1st Semester : By : Prof.

Sanjayan Nair Notes on Principles of Management

Principles of Management
Table of Contents
Mission / Vision....................................................................................................................................... 3 Task of Management .............................................................................................................................. 4 Theories of Management:....................................................................................................................... 4 Taylors Scientific Theory: ................................................................................................................... 4 Elton Mayos theory (Human Relations Theory)................................................................................. 5 Henri Fayols Theory ........................................................................................................................... 6 Planning .................................................................................................................................................. 7 Definition: ........................................................................................................................................... 7 Planning is a ........................................................................................................................................ 7 Benefits of Planning ............................................................................................................................ 7 Elements of Planning .......................................................................................................................... 7 Planning Process ................................................................................................................................. 7 Why Planning Fails: ............................................................................................................................ 8 Limitation to Planning: ........................................................................................................................ 8 Management by Objective (MBO) .......................................................................................................... 9 Benefits of an MBO ............................................................................................................................. 9 Motivation............................................................................................................................................. 10 Definition: ......................................................................................................................................... 10 Theories of Motivation ......................................................................................................................... 10 Maslows Hierarchy of Needs ........................................................................................................ 10 Herzbergs 2-factor Hygiene Theory ................................................................................................. 11 McGregors Theory ........................................................................................................................... 11 Theory Z ............................................................................................................................................ 11 Organizing ............................................................................................................................................. 12 Elements of Organizing: .................................................................................................................... 12 Benefits of Organizing: ...................................................................................................................... 12 Definition of Organization: ............................................................................................................... 12 Features of a good organization: ...................................................................................................... 13 Organizational Manual ..................................................................................................................... 13 Steps in Organizing............................................................................................................................ 13 Types of Departmentation ................................................................................................................ 13 Advantages of Departmentation: ..................................................................................................... 14 Span of Control ................................................................................................................................. 16 STAFFING............................................................................................................................................... 17 Delegation and Decentralization .......................................................................................................... 19 Aspects of Delegation : ..................................................................................................................... 19 Principles of Delegation & Decentralization ..................................................................................... 19 Benefits of Decentralization ............................................................................................................. 19 Business Policy 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1st Semester : By : Prof. Sanjayan Nair Notes on Principles of Management Policy Formulation ............................................................................................................................ 20 Principles of Policy Making ............................................................................................................... 21 Committees ........................................................................................................................................... 21 Successful Operations of Committees : ............................................................................................ 21 Direction :.......................................................................................................................................... 22 Attribution......................................................................................................................................... 22 Impression Management .................................................................................................................. 22 Locus of Control : .............................................................................................................................. 23 Leadership : ........................................................................................................................................... 24 Leadership Styles : ............................................................................................................................ 24 Communication : ................................................................................................................................... 25 Control : ................................................................................................................................................ 25 Types of Control ................................................................................................................................ 25 Steps in Control ................................................................................................................................. 25 Limitations in Control........................................................................................................................ 25 Tools in Control ................................................................................................................................. 26 Change Management ............................................................................................................................ 26

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1st Semester : By : Prof. Sanjayan Nair Notes on Principles of Management

Mission / Vision
Vision: Who am I today? Why am I in this biz? Where do you want to be in 5 / 7 / 10 years from today? Mission : How? Method / Strategy / People / Processes Policy

What do you manage? Men Machine Money Markets Materials Method

How do you manage? People Processes Policy

All these are collectively known as Resources

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1st Semester : By : Prof. Sanjayan Nair Notes on Principles of Management

Task of Management
Definition of Management: It is the process of exercising control over people, processes and policy in order to attain predetermined goals. The task of Management includes a) Economic Value Added (EVA) b) Maintaining / Projecting a Corporate Organizational Image c) C.S.R. ( Corporate Social Responsibility) a. Responsibility to Stake Holders i. Shareholders ii. Customers iii. Employees iv. Suppliers b. Responsibility to deliver quality product at affordable prices c. Limit damage to the environment d. Philanthropy (Section of companys profit is dedicated to the underprivileged people) d) Managing Human Resources a. Providing for conducive (+ve) work environment. (Hygiene) b. Setting bench marks for productivity standards c. Performance management systems (appraisals) d. System of Rewards and Punishments

Theories of Management:
Taylors Scientific Theory:
It was productivity based approach for 2 resources, namely man and machine It was about doing a job FIRST TIME RIGHT. There was also only one way for doing any job right. It involved scientific selections and training of workforce in skill sets around specialized area of knowledge. The drawback was that this method lacked a HUMAN RELATION APPROACH; in fact, it was all about productivity at any cost, resulting in lack of job satisfaction and unrest amongst labour class. o Time and Motion Study o Gantt Charts Page 4 of 27 mbughediwala@hotmail.com

1st Semester : By : Prof. Sanjayan Nair Notes on Principles of Management

Elton Mayos theory (Human Relations Theory)

It is based on the Hawthornes illumination experiments Elton and Hawthorne were co-workers Hawthornes Experiments i. 2 groups to study the impact of work environments Control Group (current conditions) a. No employee comforts

Test Group (ideal conditions) a. Diffused lightening b. Suitable temperature c. Ventilation d. Ergonomic seating ii. iii. iv. v.

They continued to observe the workers for the next 3-4 months They had the same working hours And the same nature of work Conclusion : Test group showed 30 40 % higher productivity than the control group

Main Points: i. Also known s the Human Relations Theory ii. Based on Hawthornes Experiments, it was inferred that a good clean work environment (hygiene factors) had a direct bearing (impact) on productivity of the employee. iii. Management is a social process; it involves dealing with people and hence harmonious relationships were needed to be maintained between managements and workforce to increase productivity. iv. Mayo reiterated (emphasised) the need for decent service conditions and annulments (compensation) for the workforce. v. He redefined the meaning of supervision which is beyond just managing productivity. It entailed employee counselling, training on the job which later lead to what is known as "Mentoring" today. vi. Mentor => Father Figure 1. Usually not your boss 2. Guides you a. Professionally b. Personally 3. Facilitates relationships in office 4. Facilitates relationships with boss 5. Origin from Japan

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1st Semester : By : Prof. Sanjayan Nair Notes on Principles of Management

Henri Fayols Theory

Father of modern management science Because he divided work place activities into 1. Production / Technical 2. Buying / Selling 3. Gen. Management / Administration 4. Accounting He divided the activities into areas of specialized knowledge (Departmentation) The main points of his theory were 1. Division of labour based on areas of specialized knowledge and skill sets 2. Define scope of authority and responsibility along with accountability for every job position held (JDs and KPIs) 3. Maintain discipline and abide by the rules of conduct of the company 4. Unity of command (One Boss) 5. Unity of Direction (One Organizational Objective) 6. Organizations interest should be above the individuals interests 7. Fair remuneration and decent service condition for all employees 8. Organization should have a Scalar Hierarchy. i. Authority should flow from top to bottom ii. Responsibility raises from bottom up 9. There is a place for everything in the organization and hence everything should be in a place 10. Fair and just model standing rules should be applicable to everyone within the company and nobody should be above the law. 11. He believed in the process of empowerment, to improve job performance (decentralization, power to take local decisions) 12. Get participation from your employees to accomplish goals jointly 13. Espirit de Corps meaning Teamwork

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1st Semester : By : Prof. Sanjayan Nair Notes on Principles of Management

Planning
Definition:
It is selecting a course of action from the available alternatives under the given circumstances (Business Environments) to achieve the desired organizational objectives with greatest economy and certainty.

Planning is a
Primary function It should be a continuous and dynamic process It should be flexible and adaptable It should be done with unity of direction (single objective) Planning should be practiced at all levels of the organization

Benefits of Planning
a. You always know, what to expect b. It provides with purpose and direction for all efforts within a department c. The methodology / strategy / tactics are in place in advance which gives the organization a competitive edge. d. Cost and Budgets are known in advance e. Results are to be periodically reviewed and necessary changes made.

Elements of Planning
A. B. C. D. E. F. Objective Setting : (Profit / Market Share / Productivity / Etc) Setting of Policy Framework Crafting the strategy and tactics Formulating procedures and roll out programs Creation of financial budgets and resource allocation in support of above activities Process of review and measurement of results

Planning Process
A. B. C. D. E. F. Determine the objective Clearly state the assumptions / premise / basis of planning Identify the various alternatives available in terms of course of action Select the most viable alternative Implement the programme Review Page 7 of 27 mbughediwala@hotmail.com

1st Semester : By : Prof. Sanjayan Nair Notes on Principles of Management

Why Planning Fails:

1. 2. 3. 4. 5. 6. 7. Lack of commitment to planning Lack of effective and timely decision making Failure to develop and implement effective strategies in support of the objective Goals / Objectives are not realistic and hence not achievable. Lack of a proper review procedure Lack of top Management support Lack of delegation and decentralization

Limitation to Planning:
Difficulty in accuracy related to fair costing Rapid changes in external environment o political climate o governmental regulations o labour unions o Advent in new technologies Changes in Internal environment o Resistance of employees to change within the organization o Lack of capital investment and timely release of budgets

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1st Semester : By : Prof. Sanjayan Nair Notes on Principles of Management

Management by Objective (MBO)

A. It is about minimising controls (supervision) in order to maximise employee creativity and productivity through empowerment and local decision making. B. It is about JOINT GOAL SETTING i.e. KRAs are jointly formulated by the boss and the subordinates. Both parties amicably agree on acceptable standards of performance C. MBO involves action and result oriented planning, involving a. Agreeing on joint goals b. Defining individual roles and responsibilities c. Delegation of authority (Empowerment) d. Decide on Review Mechanism i.e. i. Method / Parameters ii. Timeframe D. This encourages employee self direction and self control. It fosters creativity and self development through empowerment E. However, it is a philosophy and cannot be used as a wide spread practice across all employees F. Identify good employees who are self oriented, self controlled and self motivated with a high degree of ability as part of the MBO philosophy G. Training : Continuous training is very important for MBO to succeed H. It reduces managerial time in the supervision process and improves productivity per employee. I. Employee participation is necessary for the success of MBO and often a paradigm shift in organizational culture is required Top Management support (Non Interference) is desirable J. Link MBO initiatives with monetary rewards to keep motivational levels high

Benefits of an MBO
Delegation and decentralization becomes effective due to empowerment Motivation for all employees through participative decision making, independence and self creativity It helps exercise and develop managerial self control Training and development become part of organizational culture in MBO enabled companies

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1st Semester : By : Prof. Sanjayan Nair Notes on Principles of Management

Motivation
Definition:
It is a process of applying an external stimulus to an employee within his work environment in order to encourage work directed behaviour ERT Employee Retention Techniques

Motivation helps to a. b. c. d. Improve employee morale Encourage employee participation / teamwork Accelerates goal directed behaviour Improves productivity and performance

Motivation is a. Monetary b. Non Monetary

Theories of Motivation
Maslows Hierarchy of Needs

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1st Semester : By : Prof. Sanjayan Nair Notes on Principles of Management

Herzbergs 2-factor Hygiene Theory

a. Money b. Non Monetary i. Work Culture Transparent Ethics ii. Physical Ambiance iii. Image of Company iv. Recognition & Rewards v. Job Rotation vi. Job Enrichment / Enlargement vii. Flexi Timings viii. Global Exposure ix. Training and Development

McGregors Theory
Theory X Employee a. He dislikes his work b. Does not accept additional responsibilities or challenges c. High levels of supervision are required d. MBO cannot be practiced. Theory Y Employee a. He likes his work as he likes to play. Work is worship. b. He embraces new responsibilities and challenges c. Self managed and self controlled individual d. MBO can be practiced.

Theory Z
a. b. c. d. Principle of Mutual Responsibility Sharing of Objectives i.e. participative style of Management Select good people and hence the right person for the right job Training and development, the process of learning to be continuous and dynamic, based on evolving business environment e. Recognize and Reward Performance

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1st Semester : By : Prof. Sanjayan Nair Notes on Principles of Management

Organizing
It is the process of dividing work related activities generally based on areas of specialization in order to achieve a common organizational objective. It is a relationship between personnel (Efforts), Job (Duties) (JD) and Activities (Work) (KRA) An organization is hence a collection of individuals working as a team following the principles of division of labour in order to achieve the organizational goals.

Elements of Organizing:
a. Foster team work with synergy. b. Division of labour will be based around areas of specialization c. Create systems for interdepartmental coordination

Benefits of Organizing:
a. It clarifies the job profile and task of the individual along with the expected KRAs b. It helps produce proper authority structures, responsibility, accountability and control levels c. It helps create a logical flow of work activities as well as appropriate channels for communications d. Through the principle of division of labour, prevention of duplication of activities may occur e. It increases productivity and coordination between departments

Definition of Organization:
a. Today, an organization consist of people from different cultural, educational and professional backgrounds who come together to achieve a common goal within the organization. b. Out of the total organizational objective, different tasks / duties are assigned to various individuals in different department. c. The people within the organization share formal authority and reporting relationships within a defined span of control (no. of subordinates a manager can control) d. Develop work systems, review processes to maximise results

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1st Semester : By : Prof. Sanjayan Nair Notes on Principles of Management

Features of a good organization:

a. Simplicity and flexibility to change b. There should be a clear line of authority i.e. like in a Scalar Organization. c. Delegation of authority (Decentralized Organization) with the principle of ultimate responsibility lying with the department head d. Have a lean organization i.e. minimize no. of layers in the hierarchy e. Unity of direction and command f. Create reporting relationships between staff and line functions

Organizational Manual
a. It is a statement of organizational objective and policy b. Job descriptions and job specifications c. Systems and procedures

Steps in Organizing
a. Enumerate different types of work activities b. Group it as per areas of specialization and technical knowledge c. Allocate duties to individuals with requisite authority and empowerment

Types of Departmentation
a. b. c. d. By functions (Functional Departmentation) Product Department / Business Vertical (SBU Concept) Geographic Departmentation or Territorial Departmentation Customer type departmentation (Vijay Mallya UB Group) Exide o Institutional Key A/c o OEM o Govt. Trade o Replacement o Retail / Channel e. Process Departmentation o Assembly parts / line o Paint shop o Press shop o PDI and outcome logistics

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1st Semester : By : Prof. Sanjayan Nair Notes on Principles of Management Functional Departmentation

Advantages of Departmentation:
1. Functional Departmentation Advantages a. Evolves around specialization and skill sets. Task allotted to individuals are consistent within the area of knowledge b. It reduces demand on supervision time c. Career progress occurs within functional areas d. Coordination within the organization enhances Disadvantages a. Slow response to change often due to communication lag across departments. b. There could be conflicting decision making between cross functional areas c. It is often difficult to pinpoint responsibility and accountability

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1st Semester : By : Prof. Sanjayan Nair Notes on Principles of Management 2. Product Departmentation Advantages a. Defines responsibility and accountability b. There is full time focus on product groups as a focus Disadvantages a. Can cause conflict between divisional and corporate objectives b. Resource (Budgets) allocation (Funds) can get politicalized. 3. Customer Departmentation Advantages a. Creates focus based on needs and wants of the customer b. Division will be driven by strong marketing philosophy Disadvantages a. Can cause conflict between divisional and corporate objectives b. Resource (Budgets) allocation (Funds) can get politicalized. 4. Geographical Departmentation Advantages a. Promotes concern for need for regional customer needs b. It is possible to pinpoint responsibility for regional profitability Disadvantages a. Encourages competition for resources b. There could be a problem for coordination between divisions (countries) c. It fails to produce a large degree of specialization or technical depth. d. There could be a scenario involving duplication of efforts

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1st Semester : By : Prof. Sanjayan Nair Notes on Principles of Management

Span of Control
Definition No. of employees that a manager can effectively control / supervise Criteria for the Span of Control a. Supervising ability of the manager b. Time required for the manager employee interaction c. Nature of work supervised d. Capabilities of the subordinates e. Degree of decentralization / levels of empowerment f. Subordinate training and skill sets, ability of the manager to hence utilize MBO

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1st Semester : By : Prof. Sanjayan Nair Notes on Principles of Management

STAFFING
It is a process of hiring. It is a process of identifying number of people or human assets required to affectively conduct all tasks and duties within the organization in order to achieve a predetermined goal. Steps in Staffing: 1. Manpower planning a. Identifying the number of task / duties / responsibilities within the organization b. Create a departmentation model appropriate to the working of the company c. Determine the span of control required for effective supervision. d. Ascertain the total number of positions to be filled up in the organization along with the levels of hierarchy. 2. Recruitment Definition: It is a process of sourcing and identifying potential candidates with offers of employment for specialized task on fixed remuneration policy. At the end of the recruitment process, the organization is able to shortlist / select / hire a suitable candidate by issuing a letter of offer. a. Source of Candidates : i. Net ii. Referrals iii. Poaching iv. Newspaper Adverts v. International Promotions vi. Placement Cells vii. Campus Placements b. Recruitment Policy : i. Job Description (What the person has to do) 1. Specifies the nature of the job to be executed including responsibilities (KRAs), tasks and duties to be conducted, service conditions and locations 2. It defines authority and responsibility reporting structures ii. Job Specifications (What kind of person) 1. Education qualifications and work experience 2. Communication skills and personality attributes 3. Exposure to certain business practices and environment / work cultures 4. Physical attributes if found necessary c. Compensation Policy Generally arrived at based on industry standards and / or based on job worth Page 17 of 27 mbughediwala@hotmail.com

1st Semester : By : Prof. Sanjayan Nair Notes on Principles of Management d. Recruitment Process Varies from organization to organization and as well as nature of the position under recruitment. It generally entails the following: i. Psychometric evaluation test ii. Group Discussions iii. Interviews There are various types of interview methods namely : 1. One to One interview. Also known as In-Depth Interview 2. Panel Interview 3. Stress Interview 4. Video Interview 5. Telephonic Interview e. Selection : It is said to occur when the short listed candidate is informed by the company about their intent to hire, which is generally made through a letter of offer. f. Medical

g. Induction On joining a new organization, the employee leaves familiar surroundings and hence resulting in high levels of anxiety. Induction aims to help overcome employee anxieties related to the new work environment and policies. Induction helps the employee to join / amalgamate himself with main stream functions of the organization and show faster signs of goal directed behaviour. Induction generally includes activities like i. Formal introduction ii. Visits to various factory and depot sites iii. Familiarising the employee with organizational procedures often using the organizational manual. h. Training : It is undertaken in order to i. Improve and upgrade existing skill sets ii. Induce work direction behaviour iii. Improve efficiency and productivity Types of Training : i. In house Class room training ii. On job Training iii. Seminars and workshops iv. Continuing training Page 18 of 27 mbughediwala@hotmail.com

1st Semester : By : Prof. Sanjayan Nair Notes on Principles of Management

Delegation and Decentralization

It is the distribution of authority and duties (jobs) within the hierarchy of the organization. Authority and responsibility are generally linked to accountability (KRAs / Deliverables)

Aspects of Delegation :
a) b) c) d) It is an assignment of duties and responsibilities It is also a grant of authority Creation of accountability Encourages unity of command

Principles of Delegation & Decentralization

Decide upon whom you can delegate to (X / Y theory) To what extent to Delegate (Span of Control) Clarity of KRAs Boss and his colleagues should agree jointly on an acceptable standard of performance and a time frame for review (MBO theory) e) Allow room for independence through empowerment, encourage creativity and self development f) The boss and his team should share good levels of trust and mutual respect for each other. g) The superior should always recognize and reward performance h) The superior while delegating should never forget the PRINCIPLE OF ULTIMATE RESPONSIBILTIY. a) b) c) d)

Benefits of Decentralization
a) It reduces executive burden towards time spent on supervision b) Acts as a vehicle for motivating employees towards higher performance c) It promotes employee participation, fosters teamwork leading to improved employee morale. d) It is a useful tool to improve subordinates skill sets and creativity.

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1st Semester : By : Prof. Sanjayan Nair Notes on Principles of Management

Business Policy
There are 3 types of policies within an organization a) Originated Policy Model rules framed by the top Management as it appears in the organizational manual b) Exceptional Policy Also known as situational policy (e.g. Cheque signing authority) c) Imposed Policy Rules and Regulations of the government

Policy Formulation
1. Product Policy a. Product selection and development b. Pricing Policy c. Advertising and Sales Promotion Policy d. Distribution Policy 2. Production Policy a. MAKE or BUY Decisions Propriety Technology Always MAKE Labour & Process driven Always Outsource it or BUY b. Productivity Norms c. Raw Materials and Finished Goods Policy 3. Financial Policy a. Working Capital Procurement of Capital Policy (Debt or Equity) b. Owned or Leased c. Usage of Financial Resources d. Depreciation & Accounting Policy e. Profit Disposition 4. Marketing Policy a. Cash or Credit b. Choice of Segment c. Growth i. Organic (Existing Companies Grow) ii. Inorganic (New Companies are Acquired)

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1st Semester : By : Prof. Sanjayan Nair Notes on Principles of Management

Principles of Policy Making

A. Policy should reflect and be consistent with organizational objectives and goals B. Policy should be a part of the organizational manual and should be taught to new recruits C. Policy should be reviewed from time to time and amended as required.

Committees
Group of people drawn from various functional areas either from within or from outside the company to undertake the following tasks : 1. Deliberate and discuss problems and make recommendations 2. Take decisions which will chart or steer the future growth of the company 3. Act as advisory boards Committee may either be formal or informal. Advantages 1. More heads are better than one 2. It addresses the fear of delegating too much to one person 3. It is a vehicle for inter departmental coordination and encourages integration of business activities and plans 4. Dissemination of information to all departments is enhanced through committee meetings 5. Employee motivation is provided through participation Disadvantages of Committees: 1. High cost in terms of time and money 2. Incidents of conflicts arising out of differences of opinions 3. Politicalization of the process by dominating parties 4. Domination by certain groups of people with vested interests.

Successful Operations of Committees :

1. There should be a need for a well defined scope and authority for functioning of the committee Scope - Agenda / Objective Authority - whatever is decided has to be implemented by all concerned 2. Determine the size of the committee, generally constitutes 8 10 members drawn from diverse cross functional areas irrespective of heirachy. 3. Members are selected based around specialized area of knowledge with ability to contribute to the committees decision making 4. Select relevant issues to discuss and ensure that everyone participates and contributes towards useful decision making 5. The role of a chairperson should be to ensure that the right people are on board, relevant issues are discussed with a participative atmosphere in order to ensure that committee objectives are met Page 21 of 27 mbughediwala@hotmail.com

1st Semester : By : Prof. Sanjayan Nair Notes on Principles of Management

Direction :
It is a process of instructing / guiding and motivating the work force to achieve organizational objectives through a) Giving orders and instruction b) Guiding counselling and teaching methods c) Supervision and review process d) The use of delegation / decentralization and empowerment as a means of direction Factors affecting employee Motivation 1. Individual characteristics 2. Attitudes 3. Motivation 4. Interests, experiences and expectations (key factors in work areas)

Attribution
The way in which the people explain the cause for their own or others behaviour is known as - dispositional attribute (internal attribute of the person) - situational Attribution helps to determine persons attitude towards work

Impression Management
It is a process by which people try to manage or control people, about their selves People like to present themselves in a socially desirable way and impress others Impression Contrast Methods are adopted to create specific impressions Impression depend upon personal characteristics, interest and values of the targeted person Strategies for prevention of Demotion Justifying by excuses Apologies Dissociation / Shifting the blame to others Halo Effect : Leniency : Recency Effect / Shift : Contrast Effect : Page 22 of 27 mbughediwala@hotmail.com

1st Semester : By : Prof. Sanjayan Nair Notes on Principles of Management

Stereotyping :

Locus of Control :
Internal Hold themselves responsible for their acts / thoughts / interactions and results. They attribute all happenings to themselves first. They constantly feel that they are in a position to influence and change outcome. Such individuals are suppose to be having an inner Locus of Control External On the other hand, External Locus of Control individuals are who attribute thoughts, actions and consequences to factors external to themselves i.e. situations, individuals, faith, circumstances, etc. Such individuals are said to have an External Locus of Control.

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1st Semester : By : Prof. Sanjayan Nair Notes on Principles of Management

Leadership :
1) Must possess a strong personality packed by solid work abilities and achievement 2) He should be able to move his team towards work directed behaviour 3) His team will generally consist of followers (not subordinates) who place high degrees of trust in him and hence act upon his orders 4) He wins the cooperation and loyalties of his team 5) He is a dynamic go getter through a mix of automatic and democratic means

Leadership Styles :
A. Autocratic Leadership: a. A case of I, me, myself . b. Manager, highly self centered, self opinionated, c. does not believe in too much decentralization and delegation d. has high concern for task and low concern for people e. he will use coercion as a means of achieving objectives B. Participative Leadership: a. It is one of the more acknowledged and practiced styles of leadership where in the leader decentralizes and delegates b. He practices MBO c. And always seeks his team s opinion before arriving at a decision which he finally takes on his own. C. Free Rein Style (Country Club Manager) a. This is where the leader exhibits a high concern for people and low concern for tasks, b. This is generally successful in informal organizations having a laid back atmosphere D. Paternalistic (Japanese Concept) a. This is where the leader is seen as a father figure or in a role of a Coach / Mentor b. His subordinates willingly follow him because of a high degree of trust and mutual respect shared as well as a sense of achievement E. Best of all is Situational Leadership *** Include Diagram ***

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1st Semester : By : Prof. Sanjayan Nair Notes on Principles of Management

Communication :
It is the process of exchange of information, ideas and opinions. It is a vital tool for interdepartmental direction / coordination as well as a vehicle for feedback and response. There are 2 types of communication 1) Oral / Verbal a. Instructions b. Meetings / Reviews c. Counselling sessions 2) Written a. Memos / Notices b. Written Orders c. Reports

Control :
It is the measurement of the actual achievements registered against the original plan. It is a measure of 1. Progress against a planned goal 2. Performance of an individual / team Control is a dynamic process which is continuous and allows the manager to take corrective actions from time to time.

Types of Control
1) 2) 3) 4) 5) Time motion studies Benchmarking Quality Controls Control over Expenditure and Budget Measure and Control of job performance PMS

Steps in Control
1) 2) 3) 4) 5) Set norms / standards that need to be achieved Decide on the method and strategy to be perused Establish the time frame and parameters of the review process Evaluate performance on a continuous basis at pre decided intervals using MIS Correct / Alter and fine tune the process to achieve benchmark standards

Limitations in Control
A. Standards set are often not measurable and hence subject to bias particularly in quantitative areas B. The review process can have an element of human error as well as prejudice bias Page 25 of 27 mbughediwala@hotmail.com

1st Semester : By : Prof. Sanjayan Nair Notes on Principles of Management

Tools in Control
A. CPM Critical Path Method PERT Program Evaluation Review Technique Analysis B. Book Even Analysis C. Roll of MIS as a Control Tool D. MBO as a Control Tool

Change Management
Why Change Management It is necessitated due to A. Due to evolving business practices B. Emergence of new technologies / obsolescence C. Emergence of the internet D. Change in market dynamics no. of competitors, cost and profit structures E. Socio Economic Structures Why resistant to change A. Old habits die hard B. Fear over job security C. Economic Factors Probable loss of compensation resulting in a drop in social standing D. Fear of the unknown E. Lack of skill sets and expertise to perform in the new environment Managing Displaced Employees : A. Inform all concerned about the need for change B. Split the employees into 2 fractions / sections; namely the ones who will continue and the ones who will be displaced / detrenched C. The continuing employees may be subjected to training and mentoring so as to imbibe / cultivate new skill sets to face the changed environment D. Displaced employees along with their families need to be counselled regarding the utilitarian theory and offered any one of the following alternatives. a. Voluntary retirement scheme b. Alternative employment at another job site or with a competitor c. Be reabsorbed as contract labour on a need be basis E. Be offered a vocational occupation as may be a distributor / agent or be offered a maintenance or franchise contract with the company.

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1st Semester : By : Prof. Sanjayan Nair Notes on Principles of Management Common KRAs Profitability Market Standing / Market Share Developing or usage of Technology / Quality Common Review Parameters Target Growth

Productivity Norms Honouring CSR Efficient supply chain Management

A/c receivable Stock holding

C2S (Cost to Sales)

Leontiffs Paradox : (for 5th Semester International Business) Unless the process is technologically and capital driven (patented technology), the country which invented the product would be the largest importer of the product once it becomes labour and process driven. This signifies that once the product is out of patents it is no longer under ideal circumstances to self produce the product as cost of production would now be higher than the profits. Hence it is always seen that these products now become as out sourced strategies of the companies.

PORTERS 5 Force model (Compulsory Qs in 6th Semester Corporate Strategy) Economics of Scale o Largest Producer o Killing Price o Predator Pricing Leads to Sustainable Competitive Advantage Value = Functionality (Features) / Cost (Value for Money) Ownership Experience Today Not an Era of Customer Satisfaction, It is today as Customer Delight Technology today is the biggest driver for SCA Other Notes: Time and motion study ESCROW Account Gnatt Charts Corporate Governance

Extra Reading from Wikipedia

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