Principles and practices of management


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Principles and practices of management

  2. 2. Definitions  Management is the process of designing and maintaining an environment in which individuals working together in groups efficiently accomplish selected aims. - Weihrich and Kuontz  The use of people and other resources to accomplish objectives. - Boone and Kurtz  The process by which managers create, direct , maintain and operate purposive organizations through systematic, coordinated, cooperative human effort. - Mc. Farland  Management is a multi-purpose organ that manages a business, manages a manager and manages workers and work. - Peter Drucker
  3. 3. Management- Science & Art  Science Art  Advances by  Advances by practice      knowledge Proves Predicts Defines Measures Impresses  Feels  Guesses  Describes  Opines  Expresses
  4. 4. Why Study Management  Utilization of resources  Best performance is a given situation  To achieve pre-determined objectives  Internal and External Environmental factors affecting business  For formulating corporate strategy  To face competitive challenges  For R &D  To understand the impact of change  To understand the importance of quality  To understand how it can be applied to solve any business problem
  5. 5. “PROFESSIONAL MANAGEMENT” Professional Management  Separation of ownership from management  Knowledge based decision making  Professional managers are performance oriented  They follow management practices based on information obtained/experience  Application of management theories to solve emerging organizational problems
  6. 6. Evolution of Management thought  Classical approach  Fredrick Taylor (1856-1915) Science, not rule of the thumb Harmony, not discord Cooperation, not individualism Maximum output Development to greatest efficiency and prosperity High wages, low cost 1. 2. 3. 4. 5. 6.  1. 2. 3. 4. 5. 6. Charles Babbage Specialization Work measurement/ methods Utilization of machines and tools Division of labour Science and mathematics Cost reduction
  7. 7. Cont…..  1. 2. 3.  1. 2. 3. Frank and Lillian Gilberth (1868-1924 & 1878-1972) Time and motion study Worker welfare Potential of workers Henry Gantt (1861-1919) Gantt Chart Bonuses for Workers and Supervisors Good understanding of IR
  8. 8. Cont…  Henry Fayol ( 1841-1925) 1. Division of labour 2. Discipline 3. Unity of command 4. Subordination of individual interest to common good 5. Remuneration 6. Centralization 7. Hierarchy 8. Order 9. Equity 10. Stability of Staff 11. Initiative 12. Esprit De Corps
  9. 9. Cont….  Max Weber (1864-1920)  Bureaucracy  Criticisms  Elton Mayo- The Hawthorn Experiments (1927-32) (1880- 1949)  Mary Parker Follett (1868-1933)  Chester Barnard (1886-1961)
  10. 10. Cont….  Behavioral Science     Maslow Mc. Gregor Alderfer Herzberg  Management Science  Mathematical Modelling, or for solutions of management problems  Recent Developments       Systems Approach Contingency Approach Dynamic Engagement Approach Ethics and social Responsibility Cultures and Multiculturism TQM
  11. 11. Relation of Motion & Time Study to Work Design Objective Improve Ops by Effective utilization Of all resources Method Study/ OR Developed by Gilberth s Motion Study Standard Symbols o Operation TN/ Movement Combined Activity Objective Work Design Improve Control by More accurate plng/ estimating/ evaluating performance Used to Evaluate Alternate designs/methods Used to find the fastest Motion sequences Inspection D Delay/ Temp Storage Work Measurement Developed by Taylor Time Study Storage
  12. 12. Managerial roles identified by Mintzberg     Interpersonal Figurehead Leader Liaison     Informational Monitor Disseminator Spokesperson      Decisional The Entrepreneurial role The disturbance handler role The resource allocator role The negotiator role “ Aim all communication at identifying and solving problems, not blaming.”
  13. 13. Managerial Attributes Professional Competence Ethics/ Value Driven Candor and honesty Emotional Intelligence Commitment Human Values Leadership Qualities
  14. 14. Key Aspect of the Management Process •Planning •Organizing •Staffing •Leading •Controlling •Coordinating •Labour •Capital •Materials •Machinery •Information Organizational Resources Functions of Management Types of Managers Type 1- Expectations Values Targets Type 2- Expectations Values Targets Type 3- Expectations Values Targets Type 4- Expectations Values Targets Attainment Of Organizationa l Goal
  15. 15. Social & Ethical Responsibility of Management  “CSR refers to the businessman’s decisions and actions taken for reasons partially beyond the firm’s direct economic or technical interest.”       - Keith Davis “CSR contends that management is responsible to the organization itself and to all the interest groups with which it interacts. Other interest groups such as workers, customers, creditors, suppliers, govt. and society in general are placed essentially equal with shareholders - Operational Definition Ethics How our decisions affect other people Study of people’s rights & duties Moral rules people apply while making decisions Nature of relationships among people
  16. 16. • Arguments for Social Involvement       Improvements benefit both society and business Greater Freedom and flexibility from govt. Power with responsibility Problems can become profits Favorable public image Better to prevent than cure • Arguments Against     Primary Objectives Costs Associated Enough Power No Accountability
  17. 17. Planning  Planning is a continuous process of making present entrepreneurial decisions systematically and with best possible knowledge of their futurity, organizing systemically the efforts needed to carry out these decisions and measuring the results against expectations through feedback system. - Peter Drucker  Planning is the selection and relating the facts and making use of assumptions regarding the future in the visualization and formalization of proposed activities believed necessary to achieve the desired result. - Terry
  18. 18. Nature of Planning Planning is goal oriented Planning is an intellectual or rational process Planning is a primary function Planning is all pervasive Planning is forward looking Planning is a perpetual process Planning is an integrated process Planning involves choice
  19. 19. Significance of Planning Focuses attention on objectives Offsets uncertainty and risk Provides sense of direction Provides guidelines for decision making Increases organizational effectiveness Provides efficiency in operations Ensures better coordination Facilitates controls Encourages innovation and creativity Facilitates delegation
  20. 20. Types of Plans Top Level Time Long Range Scope Strategic Middle Level Intermediate Range Tactical Eight major areas of Strategic Goals • Market Standing and Customer loyalty • Innovation • Human Resources Management • Financial Resources • Physical Resources, Deployment and Use • Productivity, effectiveness , efficiency • Social Responsibility •Profit Requirements Lower Level Short Range Operational
  21. 21. Understanding organization What is Organization? Building Blocks  Division of work  Departmentalization  Hierarchy  Coordination Mechanistic V/s Organic Systems
  22. 22. Cont… Classification of Organizations Predominantly coercive, non-legitimate authority Predominantly utilitarian, rational legal authority, use of economic rewards Predominantly normative, use of membership status and intrinsic value rewards authority on charisma/ expertise  Mixed structures      Structures  By Function  By Product  Matrix/Mixed
  23. 23. Organizing  Definition     Identification and classification of required objectives Grouping of activities necessary to attain objectives Assignment of each grouping to the manager with authority to supervise it Provision of coordination horizontally and vertically  Formalized intentional structure of roles or positions.  Determining what tasks are to be done, who is to do them, how the tasks are to be grouped, who reports to whom and where decisions are to be made - Robbins & Coulter  Organizing is a management function involving assigning duties, grouping tasks, delegating authority and responsibility and allocating resources to carry out a specific plan in an efficient manner
  24. 24. Common Organizational Designs Simple Structure Bureaucracy Matrix Structure Team Structure Virtual Organization Boundary less Organization Divisional Structure Functional Structure
  25. 25. Why Do Structures Differ? Mechanistic Vs Organic Models Strategy Organizational Size Technology Environment
  26. 26. Line and Staff Authority  Line Authority    Directly responsible for organizational goals Standard chain of command Based on legitimate power  Staff Authority      Provides services and authority to line managers Expert help and advice Based on expert power Research, analysis and option development Policy implementation, monitoring and control  Functional Authority    Right to Control activities of other departments Based on legitimate power/ expert power Practiced in most organizations
  27. 27. Contd… Delegation  Formal authority and accountability to carry out specific tasks  Necessary for efficient functioning of any organization
  28. 28. Span of Control     Department Wide Span Narrow Span Factors determining effective span Factors determining effective Span of Control          Trained subordinated Clarity of delegation of authority Clarity of plans Use of objective standards Rate of change Communication techniques Amount of personal contact needed Use of Staff Assistants Competence of Manager
  29. 29. Relationships ( Views on Conflicts)  Importance of Conflict Management  Rewards  Leadership Change (Nadler and Tushman) Incremental Strategic Anticipatory Tuning Re-orientation Reactive Adaptation Re-creation Learning Organizations •Tolerance for ambiguity •Managing diversity •Open Communications •CPS •Conflict Resolution •Team Orientation •Innovative Efforts
  30. 30. Conflict Handling Modes (High) Competitive (own concerns at others Expense) Compromising (Mutually acceptable solution) Assertivene ss (Low) Collaborating (working with other party to find solutions) Avoidance (Not addressing conflict) Cooperativeness (Low) Mode •Competing •Collaboraing •Avoiding •Accomodating •Compromising Accommodating (Satisfying) Assertiveness High High Low Low Moderate Cooperativeness Low Low Low High Moderate (High)
  31. 31. Culture  The complex mixture of assumptions, behaviours, stories, myths, metaphors and other ideas that fit together to define what it means to be a member of a particular society Body Shop •Work, Live, Love and Learn- rather than work, work, work •See meaning and money- rather than money alone •Build network of relationships- rather than hierarchies of power •Sustain resources rather than “Use it and Lose it” •Grow Naturally- rather than grow fast •Embrace work and family- rather than work or family Artifacts- Espoused values- Basic Assumptions
  32. 32. Cont….  Cultural Practices  Material Vs Non Material cultures  Ecology and Culture  Cultural Characteristics  Observed Behavior  Norms  Values, Attitudes and beliefs  Philosophy  Rules  Organizational Climate
  33. 33. Decision Making  Process of identifying and selecting a course of action to solve a specific problem      Important aspects Past Experience – both positive and negative Human Relationships Problems and opportunity finding Deciding to decide      Problem finding process Deviation from past experience Deviation from set plans From other people Performance of competitors     Opportunity finding process Something that offers a chance to exceed objectives Dialectical inquiry method (Devil’s Advocate method) Importance of information gathering      Recognizing the Problem Prioritize Is the problem easy to deal with Might the problem solve itself Is this my decision to make
  34. 34. Cont…   1. 2.     Decision Making Specific Requirements Expected Results Resource Constraints Prioritize Needs Optional Courses of Action Choose Best Option Identify Potential unfavorable consequences
  35. 35. Cont….  Nature of Decision Making  Programmed  Non Programmed  Certainty  Objectives  Accurate, measurable and reliable information  Risk  Outcome cannot be predicted  Probability factor  Uncertainty  Little known about alternative and outcome  Importance of external factors and information Programmed Certainty High Non programmed Risk Managerial control Uncertainty Low
  36. 36. Factors affecting the decision making process Information Time factor Environmental factors Internal Factors Personality of the decision maker Participation, acceptance & implementation Precedent Escalation of commitment Problem perception
  37. 37. Rational Decision Making Process Investigate Sit: •Define problem •Diagnose causes •Identify decision objectives Implement and monitor •Plan Implementation •Monitor •Make adjustment Develop alternatives •Seek creative alternatives •Do not evaluate yet Evaluate Alternatives & Select best available
  38. 38. Cont…                 Investigation Define the problem Diagnose the causes Identify decision objectives Development Easy for programmed Difficult for non-programmed Evaluation Is the alternative feasible Is the alternative a satisfactory solution What are the consequences for the rest of the organization? Implementation Appropriate instructions Acquisition/ Allocation of resources Assigning responsibilities, budgeting Progress reports and corrections
  39. 39. Information Systems for Managerial Control and Decision Making Corporate Databases Information for decision Making Information for control MIS Feedback Control Systems DSS Mgt Control Systems EIS Balanced Scorecard
  40. 40. Management Control Systems Reason For Deviation Actual Performance Measure Performance Deviations Comparison Desired performance Corrective Actions Feedback Loop
  41. 41. Objectives of MCS Relationship with organizational goals Identification of critical processes that affect goals Identify key success factors Identify responsibilities Accountability Financial Vs non financial performance Improvement of collective decision making
  42. 42. Why Management Control system fail?? Most control systems are past action oriented Precision Leave little margin for error Controls do not change with missions, strategies, objectives and plan Behavioral and human side if the control system overlooked Standards are not modified as per the situation at hand Importance of speedy and reliable feedback
  43. 43. ERP  ERP- Integration of business processes across departments into an enterprise wide information system  Integration of      Product Planning Parts purchasing Inventory Control Product Distribution and fulfillment Order tracking     ERP Users Those who execute strategic planning Those who perform managerial control Those who do operational control
  44. 44. Cont…. Sales  Order placement  Order scheduling  Shipping and invoicing Finance  Financial data  Financial reports  Trial Balance, Balance Sheet  Quarterly financial data
  45. 45. Management Control  Management control is a systematic effort to set performance standards with planning objectives to design information feedback with these pre determined standards and to measure their significance and to take any action required to assure that all corporate resources are being used in the most effective and efficient way possible in achieving corporate objectives - Mockler Planning Implementation of strategies Control by comparing Strategies to achieve objectives Actual results with planned results
  46. 46. Feedback Loop of Management Control Desired Performance Actual Performance Analysis Deviations Identification Of deviations Corrective Action Implementation Of correction Measurement Performance Comparison Against Standards
  47. 47. Cont…..  Management Control helps in 1. 2. 3. 4. 5. Coping with uncertainty Detecting irregularities Identifying opportunities Handling complex situations Minimizing costs