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Principle of Management



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Principle of Management

  1. 1. Principle of Management GOVINDA ARYAL
  2. 2. Introduction to Management  All the activities done by the manager for getting things done through others  the art of getting things done through people Functions:  Planning  Organizing  Staffing  Directing  Controlling
  3. 3. Levels: Top level management Mid level management Low level management
  4. 4. Managers • person who manages the works and staff of the organization Types of Managers  Top Level Manager  Middle Level Manager  Low Level Manager
  5. 5. Perspective of Management Pioneers’ of Management  Robert Owen  Charles Babbage  Hennery Robinson Towne  Captain Henry Metcalf Categorization of Theories • Classical Theory • Behavioral Science and Human Relation Perspective • Quantitative Perspective • Integrating Perspective
  6. 6. Scientific Management Profounder: Federic Winslow Taylor- 1911 Principles • Scientific work rather than tradition • Training and Development of Workers • Equilibrium in division of work • Mental revolution • Maximum output in place of restricted output • Co-operation between manager and worker
  7. 7. Contribution • Use modern techniques to increase production • Follows the rule minimize the cost, maximize the profit • Improve the living standard of workers • Bring attitude between employees and employers Limitation • Focus on technical terms and ignores human aspect • Has not mention informal relation • Workers are forced to do same task again and again • Workers are not allowed to take initiative
  8. 8. Administrative Management Profounder: Henry Fayol-1919 Principles • Division of work • Discipline • Unity of command • Remuneration of personnel • Equity • Initiative • Centralization • Scalar Chain
  9. 9. Contribution • Laid heavy emphasis on universal principles of management • Follows the process “planning, organizing, directing and controlling” • Provide conceptual framework for analyzing the management process • Has isolated and analyzed management as separate discipline Limitation • Has not paid proper attention to the human behavioral aspects • No clear distinction between structure and process so it is vague • Based on personal experience and little observation • Does not provide guidance how when and where it must be applied
  10. 10. Bureaucratic Management Profounder: Max Weber – 1920 Principles • Formal rules and procedure • Functional Specialization • Well Defined Hierarchy of Authority • Supervision by Higher Authority • Technical Competence for Promotion • Interpersonal relation
  11. 11. Contribution • Focus on Chain of command • Proper division of work • Specific procedure • Job security Limitation • Rigid rules and regulation • Ignores innovation • Lack of effective communication • Problem of role conflict
  12. 12. Human Relation Approach Profounder: Elton Mayo Studies Conducted i. Illumination experiment ii. Relay test room experiment iii. Mass interviewing program iv. Bank wiring observation experiment
  13. 13. Contribution • Personal and social factors are important • Informal leaders play an important role • The concept of “social man” became unavoidable • Effective supervision plays an important role Limitation • It does not focus on work • Only focus on interpersonal relationship • Neglect the economic dimension of work satisfaction • The HR movement is anti individualist
  14. 14. Need hierarchy Theory Profounder: Abraham Maslow – 1943 Low Order Needs • Psychological Needs • Security Needs • Social Needs Low Order Needs • Esteem Needs • Self-Actualization Needs
  15. 15. Two Factor Theory Profounder: Federick Herzberg Factors: Hygienic Factor Salary Personal Life Job Security Relationship with Subordinates Motivating Factor Personal Growth Responsibility Achievement Advancement
  16. 16. Behavioral Theory Contribution • Identifies the role of human elements • Emphasizes on non-financial rewards • Emphasizes the role of individual psychology Limitation • Neglates the economic dimension of job satisfaction • Has not considered situational variables • Views management as nothing but applied business science • Has clinical bias and lacks scientific validity
  17. 17. Quantitative Perspective Profounder: New Man, Joel Dean, PMS Blackket – 1940s Types: i. Management Science Theory ii. Operation Science Theory iii. Management Information Theory
  18. 18. Contribution • Complex relation among variables can expressed more effectively • Presents management with an objective basis for making a decision • Emphasizes logical analysis in decision making process Limitation • Does not deal with the people aspect of an organization • All the required data can’t be updated and are not accurate • Requires unrealistic or unfounded assumptions
  19. 19. System Theory Profounder: Ludwing Van Bertalanffy , Kenneth Boulding Elements of System Theory • Goal Oriented • Subsystem • Synergy • System Boundary • Flow • Feedback • Open or closed system
  20. 20. Contribution • Provide conceptual framework for meaningful analysis of management • Exhorts managers to analyze and understand every elements • Tries to integrate various theories Limitations • Is too abstract so can’t be easily applied to practical problem • Does not offer any tools and techniques • Does not offer a unified body of knowledge
  21. 21. Contingency Theory Profounder: Tom Burns, James Thompson Contingency Variables • Organizational Size • Routineness of Task Technology • Environmental Uncertainty • Individual Difference
  22. 22. Contribution • Managers get help in innovating new better approaches to meet complex situation • Gives the capability to think analytical, critical • Managers are given more freedom • Managers become more sensitive and alert Limitation • Ignores universally applicable principles • Fails to enlist contingency variables • Focus in situation but which tools in what situation should be used is not defined • Ignores human behavior aspect
  23. 23. Planning Concept determines the course of actions to be followed in the future to accomplish organizational objectives
  24. 24. Levels of Planning
  25. 25. Steps in planning • Analyze opportunities • Setting objectives • Determination of premises • Evaluation of alternatives • Selection of best alternatives • Formulation of derivative plan
  26. 26. Tools for planning • Forecasting • Network technique • Flow chart • Gantt chart • Breakeven analysis • Linear programming • Simulation
  27. 27. Pitfalls of planning • Lack of control • Expensive process • Inflexibility • Based on certain assumption • Delay in action • Difficult to implement • Unwillingness to change
  28. 28. Decision Making Concept process of solving problem by choosing a specific course of from among various alternatives Types • Programmed and Non-programmed decision • Routine and basic decision • Organizational and personal decision • Individual and group decision • Decision under certainty and risk
  29. 29. Process of Decision Making i. Defining the problems ii. Identifying the relevant alternatives iii. Evaluating the alternatives iv. Selecting the best alternative v. Implementing the decision vi. Evaluating the result
  30. 30. Organizing Meaning • process of dividing and grouping of the activities • concern with structure and design of organization • organizing function of management Process of Organizing i. Division of Activities ii. Grouping the acticities iii. Hierarchy of management iv. Co-ordination
  31. 31. Principles of Organizing • Division of labor • Authority & Responsibility • Centralization & Decentralization • Departmentation • Co-ordination • Balance
  32. 32. Organizational Architecture Vertical Design Tall Structure Flat Structure Horizontal Design Functional Structure Geographical Structure Multi-Divisional Structure Matrix Structure
  33. 33. Authority • right to perform or command • allows its holder to act in certain designated ways and to directly influence the actions of others through orders Types of Authority i. Line Authority ii. Staff Authority
  34. 34. Staffing/HRM Concept • sub function of organizing • relates with fulfillment of various position of a structure • In the place of staffing, HRM is popular nowadays • HRM, broad concept in management is also known as ADUM A = Acquisition D = Development U = Utilization M= Maintenance
  35. 35. Objectives of HRM(Human Resource Mgmt) i. Quality of Work Life ii. Readyness for change iii. Productivity and Profitability iv. Commitment and Satisfaction Features • Broad Concept • Maintenance of people • Maintain low turn over through satisfaction
  36. 36. Importance of HRM • Increase in product and profit • Sharp the knowledge of people • Forcing people in right track • Proper utilization of resources • Hiring right people
  37. 37. Leading Concept • Concern with a process of influencing other • Also called Implementation aspect • Two participants involvement: leader and follower • Gateway of success • Act as a source of light Qualities of Leader i. Personal Quality ii. Managerial Quality
  38. 38. Personal Qualities • Good personalities • Self Dependent • Education • Discipline • Experience Managerial Qualities • Head Person • Technical skill • Decision Making • Plan Maker • Power Exercise
  39. 39. Leadership Styles i. Autocratic/ Authoritian / Leader-Centered ii. Democratic/ Consultative/ Participative / People-Centered iii. Leissez-Faire/ Free-rein/ Individual- Centered
  40. 40. Group Concept • Collection of people • Grouping task of organization • Team work • Innovative Process of Group Formation i. Pre-Stage ii. Storming Stage iii. Norming Stage iv. Performing Stage v. Adjourning Stage
  41. 41. Types of Group Formal Group Command Group Task Group Informal Group Interest Group Friendship Group
  42. 42. Motivation Concept • Sub function of Leading • Process of influencing and attracting other • Psychological aspect • Continuous process Importance • To fulfill physical and financial needs • To increase efficiency • To increase productivity • To increase goodwill
  43. 43. Techniques of Motivation i. Job Rotation ii. Job Enlargement iii. Job Enrichment iv. Self managed Work Team v. Participation vi. Understanding Behavior vii.Reward System
  44. 44. Communication Concept • Sub class of Leading • Process of transferring information • Continuous process • Universally applicable • Participate of active listener • Fastest process
  45. 45. Components i. Message ii. Sender iii. Encoding iv. Channel v. Decoding vi. Receiver vii.Feedback viii.Noise
  46. 46. Networks of Communication Chain Wheel Circle Completely Connected Types i. Formal Communication ii. Informal Communication iii. Inter-personal Communication iv. Non- Verbal Communication
  47. 47. Barriers to Effective Communication i. Physical Barriers ii. Psychological Barriers iii. Process Barriers iv. Semantic Barriers Features of Active listener • Educated • Healthy • Concentration • Intension • Interest
  48. 48. Controlling Concept • Function of management • Process of creating discipline environment • Insuring the jobs in right order • Last function but not least • Continuous process • Makes all activities in track
  49. 49. Purpose • To insure jobs in right order • To take corrective action • To find out deviation • To insure smooth operation • To minimize losses • To minimize misuse of resources Process i. Establishing standards (Desire Stage) ii. Measuring actual performance iii. Finding out the deviation iv. Taking corrective action
  50. 50. Types of Control i. Input control/ Gatekeeper/ Initial ii. Process control/ Concurrent/ Transformation iii. Output control/ Feedback/ Post Action Essentials of Effective Control System • Objective oriented • Flexibility Control System • Economical • Accuracy • Timely • Skillful
  51. 51. Tools and Techniques of Control i. MIS (Management Information System) ii. DSS (Decision Support System) iii. Financial & Budgetary Control iv. Production & Operational Control v. Quality Control vi. Cultural Control vii.Personal Control viii.Technological Control
  52. 52. Quality Concept • Mechanism to make production perfect • Anything that can satisfy the consumers’ need • Excellency that can give by the product Importance • Helps to satisfy people • Helps to make production excellent • Helps to compete in market • Helps to create sustainable • Profit making • Helps to increase sales
  53. 53. Emerging Issues of Quality management • Globalization • Technological Development • Consumer Awareness • Innovation of Change • Employee Turnover • Quality of Work Life • Promotion
  54. 54. Total Quality Management Concept • Never ending process of improving quality • Continuous process of improving quality • Focused on team work Components • Strategic Commitment • Employee Commitment • Materials • Technology • Methods
  55. 55. Principles of TQM • Customer Focus • Leadership • Process approach • Continuous Improvement • Awareness • Mutual Relationship Tools & Techniques of TQM i. Bench Marking ii. Out Sourcing iii. Speed iv. ISO Certificate v. SQC(Statistical Quality Control)
  56. 56. Organizational Change Concept • Shifting from old state to new state • Continuous improvement of organization • Process of shifting regular practices of organization
  57. 57. Forces of OC Internal Forces Organizational Goal Organizational Structure Organizational System Organizational policies External Forces Task Force Customers, Competitors, Facilitators External General Forces Political, Economic, Socio-Cultural, Technical
  58. 58. Paradigm Shifts & Areas i. Structure ii. Technology iii. Business Process iv. Behaviors Resistance to Change • Lack of Education • Politics • Conflict Way to Resistance to Change • Overt • Covert
  59. 59. Overcoming Resistance to Change • Fulfill the needs • Training • Flexible rules and regulation • New technology • Awareness • Proper Supervision • Group Work • Quality of work life • Reduce Conflict
  60. 60. Organizational Development Concept • Continuous process of improvement • Sequential achievement of goals • Improvement in all sectors of organization • Possible only by making small small changes of organization