Principles of Managements; Chapter one

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PAN African e-Network Project

DBM

“PRINCIPLES & PRACTICES OF

MANAGEMENT”

Semester - I

By- DR. MEENAKSHI KAUSHIK


What is management

Management involves managing efficiently and effectively the activities

of men , machines material and money.


“ Efficiency refers to getting the maximum output from the available scarce resources i.e. ‘doing things right’

Effectiveness-

“Doing the right things” to achieve desired organizational goals”

Every organization works towards achieving some common goals and formulates methods to achieve these goals.

Efficiency


Managers are the people within the organizations who play a vital role towards achieving the organization’s goals by monitoring and controlling organizational activities.

With increasing global competition ,changes in the world of technology ,changing business practices and increasing social responsibility of organizations , the role of managers has become all the more significant.

Continued…


“ Management is the process of planning , organizing ,leading ,staffing , and controlling the activities of various resources within the organization through systematic , coordinated and co-operative human efforts to achieve organizational objectives.

Harold Koontz and Heinz Weihrich defined management as the process of designing and maintaining an environment in which individuals ,working together in groups ,efficiently accomplish selected aims”

Definitions of Management


“ The use of people and other resources to accomplish objectives”

Louis E. Boone and David L. Kurtz


Defined management as

“a process by which managers create , direct ,maintain ,and operate purposive organizations through systematic ,coordinated , co-operative human efforts.”

Marry Parker Follet defined management as

“ the act of getting things done through people”

Dalton E. McFarland


Managers carry out the functions of planning, organizing ,staffing ,leading and controlling. Henry Fayol was the first management thinker to outline the five basic functions carried out by managers.

Management is essential to any kind of organization. Where ever there are group of people working together to achieve some common objectives, it becomes essential to manage their people and resources effectively.

Nature of Management


Management is essential at all hierarchical levels. However the type of skills and the degree to which various skills are required at different levels of hierarchy may vary. In order to perform their duties satisfactorily ,managers need technical , human , conceptual , and design skills.

The goals of all managers is to generate surplusThe aim of all managers is to improve productivity,

efficiency , and effectiveness.

Nature continued…


• Productivity is defined as “the output input ratio within a time period with due consideration for quality. It can be expressed as :

• Productivity =Output/Input (within a time period ,quality considered)

Continued….


In the following ways:- By producing more output with the same inputs. By reducing inputs, but maintaining the same

levels of outputs. By increasing the outputs and reducing inputs ,

thereby , making the ratio more favorable.

Thus productivity can be improved by ensuring efficiency and effectiveness in the operations of the firm.

Productivity can be improved


1. Planning-Planning is the process of selecting goals for an organization and designing necessary programs to achieve desired goals. Planning helps managers to decide on the activities to be performed with available resources.

2. Organizing-This is the process of assigning and allocating tasks ,authority and resources to enable a firm to achieve its organizational objectives.

Functions of Management


3. Staffing- Staffing involves manning the various positions created by the organizing process .It involves activities such as identifying work-force requirements ,recruitment , selection and orientation of new employees.

4. Leading –It involves directing , influencing , and motivating employees towards achieving organizational objectives

Continued…


Communicating with othersLeadership approaches and stylesMotivating people to put forth the efforts

required to achieve organizational goals.In simple words , it is the act of making

things happen through others

Leading involves


5. Controlling-

The main elements of the control process include establishing the standards of performance , measuring ,the actual performance ,comparing the actual performance with the standards and taking corrective actions in case of deviation

Continued…….


I. Comparing performance with standards

II. Determining where negative deviations ,

III. Developing remedial measures to correct deviations

Thus Control process involves


Top Level managers-: The top level management is responsible for the

overall activities of an organization. It establishes plans and goals that influence the

entire organization.Top level managers are few in number and

occupy the posts of ‘Chief executive officer’,

‘Chairman’, ‘President’ ‘Vice president’, ‘Director’ etc.

Levels of Management


These level managers are directly responsible for managing the performance of first level managers.

They are responsible for the operational efficiency of various departments in an organization.

They hold designation such as ‘Department Heads’ , ‘Project Head’, ‘Plant Manager’ and Divisional Head’.

Middle level managers


Managers at the first level have the responsibility to manage the performance of the non managerial personnel in an organization and ensure implementation of operational plans.

They are also called supervisorsThey are given different titles in different

companies like ‘Foreman’, ‘Clerical supervisor’, ‘Technical supervisors’, etc.

First Level Managers


TOP MANAGEMENTDevelops and reviews long range plans

and strategies.Evaluates overall performance of various

departments and ensures cooperation.Involved in selection of key personnel.Consults subordinate managers on subject

or problems of general scope

Functions at various levels of Management


• Makes plans of intermediate range and prepares long range plans for review by top management.

• Analyzes managerial performance to determine capability and readiness for promotion.

• Reviews daily and weekly reports on production or sales.

• Counsels subordinates on production, personnel or other problems

Middle Management


• Makes detailed ,short range operational plans.

• Reviews performance of subordinates.• Supervises day to day operations.• Makes specific task assignment• Maintains close contact with employees

involved in operations

Supervisory Management


Robert L. Katz identified three essential skills that are needed by a manager

1.Technical Skills

2.Human Skills

3.Conceptual Skills

4.Design skills

Management Skills


o Technical Skills refer to the ability of a person to carry out a specific activity. In order to do so ,one needs to have knowledge of methods ,processes and procedures. Engineers , computer specialists , accountants , and employees in manufacturing departments all have the necessary technical skills for their specialized fields.

o Example-Technical skills are essential for first level managers.

Technical Skills


• Human skills refer to the ability to work with other people as individuals and in groups. They help employees to communicate ,motivate, lead and inspire others in an organization. These skills are equally important for all managerial levels.

• These human skills or interpersonal skills refer to the ability of a person to work well with other people in a group.

Human Skills


These are the skills that are required by the managers to conceptualize abstract and complex situations.

These skills are essential for top level managers, since they need to possess a clear understanding of the overall functioning of the organization and relate it to the external environment.

Conceptual skills


• These skills are required by top level managers to find solutions to problems in a manner that would benefit the organization. Top managers should suggest a rational and feasible solution to a problem apart from recognizing the problem.

Design Skills


First level managers require more technical skills in order to supervise operational employees .They need to have good human skills for they need to interact with their subordinates on a regular basis. However conceptual skills are usually not very essential for the managers at the supervisory level.

Relative need for the Main categories of skills


The need for technical skills is lesser at the middle level management. Here , human skills and conceptual skills are more significant.

At the top management level, conceptual , design and interpersonal skills are of greatest importance. There is little need for technical skills.

Continued…


Interpersonal roles

Informational roles

Decision Roles

Managerial Roles: Henry Mintzberg


Figurehead role-Performs ceremonial and symbolic duties such as greeting visitors ,signing legal documents.

Leader role-Direct and motivate subordinates, training ,counseling and communicating with subordinates.

Liaison role-Maintain information links both inside and outside organization; use mail, phone calls ,meetings

Interpersonal roles


Recipient –Seeks and receives information, scan periodicals and reports ,maintain personal contacts

Disseminator-Forward information to other organization members ;send memos and reports, make phone calls.

Spokesperson-Transmit information to outsiders through speeches ,reports , memos.

Informational roles


Entrepreneur- Initiate improvement projects ,identify new ideas ,delegate idea responsibility to others.

Disturbance Handler-Take corrective actions during disputes or crises ;resolves conflicts among subordinates, adapt to environmental crises.

Decisional roles


Resource allocator-Decides who gets resource, scheduling , budgeting ,setting priorities.

Negotiator- Represent department during negotiation of union contracts ,sales , purchases , budgets ;represent departmental interests

Decisional Roles continued…


The McKinsey 7-S Framework-This is a value based management model. It describes how to effectively organize a company. According to this model , there are seven factors that determine a companies operations. These are as follows-;

1) Shared Values

2) Strategies

3) Structure

Approaches to Management


4) System

5) Staff

6) Style

7) Skill

Continued…


1. Shared values – It is the interconnecting centre of the model. It

states the purpose of the organizations existence.

2. Strategy- Refers to the planning for allocation of firms

scarce resources.3.Structure- The way the organizations units relate to one

another.

McKinsey 7-S framework


4. System-

It gives an understanding of how procedures , processes and routines are performed.

5. Staff-

Number of people working in an organization.

6. Style-

Cultural styles in an organization and what managers do to achieve goals .

Continued…


7. Skills-

Refers to the capabilities of different personnel in the organization.

Other Approaches to Management

Empirical Approach

Studies experience through cases, to explain management principles.

Continued…


Interpersonal behavior approach:

Focuses on interpersonal behavior , human relations , leadership , and motivation. Based on individual psychology .

Group Behavior Approach

Stresses behavior of the people in groups. Based on sociology and social psychology. Primarily study of group behavior patterns. The study of large groups is often called “Organization Behavior”

Management approaches


Decision Theory Approach

Focuses on making of decisions ,persons or groups making decisions ,and the decision making process. Some theorists use decision making as a springboard to study all enterprise activities. The boundaries of the studies are no longer clearly defined.

Continued….


It believes that managerial practices depends upon circumstances or situations i.e. (a contingency or a situation).Contingency theory recognizes the influence of the given solutions on organizational behavior patterns.

Managerial roles approaches

Categorizes managerial roles into three basic roles-interpersonal , informational , and decisional.

Contingency or Situational Approaches


Topics to be coveredIntroductionClassical ApproachBehavioral approachesQuantitative approachModern Approach to ManagementSummary

Evolution of Management thoughts


• The evolution of management began with the industrial revolution which occurred in the 1800’s.The earliest contribution to the concept of management can be traced to Robert Owen, a British factory owner who was concerned about the work environment of his workers and executed reforms in the operational process.

• In the nineteenth century , Charles Babbage advocated the principles of division of labor .

Introduction


The classical approach to management focused on the development of efficient methods of managing work and operations. This approach can be classified into three schools of management.

They are-

1.1 Scientific management-F.W. Taylor

1.2 Administrative management-Max Weber

1.3 Bureaucratic management-Henri fayol

Classical Approach


Scientific management is defined as that kind of management which conducts a business or affairs by facts or truths gained through systematic observations , experiments or reasoning”

Main features of Scientific management

1-Standardization

2-Time and motion study

3-Financial incentives

Scientific Management


Standardization-it is a process in which fixed methods are applied to work activities practiced by the workers.

Time and Motion studies-It is a process in which the work is divided into several motions and unnecessary motions are eliminated.

Financial Incentives-In this method , the incentives are provided to the workers on the basis of their performance.;

Explanation of main features


Is based on four principles-Replacement of conventional methods by

scientific methods.Scientific selection , training , and

development of workersEqual distribution of work and

responsibility between the managers and the workers.

Improvement of productivity through work and motion studies ,tools and incentive.

Scientific management theory


The administrative management theory focuses on the principles that managers use to coordinate the organizations internal activities.

Henry Fayol viewed management as a process of five functions-planning ,organizing , commanding ,coordinating , and controlling. He emphasized the importance of managerial activities in the overall functioning of the organization.

Administrative management


According to German scientist ,Max Weber “ A bureaucracy is a highly structured ,formalized ,and impersonal organization.”

He propagated the belief that an organization should have a defined hierarchical structure managed by regulations and lines of authority.

Specialization of laborFormal rules and regulationsImpersonality in application of rules

Bureaucratic Management


Well defined hierarchy Career advancement based on merit

Limitations: The principles of scientific management failed to focus

on management from a managerial point of view. Taylor and his followers overlooked the social needs of

the workers and emphasized only the economic and physical needs.

Continued…


Weber’s bureaucracy was not flexible enough to suit the complex changes in the environment.

The classical theorists failed to consider other aspects of management and stressed only on productivity.

Continued…..


• Specialization of work increases output.• Managers should be given authority to

effectively carry out their responsibilities.• Employees should respect the rules of the

organization.• Activities should be guided by a single

plan and be led by a single superior.• Individual interest should not be in conflict

with organizational interests.

Fayol’s principles of Management


• Employees should be paid fair wages.• An organization should adopt a centralized

or decentralized approach depending on the situation.

• A proper selection procedure should be implemented to ensure that the right people and material are at the right place.

• There should not be any discrimination between employees.

Continued….


Employees should be provided with job security.

Subordinates should be motivated by their superiors to take the initiative.

Managers should build up a team spirit among their subordinates.

Continued….


• The behavior approach focused on the individuals attitude and behavior in an organization.

• It emphasizes the significance of understanding the various factors that influence human behavior.

• The early advocates of the behavioral approach were Elton Mayo, Mary Parker Follet ,Abraham Maslow and Douglas McGregor.

Behavior Approach


Mary Parker Follet: She made important contributions in the area of group’s influence on individuals and conflict resolution through integration.

Abraham Maslow: He postulated the theory of motivation which states that people are motivated by a hierarchy of needs.

Douglas McGregor developed two theories ,theory X and Theory Y to describe two types of personalities who have different sets of beliefs towards their subordinates.

Early Advocates of Behavioral Approach


• Was known as “the father of human relations approach. 'He conducted certain experiments at Western Electric’s Hawthorne Plant between 1927 and 1933 to evaluate the attitudes and perceptions of workers in an organization.

• Mayo concluded that work satisfaction depends to a larger extent on informal social relations

Elton Mayo,


1-Illumination experiments were conducted to find out the productivity of the workers by exposing them to different lighting intensities .Researchers concluded that productivity was not related to the intensity of illumination.

2-In relay assembly test room experiments ,researchers focused on the working conditions of the workers. its was concluded that better working conditions enhanced productivity.

Hawthorne Experiments


3-In the interview phase the employees of Hawthorne plant were interviewed in order to determine individual attitudes towards work.

4-There were no changes in the work behavior irrespective of the changes made in the pay structure.

Continued…


The quantitative approach emphasizes the use of mathematics ,statistics ,optimization models ,and computer simulations in managerial decision making.

It consist of three main branches : management science ,operations management , and management information systems.

Quantitative Approach


Systems Approach

A system is a group of parts that operate as a whole to achieve a common objective. It has four major components:

Inputs Transformation processes Output Feedback

Modern Approaches to Management


There are two types of systems-A closed system no interaction with the

external environment .

An open system depends on external environment to carry out its activities. Most organizations are open systems as they depend upon the external environment to achieve their goals.

Continued…


It has been developed to adapt to the changing situations of the organizations. It states that there is no single principle to manage all the situations in an organizations.

The essence of this approach is that managers should identify the situations ,interpret them , and apply the approach which suits the situation best.

The contingency approach


What planning isPlanning objectivesDefinition and Nature of planning The importance of planning and its

classificationThe steps involved in planning processLimitations of planningConcept and techniques of forecasting

Objectives of this module


• Organizations operate in a dynamic environment and so require proper planning to adapt to the changing marketing conditions.

• Planning is an ongoing process of deciding in advance the activities to be performed. It bridges the gap between organizations present existence and its future prospects.

Fundamentals of plnning


• Proper planning minimizes risk and help in effective and efficient utilization of resources.

• Control is an inseparable part of planning. It involves establishing standards of performance and comparing the results with the established standards.

Continues….


Peter Drucker defined planning as “a continuous process of making present entrepreneurial decisions ( risk taking ) systematically and with best possible knowledge of their futurity ,organizing systematically the efforts needed to carry out these decisions and measuring the results of those decisions against the expectations through an organized systematic feedback.”

Definition and Nature of planning


• Thus planning is the process of coping with uncertainty by formulating a future course of action to achieve specified results.

Continued….


Planning is the primary function of the management process.

Planning is goal oriented.Planning extends throughout the

organization.Planning is a continuous and integrated

process.It is concerned about anticipating the future.Planning involves choosing a course of

action-basically it involves decision making

Nature of Planning


Establishing the right climate for planning like setting goals, proper information flow , and effective implementation.

Having clear and specific objectives.Planning premises i.e. clear identification

of external and internal environment.The top level taking the initiative.Managers at all levels participating in

planning process.

Pre-requisites of effective


Communicating the planning process to all employees in a firm.

Integrating short term and long term plans.

Having an effective management information system which includes communication of essential information.

Continued…


Planning helps in devising means to achieve organizational objectives.

It aids in accumulating information that can be used to develop detailed guidelines for achieving organizational goals.

Planning provides managers with a sense of direction.

It helps in developing objectives.It provides guidelines for decision-making.

Significance of planning


It provides a basis of control.

Planning facilitates delegation of authority and coordination of various activities within the organization.

Continued…..


Lack of accurate information.Time consuming process.ExpensiveInflexibilityResistance to changeEnvironmental constraintsLack of ability and commitment.False sense of security.Reluctance to establish goals

Limitations of planning

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Copyright @ Amity University

Principles of Managements; Chapter one

Business

management management

nature of management

management thinker

role of managers

organizations goals

common goals

organizational objectives

use of people