POM ANNA U I
Content
MANAGEMENT CONCEPT UNIT I
1. DEFINITION OF MANAGEMENT Management is defined as “the process of designing and maintaining an environment in which individuals working together in groups, achieve their objectives effectively and efficiently”. Management is defined as the process consisting of all those functions required in “Getting work has done through others” without confusion, wastage of resources and overlap. 2. NATURE OF MANAGEMENT AND ITS PURPOSE:
Universal Aims at Productivity Activity based and continuous
Both Art & Science
Purposeful
Is a Process
NATURE OF MANAGEMENT
Integrative Process
Management & Administration are synonymous
Involves Decision Making
Social Process 1
Emphasises people & not things
2.1 Universal: Management applies to all type of organizations (small or big). 2.2. Activity Based and Continuous: Management is applicable to organized activity that takes place on a continuous basis. 2.3 Purposeful: Management has a purpose like bringing about successful action. 2.4 Integrative Process: Management aims to establish integration between o Various resources of the organization. o Objectives of the organization and the requirements of its external environment (customers, society, government, etc.,)
2.5 Involves Decision – Making: Management involves decision-making. Decision making means the evaluation and selection of alternatives in a complex environment with a purpose of getting things done through others. 2.6 Emphasizes people and not things: In Management, the basic principle is that “People are more important than things”. 2.7 Is a Process: In Management there are specific inputs, processes and outputs.
INPUTS
PROCESS
OUTPUTS
INPUTS:
Men, Machine, Material, Money, Methods.
PROCESS: Planning, Organizing, Staffing, Directing, Controlling. OUTPUTS: Objectives.
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2.8 Aims at Productivity (Creating Surplus): Productivity is defined as the human efforts to produce more and more with less and less input of resources. Total Productivity = Total Output / Sum of all input factors
3. MANAGEMENT - SCIENCE OF ART? Management is a combination of two disciplines namely art and science.
3.1 Management Science: Management science is not like chemistry or mathematics it is an Organized Knowledge in Management. 3.2 Management Art: Management art implies personal creative power plus skills in performance. Science and Art in Management practices:
MANAGEMENT MAN + AGE (EXPERIENCE) 9EXPERIENCE0 FOR AND BY PEOPLE
ART
SCIENCE
Organizes and uses human talent Using motivation, leadership, Human relations etc.
Accumulated knowledge such as clear concepts, theory etc.
By using optimal resources to produce optimal results Now it is clear that science concentrates on “Knowing”, and art concentrates on “Doing”. Science alone becomes inadequate without an element of art in-order to perform a job.
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4. DEVELOPMENT OF MANAGEMENT THOUGHT: Development of management thought can be put under three broad stages as shown: Development of management thought
STAGE 1 The classical theory of management
STAGE 2 The neo – classical theory of management
STAGE 3 The modern theory of management
This evolution of management thought can be studied in the following broad stages: (a)The Classical Theory of Management (Classical Approach) - 1900 to 1930: (i) Bureaucracy, (ii) Scientific Management; and (iii) Administrative Management (b) The Neo-classical theory of Management - 1930 to 1960. (i)Human Relations Approach and (ii) Behavioral Sciences Approach (c) The Modern Theory of Management - 1960 onwards. (i) Quantitative Approach to Management (Operations Research); (ii) Systems Approach to Management and (iii) Contingency Approach to Management. 5. CONTRIBUTION OF TAYLOR AND FAYOL: 5.1. Contribution of F.W.Taylor (Frederick Winslow Taylor): F.W.Taylor is called as the “Father of Scientific Management”. Taylor defines “Scientific Management” as the art of knowing what exactly is to be done and the best method of doing it.
5.1.1. Important Principles of Scientific Management by F.W.Taylor: a) Separation of planning and execution based on specialization. b) Scientific task setting based on time, motion and fatigue study. c) Fitting the “right person for the right job” by proper selection, training and placement of personnel.
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d) Improvement in work by Standardization of tools and equipment. Improvement in work environment.
e) Mental revolution that is, creating a feeling that neither the employers nor the employees are exploiting each other. f) Distinguishing efficient workers from inefficient workers with the use of differential piece rate system. g) Scientific study of each unit of the business. 5.1.2. Important contributions of F.W.Taylor: It includes the following steps ; Observation, Measurement,‟ Experimentation, Inference, Conclusion.
5.2. Contribution of Henry Fayol to Management Thought Henry Fayol is called as the “Father of Modern Theory in general and industrial management”.
5.2.1. Henry Fayol identified the following functions of management, that is, managerial activities. Planning Organizing Commanding Implying policies, programs and procedures. Based on hierarchy of authority. Directing the business in order to gain optimum return from all workers. Bringing a harmony in activities of the organization.
Coordinating
5
Controlling
This is to correct the errors of the functionaries of organization and to make sure that such errors do not occur.
5.2.2. According to Fayol, the six categories of work carried out in business enterprises are listed. Technical activities Commercial activities Financial activities Security activities Managerial activities Production, manufacturing, adaptation. Buying, selling and exchange. Search for the optimal use of capital. Protection of property and persons. Planning, organizing, commanding, coordinating and controlling. Stock taking, balance sheet, cost statistics.
Accounting activities
5.2.3. Henry Fayol also suggested 14 principles of management. These principles are:Division of work, Authority and responsibility, Discipline, Unity of command, Unity of direction, Subordination of personal interest to organizational interests, Remuneration, Centralization, Scalar chain, Order, Equity, Stability of tenure, Span of co-operation and Initiative.
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6.
FUNCTIONS OF MANAGEMENT: The basic managerial functions are listed below as:
Planning
Organizing
Functions of Management
Directing
Staffing
Controlling
6.1Planning: Planning is an analytical thought process that covers the following; Assessing the future. Determining objectives and goals in the light of future. Developing alternative courses of action to achieve such objectives. Selecting the best course of action among the available alternatives. Assess Future Determine Objectives/ Goals Develop Alternative Courses of Action Select Best Course of Action
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6.2. Organizing: It is the process of bringing together physical, financial and human resources and developing productive relationship amongst them for achievement of organizational goals. Organizing as a process involves: Identification of activities. Classification of grouping of activities. Assignment of duties. Delegation of authority and creation of responsibility. Coordinating authority and responsibility relationships. 6.3. Staffing: The main purpose of staffing is to put right man on right job. Staffing involves: Manpower Planning (estimating man power in terms of searching, choose the person and giving the right place). Recruitment, selection & placement. Training & development. Remuneration. Performance appraisal. Promotions & transfer. 6.4. Directing: Directing is “Management in Action”. Directing has following elements: Supervision Motivation Leadership Communication Coordination
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Directing Function
Supervision
Leadership
Motivation
Communication
Coordination 6.5. Supervision: Implies overseeing the work of subordinates by their superiors. It is the act of watching & directing work & workers. 6.6. Motivation: It means inspiring, stimulating or encouraging the sub-ordinates with zeal to work. Positive, negative, monetary, non-monetary incentives may be used for this purpose.
6.7. Leadership: It may be defined as a process by which manager guides and influences the work of subordinates in desired direction.
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6.8. Communications: It is the process of passing information, experience, opinion etc from one person to another. It is a bridge of understanding.
6.9. Coordination: It is the task of integrating the efforts of people working together to produce products without confusion in order to achieve common objectives.
7.
MANAGERIAL SKILLS
For analysis, skills required of any manager are classified under three different heads technical, human and conceptual skill. 1. Technical Skill: It refers to the ability to the tools, equipment, procedures and techniques. Effective supervision coordinating of the work of the subordinates. Therefore depends on the technical possessed the lower level market. 2. Human Skill: Human skill refers to the ability of the manager to work effectively as a group member and to build cooperative effort in the team he leads. Human skills are concerned with understanding of people. Manager‟s skill in working other is natural and conditions. 3. Conceptual skills: This skill called design and problem. Solving skill involves the ability. To see organization and the various components of it as a whole. To understand how its various parts and functions mesh together. To foresee how changes in any one of these may affect all the others. A higher degree of conceptual skill helps in analyzing the environment and in identifying the opportunities. 8. MANAGEMENT LEVELS Top Level Management Middle Level Management Lower Level Management 8.1 Top Level Management: To formulate goals and policies of the company. To formulate budgets. To appoint top executives. To provide overall direction and leadership of the company. To decide the distribution of profits ect.
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9.
10.
8.2 Middle Level Management: To monitor and control the operating Management To train, motivate and develop supervisory level. To co-ordinate among themselves so as to integrate the various activities if a department. 8.3 Lower level or Supervisory Management: To train and develop the efficiency of the workers. To assign jobs to workers. To give orders and instructions. To maintain discipline and good human relations among workers. To report feedback information about workers. ROLE OF MANAGERS (i) To Have Contacts (ii) To Supervise (iii) To Attain Targets (iv) To Delegate Authority (v) To Hold Meetings (vi) To Act as a Leader (vii) To Ensure Proper Use of Resources (viii) To Resolve Conflicts (ix) To Undertake Trips (x) To Make Decisions (xi) To Handle Crisis ORGANIZATIONAL AND THE ENVIRONMENTAL FACTORS Organizational factors:
Strong leadership; management provides adequate funding, ensures availability of technology/personnel, allows the champion to function throughout the development process. User participation in the process. Organizational politics. Organizational climate. User readiness.
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Environmental factors:
11.
TRENDS AND CHALLENGES OF MANAGEMENT IN GLOBAL SCENARIO.
(a) Trends: Culture is as important as strategy for business success. Information technology can create significant competitive advantages. Innovation is more important than cost reduction for long-term success. Consolidating and sharing back office operations improves both cost and quality. Environmentally-friendly products and practices are an important part of our mission. We could dramatically boost innovation by collaborating with outsiders, even competitors. A growing percentage of our products and services behave like commodities. Unclear decision making authority is hurting our performance. Working with China and India will be vital to our success over the next 5 years. Insufficient consumer insight is hurting our performance. We wait too long before divesting businesses that hinder our performance. Our core business is running out of steam, and needs new capabilities. We know customer loyalty is important, but don‟t know how to profitably improve it. Our current capabilities are not sufficient to achieve our financial objectives. Our company would deliver better long-term results as a privately-owned firm. Cross-border acquisitions critical to achieving our growth objectives in next 5 years.
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I would rather work at a privately-owned company than a public company. We rarely achieve expected paybacks from our IT investments. We do not adequately customize our offerings to local markets. We are planning for an economic slowdown over the next 12 months. (b) Challenges: (i) The Network as Platform: “The most important trend in networking in 2008, indeed in all of IT, will be the emergence of the “network as the platform” for productivity, profitable growth, resource management and innovation. This trend will play a key role in helping determine success in business as well as in other areas of society (healthcare and education).” Eco Business Opportunities: “As private and public entities respond to the extension of social responsibility, many new service provider opportunities will explode in the finance, e-waste, recycling, remanufacturing, supply chain industry, and service entities.” New Geopolitics:
(ii)
(iii)
“Politically, between US election, China‟s coming out party (summer Olympics), and Russia‟s new (old) president, 2008 would be an interesting year. Economically, the battle for supremacy between central banks, sovereign funds, and the “real” economy could be on the headline in various disguises. (iv) Volatile Markets: “The biggest challenges for the managers in the short term are to counter the impact of weakening dollar, rising crude, declining productivity in US and Europe, and outsourcing as competitive strategy.” Dollar Decline: “For European businesses the continued decline of the US dollar against the Euro will remain one of the toughest challenges. It will be the catalyst for many changes related to repositioning within market segments, relocation of manufacturing to no-Euro zones and acceleration of innovation drive.”
(v)
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(vi)
Social Networking: “Companies must learn to effectively utilize social networking tools both inside and outside the companies to keep up with what the younger workers grew up with — fast and furious communication tools like texting, face book, My Space, You Tube, etc. that spread the word now. Not in the next quarter, next month, next week or even next day, but NOW.” Soft Skills: “The development and implementation of „soft skills‟ will be one of the greatest management challenges in the future. With changing attitudes and values it will become increasingly necessary for organizations to undergo cultural change in order to attract and retain high quality young staff and to appeal to the changing values of society in general. The establishment of a culture of community which values all stakeholders gives a strong sense of belonging and offers flexibility within a secure and diverse environment will be important.”
(vii)
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1. DEFINITION OF MANAGEMENT Management is defined as “the process of designing and maintaining an environment in which individuals working together in groups, achieve their objectives effectively and efficiently”. Management is defined as the process consisting of all those functions required in “Getting work has done through others” without confusion, wastage of resources and overlap. 2. NATURE OF MANAGEMENT AND ITS PURPOSE:
Universal Aims at Productivity Activity based and continuous
Both Art & Science
Purposeful
Is a Process
NATURE OF MANAGEMENT
Integrative Process
Management & Administration are synonymous
Involves Decision Making
Social Process 1
Emphasises people & not things
2.1 Universal: Management applies to all type of organizations (small or big). 2.2. Activity Based and Continuous: Management is applicable to organized activity that takes place on a continuous basis. 2.3 Purposeful: Management has a purpose like bringing about successful action. 2.4 Integrative Process: Management aims to establish integration between o Various resources of the organization. o Objectives of the organization and the requirements of its external environment (customers, society, government, etc.,)
2.5 Involves Decision – Making: Management involves decision-making. Decision making means the evaluation and selection of alternatives in a complex environment with a purpose of getting things done through others. 2.6 Emphasizes people and not things: In Management, the basic principle is that “People are more important than things”. 2.7 Is a Process: In Management there are specific inputs, processes and outputs.
INPUTS
PROCESS
OUTPUTS
INPUTS:
Men, Machine, Material, Money, Methods.
PROCESS: Planning, Organizing, Staffing, Directing, Controlling. OUTPUTS: Objectives.
2
2.8 Aims at Productivity (Creating Surplus): Productivity is defined as the human efforts to produce more and more with less and less input of resources. Total Productivity = Total Output / Sum of all input factors
3. MANAGEMENT - SCIENCE OF ART? Management is a combination of two disciplines namely art and science.
3.1 Management Science: Management science is not like chemistry or mathematics it is an Organized Knowledge in Management. 3.2 Management Art: Management art implies personal creative power plus skills in performance. Science and Art in Management practices:
MANAGEMENT MAN + AGE (EXPERIENCE) 9EXPERIENCE0 FOR AND BY PEOPLE
ART
SCIENCE
Organizes and uses human talent Using motivation, leadership, Human relations etc.
Accumulated knowledge such as clear concepts, theory etc.
By using optimal resources to produce optimal results Now it is clear that science concentrates on “Knowing”, and art concentrates on “Doing”. Science alone becomes inadequate without an element of art in-order to perform a job.
3
4. DEVELOPMENT OF MANAGEMENT THOUGHT: Development of management thought can be put under three broad stages as shown: Development of management thought
STAGE 1 The classical theory of management
STAGE 2 The neo – classical theory of management
STAGE 3 The modern theory of management
This evolution of management thought can be studied in the following broad stages: (a)The Classical Theory of Management (Classical Approach) - 1900 to 1930: (i) Bureaucracy, (ii) Scientific Management; and (iii) Administrative Management (b) The Neo-classical theory of Management - 1930 to 1960. (i)Human Relations Approach and (ii) Behavioral Sciences Approach (c) The Modern Theory of Management - 1960 onwards. (i) Quantitative Approach to Management (Operations Research); (ii) Systems Approach to Management and (iii) Contingency Approach to Management. 5. CONTRIBUTION OF TAYLOR AND FAYOL: 5.1. Contribution of F.W.Taylor (Frederick Winslow Taylor): F.W.Taylor is called as the “Father of Scientific Management”. Taylor defines “Scientific Management” as the art of knowing what exactly is to be done and the best method of doing it.
5.1.1. Important Principles of Scientific Management by F.W.Taylor: a) Separation of planning and execution based on specialization. b) Scientific task setting based on time, motion and fatigue study. c) Fitting the “right person for the right job” by proper selection, training and placement of personnel.
4
d) Improvement in work by Standardization of tools and equipment. Improvement in work environment.
e) Mental revolution that is, creating a feeling that neither the employers nor the employees are exploiting each other. f) Distinguishing efficient workers from inefficient workers with the use of differential piece rate system. g) Scientific study of each unit of the business. 5.1.2. Important contributions of F.W.Taylor: It includes the following steps ; Observation, Measurement,‟ Experimentation, Inference, Conclusion.
5.2. Contribution of Henry Fayol to Management Thought Henry Fayol is called as the “Father of Modern Theory in general and industrial management”.
5.2.1. Henry Fayol identified the following functions of management, that is, managerial activities. Planning Organizing Commanding Implying policies, programs and procedures. Based on hierarchy of authority. Directing the business in order to gain optimum return from all workers. Bringing a harmony in activities of the organization.
Coordinating
5
Controlling
This is to correct the errors of the functionaries of organization and to make sure that such errors do not occur.
5.2.2. According to Fayol, the six categories of work carried out in business enterprises are listed. Technical activities Commercial activities Financial activities Security activities Managerial activities Production, manufacturing, adaptation. Buying, selling and exchange. Search for the optimal use of capital. Protection of property and persons. Planning, organizing, commanding, coordinating and controlling. Stock taking, balance sheet, cost statistics.
Accounting activities
5.2.3. Henry Fayol also suggested 14 principles of management. These principles are:Division of work, Authority and responsibility, Discipline, Unity of command, Unity of direction, Subordination of personal interest to organizational interests, Remuneration, Centralization, Scalar chain, Order, Equity, Stability of tenure, Span of co-operation and Initiative.
6
6.
FUNCTIONS OF MANAGEMENT: The basic managerial functions are listed below as:
Planning
Organizing
Functions of Management
Directing
Staffing
Controlling
6.1Planning: Planning is an analytical thought process that covers the following; Assessing the future. Determining objectives and goals in the light of future. Developing alternative courses of action to achieve such objectives. Selecting the best course of action among the available alternatives. Assess Future Determine Objectives/ Goals Develop Alternative Courses of Action Select Best Course of Action
7
6.2. Organizing: It is the process of bringing together physical, financial and human resources and developing productive relationship amongst them for achievement of organizational goals. Organizing as a process involves: Identification of activities. Classification of grouping of activities. Assignment of duties. Delegation of authority and creation of responsibility. Coordinating authority and responsibility relationships. 6.3. Staffing: The main purpose of staffing is to put right man on right job. Staffing involves: Manpower Planning (estimating man power in terms of searching, choose the person and giving the right place). Recruitment, selection & placement. Training & development. Remuneration. Performance appraisal. Promotions & transfer. 6.4. Directing: Directing is “Management in Action”. Directing has following elements: Supervision Motivation Leadership Communication Coordination
8
Directing Function
Supervision
Leadership
Motivation
Communication
Coordination 6.5. Supervision: Implies overseeing the work of subordinates by their superiors. It is the act of watching & directing work & workers. 6.6. Motivation: It means inspiring, stimulating or encouraging the sub-ordinates with zeal to work. Positive, negative, monetary, non-monetary incentives may be used for this purpose.
6.7. Leadership: It may be defined as a process by which manager guides and influences the work of subordinates in desired direction.
9
6.8. Communications: It is the process of passing information, experience, opinion etc from one person to another. It is a bridge of understanding.
6.9. Coordination: It is the task of integrating the efforts of people working together to produce products without confusion in order to achieve common objectives.
7.
MANAGERIAL SKILLS
For analysis, skills required of any manager are classified under three different heads technical, human and conceptual skill. 1. Technical Skill: It refers to the ability to the tools, equipment, procedures and techniques. Effective supervision coordinating of the work of the subordinates. Therefore depends on the technical possessed the lower level market. 2. Human Skill: Human skill refers to the ability of the manager to work effectively as a group member and to build cooperative effort in the team he leads. Human skills are concerned with understanding of people. Manager‟s skill in working other is natural and conditions. 3. Conceptual skills: This skill called design and problem. Solving skill involves the ability. To see organization and the various components of it as a whole. To understand how its various parts and functions mesh together. To foresee how changes in any one of these may affect all the others. A higher degree of conceptual skill helps in analyzing the environment and in identifying the opportunities. 8. MANAGEMENT LEVELS Top Level Management Middle Level Management Lower Level Management 8.1 Top Level Management: To formulate goals and policies of the company. To formulate budgets. To appoint top executives. To provide overall direction and leadership of the company. To decide the distribution of profits ect.
10
9.
10.
8.2 Middle Level Management: To monitor and control the operating Management To train, motivate and develop supervisory level. To co-ordinate among themselves so as to integrate the various activities if a department. 8.3 Lower level or Supervisory Management: To train and develop the efficiency of the workers. To assign jobs to workers. To give orders and instructions. To maintain discipline and good human relations among workers. To report feedback information about workers. ROLE OF MANAGERS (i) To Have Contacts (ii) To Supervise (iii) To Attain Targets (iv) To Delegate Authority (v) To Hold Meetings (vi) To Act as a Leader (vii) To Ensure Proper Use of Resources (viii) To Resolve Conflicts (ix) To Undertake Trips (x) To Make Decisions (xi) To Handle Crisis ORGANIZATIONAL AND THE ENVIRONMENTAL FACTORS Organizational factors:
Strong leadership; management provides adequate funding, ensures availability of technology/personnel, allows the champion to function throughout the development process. User participation in the process. Organizational politics. Organizational climate. User readiness.
11
Environmental factors:
11.
TRENDS AND CHALLENGES OF MANAGEMENT IN GLOBAL SCENARIO.
(a) Trends: Culture is as important as strategy for business success. Information technology can create significant competitive advantages. Innovation is more important than cost reduction for long-term success. Consolidating and sharing back office operations improves both cost and quality. Environmentally-friendly products and practices are an important part of our mission. We could dramatically boost innovation by collaborating with outsiders, even competitors. A growing percentage of our products and services behave like commodities. Unclear decision making authority is hurting our performance. Working with China and India will be vital to our success over the next 5 years. Insufficient consumer insight is hurting our performance. We wait too long before divesting businesses that hinder our performance. Our core business is running out of steam, and needs new capabilities. We know customer loyalty is important, but don‟t know how to profitably improve it. Our current capabilities are not sufficient to achieve our financial objectives. Our company would deliver better long-term results as a privately-owned firm. Cross-border acquisitions critical to achieving our growth objectives in next 5 years.
12
I would rather work at a privately-owned company than a public company. We rarely achieve expected paybacks from our IT investments. We do not adequately customize our offerings to local markets. We are planning for an economic slowdown over the next 12 months. (b) Challenges: (i) The Network as Platform: “The most important trend in networking in 2008, indeed in all of IT, will be the emergence of the “network as the platform” for productivity, profitable growth, resource management and innovation. This trend will play a key role in helping determine success in business as well as in other areas of society (healthcare and education).” Eco Business Opportunities: “As private and public entities respond to the extension of social responsibility, many new service provider opportunities will explode in the finance, e-waste, recycling, remanufacturing, supply chain industry, and service entities.” New Geopolitics:
(ii)
(iii)
“Politically, between US election, China‟s coming out party (summer Olympics), and Russia‟s new (old) president, 2008 would be an interesting year. Economically, the battle for supremacy between central banks, sovereign funds, and the “real” economy could be on the headline in various disguises. (iv) Volatile Markets: “The biggest challenges for the managers in the short term are to counter the impact of weakening dollar, rising crude, declining productivity in US and Europe, and outsourcing as competitive strategy.” Dollar Decline: “For European businesses the continued decline of the US dollar against the Euro will remain one of the toughest challenges. It will be the catalyst for many changes related to repositioning within market segments, relocation of manufacturing to no-Euro zones and acceleration of innovation drive.”
(v)
13
(vi)
Social Networking: “Companies must learn to effectively utilize social networking tools both inside and outside the companies to keep up with what the younger workers grew up with — fast and furious communication tools like texting, face book, My Space, You Tube, etc. that spread the word now. Not in the next quarter, next month, next week or even next day, but NOW.” Soft Skills: “The development and implementation of „soft skills‟ will be one of the greatest management challenges in the future. With changing attitudes and values it will become increasingly necessary for organizations to undergo cultural change in order to attract and retain high quality young staff and to appeal to the changing values of society in general. The establishment of a culture of community which values all stakeholders gives a strong sense of belonging and offers flexibility within a secure and diverse environment will be important.”
(vii)
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