GENERAL PRINCIPLES

OF MANAGEMENT
 Definition Management:

Management is the process of designing and

maintaining an environment in which individuals working
together in groups, efficiently accomplish selected item

Management is the process of getting things done, through &

with people in organization
Management functions (or) Process of Management:

There are five types of functions in management. They are,

Planning-Defines the goal & establishing strategy.

Organizing-includes determining what task has to be done,

who is to do them.
Staffing-Includes recruitment of people and training them

towards the project.

Leading-Includes the motivating the employees and

directing the activities.

Controlling-It is the process of monitoring the performance.
 Managerial Skills

There are three types of skills required by a manager.

They are:
Conceptual Skills-These skills are required by the

employee who are in top level management.

Technical skills- These skills are required by the

employee who are in middle level Management.

Human Relations Skills-These skills are required by

the employee in the supervisory level.

 Different Managerial Levels

Top Management
Conceptua
l Skills

Middle Management

Human Relations Skills

Supervisory Level
Technical Skills
Order of Management

Top
Mana
geme
nt

Middle
Managers

First-Line Managers

Operatives
(or)
Executive
 Efficiency & Effectiveness
Effectiveness: Adequate to accomplish a purpose; producing
the intended or expected result.

Efficiency: Performing or functioning in the best possible

manner with the least waste of time and effort.
(Or)

Efficiency is doing something with the least possible

expenditure of resources (such as time, energy, etc.)
 Division of work: This is the specialization that economists
consider necessary for efficiency in the use of labor. Fayols applies
the principle to all kinds of work, managerial as well as technical.
Authority & responsibility: Here Fayol finds authority and
responsibility to be related, with the later arising from the former. He
sees authority as a combination of official factors, deriving from the
manager position and personal factors.
Discipline: Seeing discipline as respect for agreements which are
directed at achieving obedience, application, energy, and the outward
marks of respect. Fayol declares that discipline requires good
superiors at all levels.
Unity of command: This means that employees should receive
orders from one superior only.
Unity of direction: According to this principle, each group of
actives with the same objective must have one head and one plan.
 Subordination of individual to general interest: This is self
explanatory when the two are found to differ, management must
reconcile them.
Remuneration and methods: of payment should be fair and afford the
maximum possible satisfaction to employees and employer.
Centralization: Without using the term Centralization of
authority.Fayol's refers to the extent to which authority is concentrated
or dispersed. Individual circumstances will determine the degree that will
give the best overall yield.
Scalar chain: Fayol thinks of this as a chain of superiors from the
highest to the lowest ranks, which, while not to be departed from need
lessly, should be short circuited when to follow it scrupulously would be
detrimental.
Order: Breaking this into material and social order, Fayol's follows the
simple adage of a place for everything and everything in its place.
Equity: Loyalty and devotion should be elicited from personnel by a
combination of kindliness and justice on the part of managers when
dealing with subordinators.
Stability of tenure: Finding unnecessary turnover to be both the cause
and the effect Of bad management, Fayol points out its dangers and
costs.
Planning & Types of
Plans
L E A RN I NG O UTLI N E
Follow this Learning Outline as you read and study this chapter.

What Is Planning?
Define planning.
Types (Levels) of Planning
Strategic Planning
Intermediate Planning
Operational Planning
Planning Process/ Procedure
Barriers to Effective Planning
Planning Premises
Forecasting
Key to Planning
 What Is Planning?
Planning
Planning is the primary function of management.
It focuses on the future course of action.
A primary managerial activity that specifies the
objectives to be achieved in future and selects the
alternative course of action to reach defined objectives.
Thus, it involves:
Defining the organizations goals
Establishing an overall strategy for achieving those goals
Developing plans for organizational work activities.
What Is Planning?
Determination of future course of actions in

advance

It is the blue print of action and operation.

Planning is intellectual process which is

concerned with deciding in advance what,

when, why, how, and who shall do the work.

Definitions:
Generally speaking, planning is deciding in
advance what is to be done
-W H Newman
Planning is deciding in advance what to do,
how to do, when to do and who is to do it.
Planning bridges a gap between from where
we are to where we want to go
-Harold, Koontz and ODonnel
Planning is that function of manner in which
he decides in advance what he will do. It is a
decision making process of a special kind, its
essence is futurity.
-Hayness and Massie
 Why Do Managers Plan?
Purposes of Planning
Provides direction
Reduces uncertainty
Minimizes waste and redundancy
Sets the standards for controlling
Benefits of planning
Goal Focus
Minimize Uncertainty
Improve efficiency
Facilitates to Control
Innovation and Creativity
Better Coordination
Ensures Commitment
Aid to Business Success
Brings Systematization
How Do Managers Plan?
Elements of Planning
Goals (also Objectives)
Desired outcomes for individuals, groups, or entire
organizations
Provide direction and evaluation performance criteria
Plans
Documents that outline how goals are to be
accomplished
Describe how resources are to be allocated and
establish activity schedules
Types of Plans
Types of Plans
Strategic Plans
Apply to the entire organization.
Establish the organizations overall goals.
Seek to position the organization in terms of its
environment.
Cover extended periods of time.
Operational Plans
Specify the details of how the overall goals are to
be achieved.
Cover short time period.
Types of Plans
Long-Term Plans
Plans with time frames extending beyond three years
Short-Term Plans
Plans with time frames on one year or less
Specific Plans
Plans that are clearly defined and leave no room for
interpretation
Directional Plans
Flexible plans that set out general guidelines, provide
focus, yet allow discretion in implementation.
Types of Plans
Single-Use Plan
A one-time plan specifically designed to meet the
need of a unique situation.
Standing Plans
Ongoing plans that provide guidance for activities
performed repeatedly.
Establishing Goals and Developing
Plans
Traditional Goal Setting
Broad goals are set at the top of the organization.
Goals are then broken into sub-goals for each
organizational level.
Assumes that top management knows best because
they can see the big picture.
Goals are intended to direct, guide, and constrain
from above.
Goals lose clarity and focus as lower-level managers
attempt to interpret and define the goals for their
areas of responsibility.
The Downside of Traditional Goal Setting
Planning in the Hierarchy of Organizations
Contemporary Issues in Planning
Criticisms of Planning
Planning may create rigidity.
Plans cannot be developed for dynamic
environments.
Formal plans cannot replace intuition and creativity.
Planning focuses managers attention on todays
competition not tomorrows survival.
Formal planning reinforces todays success, which
may lead to tomorrows failure.
 Planning Process:
How does a manager Plan?
Establish
objectives Develop Strategies

Determination of
Reviewing the premises
planning
process Determination of
alternatives

Implantation of Evaluation of
plans alternatives

Formulation of Selecting a
derivative plans course of action
Analyze Opportunities
Not a step of Planning, It is pre-step of planning.
Essential to make a successful plan.
SWOT analysis

Setting objectives
First and real starting point of planning.
Management has to define objectives in clear
manner by considering organizational resources
and opportunities because a minor mistake in
setting objectives might affect in implementation of
plan.
Objectives must be specific, clear and practical.
They should be time bound and expressed in
Determination of premises
Premises are the assumptions about the future in which
the planning is implemented.
They provide environment and boundaries for the
implementation of plan in practical operation.
These premises may be tangible and intangible and
external.
(a) Tangible and intangible: Tangible premises involve
capital investment, unit of production, units sold, cost
per unit, time available etc. Similarly, intangible premises
involve employees moral, goodwill, motivation,
managerial attitude, etc.
(b) Internal and external: Internal premises involve
money, materials, machines and managements. In the
similar manner, external factors involve competitors
strategy, technological change, government policy, social
and cultural beliefs etc.
Determination of alternatives

It is essential to identify all the possible

hidden alternatives. The information about
alternative courses of action may be obtained
from primary and secondary sources. There
must be search for the best alternative. The
management must develop alternatives
through the support of experienced and
intellectual experts in management sectors.
Evaluation of alternatives

Evaluate the alternatives from their expected

cost and benefits. This is the logical step to
evaluate each alternative from its plus and
minus points.
Each alternative is studied and evaluated in

terms of some common factors such as risk,

responsibility, planning premises, resources,
technology etc.

Selecting a course of action

Formulation of derivative plans:

It is essential to formulate action or derivative

plans for each step of work and to all
departments of the organization. These
action plans involve formulation of policies,
rules, schedule and budget to complete
defined objectives. Thus, formulation of
derivative plans is an essential step in
planning process. It is difficult to implement
main plan without formulation of derivative
plan.
Implantation of plans
Without this step, other this procedure of plan will
remain as paper work.
This step brings all the procedure of plan into action.
For implementation plan, management has to take
some steps such as to communicate with subordinates
who initiate to plan into action; provide necessary
instruction and guidance; make arrangement of all
resources like materials, machines, money, equipments
etc; make timely supervision and control over
subordinates.

Reviewing the planning process

Evolution of Management
Thought
The need to study management arose with
the industrial revolution in Europe (more
specifically, England).
The industrial revolution and the systematic
study of management are the result of a
remarkable confluence of ideas and events.
Management and organizations are
products of their historical and social times
and places.
SCIENTIFIC MANAGEMENT
THEORY
Frederick W. Taylor, Henry L. Gantt, and
Frank and Lillian Gilbreth devised the body
of principles known as scientific
management theory.
Taylor based his management system on

production-line time studies. Using time

study as his base, he broke each job down
into its components and designed the
quickest and best methods of performing
each component.
 He also encouraged employers to pay more
productive workers at a higher rate than
others, using a "scientifically correct" rate
that would benefit both company and worker.
This system is called Differential Rate
System
Gantt originated a charting system for
production scheduling.
 Every worker's progress was rated publicly
and recorded on individual bar charts,--in
black on days the worker made the
standard, in red when he or she fell below
it. Going beyond this.
Frank B. and Lillian M. Gilbreth collaborated
on fatigue and motion studies and focused
on ways of promoting the individual
worker's welfare. To them, the ultimate aim
of scientific management was to help
workers reach their full potential as human
beings.
CONTRIBUTIONS OF SCIENTIFIC
MANAGEMENT THEORY
The modem assembly line pours out
finished products faster than Taylor could
ever have imagined. This production
"miracle" is the gift of scientific
management.
In addition, its efficiency techniques have
been applied to many tasks in non-
industrial organizations, ranging from fast-
food service to the training of surgeons.
LIMITATIONS OF SCIENTIFIC
MANAGEMENT THEORY
Taylor's system clearly meant that time was
of the essence. His critics objected to the
"speed up" conditions that placed undue
pressures on employees to perform at
faster and faster levels.
The emphasis on productivityand, by
extension, profitabilityled some managers
to exploit both workers and customers. This
condition created mistrust / suspicious
relationship between labour and supervisor
or management.
CLASSICAL ORGANIZATION
THEORY
Classical organization theory concerned
about the need to find guidelines for managing
complex organizations such as factories.
Henri Fayol is the founder of the classical
management theory.
Fayol believed that sound management practice
falls into certain patters that can be identified
and analyzed.
Fayol was interested in the Total Organization
and focused on management, which he felt had
been the most neglected of business
operations.
Fayols 14 Principles of
Management
1. Division of Labor 2. Authority
3. Discipline 4.Unity of Command
5. Unity of Direction 6. Remuneration
7.Subordination of Individual Interest to the
Common Good
8. Centralization 9. The Hierarchy
10.Order 11. Equity
12. Stability of Staff 13. Initiative
14. Espirit de Corps
Contribution of Classical
Management Theory
Before Fayol, it was generally believed
that "managers are born, not made."
Fayol however, said that management
was a skill like any other--one that
could be taught once its underlying
principles were understood.
It identified key management
processes, functions and skills.
It focused attention on management as
a valid subject of scientific study.
It lead foundation for latter
developments in management theory.
Limitations of Classical
Theory
This theory is more applicable for stable and
simple organizations than todays complex
and dynamic organizations.
This theory treats employees as a elements
rather than resources.
The procedure governed by this theory may
not be applicable in certain situation.
Behavioural Management Theory
Neo Classical Theory
This theory puts more emphasis on
individuals attitudes, behaviours and
on the group processes. In this
approach of management human
factor remain central focus.
This approach can be studied into two
phases
a. Human Relation Movement
b. Behavioural Science Approach
Major contributors to this approach
were Elton Mayo, Abraham Maslow and
Dugulas Mcgregor
Human Relation Movement
Human relations is frequently used as a
general term to describe the ways in which
managers interact with their employees.
When "employee management" stimulates
more and better work, the organization has
effective human relations; when morale and
efficiency deteriorate, its human relations are
said to be ineffective.
The human relations movement arose from
early attempts to systematically discover the
social and psychological factors that would
create effective human relations.
This approach aims at providing high degree
of satisfaction and motivation through
improved working conditions, style of
supervision and sense of security.
Contribution of Human Relation
Movement
This movement thrown light on, an
employee doesnt work always for money
only. Non financial rewards also
significantly affects the beheviour of the
employee.
There is no correlation between improved
working conditions and high production.
The informal group and not the individual is
the dominant unit of analysis in
organizations.
Limitation of the Human Relations
Movement
This approach over-emphasizes on
symbolic rewards and underplays the role of
material rewards.
This approach gives more importance to
informal groups by describing them as a
major sources of satisfaction for individual
workers.
This approach is based on the assumption
that satisfied workers are more productive
workers. Attempts to increase output by
improving working conditions and the
human relation skills of manager.
Behaviourial Science
Approach
This approach is an improved version of
the human relations approach to
management.
Douglas Mcgregor, Abraham Maslow, Kurt
Lewin, Chester Barnard, Merry Follett etc.
are some of the foremost behaviourial
scientists who made significant
contributions to the development of the
behaviourial approach to the
management.
This approach recognizes the practical
and situational constraints on human
rationality for making optimal decisions.
Contd
To behevioural scientists, the realistic
model of human motivation is complex
man. It suggest that different people react
differently to same situation or react same
way to different situations.
The organization considered as a groups of
individuals with certain goals.
It recognizes that conflict is inevitable and
even sometimes desirable and should be
faced with understanding and
determination.
Contribution of Behavioural
Management Theory
It provides important insights into
motivation, leadership, group dynamics and
other interpersonal process in organizations.
This theory challenged the view that
employees are tools instead employees are
valuable resources.
Focused managerial attention on employee
related process.
Limitations of Behavioural
Management Theory
Many bevioural concept couldnt be applied in
organizational processes because of manager
reluctance.
The complex human nature cannt be
predicted.
The findings of behviuoral science often
could not be communicated to the practicing
manager in an understandable manner.
System Approach
This approach is aimed at identifying
the nature of relationship among
various components of the organization
which is considered as larger system.
Chester Barnard, George Homans,

Herbert Simon etc. are the contributors

in System Approach.
This approach gives managers a way of

looking at the organization as a whole

and as a part of the larger, external
environment.
Contd
Systems theory tells us that the activity
of any segment of an organization
affects, in varying degrees, the activity
of every other segment.
It calls attention to the dynamic and
interrelated nature of organizations
and the management task.
It provides a framework within which
we can plan actions and anticipate
both immediate and far-reaching
consequences while allowing us to
understand unanticipated
consequences as they develop.
Key concepts of System
Approach
A system is a set of interdependent parts
An organization is a system composed of
four interdependent parts i.e. task,
structure, people and technology.
Central to the System Approach is the
concept of holism Means no part of the
system can be accurately analyzed and
understood apart from whole system.
Conversely the whole system cannot be
accurately perceived without understanding
all its parts.
Contd
Synergy It means that as separate
departments within an organization
cooperate and interact, they become
more productive than if each were to
act in isolation.
A system can be either open or closed
An open system interact with its
environment. A closed system is
independent of the environment.
Every system has a boundary - Each
system has a boundary that separates
it from its environment. In a closed
system, the system boundary is rigid;
in an open system, the boundary is
more flexible.
Contd
Flow - A system has flows of
information, materials, and energy
(including human energy). These enter
the system from the environment as
inputs (raw materials, for example),
undergo transformation processes
within the system (operations that alter
them), and exit the system as outputs
(goods and services).
Feedback - Feedback is the key to
system controls. As operations of the
system proceed, information is fed back
to the appropriate people, and perhaps
to a computer, so that the work can be
assessed and, if necessary, corrected.
Contribution of System Approach
System theory calls attention to the
dynamic and interrelated nature of
organizations and the management
task. Thus, it provides a framework
within which we can plan actions and
anticipate both immediate and far-
reaching consequences while allowing
us to understand unanticipated
consequences as they develop.
With a systems perspective, general
managers can more easily maintain a
balance between the needs of the
various parts of the enterprise and the
needs and goals the whole firm.
Limitations of System
Approach
According to some experts, system approach
is purely theoretical, conceptual and abstract.
It can cant be applied successfully to
practical situation.
The system Approach neither offers any tools
or technique for analysis nor it recognizes the
differences which exists between the
systems.
Contingency Approach
According to the contingency approach the
manager's task is to Identify which
technique will, in a particular situation,
under particular circumstances, and at
particular time , best contribute to the
attainment of management goals.
Methods and techniques which are highly

effective in one situation may not work in

other situations. Results differs with
situational difference.
Contribution of Contingency
Approach
Contingency views are applicable in
designing organizational structure, in
deciding the degree of centralization
and decentralization, in planning
information decision system, in
motivational and leadership
approaches, in establishing
communication and control systems, in
resolving conflicts and managing
change, in employee development and
training programmes etc.
Limitation of Contingency
Approach
It compromise between system approach
and situational factors.
It is totally practical approach without
support of theoretical and conceptual frame
work.
Some time manager finds difficulties in
analyzing the situation and discovering
appropriate management technique in
absence of proper research and
understanding behaviour of the situation.
Management: A Competency Base
Approach
Chapter 1
Managing in a Dynamic
Environment
Learning Objectives
Define Managers And Management.
Explain What Managers Do.
Describe The Competencies Used In

Managerial Work And Assess Your Current

Competency Levels.
 Introductory Concepts: What Are
Managerial Competencies?

Competency a combination of knowledge,

skills, behaviors, and attitudes that contribute to
personal effectiveness

Managerial Competencies sets of knowledge,

skill, behaviors, and attitudes that a person
needs to be effective in a wide range of positions
and various types of organizations
 Why are Managerial Competencies
Important?

You need to use your strengths to do your best

You need to know your weaknesses
You need developmental experiences at work to become
successful leaders and address your weakness
You probably like to be challenged with new learning
opportunities
Organizations do not want to waste human resources
Globalization deregulation, restructuring, and new
competitors add to the complexity of running a business
A Model of Managerial Competencies
(adapted from Figure 1.1)

Communication
Competency
Planning and
Teamwork
Administration
Competency
Competency

Global Strategic
Awareness Action
Competency Self-Management Competency
Competency
A Model of Managerial Competencies
(adapted from Figure 1.1)

Communication
Competency
Planning and
Teamwork
Administration
Competency
Managerial Competency
Effectiveness
Global Strategic
Awareness Action
Competency Self-Management Competency
Competency
 What Is An Organization?
A formal and coordinated group of people who
function to achieve particular goals
These goals cannot be achieved by individuals
acting alone
An organization has a structure, discussed in depth
in Chapter 11
Characteristics of an
Organization
An organization has a structure.

An organization consists of a group of

people striving to reach goals that
individuals acting alone could not
achieve.
 Management
Organization
Two or more people who work together in a structured
way to achieve a specific goal or set of goals.

Goals
Purpose that an organization strives to achieve;
organizations often have more than one goals, goals are
fundamental elements of organization.

The Role of Management

To guide the organizations towards goal
accomplishment
 e r
a g
a n - People responsible for
M directing the efforts aimed
at helping organizations
achieve their goals.
- A person who plans,
organizes, directs and
controls the allocation of
human, material, financial,
and information resources
in pursuit of the
organizations goals.
Management
Management refers to the tasks and activities involved
in directing an organization or one of its units: planning,
organizing, leading, and controlling.
The process of reaching organizational goals by working
with and through people and other organizational
resources.
 What are the Types of Managers?
Function: A classification referring to a group of
similar activities in an organization like
marketing or operations.
Functional Managers: A manager responsible for
just one organizational activity such as
accounting, human resources, sales, finance,
marketing, or production
Focus on technical areas of expertise

Use communication, planning and

administration, teamwork and self-
management competencies to get work
done
 What are the Types of Managers?
(contd)

General Managers: responsible for the operations

of more complex unitsfor example, a company or
division

Oversee work of functional managers

Responsible for all the activities of the unit
Need to acquire strategic and multicultural
competencies to guide organization

Many Other types of managers

Basic Managerial Functions
(adapted from Figure 1.2)

Organizing

Leading
Planning

Controlling
Management Process and Goal
Attainment
Management and Organizational
Resources
 Planning

Planning involves tasks

that must be performed to
attain organizational goals,
outlining how the tasks
must be performed, and
indicating when they
should be performed.
 Planning

Determining organizational goals and

means to reach them
Managers plan for three reasons
1. Establish an overall direction for the
organizations future
2. Identify and commit resources to achieving
goals
3. Decide which tasks must be done to reach
those goals

Discussed in depth in Chapter 7 & 8

 Organizing

Organizing means assigning the planned tasks to

various individuals or groups within the
organization and cresting a mechanism to put plans
into action.
 Organizing

Process of deciding where decisions will be made, who

will perform what jobs and tasks, and who will report
to whom in the company
Includes creating departments and job descriptions
 Leading

Leading (Influencing) means guiding the activities

of the organization members in appropriate
directions. Objective is to improve productivity.
 Leading

Getting others to perform the

necessary tasks by motivating them to
achieve the organizations goals
Crucial element in all functions

Discussed throughout the book and in

depth in Chapter 15Dynamics of
Leadership
 Controlling

1. Gather information that measures recent performance

2. Compare present performance to pre-established standards
3. Determine modifications to meet pre-established standards
 Controlling

Process by which a person, group,

or
organization consciously monitors
performance and takes corrective
action

Discussed in depth in Chapter 10

Basic Levels of Management
(adapted from Figure 1.3)

Top
Top
Managers
Managers

MiddleManagers
Middle Managers

First-LineManagers
First-Line Managers

Nonmanagers
Nonmanagers
 Top Managers

Responsible for providing the overall direction of an

organization
Develop goals and strategies for entire organization
Spend most of their time planning and leading
Communicate with key stakeholdersstockholders,
unions, governmental agencies, etc., company
policies
Use of multicultural and strategic action
competencies to lead firm is crucial
Levels of Management

First-line Managers: have direct responsibility for

producing goods or services Foreman, supervisors,
clerical supervisors
Middle Managers:
Coordinate employee activities
Determine which goods or services to provide
Decide how to market goods or services to customers
Assistant Manager, Manager (Section Head)
Top Managers: provide the overall direction of an
organization Chief Executive Officer, President, Vice
President
 First-line Managers

Directly responsible for production of goods or services

Employees who report to first-line managers do the
organizations work
Spend little time with top managers in large organizations
Technical expertise is important
Rely on planning and administration, self-management,
teamwork, and communication competencies to get work
done
 Middle Managers

Responsible for setting objectives that are consistent with

top managements goals and translating them into specific
goals and plans for first-line managers to implement
Responsible for coordinating activities of first-line
managers
Establish target dates for products/services to be delivered
Need to coordinate with others for resources
Ability to develop others is important
Rely on communication, teamwork, and planning and
administration competencies to achieve goals
Management Level and Skills
 Introductory Concepts: What Are
Managerial Competencies?

Competency a combination of knowledge,

skills, behaviors, and attitudes that contribute to
personal effectiveness

Managerial Competencies sets of knowledge,

skill, behaviors, and attitudes that a person
needs to be effective in a wide range of positions
and various types of organizations
 Six Core Managerial Competencies:
What It Takes to Be a Great Manager

Communication Competency

Planning and Administration Competency

Teamwork Competency

Strategic Action Competency

Multicultural Competency

Self-Management Competency
 Communication Competency
Ability to effectively transfer and exchange information
that leads to understanding between yourself and others
Informal Communication
Used to build social networks and good
interpersonal relations
Formal Communication
Used to announce major events/decisions/
activities and keep individuals up to date
Negotiation
Used to settle disputes, obtain resources,
and exercise influence
 Planning and Administration
Competency
Deciding what tasks need to be done, determining
how they can be done, allocating resources to enable
them to be done, and then monitoring progress to
ensure that they are done
Information gathering, analysis, and problem solving
from employees and customers
Planning and organizing projects with agreed
upon completion dates
Time management
Budgeting and financial management
 Teamwork Competency

Accomplishing tasks through small groups of

people who are collectively responsible and
whose job requires coordination
Designing teams properly involves having
people participate in setting goals

Creating a supportive team environment gets

people committed to the teams goals

Managing team dynamics involves settling

conflicts, sharing team success, and assign tasks
that use team members strengths
 Strategic Action Competency

Understanding the overall mission and values of

the organization and ensuring that employees
actions match with them

Understanding how departments or divisions of

the organization are interrelated

Taking key strategic actions to position the firm

for success, especially in relation to concern of
stakeholders

Leapfrogging competitors
 Strategic Action Competency
Snapshot

Sony must sell off businesses that dont fit

its core strategy of fusing gadgets with films,
music, and game software. That means
selling off its businesses in its Sony Financial
Holdings, which are very profitable.

Howard Stringer, CEO, Sony

Multicultural Competency
Understanding, appreciating and responding to
diverse political, cultural, and economic issues
across and within nations

Cultural knowledge and understanding of the

events in at least a few other cultures

Cultural openness and sensitivity to how others

think, act, and feel

Respectful of social etiquette variations

Accepting of language differences

 Self-Management Competency

Developing yourself and taking responsibility

Integrity and ethical conduct

Personal drive and resilience

Balancing work and life issues

Self-awareness and personal development

activities
 Self-Management Competency

Snapshot

My strengths and weaknesses havent

changed a lot in 51 years. The important
thing is to recognize the things you dont do
well and build a team that reflects what you
know the company needs.

Anne Mulcahy, CEO, Xerox

Learning Framework for Managing
Part I: Overview of Management
Part II: Managing the Environment
Part III: Planning and Control
Part IV: Organizing

Part V; Leading
 (or BOTH?)
Management as an
Art
According to Mary
Parker Follett, Harold
Koontz and several
others management
authors called
management An Art of
getting things done
through people.
Management is an art due
to the following reasons:

Intelligence

Initiative

Innovative
 Individual Approach

Application & Dedication

Goal Oriented
Management as a
Science
Science is a systematic
body of knowledge
which is universally
accepted. F. W. Taylor
father of scientific
management was
perhaps the first person
to consider
management as a
science.
 Sciences can be broadly divided into two
groups:
Physical Sciences
Social Sciences

Management is a social science because it deals

with human beings.
Frederick W. Taylors principles
of scientific management
Managers must :
- Study the way that workers perform
their tasks
- Understand the job knowledge that
workers have
- Find ways to improve how tasks are
performed
- Give written work rules
- Hire workers who have skills and
abilities needed for the tasks to be
completed
- Train workers to perform according
to the established procedures
- Establish a level of performance
acceptable and fair linked to a good
pay system
 Managers who believe in
management as a
science are likely to
believe that there are
ideal managerial
practices for certain
situations.
 Management
as an Art vs. as a Science
Art:
1) based on
practice and
creativity Science:
1) based on
2) it is a
experimentation
theoretical
2) is a systematized
body of
body of
knowledge knowledge
3) has 3) has universal
personalized application
application
Management is the art and the science of
preparing, organizing and directing
human efforts to control the forces and
utilize the material of nature for the
benefit of men.
Management has got two faces like a

coin; on one side it is art and on the

other side it is science.
Management is a mixture of an art and

science the present ratio is about 80%

art and 20% science. Dean Stanley.
Entrepreneur vs Manager
Entrepreneur
Owns his own company/firm/organization
Invests his own money into his venture
Takes full risk for losses
Gets full return of profits
Risk taker
Manager
Is an employee in a
company/firm/organization
Low risk taker
Is not directly responsible for losses to

company
May not get much from companys profits
Difference between Salary/Career
Manager
Time based promotion
Receives fixed salary each month
Fixed rise every year
Entrepreneur
Already a owner of his
company/promotions do not
matter
May not get salary in the starting
period of the venture
Almost own all the profits , rise
with business
Differences - working style
Manager
Cautious process based approach
Works by building consensus ,
harmony in between teams
Has a team to manage,
Entrepreneur
Risk taking, independent approach
Works on the inputs by customer,
may be erratic and not based on a
plan
Almost own all the profits , rise
with business
Types of Business
Organization
Types of Business
Organisation
Sole Proprietorship
Partnerships (Limited/Gen)
Corporations
Non-profits
Sole Proprietorship- 72% of
businesses
Advantages of sole Economic Weakness of sole
proprietorships proprietorship:

Unlimited Liability: you have total

Ease of start up

Ease of Management responsibility for all debts and liabilities of

You keep all profits the company

You do not have to pay any business Difficulty in raising financial capital

taxes Limited size and efficiency

Psychological advantages Limited managerial experience

Ease of exit Limited Life

9% of businesses
Partnerships
Two major types of partnerships:
General Partnership: (most common type) all partners are

responsible for management and the financial responsibilities

of the partnership.
Limited Partnership: at least one partner is not active in the day

to day running of the business. They have limited liability.

Articles of Partnership: contract between partners spelling out

the rules of partnership.
Dividing profit
Dividing responsibility
Admitting new partners
Buying out partners
Partnerships
Advantages of Partnerships: Disadvantages of Partnerships
Ease of establishment Unlimited liability
Ease of Management: each Limited partner is only
partner has different things to offer
responsible for his initial
No special business taxes
investment. He has limited
Easier to raise financial capital
liability.
Larger than sole proprietorship
Limited Life
Easier to attract qualified
Conflict between partners
workers
Corporations- 20% of Business
74%-profits
Corporation- Set up
Incorporate: to form a corporation.
Charter: a document granted by the state giving a

corporation the right to do business

Stock: shares of ownership in the corporation
Stockholders (shareholders): owners of stock.

Reasons to own stock:

Dividends: share of corporate profits paid to
stockholders
Speculation: buy in hope that price of stock will
increase.
Corporation- Ownership
Common Stock is a basic share of ownership in a corporation
Have voting rights in the management of the company

In reality they turn over voting rights to someone else with a proxy: giving

someone else the right to vote your share of stock.

Preferred Stock:
Non voting shares of ownership
Guaranteed dividend
Liquidation benefit: If corporation goes out of business they are ahead of
common stockholders in getting back money.
Board of Directors: duty to direct the corporations business by setting board

policies and goals

Elected by common stockholders

Hires a professional management team to run day to day activities. (CEO,

CFO.)
Corporations
Advantages of a corporation: Disadvantages of a
corporation:
Ease of raising financial capital
(main advantage)
Selling stock to investors Start up expenses are high.
Selling bonds: a written promise to
Stockholders (owners) have a
repay a loan on a specific date
Principal: the amount borrowed
Interest: the price paid for the use limited
of anothers money Profits are taxed
Borrowing money from banks.
Ability to hire Corporations are subject to
Limited liability
Unlimited life more government regulations
Ease of transferring ownership:.

Buying and selling stock is easy and is than sole proprietors or partners
done millions of times a day
 Community and Civic organizations
Cooperatives- REI
Consumer- Sams Club

Labor, Professional and Business Organizations

Labor Unions- organization of workers formed to represent its members
interests in varying employment matters. Collective bargaining
Professional Associations- a group of people in a specialized field that
work to improve their working conditions.
Business associations
Chamber of Commerce- promote economic growth of the community
Better Business Bureau- cops for businesses
Mergers and Acquisitions
5 Reasons to merge- Make money faster, Increase
efficiency, Acquire new product lines, Catch up or
eliminate rivals, Lose a company identity.

Horizontal Merger- when two or more companies that

product the same kind of product join forces.

Vertical merger- when two or more firms that are at

different steps of manufacturing process join together.

Conglomerates- is a firm that has at least four

businesses, each making unrelated products.
organization culture and
environment

13
5
13
6
Organizational Culture:
The shared values, principles, traditions, and
the ways of doing things that influence the
way organizational members act.
These shared values and practices have

evolved over time and determines how things

are done in the organization.

13
7
Organizational Culture:
The definition implies three things:
- culture is perception: it's not something that

can be physically touched or seen.

- culture is descriptive: it's concerned with how

members perceive the culture, not with

whether they like it
- culture is shared: individuals tend to describe

the organization's culture in similar terms,

even they may have different backgrounds or
work at different organizational levels

13
8
Organizational Culture:
Researchers suggests that there are seven
dimensions that describe an organization's
culture ranging from low to high: exhibit 3-
2 page 63 showing that:
All organizations have cultures, but not all

cultures equally influence employees'

behaviors and actions.

13
9
Exhibit 3-2
Dimensions of Organizational
Culture

14
0
Organizational Culture
Strong and Weak cultures:
Strong culture: organizational cultures in which
the key values are intensely (deeply) held and
widely shared. Have greater influence on
employees than do weaker cultures.
Exhibit 3-4 page 64 showing comparison
between strong and weak cultures.
As more employees accept the organization's
values, the greater their commitment to those
values.

14
1
Exhibit 3-4
Strong Versus Weak Cultures

14
2
Organizational Culture:
The strong culture is important because in
organization with strong cultures, employees
are more loyal than employees with weak
culture, and the strong cultures are
associated with high organizational
performance, and the employees can act
quickly to take care of problems if values are
clear and widely accepted by them.
But strong culture might prevent employees
from trying new approaches.

14
3
Exhibit 2-8
Establishing and Maintaining
Culture

14
4
Organizational Culture: continued
1- philosophy of organizations founders: Its
usually reflects the vision of the founders.
2- Selection criteria: certain organizational

practice help maintain the culture, ex: during

the employees selection process, managers
judge job candidates not only on job
requirement but also on how well they might
fit into the organization.

14
5
Organizational Culture: continued
3- the action of top managers also have a major
impact on the organizations culture. Top
managers establish norms that can have positive
effect on employees behavior, the actions of top
managers can also lead to undesirable outcomes.
4- socialization: the process that helps employees
adapt to organizations culture, helping them to
learn the way of doing things, understand the
culture and become enthusiastic and
knowledgeable with customers, and minimize the
chance that new employees who are unfamiliar
with organizations culture might disrupt current
beliefs and customs.

14
6
Organizational Culture: continued
How employees learn culture: through the
following ways:
1- Stories: by narrative of significant events or
people, like organizations founders. Story
tellers could be executives who explain the
companys heritage and tell stories that
celebrate people getting things done.
2- Rituals: by repetitive sequences of activities
that express and reinforce the important values
and goals of the organization.

14
7
Organizational Culture: continued
3- Material Symbols: ex: how employees dress, the type of
automobiles provided to top managers, the elegance of
furnishings, employees fitness center, health club
memberships.
Its convey to employees who is important and the kinds of
behavior.
4- Language: many organizations use language as a way
to identify and unite members of culture. Some
organizations have its unique vocabularies, ex:
Work judo (deflecting a work assignment to someone else
without making it appear that you are avoiding it), death
march (countdown to shipping a new product).

14
8
Organizational Culture: continued
How Culture Affect Managers:
Because an org. culture constrains what they
can and cannot do, such constrains are rarely
explicit, they are not written down, managers
should quickly learn what to do and not to do
in their org. some values are not written down,
but come from a real org. as:
- look busy even if you are not.
- what made us successful in the past will
make us successful in the future.
- if you want to get to the top, your have to be
a team player.

14
9
Exhibit 3-6
Managerial Decisions Affected by Culture

15
0
Organizational Culture: continued
Current Organizational Culture Issues:
1- creating an ethical culture: the content and
strength of an organizations culture influences
its ethical climate and the ethical behavior of its
members,
If the culture is strong and supports high ethical

standards, it should have a very powerful and

positive influence on employee behavior, and
vice versa.
Exhibit 3-7 page 69 showing how to creating an

ethical culture.

15
1
Organizational Culture: continued
2- Creating An innovative Culture: any successful org. needs a
culture that supports innovation.
What does an innovative culture characterized:

- Challenge and involvement:

- Freedom: can employees take initiative in their activities.
- Trust and Openness: are employees supportive and
respectful to each other.
- Idea Time: do employees have time to elaborate on new
ideas before taking action.
- Playfulness/Humor: is the work place spontaneous and fun.
- conflict resolution: do employees make decisions and
resolve issues.
- Debates: are employees allow to express opinions and put
ideas
- Risk taking: do managers tolerate uncertainty and
ambiguity.

15
2
Organizational Culture: continued
3- Creating A customer Responsive Culture:
exhibit 3-8 page 71 showing the
characteristics of customer responsive
culture, and the suggestions for managers.

15
3
 Exhibit 3-8
Creating a Customer-Responsive Culture

How Do You Create a Customer

Responsive Culture?
Hire the right type of employees (those with a
strong interest in serving customers)
Have few rigid rules, procedures, and
regulations
Use widespread empowerment of employees
Have good listening skills in relating to
customers messages
15
4
Organizational Culture: continued
4- Creating a culture that support diversity:
Workforce diversity: a workforce thats
heterogeneous in terms of gender, race,
ethnicity, age, and other characteristics that
reflect differences.
Diversity contributes to more creative
solutions and enhances employees morale,
the managing workforce diversity box
discusses what managers can do.
(homework)?

15
5
Organizational Culture: continued
5- Spirituality and organizational culture: its a
feature of a culture where organizational
values promote a sense of purpose through
meaningful work that takes place in the
context of community.
Organizations with spiritual culture recognize
that people have a mind and a sprit, seek to
find meaning and purpose in their work, and
desire to connect with other human beings
and to be part of community.

15
6
Organizational Culture: continued
Workplace spirituality seems to be important
now for a number of reasons:
- employees are looking for ways to cope

with the stresses and pressures of a turbulent

pace of life. Like: single parent families,
geographic mobility, temporary jobs.

15
7
Organizational Culture: continued
Research shows that spiritual organizations
tend to have five cultural characteristics:
a- strong sense of purpose: thats create a
more productive, efficient, loyal, and
committed employee base.
b- focus on individuals development: thats
create cultures in which employees can
continually grow and learn.

15
8
Organizational Culture: continued
c- trust and oppeness: managers arent afraid to
admit mistakes, and they tend to upfront with
employees, customers, and suppliers.
d- employee empowerment: managers trust
employees to make thoughtful and
conscientious decisions, even if it means going
against company policies.
e- toleration of employee expression: they allow
people to be themselves, to express their
moods and feelings without guilt and profits
compatible.

15
9
The Environment:

An organization interacts with its

environment as it takes in inputs and
distributes outputs.
Environmental forces play a major role in

shaping managers actions, even external or

internal environment.

16
0
The environment: Continued:
External environment: refers to factors and
forces outside the organization that affect the
organizations performance.
Organization environment includes two

components: specific and general

environment. As shown in exhibit 3-9 page
73.

16
1
Exhibit 3-9
Components of External
Environment

16
2
The environment: Continued:
a- specific environment: external forces that
directly or indirectly impact managers
decisions and actions and are directly
relevant to the achievement of the
organizations goals. And include:

16
3
The environment: Continued:
1- Customers: an organization exist to meet the
needs of customers who use its output,
customers taste can change or they can
become dissatisfied with the organizations
product.
2- Suppliers: managers seek to ensure a steady
flow of needed inputs, at the lowest price
possible, org. suppliers might be delay or
limited in delivery and that can constrain
managers to meat the right demand levels for
customers.

16
4
The environment: Continued:
3- Competitors: managers cant afford to
ignore the competitors.
4- Pressure groups: special interest groups
that attempt to influence the actions of
organizations in order to get managers to
change some decisions or actions, like:
human rights, boycotting, consumers
protection societies.

16
5
The environment: Continued:
b- The general environment: broad external
conditions that may affect an organization. And
include:
1- Economic conditions: As: interest rates,
inflation, changes in disposable income, stock
market fluctuations, and the stage of general
business cycle.
2- Political/Legal conditions: As: national and
local laws, regulations in other countries where
a business operate.
Exhibit 3-10 page 75 showing the important
U.S legislation (self study).

16
6
The environment: Continued:

3- Sociocultural conditions: managers must

adapt their practices to the changing in
customer attitudes, values, customs, tastes, and
must respond to customers changing. Like
flexible, work hours, child care facilities, leave
policies.
4- Demographic conditions: refer to population
characteristics such as gender, age, level of
education, geographic location, income, and
family composition.

16
7
The environment: Continued:
5- Technological conditions: the rapid
changes that occurred in technology.
6- Global conditions: is one of the major
factors affecting managers and organizations.
As the markets and competitors. WTO.

16
8
The environment: Continued:
How the Environment Affects Managers: by
two ways:
a- the degree of environmental uncertainty
(changes and complexity): the degree of
changes and complexity in an organizations
environment.

16
9
The environment: Continued:
the degree of environmental complexity: the
number of components in an organizations
environment and the extent of the
organizations knowledge about these
components.

Exhibit 3-11 page 77 showing the

environmental uncertainty matrix:

17
0
Exhibit 3-11
Environmental Uncertainty Matrix

17
1
The environment: Continued:
b- managing the various stakeholder
relationships that exist between the
organization and its external constituencies.
Stakeholders: any constituencies in an

organizations environment that are affected

by the organizations decisions and actions.
Exhibit 3-12 page 78 showing the
organizational stakeholders.

17
2
Exhibit 3-12 Organizational
Stakeholders

17
3
The environment: Continued:
Reasons for keeping good relationships with
stakeholders:
1- to reduce the impact of change.
2- the organizations depend on these forces
as a sources of inputs.

17
4
The environment: Continued:
How managers manage stakeholders
relationships:
1- need to identify the organizations
stakeholders.
2- need to determine what particular interests or
concerns the stakeholders might have.
3- need to decide how critical each stakeholders
is to the organizations decisions and actions.
4- need to determine how to manage external
stakeholders relationships.

17
5
ORGANIZATIONAL STRUCTURES:
CONCEPTS AND F0RMATS
departmentalization the grouping of related functions into manageable units to
achieve the objectives of the enterprise in the most efficient and effective
manner.
delegation the process that makes management possible because management is
the process of getting results accomplished through others.
Delegation is the work a manager performs to entrust others with responsibility
and authority and to create accountability for results. It is an activity of the
organizing function.
scalar principle (chain of command) a clear definition of authority in the
organization. This authority flows down the chain of command from the top level
to the first or lowest level in the organization.
centralization occurs in an organization when a limited amount of authority is
delegated. decentralization occurs when a significant amount of authority is
delegated to lower levels in the organization.
contingency approach an approach to organizational structure that states that the
most appropriate organizational structure depends on the situation, consisting of
the particular technology, the environment, and many other dynamic forces.
 CHAPTER
TYPES OF ORGANISATION
 Introduction
o Organisation is designed on the basic of
principles of labour and span of
management. The success of the
organisation depends upon the experience
and competence of the officers of the
organisation. Nature, scale and size of the
business are the normal factors which
determine forms of internal organisation.
The following common types of
organisation find a place in the structure of
internal organisation.

We Learn A Continuous Learning Foru

Welingkars Distance Learning
Division
Introduction
o Line, Military or scalar organisation
o Functional organisation
o Line and staff organisation
o Committee organisation
o Project organisation
o Matrix organisation
o Freeform organisation

We Learn A Continuous Learning Foru

 Line Organisation

o Line organisation is the simple and

oldest type of organisation followed in
an organisation. Under line
organisation, each department is
generally a complete self-contained
unit.

o A separate person will look after the

activities of the department and he
has full control over the department.

We Learn A Continuous Learning Foru

 Line Organisation
Welingkars Distance Learning
Division
o The same level executives do not give or
receive orders amongst themselves. But they
receive orders from their immediate boss and
give orders to their subordinates. Hence, all
the heads are responsible to the general
manager, the general manager, in turn, is
responsible to the shareholders who are the
owners.

o This type of organisation is followed in the

army on the same pattern. So, it is called
military organisation. Under type of
organisation, the line of authority flows from
the top to bottom vertically. So it is called line
We Learn A Continuous Learning Foru
 Characteristics of line
Welingkars Distance Learning
Division organisation

o It consists of direct vertical

relationships.
o Authority flows from top-level to level
to bottom level.
o Departmental heads are given full
freedom to control their departments.
o Each member knows from whom he
would get orders and to whom he
should give his orders.

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 Characteristics of line
Welingkars Distance Learning
Division
organisation

o A senior member has direst command

over his subordinates.
o Operation of this system is very easy.
o Existence of direct relationship
between superiors and subordinates.
o The superior takes decisions within
the scope of his authority

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Advantages of line organisation Disadvantages of line
organisation
Advantages
1. Simplicity
and Disadvantages
1. Lack of specification
of
LineandOrganisation
2. Division of authority 2. Over loading
responsibility
3. Unity of control 3. Lack of initiative

4. Speedy action 4. Scope for favoritism

5. Discipline 5. Dictatorial

6. Economical 6. Limited communication

7. Co-ordination 7. United administration

8. Direct communication 8. Subjective approach

9. Flexibility 9. Instability

10. Lack of co-ordination

 Suitability
o This type of organisation is suitable to
small size business units.
o Where the activities are of routine nature
or machine based.
o If the business activities are service
mined.
o Where the number of persons working is
small
o The business operation is simple in
nature.
o A business unit which has straight
methods of operations.
We Learn A Continuous Learning Foru
Welingkars Distance Learning
Division
Functional organisation

o Under line organisation, a single

person is in charge of all the activities
of the concerned department. The
person in charge finds it difficult to
supervise all the activities efficiently.

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Welingkars Distance Learning
Division
Functional organisation
o The reason is that the person does not
have enough capacity and required
training. Under functional organisation,
various specialists are for various
functions performed in an organisation.
These specialists will attend to the work
which is common to different functions
of various departments. Workers, under
functional organisation, receive
instructions from various
We Learn specialists.
A Continuous Learning Foru
Welingkars Distance Learning
Division
Functional organisation
o The need for functional organisation
arises out of:
o The complexity of modern and large-
scale organisation
o A desire to use the specialization in
full and;
o To avoid the work-load of line
managers with complex problems and
decision-making
We Learn A Continuous Learning Foru
Welingkars Distance Learning
Characteristics of
Division functional
organisation
o The work is divided according to
specified functions.
o Authority is given to a specialist to
give orders and instructions in
relation to specific function.
o Functional authority has right and
power to give command throughout
the line with reference to his specified
area.
We Learn A Continuous Learning Foru
 Characteristics of functional
organisation
o The decision is taken only after making consultations with the
functional authority relating to his specialized area.

o The executives and supervisors discharge the responsibility of

functional authority.
- Route clerk
- instruction card clerk
- time and cost clerk
- Gang boss
- Speed boss
- Inspector
- Repair boss
- Disciplinarian

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Welingkars
Advantages ofDistance
functionalLearning
Disadvantages of functional
Division
organisation organisation
Advantages and Disadvantages
o Benefit of specialization o Complex relationship of
Functional Organisation
o Application of expert o Discipline
knowledge o Over specialization
o Reducing the work load o Ineffective co-ordination
o Efficiency o Speed of action
o Adequate supervision o Centralization
o Relief to line executive o Lack of responsibility
o Co-operation o Increasing the overhead
o Economy expenses
o Flexibility o Poor administration
o Mass production o Suitability of functional
organisation

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Welingkars Distance Learning
Division
Line and staff organisation

o The line officers have authority to take

decisions and implement them to
achieve the objectives of the
organisation.

o The line officers may be assisted by

the staff officers while framing the
policies and plans and taking
decisions organisation.
We Learn A Continuous Learning Foru
Welingkars Distance Learning
Division
Line and staff organisation
o The authority flows from top level to the
lower level of the organisation through
the line officers while the staff officers
attached to the various departments
advise the departments. The staff
officers are not in a position to compel
the line officers to follow the advice by
them. Each department is headed by a
line officer who exercises full authority
regarding the planning.
We Learn A Continuous Learning Foru
Welingkars Distance Learning
Division
Types of staff

o Personal staff

o Specialized staff

o General staff assistant

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 Functions
Welingkars of staff
Distance Learning officers
Division
o The staff officers assist the line officers in
the planning of business activity.

o The board of directors frames the policies

of the business on the basis of
recommendations given by the staff
officers.

o The managers can get the advice from the

staff officers regarding the selection.
training placement and remuneration
fixation the personnel
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 Functions of staff officers
Welingkars Distance Learning
Division
o The staff officers give regarding the method of
improving the product, the technique of
reducing the cost of production, increasing the
profits of the concern.
o The staff officers prescribe the procedures to
be followed by the line officers in the execution
of policies and programs.
o Staff officers of a department help the manager
in the preparation of budget of the
department.
o the staff officers may be called to solve the
administrative problems encountered by the
line officers in general.

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 Arguments
Welingkars of staff
officers
Distance Learning
Division
against line officers
o The staff officers have only theoretical
academic knowledge but not practical
knowledge.
o The staff officers go beyond their sphere of
activity and assume that they have line
officers authority.
o Much of the advice given by the staff
officers is impractical
o Since the staff officers unnecessary
increases the paperwork of the line officers.

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Welingkars Distance Learning
Arguments of staff
Division officers
against line officers
o The staffs give advice without
considering the nature of business as
a whole.

o Staff officers are very much interested

in becoming line officers of the
organisation rather than impairing
advice to them.

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 SolutionDistance
Welingkars to the Learning
conflict between line
Division officers and staff officers

o Both line officers and staff officers should

clearly understand the nature of relationship
prevailing between them.
o A separate staff member should be appointed
to bring about co-operation between the line
officers and staff officers.
o The line officers should be encouraged to use
the advice of staff officers.
o Only qualified persons should be selected and
placed as staff officers.

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 SolutionDistance
Welingkars to the Learning
conflict between line
Division officers and staff officers

o The staff officers should be convinced by the

line officers if their advice is not accepted
o The responsibility for results could be fixed
on both line officers and staff officers
o Only experienced persons alone should be
promoted as line executives..
o Remove the fear of the line officers and staff
officers whether the new ideas of advice
would be properly put into use or not.

We Learn A Continuous Learning Foru

Welingkars Distance
Advantages of line and staff Learning
Disadvantages of line and staff
organisation organisation
Division
Facilitates to work faster and better If powers are not defined then get
confusion
Specialization is attained Line officers may reject advice without
any reason for their action
Enables to utilize experience and Staff officers are not responsible if
advice favorable results are not obtained.
Officers can take sound advice Difference between line and staff
officers will defeat the very purpose of
specialization
New technology or procedure can be Line officers blame staff officers for
introduced without any dislocation unfavorable results and want to get
rewards for favorable results
Promotes efficient functioning of line
officers
Very good opportunity is made
available to young person to get
training
We Learn A Continuous Learning Foru
 Committee organisation
o A Committee as a group of persons either
appointed or elected who are to meet for
the purpose of considering matters
assigned it

Types of committee
o Advisory committee problem solving
committees

o Fast-finding committee

o Action committee
We Learn A Continuous Learning Foru
 Functions
Welingkars of a Committee
Distance Learning
Division
o Collect the necessary information from
different sources and arrange the
information orderly.
o The collected information is critically
analyzed.
o Draft a detailed report containing the
recommendations for the purpose of
implementation.
o Formulate the standard of performance for
the purpose of evolution of actual
performance in future.
We Learn A Continuous Learning Foru
Welingkars Distance for
Recommendations Learning
efficient functioning of a
Division committee

Preparation
Size of the Clear
for a
committee Objective
meeting

Selection of
meeting
Role of
Committee
chairman
Follow up

Selection
evolution Role of
of subject
committee
matter

We Learn A Continuous Learning Foru

 Project
Welingkars organisation
Distance Learning
Division
o The project organisation idea was
developed after the second war.

o A project organisation can also be the

beginning of an organisation cycle.
The project may become a long term
or permanent effort that eventually
becomes a program or branch
organisation

We Learn A Continuous Learning Foru

Welingkars Distance Learning
Division
Features of project organisation

o The Success of the project

organisation depends upon the co-
ordination of activities

o There is a grouping of a activities for

each project. It leads to the
introduction of a new line of a
authority.
We Learn A Continuous Learning Foru
 Drawbacks
Welingkars of
Project
Distance Learning
Division
Organisation
o The professionals are deputed for the project.
But there is an assurance of continuous work
for the professional in a project organisation.

o The decision is taken in the project

organisation under pressure of the top controls
the staff in an organisation.

o The top management does not extend its full

co-operation for the effective functioning of
the project organisation. Some hindrance may
be caused by the top Wemanagement.
Learn A Continuous Learning Foru
Welingkars Distance Learning
Division
Matrix organisation

o Any organisation that employs a

multiple command structure but also
related support mechanisms and an
associated organizational culture and
behavior pattern The matrix
organisation may be followed where a
large of small projects have to be
managed.
We Learn A Continuous Learning Foru
 Conditions for effective matrix
organisation
o The principle of chain of command is not
followed in the matrix organisation. A
project manager should give his report to
more than one superior.

o There should be an agreement among the

managers regarding the authority of
utilizing the available resources. The term
resources include physical resources,
financial resources and human resources.
We Learn A Continuous Learning Foru
 Merits
Welingkars and
Distance Demerits
Learningof
Division
Matrix organisation

Merits of Matrix Demerits of matrix

organization organization
o Achievement of o Complex relationship
objectives o Struggle for power
o Best utilization of o Excessive, emphasis
resources on group decision-
o Appropriate structure making
o Flexibility o Arising conflict
o Motivation We resolution
Learn A Continuous Learning Foru
 Free form organisation

o This type of organisation is formed

whenever a need arises to form an
organisation, for achieving a particular
object. it will be dissolved after
achieving the object of the
organisation. The free form
organisation resembles the project
and matrix organisation. It otherwise
called organic or ratio organisation.
 Chapter 2
MANAGEMENT
YESTERDAY
AND TODAY

2003 Pearson Education Canada Inc. 2.1

LEARNING OBJECTIVES
should be able to:
Discuss managements relationship to other
academic fields of study
Explain the value of studying management
history
Identify some major pre-twentieth-century
contributions to management
Summarize the contributions of the scientific
management advocates
Describe the contributions of the general
administrative theorists

2.2
LEARNING OBJECTIVES (continued)

You should be able to:

Summarize the quantitative approach to
management
Describe the contributions of the early
organizational behaviour advocates
Explain the importance of the Hawthorne Studies
to management
Describe the effects of: globalization, workforce
diversity, entrepreneurship, e-business, need
for innovation and flexibility, quality
management, learning organizations, and
knowledge management

2.3
MANAGEMENTS CONNECTION TO
OTHER FIELDS OF STUDY
Academic Disciplines that Affected Management
Anthropology - work on cultures and social
environments
Economics - concern about the allocation and
distribution of scarce resources
Philosophy - examines the nature of things
Political science - effect of political environment on
individuals and groups
Psychology - seeks to measure, explain, and change
human behavior
Sociology - studies people in relation to their fellow
human beings

2.4
 DEVELOPMENT OF MAJOR
MANAGEMENT THEORIES
Management Theories

Historical
Scientific General Quantitative Organizational
Background
Management Administrative Approach Behaviour
Theorists

Early Examples Early Advocates

of Management

Hawthorne Studies
Adam Smith

Industrial
Revolution

2003 Pearson Education Canada Inc. 2.5

HISTORICAL BACKGROUND OF
MANAGEMENT
Organizations Have Existed for Thousands
of Years
Significant Pre-Twentieth-Century Events
Adam Smith
division of labour - breakdown of jobs into narrow and
repetitive tasks increased productivity
Industrial Revolution
substitution of machine power for human power
large organizations required formal management

2.6
SCIENTIFIC MANAGEMENT
F.W. Taylor - Principles of Scientific
Management
Use of scientific methods to define the one best
way for a job to be done
Perspective of improving the productivity and
efficiency of manual workers
Applied the scientific method to shop floor jobs
Frank and Lillian Gilbreth
Use of motion pictures to study hand-and-body
movements
Therbligs - classification system for 17 basic
hand motions

2.7
TAYLORS FOUR PRINCIPLES OF
MANAGEMENT (Exhibit 2.2)
1. Develop a science for each element of an individuals
work, which will replace the old rule-of-thumb method.
2. Scientifically select and train, teach, and develop the
worker. (Previously, workers chose their own work and
trained themselves as best they could.)
3. Heartily cooperate with the worker so as to ensure that all
work is done in accordance with the principles of the
science that has been developed.
4. Divide all work and responsibility equally between
management and workers. Management takes over all
work for which it is better fitted than the workers.
(Previously almost all the work and the greater part of the
responsibility were thrown on the workers.)
2.8
GENERAL ADMINISTRATIVE
THEORISTS
Henri Fayol
Concerned with making the overall organization
more effective
Developed theories of what constituted good
management practice
proposed a universal set of management functions
published principles of management
fundamental, teachable rules of management

2.9
PRINCIPLES OF MANAGEMENT
(Exhibit 2.3)

2.10
GENERAL ADMINISTRATIVE
THEORISTS (continued)
Max Weber
Developed a theory of authority structures and
relations
Bureaucracy - ideal type of organization
division of labour
clearly defined hierarchy
detailed rules and regulations
impersonal relationships

2.11
IDEAL BUREAUCRACY (Exhibit
2.4)

2.12
QUANTITATIVE APPROACH TO
MANAGEMENT
Operations Research (Management
Science)
Use of quantitative techniques to improve
decision making
applications of statistics
optimization models
computer simulations of management activities
Linear programming - improves resource
allocation decisions
Critical-path scheduling analysis - improves
work scheduling

2.13
TOWARD UNDERSTANDING
ORGANIZATIONAL BEHAVIOUR
Organizational Behavior
Study of the actions of people at work
Hawthorne Studies
Started in 1924 at Western Electric Company
Elton Mayo - studies of job design
Changed the dominant view that employees were
no different from any other machines

2.14
EARLY ADVOCATES OF OB
(Exhibit 2.5)

2.15
CURRENT TRENDS AND ISSUES
Globalization
All organizations are faced with the opportunities
and challenges of operating in a global market
Workforce Diversity
Heterogeneous workforce in terms of gender,
race, ethnicity, age, and other characteristics that
reflect differences
workforce is getting older
high degree of immigration in Canada

2.16
CURRENT TRENDS AND ISSUES
(continued)
Entrepreneurship
Three important themes
pursuit of opportunities - capitalizing on
environmental change to create value
Innovation and uniqueness - introducing new
approaches to satisfy unfulfilled market needs
growth - not content to remain small
Will continue to be important in all societies
Will influence profit and not-for-profit
organizations

2.17
CURRENT TRENDS AND ISSUES
(continued)
Managing in an E-Business World
E-business - comprehensive term describing the
way an organization does its work by using
electronic (Internet-based) linkages with key
constituencies
E-business - any form of business exchange or
transaction in which parties interact electronically
Intranet - an internal organizational
communication system that uses Internet
technology and is accessible only by
organizational employees

2.18
 TYPES OF E-COMMERCE TRANSACTIONS
Business-to-Business
(B2B)
All transactions between a
company and its suppliers

Government-to-Business
(G2B) Business-to-Consumer
All transactions between E-Commerce (B2C)
companies and Electronic retailing
government agencies

Consumer-to-Consumer
(G2C)
Electronic markets formed
by Web-based auctions
2.19
2003 Pearson Education Canada Inc.
 CATEGORIES OF
E-BUSINESS INVOLVEMENT
E-Business-Enhanced
Organization

E-business units
within Total E-Business
traditional Organization
organization

E-Business-Enabled Organizations entire work

Organization processes revolve around
e-business model
E-business tools
and applications
used within tradi-
tional organization
2.20
2003 Pearson Education Canada Inc.
CURRENT TRENDS AND ISSUES
(continued)
Need for Innovation and Flexibility
Without a constant flow of new ideas, an organization
is doomed to obsolescence or even worse
Must be flexible to accommodate changing
customers needs, appearance of new competitors,
and shifting employees from project to project
Quality Management
Total Quality Management (TQM) - philosophy of
management based on continual improvement and
responding to customer needs and expectations
Customer - refers to internal and external entities
that interact with the organizations product or
service

2.21
WHAT IS TQM? (Exhibit
2.8)

2.22
CURRENT TRENDS AND ISSUES
(continued)
Learning Organizations and Knowledge Management
Learning organization - one that has developed the
capacity to continuously learn, adapt, and change
Create learning capabilities throughout the
organization
Knowledge management - involves cultivating a
learning culture where organizational members
systematically gather knowledge and share it with
others in the organization so as to achieve better
performance
managers must transform themselves from bosses to
team leaders--listening, coaching, motivating and
nurturing

2.23
LEARNING ORGNAIZATION VERSUS
TRADITIONAL ORGANIZATION

2.24
Delegation
Concept of Power

Power refers to a capacity that A has to

influence the behaviour of B so that B does
something he or she would not otherwise
do.
Concept of Authority
Authority in the organisation is the power in
a position( and through it,the person
occupying the position) to exercise discretion
in making decisions affecting others.
Responsibility
Responsibility comes into existence because
a person with authority,requires assistence
from another and delegates authority to him.
Delegation of Authority
By means of delegation,the manager extends
his area of operations,for without
delegation,his actions are confined to what
he himself can perform.
Features
Delegation is authorisation to a manager to act
in a certain manner.
Delegation has dual characteristics.
Authority once delegated can be
enhanced,reduced,or withdrawn .
Delegation of authority is always to the position
created through the process of organising.
A manager delegates authority out of the
authority vesting in him.
Delegation of authority may be specific or
general.
Steps in delegation
Determination of results expected.
Assignments of duties.
Authorisation for action.
Creation of obligation.
Principles of delegation
Delegation by results expected.
Functional definition.
Clarity of lines of authority.
a) scaler chain.
b) unity of command.
Level of authority.
Absoluteness of responsibility.
Parity of authority and responsibility.
Blocks to effective
delegation
A) Factors in delegator (superior):
1) love for authority.
2) maintenance of tight control.
3) fear of subordinates.
4) fear of exposure.
5) attitude towards subordinates.
6) personality of superior.
B) Factors in delegant (subordinate);

Subordinates are expected to exercise less

authority in the following situations:-
1) when they fear harsh criticism for
unfavourable results.
2) when they lack self confidence.
3) when they lack resources.
4) when they have inadequate positive
incentives;and
5) when their superior is easily available for
making decisions on their part.
Organisational factors
Various organisational factorssuch as
management philosophy,policy towards
centralisation or decentralisation, availability
of managerial personnel,control
techniques,etc. determine the delegation of
authority at various levels of management.For
eg; even the autocrat has to delegate
authority if the organisational factors so
warrant.
Measures for effective delegation
Making the potential delegator feel secure.
Creating awareness for need of delegation.
Determining decisions and tasks to be
delegated.
Establishing conducive organisational climate.
Choosing the delegant wisely.
Tying delegation with planning.
Delegating authority for whole job.
Developing appropriate control techniques.
Centralization and
Decentralization
CENTRALIZATION
Centralizationis the degree to which decision
making takes place at upper levels of the
organization.
If top managers make key decision with little

input from below, then the organization is

more centralized.
Keep in mind that centralization is relative,

not absolute- that is, an organization is never

completely centralized.
 More Centralization
Environment is stable.
Lower-level managers are not as capable or experienced at
making decisions as upper-level managers.
Lower-level managers do not want to have a say in
decisions.
Decisions are relatively minor.
Organization is facing a crisis or the risk of company
failure.
Company is large.
Effective implementation of company strategies depends on
managers retaining say over what happens.
Definition of Decentralization
A decentralized organization is one in which
decision making is not confined to a few top executives
but rather is throughout the organization, with
managers at various levels making key operating
decisions relating to their sphere of responsibility.
 More Decentralization
Environment is complex, uncertain.
Lower-level managers are capable and experienced at
making decisions.
Lower-level managers want a voice in decisions.
Decisions are significant.
Corporate culture is open to allowing managers to have a
say in what happens.
Company is geographically dispersed.
Effective implementation of company strategies depends
on managers having involvement and flexibility to make
decisions.
 What is Formalization ?
Formalization is the extent to which rules and procedures are
followed in an organization.

The degree to which organizations standardize behavior through

rules, procedures, formal training, and related mechanisms.

Departmentalization Span of Control

Elements of
Organizational
Structure
Formalization Centralization
Advantages :-
Formalization makes the process of succession routine.
Increase the rationality of organization.
Make explicit and visible the structure of relationships
among organizational participants.
Disadvantages :-
Employees are not allowed to exercise their own
judgment.
Discrimination of work load between employees.
Formal structures are the norms and behaviours that exist
regardless of individuals involvement.