The document provides an overview of management principles and concepts. It defines management, discusses the nature and characteristics of management, and covers the functional areas, objectives, and functions of management. It also examines the evolution of management approaches over time, from scientific management to modern contingency approaches. Various theorists and their contributions are summarized, including Taylor's scientific management principles, Fayol's administrative management principles, and the Hawthorne Studies' findings on social and human factors.

1. MG8591
Principles of Management

2. Unit I Introduction to Management and
Organizations
Definition of Management – Science or Art – Manager Vs Entrepreneur
– types of managers -managerial roles and skills – Evolution of
Management – Scientific, human relations, system and contingency
approaches – Types of Business organization – Sole proprietorship,
partnership, company-public and private sector enterprises –
Organization culture and Environment – Current trends and issues in
Management.
1–2

3. Definition of Management
• Management is a process of planning, decision making,
organizing, leading, motivation and controlling the human
resources, financial, physical, and information resources of an
organization to reach its goals efficiently and effectively.
• Management involves coordinating and overseeing the work
activities of others so that their activities are completed
efficiently and effectively.
1–3

4. Nature and Characteristics of
Management
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Multidisciplinary
Continuous process
Universal activity
Science as Well as an Art
Dynamic and not Static
Profession
Group activity
Aims at obtaining wealthy results
Skills and Experience in getting
things done through people
System of authority
Intangible
Good Leadership

5. Functional areas of Management
• Financial Management
• Human Resource Management
• Marketing Management
• Production Management
• Material Management
• Purchasing Management
• Maintenance Management
• Office Management
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6. Objective of Management
• Getting maximum results with minimum efforts.
• Increasing the efficiency of factors of production
• Maximum prosperity for employer and employees
• Human betterment & Social Justice
• Reduces Cost
• Establishes Equilibrium
• Establishes Sound Organization
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7. What Is Management?
• Managerial Concerns
• Efficiency
• “Doing things right”
• Getting the most output for the least
inputs
• Effectiveness
• “Doing the right things”
• Attaining organizational goals
1–7

8. Effectiveness and Efficiency in
Management
1–8

9. Function of Management
• According to George & Jerry
• Planning, Organizing, Actuating, & Controlling
• According to Henry Fayol
• Plan, Organize, Command & Control
• Luther Gullick (POSDCORB)
• Planning, Organizing, Staffing, Direction, Coordinating , Reporting, & Budgeting
• Koontz & O’DONNEL
• Planning, Organizing, Staffing, Directing, & Controlling
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10. Function of Management
Controlling
Directing
Staffing
Organising
Planning
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11. Planning
• What to Do? When to Do? How to Do? Who is to Do?
• The planning process involves the following activities
• Determination of the goal of the Organization
• Formulating policies, rules, procedures etc. for the organization
• Forecasting the future based on past and present activities
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12. Organising
• Identification and analysis of activities required for the attainment
organisational objective
• Assignment of duties to the individuals concerned
• Follow up the activities
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13. Staffing
• Selecting candidate for position
• Fixing salary
• Training
• Developing them for effective organization function
• Performance Appraisal
• Promotions & Transfer
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14. Directing/Leading
• Guiding
• Supervising
• Motivation
• Leadership
• Communication
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15. Controlling
• Establishing standard
• Measuring current performance
• Comparing this performance to the established
standards
• Taking corrective actions of deviation are detected
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16. Management – Science or Art
• Management is science because of several reasons. They are
universally accepted principles, it has cause and effect relationship,
etc, and at the same time it is art as it requires perfection through
practice, practical knowledge, creativity, personal skills,
etc. Management is both art and science.
1–16

17. Levels of Management
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18. 8/4/2022 18

19. Who Are Managers?
•Managers are the people in the organization responsible
for developing and carrying out this management process.
The four primary functions of managers are planning,
organizing, leading, and controlling.
1–19

20. Types of Manager
• Purchase manager- Who is responsible for procuring the raw materials in a company
• Production manager- Who is responsible for managing the manufacturing process.
• IT manager- Who is responsible for supervising all computing and IT communication
related issues.
• Marketing manager- Who is responsible for supervising the promotion and advertising of
the company’s products/services.
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21. Types of Manager
• Sales manager- Who looks after the sales department and sets targets for
sales personnel and appraises their performance on the basis of the extent of
target achievement
• Finance manager- Who is responsible for the financial management of the
organization.
• Human resources manager- Who is responsible for the HR department and
oversees all human resource management functions
• Product development manager- Who is authorized with the management of
the technical division of new product design and product innovation.
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22. 8/4/2022 22

23. 8/4/2022 23

24. 8/4/2022 24

25. Managerial Skills
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26. Role of Manager
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Henry Mintzberg (1973)

27. Interpersonal
• Figurehead
• Symbolic head, obliged to perform a number of routine duties of a legal or social nature
• Leader
• Responsible for the motivation and activation of subordinates; responsible for staffing,
training and associated duties
• Liaison (Link)
• Maintains self-developed network of outside contacts and informers who provide favors
and information.
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28. Informational
• Monitor
• Seeks and receives wide Varity of special information to develop thorough
understanding of organization and environment; emerges as nerve internal and
external information of the organization.
• Disseminator
• Transmits information received from outsiders or from other subordinates to
members of the organization.
• Spokesperson
• Transmit information to outsiders on organization’s plans, policies, actions, results,
etc.,
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29. Decisional
• Entrepreneur
• Searches organization and it environment for opportunities and initiates
:improvement projects” to bring about change; supervises design of certain projects
as well.
• Disturbance handler
• Responsibility for corrective action when organization faces important, unexpected
disturbance.
• Negotiator
• Responsible for representing the organization at major negotiations
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30. Entrepreneur Vs Manager
ENTREPRENEUR
• An Entrepreneur is a person who
organize and manages a business
undertaking, assuming the risk
for the sake of profit
MANAGER
• A manager is the person
responsible for planning and
directing the work of a group of
individuals, monitoring their work,
and taking corrective action when
necessary.
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31. Manager Vs Entrepreneur
CHARACTERISTIC ENTREPRENEUR MANAGER
Behaviour characterized by Desire for control Delegation of authority
Management style One man show Management team
Driving force Creativity-innovation Establish & preserve the status
Quo
Organizational growth Rapid reaction Strategic planning
Organization structure Informal, Flexible Organized
Decision making Intuitive Collect information & seek
advice
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32. Manager Vs Entrepreneur
CHARACTERISTIC ENTREPRENEUR MANAGER
Definition of Aims In terms of “Vision” In commercial Terms
Attitude to Money A By-Product Measure of Success
Attitude to risk Calculated Risks Avoidance of Risks
Organizational Culture “Entrepreneurial
Culture”
“Management Culture”
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33. Evolution of Management
• Pre Scientific Management Era (Before 1880)
• Classical Management Era (1880 – 1930)
• Neo Classical Management Era (1930 – 1950)
• Modern Management Era (1950 on word)
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34. Evolution of Management
• Classical Management Era (1880 – 1930)
• Scientific Management School
• Administration Management School
• Bureaucracy Management
• Neo Classical Management Era (1930 – 1950)
• Human Relational School
• Behavioral Management School
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• Modern Management Era (1950 on word)
• Social System School
• Decision Theory School
• Quantitative Man Management School
• System Management School
• Contingency Management School

35. Scientific Management School
Fred Winslow Taylor 1856 – 1915
•Father of Scientific Management
•Midvale steel, Simonds Rolling Machine Bethleham
steel (Apprentice Machinist, Chief Engineer)
•It is an Art of knowing exactly what you want your men
to do and seeing that they do it in the best and
cheapest way.
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36. Principles of Scientific Management
•Replacing rules of thumb with science (Enquire, investigation, data
collection, analysis and framing a rule)
•Obtaining harmony in group action, rather than discord
•Achieving cooperation of human beings, rather than chaotic individualism
•Working for max. output rather than restricted output
•Developing all workers to the fullest extent possible for their own and their
company’s highest prosperity
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37. Techniques of Scientific Management
•Time Study
• Fair Day’s Work = Standard Time + Working Hours
•Motion Study
•Standardization
•Differential Piece Wage Plan
8/4/2022 37

38. Criticism
• Unemployment
• Weakening of trade
union
• Monotony
• Over speeding
8/4/2022 38
• Expensive
• Time consuming
WORKER’S VIEWPOINT EMPLOYER’S VIEWPOINT

39. Administrative Management
• Father of modern operational management theory
• Worked in French mining and metallurgical company
8/4/2022 39
Henri Fayol (1841 – 1925)

40. 14 Principles
1. Division of labour – Divided & Subdivided and allotted to various persons according to their
expertise in a particular area.
2. Authority and Responsibility
3. Discipline – Sincerity, Obedience, Diligence, Correct attitude
4. Unity of Command – receive order from one superior
5. Unity of direction – similar activities should be grouped
6. Subordination of Individual’s interest to the common goal
7. Remuneration – Fair and equitable
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41. 14 Principles
8. Centralization & Decentralization– balance between concentration and dispersal of
authority
9. Scalar Chain – Chain of authority from top to bottom
10. Order – ‘A place for everything and everything in its place’
11. Equity – Sense of fair play and justice
12. Stability of tenure of personnel – too much of turnover of staff/job rotation interfere the
stability
13. Initiative – Subordinate initiatives
14. Esprit de crops – Team spirit should be fostered and administrated
8/4/2022 41

42. Elton Mayo and F. Roethlisberger and the
Hawthorne Studies
• Western electric company – 1927 to 1932
• 1924 to 1927, National Research Council –>Nature of illumination and other conditions  Productivity
• Changing illumination, modifying rest periods, Shortening workdays and varying incentive pay system
did not improve productivity.
• In general, that the improvement in productivity was due to such social factors as morale, satisfactory
interrelationships between members of a work group (a "sense of belonging"), and effective
management--a kind of managing that would understand human behavior, especially group behavior,
and serve it through such interpersonal skills as motivating, counseling, leading, and communicating.
8/4/2022 42

43. Recent Contributors of Management
• Peter F.Orucker (1974) – writer on many general management topics
• W.Edward Deming – Introduce QC in Japan
• Laurence Peter – People get promoted to a level where they are incompetent, and no further
promotion is possible
• William ouchi (1981) – Discussed selected Japanese managerial practices adapted in the US
environment
• Thomas peters and Robert Waterman – Identified Characteristics of companies they considered
excellent
8/4/2022 43

44. APPROACHES TO MANAGEMENT
1. Empirical or case approach
2. Managerial roles approach
3. Contingency or situational approach
4. Mathematical or management science approach
5. Decision theory approach
6. Reengineering approach
7. Systems approach
8. Socio technical systems approach
9. Cooperative social systems approach
10. Group behavior approach
11. Interpersonal behavior approach
12. Frame work approach
13. Total quality management approach
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45. Patterns of Management Analysis
A Management Theory Jungle?
APPROACHES TO MANAGEMENT
Characteristics Limitations Illustration
EMPIRICAL OR CASE APPROACH
Studies experience
through cases. Identifies
successes and failures
Situations are all
different. No attempt
to identify principles
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46. Patterns of Management Analysis
A Management Theory Jungle?
APPROACHES TO MANAGEMENT
Characteristics Limitations Illustration
MANAGERIAL ROLES APPROACH
10 roles were identified
1. Figure head role
2. Leader role
3. Liason role
4. Recipient role
5. Disseminator role
6. Spoken person role
7. The entrepreneurial role
8. The disturbance handler role
9. Resource allocator role
10. Negotiator role
Some activities are
not managerial. Some
activities were left out
(e.g. Appraising
Managers)
8/4/2022 46

47. Patterns of Management Analysis
A Management Theory Jungle?
APPROACHES TO MANAGEMENT
Characteristics Limitations Illustration
CONTINGENCY OR SITUATIONAL APPROACH
Management practice
depends on
Circumstances
There is no best way to
do things. Difficulty in
determining all the
relevant contingency
factors and showing their
relationships
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48. Patterns of Management Analysis
A Management Theory Jungle?
APPROACHES TO MANAGEMENT
Characteristics Limitations Illustration
MATHEMATICAL OR MANAGEMENT SCIENCE APPROACH
Management is seen as
the mathematical
process, concepts,
symbols & models
Many aspects of
managing cannot be
modeled
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49. Patterns of Management Analysis
A Management Theory Jungle?
APPROACHES TO MANAGEMENT
Characteristics Limitations Illustration
DECISION THEORY APPROACH
Decision making as a
spring board to study
all enterprise
activities
There is more to
managing than
decision making. The
focus is at the same
time too narrow and
too wide
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50. Patterns of Management Analysis
A Management Theory Jungle?
APPROACHES TO MANAGEMENT
Characteristics Limitations Illustration
REENGINEERING APPROACH
Fundamental rethinking
Process analysis
Radical redesign
Dramatic results.
Neglect external
environment ignoring
customer needs
neglect human needs.
Ignores total
Management systems
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51. Patterns of Management Analysis
A Management Theory Jungle?
APPROACHES TO MANAGEMENT
Characteristics Limitations Illustration
SYSTEMS APPROACH
Systems have
boundaries but
they also interact
with external
environment
It is a new
approach to
Management
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52. Patterns of Management Analysis
A Management Theory Jungle?
APPROACHES TO MANAGEMENT
Characteristics Limitations Illustration
SOCIO TECHNICAL SYSTEMS APPROACH
Technical system has
great effect on
social system
Emphasis only on
blue collar and
lower level office
work
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53. Patterns of Management Analysis
A Management Theory Jungle?
APPROACHES TO MANAGEMENT
Characteristics Limitations Illustration
COOPERATIVE SOCIAL SYSTEMS APPROACH
Concerned with
interpersonal and
group behavioral
aspects leading to a
system of Co-
operation
Too broad a field
for the study of
Management
8/4/2022 53

54. Patterns of Management Analysis
A Management Theory Jungle?
APPROACHES TO MANAGEMENT
Characteristics Limitations Illustration
GROUP BEHAVIOR APPROACH
Emphasis on
behavior of people
in groups. Based
on sociology and
social psychology
Often not
integrated with
management
concepts,
Principles, theory
and techniques
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55. Patterns of Management Analysis
A Management Theory Jungle?
APPROACHES TO MANAGEMENT
Characteristics Limitations Illustration
INTERPERSONAL BEHAVIOR APPROACH
Focus on interpersonal
behavior, human
relations, leadership
and motivation. Based
on individual
psychology
Ignores planning,
Organizing and
Controlling.
Psychological
training is not enough
to be an effective
manager
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56. Patterns of Management Analysis
A Management Theory Jungle?
APPROACHES TO MANAGEMENT
Characteristics Limitations Illustration
McKINSEY’S FRAME WORK APPROACH
7 SKILLS
1. Systems
2. Style
3. Staff
4. Shared Values
5. Skills
6. Strategy
7. Structure
The terms used are
not precise and topics
are not discussed in
depth
8/4/2022 56

57. Patterns of Management Analysis
A Management Theory Jungle?
APPROACHES TO MANAGEMENT
Characteristics Limitations Illustration
TOTAL QUALITY MANAGEMENT APPROACH
Dependable satisfying products &
services (Deming)
Product or services that is fit for
use (Juran)
Conformance to quality
requirements (Crosby)
• Continuous improvement
• Team Work
• Quality education
No complete agreement of
what TQM is
8/4/2022 57

58. The Management Process or Operational
Approach
 This approach draws together the pertinent knowledge of
management by relating it to the managerial job--what managers do
 It tries to integrate the concepts, principles, and techniques that
underlie the task of managing
8/4/2022 58

59. 8/4/2022 59

60. The Systems Approach to The
Management Process
• A model of process or operational management that indicates how the various inputs are
transformed through the managerial functions of planning, organizing, staffing, leading,
and controlling.
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61. The Systems Model of
Management
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62. Inputs and Claimants
•The inputs from the external environment may
include people, capital, managerial skills, as
well as technical knowledge and skills.
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63. The Managerial Transformation Process
• The task of managers is to transform the inputs, in an
effective and efficient manner, into outputs.
8/4/2022 63

64. The Communication System
• Communication integrates the managerial functions. It is through
communication that one determines whether events and performance
conform to plans. It is communication that makes managing possible.
8/4/2022 64

65. External Variables
Effective managers regularly scan the external
environment.
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66. Outputs
Products, services, profits, satisfaction, integration of the foals
of claimants to the enterprise.
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67. Reenergizing the System
In the systems model of the management process, some of the
outputs become inputs again.
8/4/2022 67

68. Types of Organization
(Business Organization)
Business Organization
Proprietorship Partnership Corporation
8/4/2022 68

69. Individual Proprietorship
• Single person owns the capital
• He has taken the decision, uses his own skill ,
Knowledge and experience
• All profits belong to him
• He bear all the losses
• His decision is final in employment, purchase
production and sale
• Small establishments Started easily
Closed down easily
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70. Individual Proprietorship
• The area of operation is limited, the owner can develop
cordial relationship with workers, supplier of inputs and
buyers.
• Capital base is small and narrow
• Small business promotes fair distribution of income and
wealth.
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71. Partnership
• Formed by a simple contract
• Each party of the contract becomes the general agent of the business
• Sharing their duties responsibility on one hand & profit / losses on the
other hand
• Minimum two persons
• In the absence of any agreement to the contrary , all partners have equal
right to participate the business
• Written agreement is signed by all partners and stamped it becomes
partnership deed
• Registered firms enjoy many benefits
• Unregistered firms cannot sue other partners of the firm.
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72. Advantages of Partnership
Raising Additional Finance
Specialized experiences of various partners
Bankers provide easy credit
Liability is unlimited
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73. Disadvantages of Partnership
•Partners become responsible for acts of each & every
other
•It suffers uncertain continuity, lesser public confidence,
restricted right to transfer of capital and liability of
partner even after his retirement from the firm.
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74. Joint Stock Companies
• Corporation has been defined as an artificial person
• Recognized by law, it is a legal entity
• Distinctive name, a common seal
• Common capital
• Transferable shares of fixed value, limited liability
• Share holders may come & go, but company goes
• Share holders cannot participate the working of a company
• Board of directors, assisted by professional Mangers
• Memorandum of Association is prepared
• Classified as Pvt Ltd & Public Ltd
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75. Pvt. Ltd Company
Registered by 2 or more persons
But limits to 50
Restriction on transfer of shares
General public cannot participate in the capital
Limited liability
Keep their business as private as possible
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76. Public Limited Company
•Membership is open to all
•Minimum no is 7, but there is no ceiling
•To collect capital, through the selling of
shares
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77. Formation
•Group of persons conceive an idea of a successful
business, called promoters
•Registration to Registrar of companies with name
and fee, accompanied by Memorandum of
Association (MOA) & Article of Association
(AOA)
•MOA defines objectives, powers of the company,
the name clause, situation clause, objective clause,
capital clause and liability clause
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78. Formation
• AOA  Rules & Regulations governing internal management (Power
& duties of directors and other officers, borrowing powers, power to
hold meetings etc)
• After the meeting of directors, Chairman, Bankers, auditors, brokers
etc are appointed
• Then they raise the capital from general public
• Then registrar issues commencement certificate
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79. Advantages Of Public Limited Company
• Liability is limited as per the face value of shares
• Easily raise the capital from public and lending
institutions
• Avail the services of experts
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80. Advantages Of Public Limited Company
• Long drawn process
• More legal formalities
• Larger amount of initial expenditure
• Ownership is diverted from control
8/4/2022 80

81. Co - Operatives
• Voluntary association of eleven or more members
• They are in same locality carrying on business not for
profit
• It is based self help through mutual aid
• The membership is open to all
• Value of the share is kept low
• In India we have credit cooperatives, marketing
cooperatives, housing cooperatives etc.
• In rural India, cooperatives are controlled by rural rich
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82. Public Sector Undertakings
• Government departmental organizations
• Public Corporations
• Mixed ownership Corporations
8/4/2022 82

83. Government Department Organization
• Postal & Telegraphs, railways,highways, defence industries etc.
• They are financed by appropriations from the treasury
• It is subject to budget accounting and audit controls
• Civil servants are the in charge of such enterprises
• It cannot be sued without the consent of the government
• They ensure maximum degree of control
• Transactions are approved by appropriate agencies
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84. Drawbacks of
government department organization
• Absence of flexibility in its operations
• Immediate decisions depending on the business environment cannot
be made
• Delay, red tapism, inadequate services etc are in this organizations
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85. Public Corporations
• It is wholly owned by the state
• Greater freedom in making contracts, acquiring & disposing of property than
government departments
• They obtain funds from treasury, public and revenues from sale of goods and
services
• They are not subject to budget accounting & audit loss
• Employees are recruited and remunerated under the terms and conditions of
the corporation
• It enjoy the freedom of govt. regulation & control
• High degree of operating & financial flexibility
• Expansion programs can be finance without delays by the use of revenues or
borrowed funds
• Ex: Industrial Financial Corporation of India, LIC, UTI & RBI
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86. Mixed Enterprises
• Capital owned by the Govt. & Pvt. share holders
• Directors are nominated by both of them
• It can enter into contract and acquire property in their
own name
• Own legal entity
• They can be sued and they can sue
• Exempted from budget accounting
• Permission from GOI is necessary
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87. Mixed Enterprises
If no foreign participation,
state Govt. or SIDC – 26%
Private Individual - 25%
Lending Institutions - 49%
8/4/2022 87
If foreign Participation
State – 25%
Indian entrepreneurs – 20%
Foreign Investor – 20% &
Investing public – 35%

88. Globalization
It means internationalization of trade, Particularly financial
product transactions and the integration of economic and capital
markets throughout the world
• Trade exists freely among the countries
• World economy becomes a single market or single economy
• In globalization, there is no restriction of quota, license, tariff
and other adminstrative barriers for trade
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89. Globalization
Trade can be of products and factors
•Trade of product means goods, commodities and
services
•Trade of factors means transfer of technology, finance
and labour
•Currencies of the country should be freely exchangeable
•Uniformity of laws and rules
8/4/2022 89

90. Benefits of Globalization
1. Improves efficiency – >Glob. leads to specialization in production
2. Improve factor income –>the factor mobility is free (factor incomes
among the trading countries will get equalized)
3. Improves finance –> need for growth and industrialization of country
4. Gain from migrations
* For developed countries migration fulfills the need of manpower in the
form of skilled person
* For developing countries migration solves the problem of
unemployment
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91. International Management /Managing
Globally
• It is the process of Planning, Organizing, leading and
controlling in organizations engaged in international
Business
• Now a days Managers engage in international business are
like to face competition from international organizations or
to deal with them either suppliers or customers
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92. Multinational Corporations (MNC)
•It is an organization that is engaged in production or
services through its own association in several countries,
manages and control the overall activities from a global
perspective
•They are large in size and are engaged in substantial
amount of business throughout the world
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93. Multinational Corporations (MNC)
• MNC is a business that has its head quarters (domicile) in one
country but which operates in many
• The BOD (Board of Directors) might comprise a two tier
system
• Strategic board which determines global policy
• One or more national boards responsible for
implementing this policy in particular countries
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94. Differences between MNC & one country Firm
a) Market segment is more for MNC
b) Recruitment, training, appraisal and promotion
procedures must be drafted on international scale
c) Greater amount of diversification
• Choice of national market for final products
• Location of production facilities
• Sources of raw materials
• Buy and import (products) from rest of the world
d) MNC can afford more risk than domestic rivals. A loss
in one country can be offset against profits elsewhere.
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95. Categories Horizontally Integrated Multinational
• MNC Seeks to produce the same product in different countries. The
primary objective is to achieve growth by expanding into new markets
Vertically Integrated Multinational
• MNC Undertakes the various stages of production in different countries
for a core business.
Ex: Oil companies like shell and Exxon (ESSO)
Conglomerate Multinational
• MNC will produce a range of different products in different countries
8/4/2022 95

96. Type of International Management
• Ethocentric
• Polycentric
• Regiocentric
• Geocentric
8/4/2022 96

97. Ethnocentric
International Management are home country oriented. Here,
Managers assume that practices that work in home country
must necessarily work elsewhere
8/4/2022 97

98. Polycentric
International Management are host country oriented
8/4/2022 98

99. Regiocentric
International Management are region
oriented. Managers believe that the company
problems related to that region are generally
best solved by individuals from the region.
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100. Geocentric
International Management are world oriented. Here
Managers believe that global view is needed in both the head quarters
of the company and its various subsidiaries that the best individuals
regardless of host or home country, should be utilized to solve
company problems anywhere in the world.
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101. Entry to International Business
1. Exporting : It is the process of making a product in the
home country and sending it overseas. It requires very small
capital.
2. Licensing : It is an agreement in which one organization
gives limited rights to another to use certain assets
(expertise, patents, copyrights or eqpt.) for an agreed upon
fee or royalty
• Licensing allows to use assets within specific territory and
for a specific period
8/4/2022 101

102. Entry to International Business
3. Establishing Strategic alliances: A joint venture is an
agreement involving two or more organizations that
arrange to produce a product or service through a jointly
owned enterprises
4.Operating wholly owned subsidiaries: A wholly owned
subsidiary is an operation on foreign soil that is totally
owned and controlled by a company with headquarter
outside the host country.
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103. MNC Strategies
• MNC must give weightage to two important factors.
i. The need to make optimum economic decisions on global
basis.
ii. Responsive to host country differences
MNC opt for any of the four strategy
a. Worldwide integration / globalization strategy
b. National responsiveness strategy
c. Region responsiveness strategy
d. Multifocal strategy
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104. Challenges of Management
in Global Scenario
a) Language Barriers – Less in developed country
- More in developing countries (Africa or Latin America)
b) Selling and Marketing in Foreign Markets
Selling at home might fail overseas because of wide
social and cultural differences.
Ex: McDonald’s, Cocacola
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105. Challenges of Management
in Global Scenario
c) Attitudes of host governments
Govt. insisting on part ownership in the subsidiary of tight rules and
regulations governing the MNC’s behavior or harsh tax regimes
d) Communication and Co-ordination between subsidiaries
For expanding global business, lines of communication become longer
and more complex.
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106. Advantages of MNC Investment
•Employment
•The Balance of Payment
•Technology Transfer
•Taxation
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107. Disadvantages of MNC Investment
•Uncertainty
•Control
•Transfer Pricing
•The Environment
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108. Japanese Management
•They combine structure and people with
Japanese culture to create a highly productive
and efficient organization.
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109. Characteristics of Japanese management or
Theory Z
1. Human Resources : Japanese Management prefers human resource than
financial resources
2. Job Security : It results in employees with high morale
3. Team work : team efforts & Team spirit leads to effective management
4. Promotion : Promotion are based on seniority
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110. 5. Appraisal System : Employee performance in the long run is
given more importance than short run.
6. Communication : It is designed to foster open communication.
It facilitates extensive face to face communication.
7. Decision Making : Japanese management encourages the
lower level employees ideas, Knowledge & Experience.
Lower level employees also take part in decision making
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Characteristics of Japanese management or
Theory Z

111. Weakness of Japanese Management
1. It suppressed individual talents
2. Promotion policy is not encouraging outstanding younger
employees
3. Decision making process is time consuming process
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112. Japanese Management USA Management
It involves long term planning It Involves short term planning
More people involved in decision
making process
Only top executives involved in
decision making process
More favor for decentralization More favor for centralization
Participative Management Not a Participative Management
Here informal and democratic
organization structure
Formal and bureaucratic
organization structure
Training is important activity Training is not an important
Job Security Job Insecurity
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113. Japanese Management USA Management
Leader is not a important role Leader is a important role
It enhances self control and peer
control
All Managerial activities controlled by
superiors
Execution of all the process in the
organization is very fast
Execution of all the process in the
organization is not fast
Given more benefits to the employees Employees benefits less compared to
Japan
Appraisal process is not consider
immediately
Appraisal process is consider
immediately
It enhances group performance It enhances individual performance
Promotion, demotion and termination
process are less
Promotion, demotion process is often
Communication system is poor Communication is effectively
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114. German Management
• German Management is autocratic
• The Managers expect obedience from their subordinates
• Labour suggestions also accepted
• One of the labour director is elected as a member of the
executive committee.
• Managerial decisions are taken by the executive committee in
consultation with labour director
• Labour director is represented the employee’s problems also
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115. Organizational Culture
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116. Importance of Organizational Culture
• Talent Attractor
• Talent Retainer
• Engage People
• Creates Energy and Momentum
• Changes the View of Work
• Creates Greater Synergy
• Makes Everyone More Successful
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117. 8/4/2022 117
Characteristics Of Organizational Culture
Organizational Culture
Attention in
Detail
Outcome
Orientation
People
Orientation
Team
Orientation
Aggressiveness
Stability
Innovation
and Risk
Taking
Degree to which employee are
expected to exhibit precision
analysis and attention to detail
Degree to which managers
focus on results or outcomes
rather than on ho these
outcomes are achieved
Degree to which management
decisions take into account the
effects on people in the
organization
Degree to which work is
organized around teams rather
than individuals
Degree to which employees are
aggressive and competitive rather
than cooperative
Degree to which organizational
decisions and actions emphasize
maintaining the status quo
Degree to which employee are
encouraged to be innovative and
take risk

118. Elements Of Organizational Culture
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Artefacts
Language, Technology, Products, Style
of dressing, Physical Environment,
Manners, Myths, stories
Espoused Values
Conscious Strategies, goals and
philosophies
Basic Assumptions and Values
Norms, Unwritten rules, shared assumptions, taken for
granted beliefs, values existing at unconscious level

119. Strong Vs Weak Culture
Strong culture
• Strong culture-key values
are deeply held and widely
shared.
• Employees in such
organizations are more
committed
• Increased organizational
performance.
Weak culture
•Weak Culture-do not
make clear what is
important and what is not
•Lack of clarity in
organization
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120. How an organization’s culture is
established and maintained?
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121. How employees learn culture?
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122. Organization and environmental factors
8/4/2022 122
Organization
environment
factors
Internal
environment
External
environment
General environment or
Macro environment.
Task environment or micro
environment

123. Internal Environment factors
• Management
• Organizational culture
• Employee
• Financial changes
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124. External Environment factors
Macro Environment
•Technology
•Economic conditions
•Political conditions
•Socio-cultural factors
Micro Environment
•Suppliers
•Customers
•Competitors
•Distributor
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125. Current trends and Issues in Management
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Work force diversity
Changing demographics of workforce
Internal environment
Changing employee expectations
Building organizational capabilities
Technological advances
Changing psycho-social system
Job design and organizational capabilities
Management of human relations
Change in legal environment and industrial relation
Globalisation