“ Process of ensuring that actual activities conform to planned activities.”
Establishing standards of performance.
Measuring current performance.
Comparing this performance to the established standards.
Taking corrective actions if deviations are detected.
PLANNING Managers use logic & methods to think through goals and actions. ORGANIZNG Managers arrange & allocate work, authority, and resources to achieve organizational goals. LEADING Managers direct, influence and motivate employees to perform essential tasks. CONTROLLING Managers make sure an organisation is moving towards organizational objectives. THE INTERACTIVE NATURE OF THE MANAGEMENT FUNCTIONS
IMPORTANCE OF MANAGEMENT FUNCTIONS AT DIFFERENT LEVELS
Study of how managers achieve results is predominantly a 20 th century phenomenon.
World War I compelled people to think of solution to the problem of how limited resources could be applied in better way.
World War II added further problem.
Growing competition and complexity of managing large business organisation forced to develop systematic management concepts and principles.
Increase in competition has come from factors as:-
Technological innovations and their dissemination in business.
Growing technological obsolescence.
Increase in capital investment.
Freedom at national and international markets.
Increasing buyers’ sovereignty in the markets.
Complexity of managing business has increased because :-
Increasing size of business organisations.
High degree of division of labour and specialisation.
Increased government regulations and controls to make business more socially-oriented.
Organized union activities to put pressures on management.
Pressure of various conflicting interest groups to meet their demands from the organizations.
Management Contributions by Earlier Civilisations Centralisation of command and decentralisation of military operations. Military organisational structures Simple hierarchy of authority with a ranking order of pope, cardinal and local priest. Roman Catholic Church (AD 200) Creation of chain of command by delegating authority to 100 provinces. Romans (AD 284) Application of the span of management and creation of line organisation structure by Moses. Hebrews Code of Hammurabi stipulating guidelines and procedures in respect of trade, property, families and labour. Babylonians (2000 BC) Written records in respect of control of herds, income, taxes and property. Sumerians (3000) BC Planning, mobilisation, organizing and coordination of natural and especially human resources in the building of the pyramids. Egyptians (4500 BC) CONTRIBUTION CIVILIZATION
Many followers took aggressive mechanical view of production and sidelined human aspect at the workplace.
Work used to be performed under close and strict supervision based on authoritarian approach.
Lack of scientific standardization of work and whatever standards used to be set by the management, workers had to follow strictly.
Most crucial element under contention was Differential rate system- Taylor’s compensation system involving the payment of higher wages to more efficient workers which was interpreted by trade unions as a new method of exploiting workers by the industrialists.
Unity of Command: Each worker should have only one boss with no other conflicting lines of command.
Unity of Direction: People engaged in the same kind of activities must have the same objectives in a single plan. This is essential to ensure unity and coordination in the enterprise.
Subordination of Individual Interest to General Interest: Common interest is above the individual interest. Individual interest must be subordinate to general interest when there is a conflict between the two.
Stability of Tenure: No employee should be removed within short time. There should be reasonable security of jobs.
Initiative: Within the limits of authority and discipline, managers should encourage their employees for taking initiative. It increases zeal and energy on the part of human beings.
Esprit de Corps: This is the principle of ‘union is strength’ and extension of unity of command for establishing team work. The manager should encourage esprit de corps among his employees.
Dissimilarity between contributions of Taylor and Fayol Systematic theory of management Basis for accomplishment on production line. Overall Contribution Personal experiences translated into universal truths. Scientific observation & measurement Results Managerial functions. Production and engineering Orientation Overall efficiency by observing certain principles. Efficiency through work simplification and standardisation Focus Higher management level Shop-floor level Perspective Fayol Taylor Basis of Difference
Excessive specialisation may lead to trained incapacity in the organisation which refers to a phenomenon where a person does not see beyond his training and tries to correlate the matter with total situation on the basis of his training.
Conflicts between professionals and bureaucrats.
Professionals try to work according to their discipline for efficiency.
Bureaucrats try to emphasize rules and regulations.
A system is basically a combination of parts- subsystems.
Parts and sub-parts of a system are mutually related to each other.
A system is not merely the totality of parts and subparts but their arrangement is more important.
Synergy:- The situation in which the whole is greater than its parts. In organisational terms, synergy means that departments that interact co-operatively are more productive than they would be if they operated in isolation.
Developed in the early 1980s by Tom Peters and Robert Waterman, two consultants working at the McKinsey & Company consulting firm, the basic premise of the model is that there are seven internal aspects of an organization that need to be aligned if it is to be successful. Following are the uses:-
Improve the performance of a company;
Examine the likely effects of future changes within a company;
Align departments and processes during a merger or acquisition; or
Determine how best to implement a proposed strategy.
Shared Values: called "superordinate goals" when the model was first developed, these are the core values of the company that are evidenced in the corporate culture and the general work ethic.
Style: the style of leadership adopted.
Staff: the employees and their general capabilities.
Skills: the actual skills and competencies of the employees working for the company
A process that involves defining the organisation’s goals, establishing an overall strategy for achieving those goals, and developing a comprehensive set of plans to integrate and co-ordinate organizational work.
Ongoing process that reflects and adapts to changes in the environment surrounding each organization.
Planning is an activity consisting of a process, hence various sub-activities.
Plans are the documents that outline how goals are going to be met including resource allocations, schedules, and other necessary actions to accomplish the goals.
Goals are desired outcomes for individuals, groups or entire organizations.
Organisational objectives form a hierarchy ranging from the broad aim to specific individual objectives.
Process of assigning a part of a mission to a particular department and then further sub dividing the assignment among sections and individuals creates a hierarchy of objectives.
Objective of each subunit contribute to the objectives of the larger unit of which it is a part.
Hierarchy of Organizational Objectives 7. Individual objectives 6. Department and unit objectives 5. Division Objectives 4. More specific overall objectives 3. Overall objectives of the organization 2. Mission 1. Socio- economic purpose
Approach was first proposed by Peter Drucker in his 1954 book ‘The Practice of Management’.
“ A comprehensive managerial system that integrates many key managerial activities in a systematic manner, consciously directed towards the effective and efficient achievement of organisational objectives.”
Company minimises its weaknesses by developing its internal strengths and maximises the environmental opportunities.
T take advantage of opportunities, a firm with certain weaknesses in some areas may either develop those areas within the enterprise or acquire needed competencies, e.g., technology, persons with needed skills,etc.
Company maximises its strengths (technological, functional, managerial,etc.) to be able to minimise the environmental threats.
Company can make use of its technological developments to face the threat of stiff competition with its competitor.
“ Planning premises are the anticipated environment in which plans are expected to operate. They include assumptions or forecasts of the future and known conditions that will affect the operation of plans.”
Refers to comparing additional revenues associated with the acceptance of an alternative with its additional costs.
If the additional benefits are more than the additional costs associated with an alternative, the proposed alternative should be accepted.
Also known as Cost Benefit Analysis.
Refers to comparing the future expected benefits with the potential costs of alternative solutions and selecting the one which gives the maximum benefit generated in terms of difference between the potential revenues and costs.
They are created on the basis of some similarity among its members.
A person may become member of several informal organisations at the same time.
They can be very helpful in getting work accomplished.
It enables informal learning that takes place while working and interacting together throughout the work day.
Social interaction. Well – set goals. Purpose 4. It is attached to a person and given by group. It is attached to position and is institutional in nature. Power 3. People and their relationships. Positions Emphasis 2. Spontaneous reaction to formally structured organisations Formally structured. Structure 1. Informal Organisation Formal Organisation Nature S.No.
Group norms. Rules & procedures. Guidelines for behavior 7. Highly flexible. Not flexible. Flexibility 8. Change in members can lead to instability. Stable;not affected by incomings and outgoings of organisational members. Stability 6. Authority comes from personal knowledge & skill and given by group. Chain is respected and the authority is delegated by the top management. Chain of Command 5. Informal Organisation Formal Organisation Nature S.No.
“ It is the grouping of jobs and resources within the company in such a way that employees who perform the same or similar activities are in the same department.”
Departments are created along the various activities or functions of an organization.
It is grouping of activities on the basis of similarities of functions.
Organization Chart showing Functional Departmentation Board of Directors GM Production GM Finance GM Personnel GM Marketing Production Control Manufacturing Purchasing Capital Budgeting Current Assets Budgets Recruitment Placement Training & Promotion Advertisement Sales Promotion R & D
It is the grouping of jobs and resources around the products or product lines that a company sells.
Focus of attention is the product line and all functional activities associated with that product line.
Each department is headed by a product manager who is given necessary authority by the top manager to carry out the functional activities associated with the department.
Organisation Chart showing Product Departmentation Board of Directors GM Production GM Finance GM Personnel GM Marketing Manager Product A Manager Product B Manager Product C Accounting R & D Finance Production Production Finance Accounting R & D Production Finance Accounting R & D
Henri Fayol defines authority as “ the right to give orders and power to exact obedience.”
It is the right to make a decision and act.
Authority implies both responsibility and accountability.
Responsibility is an employee’s obligation to perform assigned tasks.
Accountability is the expectation that employees will accept credit or blame for their performance.
When delegating tasks to others, managers should take care to match the responsibility they confer with authority and then insists on accountability for results.
Difference Between Authority and Power It cannot be depicted on the organisation chart. It can be depicted on the organisation chart. It is related to the person; his qualities, experience and expertise that enables him to influence the behavior of others. It is related to the position that a person holds in a organizational hierarchy. It is not a formal right but only the ability of a person to issue orders and instructions to his subordinates. It is the formal right of an individual to issue orders and instructions to his subordinates. POWER AUTHORITY
Continued… Power being attached to the person can be both formal and informal. It is formal in nature as it is derived by virtue of the position. There is no such parity maintained between power and responsibility. Parity between authority and responsibility is maintained. It cannot be delegated as it is the personal abilities of a person. It can be delegated to people at lower levels. POWER AUTHORITY
Line authority belongs to managers who have the right to direct and control the activities of employees who perform tasks essential to achieve organizational goals.
Line authority flows down the organisation through the primary chain of command, according to the scalar principle-
“ The clearer the line of authority from the ultimate management position in an enterprise to every subordinate position, the clearer will be the responsibility for decision making and more effective will be the organisation communication.”
Decentralization is disposal of a high degree of authority to lower levels of an organization or department.
It is essential but how much should the managers decentralize depends on various factors.
Absolute decentralization of authority is not possible because the manager cannot delegate all his authority without surrendering his position as a manager.
Difference between Delegation & Decentralization Superior is relieved from his responsibility for the work decentralized and the subordinate becomes liable for that. Superior continues to be responsible for the work delegated to his subordinates. It is the end result of delegation and dispersal of authority which exists as a result of the systematic delegation of authority throughout the organization. Delegation is a process which refers to the granting of authority and creation of responsibility as between one individual and another. DECENTRALISATION DELEGATION
Continued… The process to control is also delegated to lower level managers. Power to control the delegated tasks vests with the delegator. Managers of each unit frame their own plans. Lower levels managers carry out the plans framed by their superiors. Decentralization is not possible without delegation. Delegation is possible without decentralization. DECENTRALISATION DELEGATION
It is done by Inventory Chart – Organisation chart of a unit with managerial positions indicated and keyed as to the promotability of each incumbent.
General Manager Manager General Accounting 45 M.Y. Singh 6 Manager Cost Accounting 52 J.K. Sinha 2 Manager Contract Pricing 42 G.N. Madhav 1 Manager Budget analysis 43 C. N. Suresh 7 Promotable now Promotable in 1 yr Potential for further promotion Satisfactory but not promotable Dismiss 45 = age 6 = Yrs in position MANAGER INVENTORY CHART
Does not show to what position manager may be promotable.
Information not sufficient for a fair assessment.
Not suitable to share this information with all employees.
Takes time and effort to keep the chart up-to-date.
Upper level managers may be afraid to loose competent subordinates to other organisation units.
External Environment Enterprise Plans Organization plans Number, kinds of managers required Manager Inventory Analysis of Present & future needs for manager External sources Internal sources Recruitment Selection Placement Promotion Separation Appraisal Career strategy Training and development Leading and controlling Internal environment Personnel policies Reward system SYSTEMS APPROACH TO STAFFING
Coordination is defined as “the process of integrating the objectives and activities of the separate units (departments or functional areas) of an organisation in order to achieve organisational goals efficiently.
It is the orderly synchronisation or fitting together of the interdependent efforts of individuals, in order to attain a common goal.
It is the process of linking the activities of the various departments of the organisation.