Principles and Practices of Management

Dr (Capt) C M Chitale
Dean- Faculty of Management, University of Pune, Pune 411 007

Principles of Management

I Introduction to Management II - Planning III Organizing IV Direction V - Staffing VI Controlling VII Coordination VIII- Decision Making

I. Introduction to Management

I. Introduction to Management
Agenda
1. Introduction a.Business b.Organization c.Administration d.Management 2. Why Management? Objectives, Efficiency and Effectiveness 3. Different Roles of Manager 4. Survival of Organization Internal and External Environment 5. Management Whether Science or Art? Different Approaches to Management 6. Evolution of Management thought 7. Contribution of Henry Fayol and F. W. Taylor 8. Different Functions of Management

I. Introduction to Management

1.Introduction
a.Business
Business may be identified as any activity which leads to the creation of utilities of goods and services for the satisfaction of human wants in return for a price.

a.Organization
C.H. Nothcott has applied the term organization to arrangements by which tasks are assigned to men and women so that their individual efforts contribute effectively to some more or less clearly defined purpose for which they have been brought together.

I. Introduction to Management
1.Introduction
c.Administration
Administration is fundamentally the direction of business affairs - 3 main Elements:

I. Formulation of goals II.The choice of ways & means to achieve these goals III.The direction of the people in some group purpose

I. Introduction to Management
1.Introduction
d.Management
8 Ms of management

I. Men II.Money III.Material IV.Machines V.Methods VI.Markets VII.Milieu VIII.Minutes

I. Introduction to Management
1.Introduction
d.Management
Is an artful science Direction of people towards predetermined goal Accomplishment, of the desired objectives by establishing an environment favorable to performance by people operating in the organized groups A multipurpose organ, manages a business, manages managers and manages workers & work Is a process of getting things through the people for the successful accomplishment of the organizational goals Is always the art of the possible, art of the acceptable and art of the fruitful

I. Introduction to Management
1.Introduction
d.Management
Definitions

Dr. William R Spriegel: Management is an executive function which is primarily concerned with carrying out of the broad policies laid down by the administration; it is that function of an enterprise which concerns itself with the direction & control of the various activities to attain the business objectives. S George: Management consists of getting things done through others. Manager is one who accomplishes the objectives by directing the effort of others.

I. Introduction to Management
2.Why Management? Objectives, Efficiency and Effectiveness
Why Management?
A Manager is

One who can step on your toes without damaging your shine One who can bring about an excellent, compromise between the individual objective and organizational objectives of a worker One who can get extra-ordinary work from an ordinary worker

Objectives
To make profit, the logical and publicly desirable aim of the management should be a surplus.

I. Introduction to Management
Survival of Organization Internal and External Environment
The General Environment consists of all conditions in external environment that form a background context for managerial decision making. Typical external environmental issues include:
Economic Conditions Social Cultural Conditions Legal Technological Conditions Natural Environment conditions Ethical

I. Introduction to Management
2.Why Management? Objectives, Efficiency and Effectiveness
Objectives
In search of excellence Thomas J. Peters & Robert H.Waterman identified the following 8 attributes of successful firms.

i. Were oriented toward action ii.Learned about the need of their customers iii.Promoted managerial autonomy and entrepreneurship iv.Achieved productivity by paying close attention to the needs of their people v.Were driven by a company philosophy often based on the values of their leaders vi.Focused on the business they knew best vii.Had a simple organization structure with a lean staff viii.Were centralized as well as decentralized, depending on appropriateness.

I. Introduction to Management
2.Why Management? Objectives, Efficiency and Effectiveness
Efficiency and Effectiveness
Efficiency is doing things right, Ability to do things right. Effectiveness is doing the right things, setting right job.

I. Introduction to Management
2.Why Management? Objectives, Efficiency and Effectiveness
Efficiency and Effectiveness
Managerial effectiveness:

Information Functional Information Organizational Information Environmental Information Skills Functional skills Interpersonal Skills Vision Insight: The understanding of how is his job contributes to the objectives of his organization Foresight: How the job is likely to develop in future

I. Introduction to Management
3.Different Roles of a Manager (by Mintzberg)
Interpersonal Roles
The figurehead role (performing ceremonial and social duties as the organizations representative) The leader role The liaison role (particularly with outsiders)

Informational Roles
The recipient role (receiving information about the operation of an enterprise) The disseminator role (passing information to subordinates) The spokesperson role (transmitting information to those outside the organization)

I. Introduction to Management
3.Different Roles of a manager
Decision roles
The entrepreneurial role The disturbance-handler role The resource-allocator role The negotiator role (dealing with various persons and groups of persons)

I. Introduction to Management
4.Management Whether Science or Art? Different Approaches to Management
Managing: Science or Art Three important characteristics of science:
It is an systematized body of knowledge & uses scientific methods for observation Its principles are evolved on the basis of continued observation & experiment Its principles are exact and have universal applicability without any information.

What is Art?
Art refers to the way of doing specific things It indicates how an objective is to be achieved It is know-how to accomplish a desired concrete results Getting the things done

I. Introduction to Management
5.Management Whether Science or Art? Different Approaches to Management
Elements of Science
Science is organized knowledge. Scientific approach first requires clear concepts words and terms that are exact, relevant to the things being analyzed & informative to the scientists & practitioner alike. Theory is a systematic grouping of interdependent concepts and principles which give a framework to or tie together, a significant area of knowledge Principles in management, like those in the physical sciences, are descriptive or productive and not prescriptive.

I. Introduction to Management
5. Management Whether Science or Art? Different Approaches to Management
Different Approaches to Management

page 19 Par

For figure refer

Different Approaches to Management

Classical School (People are Rational)

Scientific Mgt School Babbage Charles F W Taylor Gilbreths Grantt Henry

Organisational School Fayol Henri Weber Max Mooney & Reilly Chester Barnard Herbert Simon

I. Introduction to Management
Contribution by F.W. Taylor
F.W. Taylor is generally acknowledged as Father of Scientific Management. Principal concern
increasing efficiency in production, not only to lower costs & raise profits, but, also to make possible increased pay for workers through their higher productivity.

The fundamental principles underlying the scientific approach to managing (according to F.W. Taylor)
Applying rules of thumb with science (organized knowledge) Obtaining harmony in group action, rather than disorder. Achieving Cooperation of human beings, rather than chaotic individualism Working for maximum outputs, rather than restricted output. Developing all workers to the fullest extent possible for their own and their companys highest prosperity.

I. Introduction to Management
Contribution by Henry Fayol
14 Principles and Management teaching by Henry Fayol
i. Division of work ii. Authority & Responsibility iii.Discipline iv.Unity of command v. Unity of Direction vi.Subordination of Individual interest to general interest vii.Remuneration of personnel viii.Centralization ix.Scalar Chain x. Order A place for everything & everything in its place xi.Equity is a combination of kindliness & Justice xii.Stability of tenure of personnel xiii.Initiative xiv.Espirit de Corps

Different Approaches to Management

Behavioural School (People are Social and Self-Actualizing) Robert Owen Hugo Munsterberg Elton Mayo Mary Parker Follett Abraham Maslow Douglas McGregor Chris Argyris

Different Approaches to Management

Quantitative School (People can use applied mathematics ) Management Science Operations Management Management Information System

I. Introduction to Management
Quantitative School
Characterized by:
1.Primary Focus on Decision Making The end result of problem analysis will include direct implications for managerial action. 2.Based on Economic Decision Theory Final actions are chosen on such criteria as costs, revenues, and rates of return on investment. 3.Use of Formal Mathematical Models Possible solutions to problems are specified as mathematical equations and then analyzed according to mathematical rules and formulas. 4.Frequent Use of Computers Heavy reliance is placed on computers and their advanced processing capabilities (Schermerhorn, 1989)

I. Introduction to Management
Quantitative School
Management Science Applies Mathematical Analysis to decision Making Operations Management Application of quantitative methods to the organizational tasks of production and operations control Management Information Systems Management Information Systems (MIS) are integrated programs for the collection, analysis and dissemination of information to support management decision making.

Different Approaches to Management

Integration School (There is no one best way to Manage) Contingency Theory System Theory

I. Introduction to Management
Evoluation of Management thought
Integration School
Contingency Theory

Contingency theory is based on the notion that the proper management technique in a given situation depends upon the nature and conditions of that situation.
Systems Theory

A system may be defined as a goal-oriented organism that is composed of parts interrelated in such a way that the total system is greater than the sum of its parts. For any organism, the number one objective is survival.

Different Approaches to Management

Contemporary School (People are Complex) Global Theory Z McKinsey 7 S Excellence Quality/ Productivity

I. Introduction to Management
Contemporary School
Theory Z

Ouchi and Jaeger (1978) studied Japanese and American management practices and classified them under three headings Type J forms which use typical Japanese Management practices Type A firms which use typical American management techniques Type Z firms which are those highly successful American firms that use many of the Japanese management practices.

I. Introduction to Management
Contemporary School
Mc Kinsey 7s Factors
Strategy, or the plans that determine the allocation of an organizations scarce resources and commit the organization to a specified course of action Structure, or the design of the organization that determines the number of levels in its hierarchy and the location of the organizations authority Systems, or the organizational processes and proceduralized reports and routines Staff, or the key human resource groups within an organization, described demographically. Style or the manner in which managers behave in pursuit of organizational goals. Skills, or distinct abilities of the organizations personnel Superordinate goals (shared values), or the significant meanings or guiding concepts that an organization instils in its members (Pascale and Athos, 19 81).

I. Introduction to Management
Different Functions of Management
a.Planning, b.Organizing, c.Staffing, d.Leading, e.Controlling f. Coordination

I. Introduction to Management
What have we covered:
1. Introduction a.Business b.Organization c.Administration d.Management 2. Why Management? Objectives, Efficiency and Effectiveness 3. Different Roles of Manager 4. Survival of Organization Internal and External Environment 5. Management Whether Science or Art? Different Approaches to Management 6. Evolution of Management thought 7. Contribution of Henry Fayol and F. W. Taylor 8. Different Functions of Management

II. Planning

II. Planning

1.What is Planning?
Planning involves selecting from among alternative future courses of action for the enterprise as a whole and for every department or section within it. Planning bridges the gap between from where we are to where we want to go. Planning is an intellectually demanding process

II. Planning

2.Steps of Planning
Being Aware of opportunity Setting Objectives or goals Considering planning premises Identifying alternatives Comparing Alternatives in light of goals sought Choosing an Alternative Formulating supporting plans Numberizing plans by making Budgets

II. Planning

3.The Hierarchy of Plans

II. Planning
Vision
Involves thinking strategically about
Firms future business plans Where to go

Mission
Defines current business activities Highlights boundaries of current business Conveys
Who we are, What we do, and Where we are now

Tasks include
Creating a roadmap of the future Deciding future business position to stake out Providing long-term direction Giving firm a strong identity

Company specific, not generic so as to give a company its own identity

III. Organizing

III. Organizing

1.Formal & Informal Organization, Forms of Departmentation

Organizing is defined as the management function of assigning duties, grouping tasks, establishing authority, & Allocating resources to carry out a specific plan.
Formal Organization: means the Intentional structure of roles in a formally organized enterprise Informal Organization: A network of personal and social relations not established or required by the formal organization but arising spontaneously as people associate with one another

III. Organizing

1.Formal & Informal Organization, Forms of Departmentation

Forms of Departmentation:
i. Function ii. Product or Service iii.Territory iv.Customer v.Processes vi.Project vii.Matrix

III. Organizing

2.Line and staff organization, Authority, Responsibility, Accountability, Power, Centralization and Decentralization, Delegation of Authority
Line and Staff Organization
The line organization refers to those departments which are held directly responsible for accomplishing the major activities of the organization. Staff departments refer to those that are not directly involved in the mainstream activity of the organization or department.

Authority

III. Organizing

2.Line and staff organization, Authority, Responsibility, Accountability, Power, Centralization and Decentralization, Delegation of Authority
Responsibility & Accountability
Responsibility refers to the obligation that is created when an employee accepts a managers authority to delegate tasks or assignments. Accountability refers to the fact that employee will be judged by the extent to which they have fulfilled their responsibilities (Both cannot be delegated).

Power
Power is used in terms of ability or capacity to do something

III. Organizing

2.Line and staff organization, Authority, Responsibility, Accountability, Power, Centralization and Decentralization, Delegation of Authority
Centralization and Decentralization
Centralization refers to concentrating the power and authority near the top, or in the head of an organization. Decentralization is dispersing the power and decision making to successively lower levels of organization.

III. Organizing

2.Line and staff organization, Authority, Responsibility, Accountability, Power, Centralization and Decentralization, Delegation of Authority
Comparison between Delegation and Decentralization
Delegation is a process while decentralization is the end result of a deliberate policy of making delegation widespread in the organization. Delegation is between superior & Subordinate while decentralization is company wide. Delegation is between top management and departments or divisions of the organization In delegation, the delegator exercises supervision and control over the delegatees, while in decentralization, top management exercises broad & minimum control.