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Management principles and practices

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Management principles and practices

  1. 1. Management Principles & Practice Module 3 TINKUTINKU IBMR- HIBMR- H
  2. 2. ORGANISING Concept of Organisation: The term ‘Organisation’ is used in management literature in two different ways 1)Organisation as a Structure 2)Organisation as a Process Nature of Organisation: The main characteristics of an Organisation are as follows: 1)Common Purpose 2)Division of Labour 3)Authority Structure 4)People 5)Communication 6)Coordination 7)Environment 8)Rules and Regulations
  3. 3. Definition of Organisation: The organisation is defined as the rational coordination of activities of a number of people for the achievement of some common explicit purpose or goal, through division of labour and function, and through a hierarchy of authority and responsibility. The term ‘Organisation’ is defined as the process of identifying and grouping of the work to be performed, defining and delegation the responsibility and authority, and establishing relationships for the purpose of enabling people to work most effectively together in accomplishing their objectives.
  4. 4. Steps in Organising Process: The process of designing organisation structure involves the following steps: 1. Identification of Activities 2. Grouping of Activities 3. Assignment of Duties 4. Delegation of Authority a) Activities Analysis b) Decision Analysis c) Relations Analysis Determinants of Organisation Structure: Organisation structure is not a static frame. It undergoes change with changes in the external and internal conditions. While designing the internal organisation structure, management should consider the following factors: 1.Goals 2.Strategy 3.Size 4.People 5.Technology 6.Environment.
  5. 5. 1. Unity of Objective 2. Specialisation or Division of Work 3. Span of Control 4. Scalar Principle 5. Functional Definition 6. Exception Principle 7. Unity of Command 8. Balance 9. Efficiency 10. Flexibility 11. Continuity 12. Facilitation of Leadership 13. Authority and Responsibility 14. Coordination Principles of Organisation (Features of a Good Organisation Structure)
  6. 6. Formal and Informal Organisation Formal Organisation: Formal organisation means the intentional structure of roles n a formally organised enterprise. It furnish an environment in which individual performance contributes most effectively to group goals. Informal Organisation: Informal organisation can be described as a network of personal and social relations not established or required by the formal organisation but arising spontaneously as people associate with one another. The Intrapreneur and the Entrepreneur Intrapreneur: An Intrapreneur is a person who focuses on innovation and creativity and who transforms a dream or an idea into a profitable venture by operating within the organisational environment. Entrapreneur: An Entrepreneur is a person who does similar things that of Intrapreneur, but outside the organisational setting. They have the ability to see the opportunity, obtain the necessary capital, labour and other inputs and the know how to put together an operation successfully. They are willing to take the personal risk of success and failure.
  7. 7. SPAN OF MANAGEMENT Meaning: The term ‘Span of Management’ is also known as ‘span of control’ and ‘Span of Supervision’. Span of Management refers to the number of subordinates that report directly to a single manager or superior. It is necessary decide the appropriate span for every executive. If the no. of subordinates reporting directly to a manager is very large, he may not be able to exercise effective supervision and control. On the other hand, if the no. is too small, full use of manager’s abilities may not be made and the subordinates may not get adequate autonomy on work. There is a limit on the no. of subordinates that a manager can effectively supervise.
  8. 8. 1. Nature of work 2. Type of technology 3. Ability of the manager 4. Capacity of subordinates 5. Degree of decentralisation 6. Planning 7. Staff assistance 8. Communication techniques 9. Time available for supervision 10. Geographical dispersion of subordinates Factors Determining the Span of Management
  9. 9. Advantages Disadvantages 1. Superiors are forced to delegate 2. Clear policies must be made 3. Subordinates must be carefully selected 1. Tendency of overloaded superiors to become decision bottlenecks 2. Danger of Superior’s loss of control 3. Requires exceptional quality of managers Advantages Disadvantages 1. Close Supervision 2. Close control 3. Fast Communication between subordinates and superiors 1. Superiors tend to get too involved subordinates work 2. Many levels of management 3. High costs due to many levels 4. Excessive distance between lowest level and top level Organization Structure with narrow spans Organization Structure with wide spans
  10. 10. DEPARTMENTATION Meaning: Grouping of activities into departments, divisions or other homogeneous units is known as departmentation. Departmentation or departmentalisation is the process of grouping tasks into jobs, the combining of jobs into effective work groups and the combining of groups into identifiable segments or departments. It involves horizontal differentiation of activities in an enterprise. A department is a division, branch, regiment or some other organisational unit over which a manager has authority for performance of task. Thus, departmentation is the process of dividing the work of organisation into departments or other manageable units.
  11. 11. Need and Importance of Departmentation: The basic purpose of departmentation is to make the size of each departmental unit manageable and to secure advantages of specialisation. Departmentation is necessary on account of the following reasons: 1. Specialisation 2. Expansion 3. Autonomy 4. Fixation of Responsibility 5. Appraisal 6. Management Development 7. Administrative Control Bases or Types of Departmentation (Patterns of Departmentation) 1. Departmentation of Functions 2. Departmentation by Products 3. Departmentation by Territory 4. Departmentation by Customer 5. Composite Departmentation (Matrix Organisation).
  12. 12. Line / Staff Authority ▪Power and Authority ▪Empowerment Decentralisation of Authority Decentralisation is the tendency to disperse decision-making authority in an organised structure. It is a fundamental aspect of delegation; to the extent that authority is not delegated, it is centralised. Advantages of decentralisation: 1.Relieves top management of some burden of decision making and forces upper- level managers to let go. 2.Encourages decision making and assumption of authority and responsibility. 3.Gives managers more freedom and independence in decision making. 4.Promotes establishment and use of broad controls which may increase motivation. 5.Makes comparison of performance of different organizations units possible. 6.Facilitates setting up of profit centres. 7.Facilities product diversification. 8.Promotes development of general managers. 9.Aids in adaptation to fast changing environment
  13. 13. Delegation of Authority (Personal Attitudes toward Delegation) ▪Receptiveness ▪Willingness to let go ▪Willingness to let others to make mistakes ▪Willingness to trust subordinates ▪Willingness to establish and use broad controls Limitation of decentralisation: 1.Makes it more difficult to have a uniform policy. 2.Increase complexity of coordination of decentralised organisational units. 3.May result in loss of some control by upper level managers. 4.Can be limited by the availability of qualified managers. 5.Involves considerable expenses for training managers.
  14. 14. Effective Organising: ▪Understanding Authority Relationships ▪Making Lines Listen to Staff ▪Keeping Staff Informed ▪Requiring Completed Staff Work ▪Making Staff work as a way of organisational life ▪Providing Organization Charts ▪Position Descriptions Defining Organisational Culture As it relates to organisations, culture is the general pattern of behaviour, shared beliefs, and values that members have in common. Culture can be inferred from what people say, do, and think within an organisational setting . It often sets the tone for the company and establishes implied rules for the way people should behave.
  15. 15. Promoting an appropriate Organisation Culture: The effectiveness of an organisation is also influenced by the organisation culture, which affects the way the managerial functions of planning, organising, staffing, leading, controlling are carried out. Environment A Environment B Planning Organising Staffing Leading Controlling Goals are set in an autocratic manner. Decision making is centralised. Authority is centralised. Authority is narrowly defined. People are selected on the basis of friendship. Training is in a narrowly defined speciality. Managers exercise directive leadership. Communication flow is primarily top down. Superiors exercise strict control. Focus is on financial criteria. Goals are set with a great deal of participation Decision making is decentralised. Authority is decentralised. Authority is broadly defined. People are selected on the basis of performance. Training is in many functional areas. Managers practice participative leadership. Communication flow is top-down, bottom-up, horizontal and diagonal. Individual exercise a great deal of self control. Focus is on multiple criteria.

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