. Elton MayoFritz Roethlisberger. Elton Mayo, , known as the Father of the Hawthorne Studies, known as the Father of the Hawthorne Studies, identified the identified the Hawthorne EffectHawthorne Effect or the bias that or the bias that occurs when people know that they are being occurs when people know that they are being studied. studied.

The Hawthorne Studies are significant because The Hawthorne Studies are significant because they demonstrated the important influence of they demonstrated the important influence of human factors on worker productivity. human factors on worker productivity.

There were four major phases to the Hawthorne There were four major phases to the Hawthorne Studies: Studies: The illumination experimentsThe illumination experiments, , The The Relay Assembly Group Experiments, The Relay Assembly Group Experiments, The Interviewing ProgramInterviewing Program, and , and The Bank Wiring The Bank Wiring Group Studies.Group Studies.

MMANAGEMENT ANAGEMENT (T(THEHE G GLOBALLOBAL P PERSPECTIVEERSPECTIVE))

FFUNCTIONSUNCTIONS && S SKILLSKILLS OFOF MMANAGEMENTANAGEMENT

Functions of Functions of ManagementManagement

PlanningPlanning

OrganizingOrganizing

StaffingStaffing

LeadingLeading

ControllingControlling

AAREAREA C CARRYINGARRYING O OUTUT MMANAGERIALANAGERIAL F FUNCTIONSUNCTIONS

First Level Supervisors

TopLevel

Managers

Middle Level Managers

SSKILLSKILLS & M & MANAGEMENTANAGEMENT SSKILLSKILLS

Top Management

Middle Management Middle Management Middle Management

Supervisors

Assistance

Concept & Design Skill

Human Skill

Technical Skill

LLEVELSEVELS OFOF M MANAGEMENTANAGEMENT

GGOALSOALS O OFF M MANAGERSANAGERS & & OORGANIZATIONRGANIZATION

In all kinds of organizations, whether business or In all kinds of organizations, whether business or non-business, the logical and publicly desirable non-business, the logical and publicly desirable aim of all managers should be a aim of all managers should be a SurplusSurplus. .

Thus, managers must establish an environment Thus, managers must establish an environment in which people can accomplish group goals in which people can accomplish group goals with the least with the least amount of time,amount of time, money,money, materialsmaterials and and personal dissatisfactionpersonal dissatisfaction or in which they can or in which they can achieve as mush as possible of a desired goal achieve as mush as possible of a desired goal with available resources.with available resources.

PPRODUCTIVITYRODUCTIVITY, E, EFFECTIVENESSFFECTIVENESS & & EEFFICIENCYFFICIENCY

Productivity:Productivity: It is as the It is as the output-inputoutput-input ratio within a time ratio within a time period with due consideration. period with due consideration.

EffectivenessEffectiveness:: Effectiveness is the achievement of Effectiveness is the achievement of objectives.objectives.

Efficiency:Efficiency: Efficiency is the achievement of the ends with Efficiency is the achievement of the ends with

the at least amount of resources. the at least amount of resources.

Productivity = Output Input

Note: The formula indicates that productivity can be improved.1. By increasing outputs with the same inputs.2. By decreasing inputs but maintaining the same outputs.3. By increasing outputs and decreasing inputs to change the ration

favorably.

Is the Management Science or Is the Management Science or Arts?Arts?

It is this knowledge that constitutes a It is this knowledge that constitutes a science. Thus, managing as practice is science. Thus, managing as practice is an art.an art.

SSUMMARYUMMARY

Many Writers and practitioners have contributed to the Many Writers and practitioners have contributed to the development of management thought. development of management thought. Taylor’sTaylor’s concern was concern was productivity improvement through the application of the productivity improvement through the application of the scientific Method. scientific Method. HenryHenry Gantt Gantt developed the Gantt chart. developed the Gantt chart. Frank GilbrethFrank Gilbreth is known for his time and motion studies, is known for his time and motion studies, while while Lillian Gilbreth Lillian Gilbreth focused on Human Aspects of work. focused on Human Aspects of work. Henri FayolHenri Fayol “the Father of Modern Management Theory”. “the Father of Modern Management Theory”. Max Webber Max Webber is known for his theory of Bureaucracy. is known for his theory of Bureaucracy. Chester Barnard Chester Barnard social approach of managing. social approach of managing.

There are many theories about management, and each There are many theories about management, and each contributes something to our knowledge of what managers contributes something to our knowledge of what managers do.do.