P RINCIPLES OF M ANAGEMENT MGT-201 Instructor’s Name HAMMAD TAHIR DIRECTOR EDC BIZTEK - I NSTITUTE OF B USINESS & T ECHNOLOGY
C ORPORATE L ESSONS So, we will be going through change Here’s three lessons from large corporations to help you survive change….
CORPORATE LESSON 1 So, the rabbit sat on the ground below the crow, and rested. 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.
CORPORATE LESSON 1 Moral of the story is…. To be sitting and doing nothing you must be sitting very, very high up.
CORPORATE LESSON 2 A turkey was chatting with a bull. 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. " I would love to be able to get to the top of that tree ," sighed the turkey, " but I haven't got the energy .” " Well, why don't you nibble on some of my droppings?" replied the bull. They're packed with nutrients."
CORPORATE LESSON 2 Moral of the story: Bullshit might get you to the top, but it won't keep you there.
CORPORATE LESSON 3 A little bird was flying south for the winter. 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. Following the sound, the cat discovered the bird under the pile of cow dung, and promptly dug him out and ate him! 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. A passing cat heard the bird singing and came to investigate.
T HE M ORAL OF T HIS W HOLE S TORY A RE: <ul><li>Not everyone who drops shit on you is your enemy. </li></ul><ul><li>Not everyone who gets you out of shit is your friend. </li></ul><ul><li>And when you're in deep shit, Keep your mouth shut. </li></ul>
The Evolution of Management Thought & The Patterns of Management Analysis
M EANING OF M ANAGEMENT <ul><li>There are FOUR primary views of Management: </li></ul><ul><li>Management is a Process </li></ul><ul><li>Management is a Discipline </li></ul><ul><li>Management is a Human Activity </li></ul><ul><li>Management is a Career </li></ul>
DEFINITIONS <ul><li>MANAGEMENT: The planning, organizing, leading, and controlling of human and other resources to achieve organizational goals effectively and efficiently. </li></ul><ul><li>ORGANIZATIONAL PERFORMANCE: A measure of how efficiently and effectively a manager uses resources to satisfy customers and achieve organizational goals. </li></ul><ul><li>EFFICIENCY: A measure of how well or productively resources are used to achieve a goal. </li></ul><ul><li>EFFECTIVENESS: A measure of the appropriateness of the goals an organization is pursuing and of the degree to which the organization achieves those goals. </li></ul>
What is MANAGEMENT? <ul><li>Management is the process of designing and maintaining an environment which individuals, working together in groups, efficiently accomplish selected aims. </li></ul><ul><li>Business Management is a set of processes that help organizations optimize business performance. It is focused on business processes such as planning and forecasting. </li></ul>
M ANAGEMENT C OMES F ROM <ul><li>Management" (from Old French management "the art of conducting, directing", from Latin Manu agere "to lead by the hand"). One can also think of management functionally, as the action of measuring a quantity on a regular basis and of adjusting some initial plan, and as the actions taken. </li></ul>
D EVELOPMENT O F M ANAGEMENT 4000 BC BC years (Before Capitalization) <ul><li>Slave Labor. </li></ul>1-500 AD Classical Era (Greeks & Alexander) <ul><li>Self production. </li></ul><ul><li>Artisan Production. </li></ul>500 – 1300 AD. Early ages of Capitalism. Crafts & Guilds. 1300 – 1500 AD. Protestant Capitalism Rise of Trade. 1500 – 1776. Mercantilism. Rise of Trade. 1776 – 1890 Industrial Capitalism New World Factory Production. 1890 – 1933 Financial Capitalism Revolution in England. 1933 – 1950 National Capitalism American Contribution. 1950 To Date Managerial Capitalism Second Revolution
<ul><li>The Classical ERA Contributors are: </li></ul><ul><li>Frederick Taylor. </li></ul><ul><li>Max Weber. </li></ul><ul><li>Frank Lillian Gilbert. </li></ul><ul><li>Henri Fayol. </li></ul><ul><li>Chester Barnard. </li></ul>C LASSICAL E RA O F H ISTORICAL E VOLUTION O F M ANAGEMENT
T HE C LASSICAL P ERSPECTIVE <ul><li>Frederick W. Taylor designed a 4-step Method </li></ul><ul><ul><li>It begins with breaking the job into its smallest pieces. </li></ul></ul><ul><ul><li>The second step is to select the most qualified employees to perform the job and train them to do it. </li></ul></ul><ul><ul><li>Next, supervisors are used to monitor the employees to be sure they are following the methods prescribed. </li></ul></ul><ul><ul><li>Finally, continue in this fashion, but only use employees who are getting the work done. </li></ul></ul>Scientific Managemen t focuses on ways to improve the performance of individual workers. Some of the major contributors are: 1856 - 1912
Bureaucracy <ul><li>Max Weber (1864-1920), known as the Father of Modern Sociology, analyzed bureaucracy as the most logical and rational structure for large organizations. Bureaucracies are founded on legal or rational authority which is based on law, procedures, rules, and so on. Efficiency in bureaucracies comes from: </li></ul><ul><li>Clearly defined and specialized functions. </li></ul><ul><li>Use of legal authority. </li></ul><ul><li>Hierarchical form. </li></ul><ul><li>Written rules and procedures. </li></ul><ul><li>Technically trained bureaucrats. </li></ul><ul><li>Appointment to positions based on technical expertise. </li></ul><ul><li>Promotions based on competence. </li></ul><ul><li>Clearly defined career paths. </li></ul>
F RANK (1868-1924) L ILLIAN G ILBRETH (1878-1972) <ul><li>Frank Gilbert , known as the Father of Time and Motion Studies , filmed individual physical labor movements. This enabled the manager to break down a job into its component parts and streamline the process. </li></ul><ul><li>Lillian Gilbert , was a psychologist and author of The Psychology of Work. In 1911 Frank Gilbreth wrote Motion Study and in 1919 the couple wrote Applied Motion Study . </li></ul>
H ENRY G ANTT (1861-1919) <ul><li>Henry Gantt developed the Gantt Chart, which is used for scheduling multiple overlapping tasks over a time period. </li></ul><ul><li>He focused on motivational schemes, emphasizing the greater Effectiveness of Rewards for Good Work (rather than penalties for poor work). </li></ul><ul><li>He developed a Pay Incentive System with a guaranteed Minimum wage and Bonus Systems for people on Fixed Wages . Also, Gantt focused on the importance of the qualities of leadership and management skills in building effective industrial organizations </li></ul>
A DMINISTRATIVE M ANAGEMENT H ENRI F AYOL (1841--1925) <ul><li>Administrative management emphasizes the manager and the functions of management. HENRI FAYOL (1841--1925), known as the Father of “Modern Management”, was a French industrialist who developed a framework for studying management. </li></ul><ul><li>He wrote General and Industrial Management . His five functions of managers were Plan, Organize, Command, Coordinate, and Control. </li></ul>
H ENRI F AYOL (1841-1925), His Fourteen Principles of Management included: Authority and responsibility Centralization Division of work Scalar chain Discipline Order Unity of command Equity Unity of direction Stability of tenure of personnel Subordination Initiative Remuneration of personnel Esprit de corps (union is strength).
C HESTER B ARNARD (1886-1961) <ul><li>When Chester Barnard retired as the CEO of New Jersey Bell Telephone, he recorded his insights about management in his book, Functions of the Executive . </li></ul><ul><li>He developed the concepts of Strategic Planning and the Acceptance Theory of authority. </li></ul><ul><li>Strategic Planning is the formulation of major plans or strategies, which guide the organization in pursuit of major objectives. Barnard taught that the three top functions of the executive were: </li></ul><ul><li>Establish and maintain an effective communication system, </li></ul><ul><li>Hire and retain effective personnel, and </li></ul><ul><li>Motivate those personnel. </li></ul><ul><li>His Acceptance Theory of Authority states that managers only have as much authority as employees allow them to have. The acceptance of authority depends on four conditions. </li></ul><ul><li>Employees must understand what the manager wants them to do. </li></ul><ul><li>Employees must be able to comply with the directive. </li></ul><ul><li>Employees must think that the directive is in keeping with organizational objectives. </li></ul><ul><li>Employees must think that the directive is not contrary to their personal goals. </li></ul>
H ISTORICAL E VOLUTION O F M ANAGEMENT <ul><li>Adam Smith: </li></ul><ul><li>Smith Conducted that division of Labor Raises productivity by increasing each worker’s skills and dexterity by saving time that is commonly lost in changing tasks. </li></ul><ul><li>Charles Babbage: </li></ul><ul><ul><li>It reduces the time for learning job. </li></ul></ul><ul><ul><li>It reduces the waste of material during the learning stage. </li></ul></ul><ul><ul><li>It allows for the attainment of high skills levels. </li></ul></ul><ul><ul><li>It allows a more careful matching of people’s skills and physical abilities with specific tasks. </li></ul></ul><ul><li>Robert Owen: </li></ul><ul><li>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 agreed, in 1825 for regulated hours of work for all, child labor laws, public laws, public education, company furnished meals at work , and business involvement in community projects. </li></ul>
T HE H AWTHORNE S TUDIES <ul><li>Harvard Business School researchers, T.N. Whitehead , Elton Mayo, and George Homans , were led by Fritz Roethlisberger. Elton Mayo , known as the Father of the Hawthorne Studies, identified the Hawthorne Effect or the bias that occurs when people know that they are being studied. </li></ul><ul><li>The Hawthorne Studies are significant because they demonstrated the important influence of human factors on worker productivity. </li></ul><ul><li>There were four major phases to the Hawthorne Studies: The illumination experiments , The Relay Assembly Group Experiments, The Interviewing Program , and The Bank Wiring Group Studies. </li></ul>
M ANAGEMENT (T HE G LOBAL P ERSPECTIVE ) F UNCTIONS & S KILLS OF M ANAGEMENT
Functions of Management <ul><li>Planning </li></ul><ul><li>Organizing </li></ul><ul><li>Staffing </li></ul><ul><li>Leading </li></ul><ul><li>Controlling </li></ul>
A REA C ARRYING O UT M ANAGERIAL F UNCTIONS First Level Supervisors Top Level Managers Middle Level Managers ORGANIZATIONAL HIERARCHY Planning Organizing Leading Controlling
S KILLS & M ANAGEMENT S KILLS Concept & Design Skill Human Skill Technical Skill Top Management Middle Management Middle Management Middle Management Supervisors Assistance
G OALS O F M ANAGERS & O RGANIZATION <ul><li>In all kinds of organizations, whether business or non-business, the logical and publicly desirable aim of all managers should be a Surplus . </li></ul><ul><li>Thus, managers must establish an environment in which people can accomplish group goals with the least amount of time, money, materials and personal dissatisfaction or in which they can achieve as mush as possible of a desired goal with available resources. </li></ul>
P RODUCTIVITY , E FFECTIVENESS & E FFICIENCY <ul><li>Productivity: It is as the output-input ratio within a time period with due consideration. </li></ul><ul><li>Effectiveness : Effectiveness is the achievement of objectives. </li></ul><ul><li>Efficiency: Efficiency is the achievement of the ends with the at least amount of resources. </li></ul>Productivity = Output Input <ul><li>Note: The formula indicates that productivity can be improved. </li></ul><ul><li>By increasing outputs with the same inputs. </li></ul><ul><li>By decreasing inputs but maintaining the same outputs. </li></ul><ul><li>By increasing outputs and decreasing inputs to change the ration favorably. </li></ul>
Is the Management Science or Arts? It is this knowledge that constitutes a science. Thus, managing as practice is an art.
S UMMARY <ul><li>Many Writers and practitioners have contributed to the development of management thought. Taylor’s concern was productivity improvement through the application of the scientific Method. Henry Gantt developed the Gantt chart. Frank Gilbreth is known for his time and motion studies, while Lillian Gilbreth focused on Human Aspects of work. Henri Fayol “the Father of Modern Management Theory”. Max Webber is known for his theory of Bureaucracy. Chester Barnard social approach of managing. </li></ul><ul><li>There are many theories about management, and each contributes something to our knowledge of what managers do. </li></ul>