Management Principles Aand Practices

MANAGEMENT PRINCIPLES AND PRACTICES
Dr. R. Krishna FT MBA NMIMS FIRST TRIMESTER

Dr.R. Krishna - Management Principles 1
Definition of Management
Management : On expanding : Manage men tactfully Manage Men technology Manage men as team Manage competencies Manage objectives (MBO) Manage men and things (resources physical, inanimate) MANAGE f ( RISKS, REWARDS) Competencies = f (SKATE) (Men/Women- no discrimination) Norway will have by 2007, 40% women in all fields, in govt orgs, in corporates and also in NGOs. This is now made as a law.
Dr.R. Krishna - Management Principles
When it comes to manage people, it is said that people are enigmatic. Thus, Management is enigmatic. Harold Koontz described the present state of management theory as a jungle.
There can be lots of ambiguity and there will be no recipe book

MANAGEMENT IS A FUNCTION OF : M = f(RESULTS, FEEDBACK, RESULTS) MANAGING THE INTERNAL AND EXTERNAL ENVIRONS IN THE BIO-ECOSYSTEMS, THROUGH VARIOUS EFFECTIVE AND EFFICIENT PROCESSES, WITH THE OBJECTIVE OF ACHIEVING LAID DOWN EXPECTED RESULTS.
All is PEOPLE RESOURCE MANAGEMENT

Why? Get into discussion mode: Who Created all that is around us: Except the sun, the moon, air, ocean, sky, stars, and the first human being and the first animals/insects Thereafter the development of clones, artificial insemination, going on the moon, technological advancements and moving towards civilization is all done my people.
Definition of Management
By Griffin: A set of management functions directed at the efficient and effective utilization of resources in the pursuit of organization goals.
Definition.contd.
By Koontz and Weihrich: Management is the process of designing and maintaining an environment in which individuals working together in groups, efficiently accomplish selected aims.
Peter F. Drucker-Father of Modern Management

Management is an organ, organs can be described and defined only through their functions
The difference between Management Principles and Management Functions: What should I do (principles) to ensure that I do my job (functions) with effectiveness and efficiency. Principles are strategies / processes which enable the individual to do their functions better to achieve laid down goals and objectives GOALS qualitative achievements Objectives could have a mix of quantitative and qualitative
Terry & Franklin

Management is a distinct process consisting of activities of planning, organizing, actuating, and controlling, performed to determine and accomplish stated objectives with the use of human beings and other resources.
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CONCEPTUAL SKILLS
Top level
U
M A
TE CH NI
Middle level
N S K
CAL
SKI LLS
Supervisory level/entry level
ILL
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Henry Mintzberg
He has categorized these roles into three groups interpersonal roles Informational roles Decisional roles
Description of each of the roles

Interpersonal Roles
A manager serves as a figurehead a symbol; as a leader, ie., hires, trains, encourages, fires, remunerates, judges; and as a liaison between outside contacts and the organizational)
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Informational roles
A manager serves as a monitor by gathering information; As a disseminator of information As a spokesperson of the organization
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Decisional Roles
A manager serves as an entrepreneur by being: An initiator Innovator Problem discoverer Designer of improvement projects As a disturbance handler of unexpected situations As a resource allocator and As a negotiator
ALL THE THREE ROLES PUT TOGETHER IS CALLED AS: THE MANAGERIAL WORK ACTIVITY APPROACH
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The whole management process is actually an integration of the work activity (Mintzberg) and the management functions MANAGEMENT FUNCTIONS : Planning, Organization, Co-ordination, motivation, and control are Universal. These functions are performed in all organizations SMEs, Large, not-for-profit organizations, etc.
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Definitions
Planning : Management functions that involves the process of defining goals, establishing strategies for achieving those goals and developing plans to integrate and coordinate activities Organizing: management function that involves the process of determining what tasks are to be done, who is to do them, how the tasks have to be grouped, who reports to whom, and where decisions are to be made
Leading : management functions that involves motivating subordinates, influencing individuals or teams as they work, selecting the most effective communicating channels or dealing with any with employee behavior issues Controlling : Management functions that involving monitoring actual performance, compiling actual to standard, and taking action if necessary Management process : The set of ongoing decisions and work activities in which managers engage as they plan, organize, lead and control.
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The pyramid to the top

Talk of management levels: Top level middle level Front line supervision Non-managerial work force
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Leadership
Blake and Mouton: R1 ---- R2 ------ R3
R1 = RESOURCES R2 = RELATIONSHIPS R3= RESULTS
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What is leadership?
A sound way of exercising leadership is through the use of what are called as three Rs Resources, relationships and results. How a person operates in this context can make a difference between organization success and failure
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THE ;LEADERSHIP GRID : Source: Scientific Methods Inc. X & Y axis on a scale of 1 9 C O N C E R N F O R P E O P L E High 1,9 Country Club Mgmt Team Mgmt 9,9
5, 5 Middle of the Road Management
low
1,1 Impoverished Mgmt
Authority Compliance 9,1
Low
CONCERN FOR PRODUCTION

High
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How concerns for Production/People affect Leadership Style:

1,9 : Country Club Management : Thoughtful attention to the need of people for satisfying relationships leads to a comfortable, friendly organization atmosphere and work tempo. 1,1 : Impoverished Management : Exertion of minimum effort to get required work done is appropriate to sustain organizational membership 9,1 : Authority Compliance : Efficiency in operations results from arranging conditions of work in such a way that human elements interfere to a minimum degree
9,9 : Team Management : Work accomplishment is from committed people; interdependence to a common stake in organization purpose leads to relationships of trust and respect
9+9 : Paternalistic management : Reward and approval are granted to people in return for loyalty and obedience; failure to comply leads to punishment OPPORTUNISTIC MANAGEMENT : In this style, organization performance occurs according to a system of exchanges, whereby effort is given only for an equivalent measure of the same. People adapt to the situation to gain maximum advantage from it. (all leadership points ie. 1,1; 1,9;, etc., converge at a new point OPM)
THE MOTIVATIONAL DIMENSIONS FOR EACH STYLE PLEASE REFER TO LEADERSHIP GRID OF BLAKE AND MOUTON.
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Management..
Is based on a systematic body of knowledgelaws, principles and concepts And this knowledge is universal If a manager has this fundamental knowledge And knows how to apply it to a given situation He should be able to perform the managerial functions efficiently and effectively
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Management
Management Practice is regarded as an art But, organized knowledge about management is a science THUS MANAGEMENT IS BOTH AN ART AND A SCIENCE
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Management ..
Is also a profession Separation of ownership from control The rules and regulations framed by the govt to protect citizens from exploitation The growth of trade union movement The desired of business leaders for social status And the Impetus of the scientific management philosophy which stresses the need for technically trained professional managers contributed to the PROFESSIONALIZATION OF MANAGEMENT.
Most important human activities is managing

Mackenzie King remarked: Labor cannot do anything without capital, Capital nothing without labor and neither Can do anything without the guiding genius of management.
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This should have enabled you to understand what management is at a fundamental level of definition and understanding.. Any questions
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Evolution of Management Thought

Give a handout titled: Early streams of Managerial ideas responding to situational demands Put students on discussion mode
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Schools of Management Thought

It was during the 20th century that a systematic study of management began
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4 schools of thought (by: Newman, Summer and Warren)

Productivity approach Behavioral approach Rationalistic model approach, and Institutional approach
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Hutchisons classifications
Classical management theory Human behavior theories Social and political systems approaches Ecological systems approach and Rational decision making concepts
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THE CONTRIBUTORS ON MANAGEMENT PRICIPLES
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Charles Babbage (1792-1871)

Benefits of division of labor Use of science and mathematics Emphasis on cost reduction
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Henry R. Towne
Main contribution is : That he set the climate and atmosphere for the later application of scientific methods. Of lesser importance was his plan of gainsharing as a system of wage payment.
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Henry Metcalfe (1847-1917)

In 1885, his pioneering work: The Cost of Manufacturers and the administration of Workshops, Public and Private Theory of Management was based on system and control He insisted that all authority should emanate from a given source, with a flow back to that source of detailed information concerning expenditures and accomplishments
Henry Laurence Gantt (1816-1919)

Educated from John Hopkins College Engineer, as draughtsman and later Asst. engineer His publications: Work, Wage and Profits (1910); Industrial Leadership(1916); and Organizing for Work.(1919)
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Gantts Thoughts.
Task and Bonus Plan Daily Balance Chart (Gantt Chart) Humanizing Science of Management Important of Leadership Training of Workers Social Responsibility of Business (Also called as : Forerunner of modern industrial democracy; also called as apostle of industrial peace)
Harrington Emerson (1853-1931)Popularizer of scientific management

Principles of Efficiency (12) 1. Clearly define ideal 2. commonsense 3. Competent Counsel 4. Discipline 5. Fair deal 6. Reliable, immediate, adequate and permanent records 7. Dispatching (production scheduling and control techniques) 8. Standards and schedules 9. Standardized conditions 10. Standardized Operations 11. Written standard practice instructions 12. Efficiency reward
According to Ernest Dale, Emerson really advocated the elimination of waste: a. Setting definite logical goals for all company operations and making managers down the line understand them so that they would not be seeking private goals of their own b. Production planning and scheduling and the use of written standard practices c. Better utilization of machine and man
d. Cost Accounting e. Standards and specifications for materials f. Standardization of parts and products as far as possible g. A rational approach to capital expenditures h. Better selection, placement, and fair treatment of employees and a system of financial incentives as equitable as possible
Frank Bunker Gilbreth (1868-1924) and Lillian Moller Gilbreth(18781972)

FBG: authored: Concrete Systems (1908); Field System (1908); Motion Study (1911); Power of Scientific Management (1912); Fatigue Study (1916); Applied Motion Study (1917, with Lillian Gilbreth); and Motion study for the Handicapped (1920) The Father of Motion Study was a contemporary of Taylor and Gantt
Lillian Moller Gilbreth:Professor of Management at Purdue University. Her famous works: The Psychology of Management (1914) and Quest for the Best Way (1924)
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Contributions by Frank Gilbreth

Motion study Time Study One best way Training of personnel Three position plan of promotion (each worker should be considered to occupy three positions: a. the job he held before promotion to his present position b. his present position and c. the next higher job Part of his work, then would be teaching the man below him and learning from the man above him. In this way, he would qualify for promotion himself and help to provide a successor to his current job.
Contributions of Lillian Gilbreth

It should be noted that FBG was greatly assisted by Lillian Gilbreth whom he married in 1904 Both of them used motion picture films to analyze and improve motion sequences Both developed the process of chart and the flow diagram to record process and flow patterns used in a work situation They emphasized written instructions to avoid confusion and misunderstanding (the white list card system) The Gilbreths urged tha the POM and motion analysis could effectively be applied to huge untapped area of self-management. They started to search into the area of fatigue and its impact o health and productivity.
Robert Owen (UK)-The father of personnel management

Contributions: Improvement in Factory and domestic conditions of his employees Social reforms (creating model community out of his mills town; educational reforms) Owen said that his object was not to be a mere manager of cotton mills, but to introduce principles in the conduct of the people.
MODERN GURUS - POM
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Fredrick Taylor
The credit of systematic study and practice of management goes to FWT, very well known as FATHER OF SCIENTIFIC MANAGEMENT Experiments of Taylor
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Midvale experience
At Midvale Steel Company, he found that individual workers had their own notions about work and different workers performed the same task in different ways He realized that greater output was possible on the part of the workers but most of them were engaged in what he called systematic soldiering. The solution: the first task of management was to know what constituted a proper days work He conducted time studies at Midvale Steel Company which proved of immense use to him
Bethlehem Experiments Pig-Iron Handling

Taylor was hired by the Bethlehem Steel Company to increase the output of one of the larger machine shops which had been a serious production bottleneck Conclusion: Periodic rests enabled a worker to produce more than continuous work. By a systematic resting time and improved methods average productivity was raised from 12.5 tons to 47.5 tons per day. Taylor began selecting workers and training them in handling pig-iron The original crew was 75, this reduced dramatically The earnings of the crew increased from USD1.15 to USD 1.85 per man per day.
Taylors prescription for Managers responsibilities

a. Under four heads : They should develop a science for each element of mans work which replaces the old rule of thumb method b. They should scientifically select and then train, teach and develop the workmen c. They should heartily cooperate with the men so as to ensure performance of work in accordance with the principles of the science which have been developed d. There should be almost equal division of work and responsibility between management and workmen Taylor, wanted that management should take the responsibility of planning, directing and organizing work. HE DEEMED IT ESSENTIAL TO SEPARATE THE PLANNING OF WORK FROM ITS EXECUTION, SO THAT EACH INDIVIDUAL COULD WORK AT HIS BEST EFFICIENCY AND COULD BE COMPENSATED ACCORDINGLY.
Taylors Management Principles

Large, daily, defined task Standard conditions skill sets and tool sets to be made available with authority along with clear cut objectives and expectations; this is called as ACCOUNTABILITY High Pay for success Loss in case of failure Separation of planning from doing the most valuable insights of TAYLOR Functional foremanship
HENRY FAYOL= Father of Principles of Management

Division of labor Authority and Responsibility Discipline Unity of command (one boss--subordinate) Unity of Direction (one head and one plan) Subordination of Individual Interests to General Interest (FIRM, FAST AND FAIR)
Remuneration of Personnel (Pay by Results; motivational ESOPS, etc) Centralization (optimization between centralization and decentralization; as the human body brain is the centralized organ) Scalar Chain This is the chain of superiors ranging from the ultimate authority to the lowest ranks. THE ORGANOGRAM Order: Right man in the right place; competency specific; man should fit the job and not the other way round; or else this will be like A SQUARE PEG IN A ROUND HOLE.
Stability of tenure of personnel retention of talent; attrition; turnover of people Initiative encourage initiative among subordinates Esprit-de-Corps : UNION IS STRENGTH; team work; cohesiveness among the members
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Fayols Elements of Management

Fayol made a distinction between General Principles of Management and elements of Management. The latter was regarded as functions of management. Dividing them into: PLANNING, ORGANIZATION, COMMAND, COORDINATION AND CONTROL
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Planning
Planning : most important and difficult managerial function. Planning meant looking ahead and to foresee both to assess the future and make provision for it He considered unity, continuity, flexibility and provision as the broad features of a good plan of action A GOOD PLAN IS A PRECIOUS MANAGERIAL INSTRUMENT A GOOL PLAN ALSO HAS TO BE IMPLEMENTABLE
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ORGANIZING
Means : to organize a business is to provide it with everything useful to its functioning, raw materials, tools, capital, personnel. Fayol concerned himself both with structure and process, listing 16 managerial duties and emphasizing the necessity for clear objectives, authority, decisions and task
COMMAND/DIRECTION
After the organization is formed, it is the mission of command to set it going. For every manager, the object of command is to get the optimum return from all employees of his unit in the interest of the whole concern The art of command, according to Fayol, rests on certain personal qualities and knowledge of general principles of management
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COORDINATION
1. 2. To coordinate is to harmonize all the activities of a concern so as to facilitate its working and its success According to him, in a well coordinated enterprise the following facts are to be observed; Every dept works in harmony with the rest Divisions or sub-divisions in each dept are precisely informed as to the share they must take in the commercial task and the reciprocal aid they are to afford one another The working schedule of the various departments and sub-divisions thereof is constantly attuned to circumstances
3.
CONTROL/MEASUREMENT AND FEEDBACK

According to Fayol, control consists in verifying whether everything occurs in conformity with the plan adopted, the instruction issued and the principles established Its object is to point out weaknesses and errors in order to rectify them and prevent recurrence. It operates on everything resources (things), people and actions
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Key principles of Mgmt of FAYOL

Unity of command Unity of direction Responsibility equal to authority and Scalar Chain
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MAX WEBER- THETHEORY OF AUTHORITY STRUCTURES

There are three factors involved in the understanding of any organization as under: The laws and the traditional taboos of the society Individual leadership (charisma) which is largely emotional Bureaucracy, i.e., The mass of administrators who carried out the laws and policies of the government
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Three types of authority

Charismatic Authority based on the personal magnetism of the leader CHARISMA : PERSONAL QUALITY OR GIT THAT ENABLES AN INDIVIDUAL TO IMPRESS AND INFLUENCE MANY OF HIS FELLOWS, A LEADER DOMINATES DECISION MAKING
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TRADITIONAL AUTHORITY
In this type of authority system the leader has authority by virtue of his status that he has inherited The extent of his authority is fixed by custom The officials who carry out the orders are like household staff of the master
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Rational-Legal authority = bureaucracy

This authority system dominates, and it is most efficient one This system is characterized by rationality and legality The system is rational because the means are expressly designed to achieve certain specific goals The org is like a well designed machine with a certain function to perform, and every part of the machine contributes to the attainment of maximum performance of that function. It is legal, because authority is exercised by means of a system of rules and procedures through the office which the individual occupies at a particular time
BUREAUCRATIC FUNCTIONS ARE:

Regular activities aimed at organizational goals so that they are distributed as fixed official duties All activities follow the organizational principles of hierarchy Operations receive equal treatment under a consistent systems of abstract rules Officials operate as formalistic personalities without becoming emotionally involved.
Lyndall Urwick 6 sets

Principle of Investigation Principle of Objective Principle of Organization Principle of Direction Principle of Experiment Principle of Control (Urwicks principles of management and organization source: A dictionary of Industrial Administration edited by John Lee )
Urwicks Principles of Organization

This was his main contirbutions to original thinking in regard to the framework of management The principles were modified and published by AMA They are :
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Principle of Objective (purpose/mission/objectives and vision) Principle of Specialization : the activities of every member of any organized group should be confined, as far as possible, to the performance of a single function Principle of coordination: The purpose of organizing per se, as distinguished from the purpose of the undertaking, is to facilitate coordination and unity of effort.
Principle of Authority: In every organization group, the supreme authority must rest somewhere. There should be a clear line of authority from the supreme authority to every individual in the group Principle of Responsibility : The responsibility of the superior for the acts of his subordinate is absolute Principle of Definition: The content of each position, the duties involved, the authority and responsibility contemplated and the relationships with other positions, should be clearly defined in writing, and published to all concerned
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Principle of Correspondence: in every position, the responsibility and the authority should correspond Principle of Span of Control: No person should supervise more than five, or at the most six direct subordinates (reportees) whose work interlocks Principle of Balance: The various units of an organization should be kept in balance Principle of continuity : Reorganization is a continuous process, in every undertaking specific provision should be made for it.
George Elton Mayo (1880-1949)

He has been called the founder of the human relations school. He became famous on account of the Hawthorne experiments These experiments had a significant impact on management thought, and considerably influenced the human relations movement. Experiments conducted in the Hawthorne Plant of the Western Electric Company in Chicago from 1927 to 1932.
Hawthorne studies three general phases

Test Room Studies : the object being to assess the effect of single variables upon employee performance. They were experimental in nature Interviewing Studies: these were largely concerned with improving employee attitudes and were psychological in nature Observations Studies: these were undertaken to understand and describe the factors influencing the informal organization of work groups and were sociological in nature
TEST ROOM STUDIES

Illumination Experiments: Two test groups varied effects of lighting on output vs. no change situation; the results were that in both the groups the output increased. Conclusion that environmental factors like lighting may not be the only factor, there could be other variables Relay Assembly Test Room Experiments: This study was made to discover the anomalies of the previous experiments. Numerous variables were put into action room conditions, pauses during work, piece-work, work without pauses and shorter working hours. After 12 week study, the output went up to a record level
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Interviewing studies: An interview program of thousands of workers was conducted with the object of finding out the attitude of the employees towards their job, working conditions and supervision The interviewing program revealed the following points: a. Merely giving a person an opportunity to talk and air his grievance has a beneficial effect on his morale b. Complaints are not necessarily objective statements of facts. They are often symptoms of more deep-seated disturbances c. Workers are influenced in their demands by experience both inside and outside the factory d. Worker is satisfied or dissatisfied not in terms of any objective frame of reference but rather in terms of how he regards his social status in the firm and what he feels he is entitled to in the way of rewards
Observational studies
The Bank Wiring Observation Group Study constituted the last phase of Hawthorne studies It was conducted to investigate the social pattern of a group of fourteen workers and their associated supervisors The main point of difference between this study and the earlier test room studies was that no experimental changes were planned but efforts were directed to study the group in its customary functioning This study revealed that there existed a GROUP NORM in terms of which the behavior of different individuals was in some sense being regulated
This group was restricting the output on account of various forms of social pressures The group had for itself a standard of a days work which was not imposed upon them, but had apparently been evolved by workmen themselves The group had various social pressures to see that the workers did not exceed the group output norm, and nobody attempted to attain official production targets Those who attempted to exceed became targets of social disapproval, verbally or physically This study showed the importance of informal, social group in business organization A member of such a group cared more for the opinion of the group rather than for financial incentives of the management IT WAS THE GROUP THAT DECIDED HIS ATTITUDE TO WORK, MANAGEMENT AND LEVEL OF PRODUCTION THESE STUDIES FURTHER REAFFIRMED THE IMPORTANCE OF INFORMAL GROUP IN THE MOTIVATION OF WORKERS.
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CONCLUSIONS OF HAWTHORNE STUDIES

1. Environmental factors not the sole factors affecting productivity 2. Worker is not an economic man (not purely motivated by money alone) 3. Importance of recognition, Security and Morale 4. Importance of Informal group 5. Importance of total work situation 6. Complaints as symptoms
Mary Parker Follett-famed political and social philosopher

Her main contributions: Was formulation of principles of human association and organization, especially in terms of industry The basis of her philosophy was that one cannot separate work from human beings Business is a series of interrelationships between people Follett pleaded that there is a great need to recognize the motivating desires of the individual and the group She said that the basic problem of any organization was that of harmonizing and coordinating the group efforts to achieve the most efficient effort towards completing a task She talked about power, leadership and authority. Her ideas are as under:
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Conflicts
Follett said that conflicts have a constructive role to play in an organization. Conflicts are not warfares but the appearance of difference, difference of opinion, of interests. Conflicts are neither good or bad; if used constructively their results are god and if used destructively their results are bad She suggested that conflicts can be harnessed to the service of the group much as an engineer uses friction
Three ways to resolve conflicts

Domination (victory of one side over the other. Follett did not advance this method, because of use of force beyond a certain point lessens energies and self-respect) Compromise (This is better than Domination; both sides surrender some part of what they are demanding, i.e., for a compromise there must be a mid-point between the needs and desires of both parties on which they agree, willingly or unwillingly. This method is still commonly unsatisfactory) Integration (best way to resolve conflicts; it means combination of what is best in all view points, i.e, bringing about unity of conflict in which both sides se a way out which will satisfy their real needs. It resolves conflicts for good
FOR DETAILS ATTEND A CONFLICT MANAGEMENT CLASS
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Folletts views on Leadership

It is the role of the leader to educate and train The leader is responsible for integrative unity The great leader is one who is able to integrate the experience of all and use it for a common purpose Leadership is not the product of position but of knowledge
Folletts views on Authority and Responsibility

Authority belongs to the job and stays with the job An executive decision is an movement in a process Authority and responsibility go with function
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Folletts views on Co-ordination

CONTROL , Follett, meant fact control rather than human control, and central control meant synthesis rather than domination from the center The four principles of organization at which she finally arrived at provided for the need of four kinds of coordination as the basis of good management:
4 principles of coordination
Coordination by direct contact of the responsible people concerned. Ideas, ideals, goals and purposes can be easily stated and understood through direct personal contact and communication Coordination should be achieved in early stages of planning and policy-making. It would be easier to secure the willing enthusiastic adherence of all concerned to any new principles and policy if they have participated from the beginning. For this principle Follett had suggested cross relations between heads of departments instead of up and down the line through the chief executive
In coordination all factors in a situation are reciprocally related Coordination is a continuous process. It means that coordination should be left to chance and it is the duty of the coordinator to strive for it constantly so that the efforts of the group are directed towards achieving the common goals
Follett on PROFESSIONAL MANAGEMENT

a. b. Management can develop as a profession on two bases: Its recognition as a function of or service to the community Application of an accepted and proven body of knowledge and principles Managers can become professional by working for long hours and thus getting satisfaction from work. According to her, a professional manager has three main jobs: 1. 2. 3. S/he must be loyal to company S/he must inform the public what are good practices and standards (today it is called Corporate Governance) and S/he must try to extend the boundaries of knowledge in his/her profession and then pass on his/her extra knowledge for the benefit of all.
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CHESTER I. BARNARD (18861961)

While Fayol developed the principles of management, Barnard proved that such principles could be applied in practice He defined organization as : a system of consciously coordinated activities or forces of two or more persons. He believed people in organization contributed services and not themselves Barnard tried to analyze how organization functions as a living body. For him, to understand the small organization was to understand the large organization because all organizations possess certain common characteristics
Elements of Organization
Willingness to cooperate Common purpose and Communication Are the elements of an organization
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Equilibrium internal and external

Barnard firmly believe that an organization is separate from the environment in which it operates The person who contribute services to the orgs has two distinct roles the personal role and the an organizational role He suggested that orgs must maintain internal and external equilibrium Internal equilibrium he meant: reward and satisfaction for the participation; thus the balance between what employees get out of work (money, status, reward, etc) and what they contribute (time, worry, discomfort, etc) must be maintained The relationship of the org to the environment is not static but functional
Acceptance theory of authority

Barnard disagreed with the classical view that authority transcends from top to bottom He said that authority transcends from bottom to top i.e. it is delegated upwards Authority does not depend on commands, but on a reciprocal relationship; a communication becomes authoritative by virtue of its acceptance by a contributor. Thus AUTHORITY DEPENDS ON COMMUNICATION
1. 2. 3.
4.
A PERSON CAN AND WILL ACCEPT A COMMUNICATION AS AUTHORITATIVE ONNLY WHEN FOUR CONDITIONS ARE SIMULTANEOUSLY FULFILLED: S/HE can and does understand communication At the time of his/her decision, he believes that it is not inconsistent with the purpose of the organization At the time of his/her decision, s/he believes it to be compatible with his / her personal interest as a whole , and s/he is able, mentally and physically, to comply with it.
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Zone of Indifference
Barnard developed the concept of zone of indifference. He believed that the form and nature of the acceptance of the communication differ and it depends upon the zone of indifference Certain orders are acceptable, certain barely acceptable, and certain orders are unquestionable Those orders which are unquestionably acceptable lie within the zone of indifference, ie. They lie within the range that in a general way was anticipated at the time of undertaking the connection with their organization
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Barnards views on Incentives

a. b. c. d. e. f. g. h. Incentives are prerequisites of cooperation in any organization. Barnard was of the view that people in the org do not work for money alone. Some of the incentive types are: Material or financial inducements Personal opportunities, such as status, power, et Good physical conditions Attractiveness of social conditions General conditions adapted or suitable to the individuals ideas and attitudes Opportunities for participation Good communication and Opportunities for satisfying perosnal motivation such as pride in work, sense of adequacy, etc.
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Executive decisions and functions

a. The executive who occupies a crucial position in the organization has three basic functions. They are: Maintaining org communication. It includes determining the scheme of organization, fostering loyalty in subordinates and maintaining the informal system Obtaining essential services from individuals: It includes correct selection of individuals, and provision of the necessary inducements, maintaining morale (subjective feeling toward work), providing incentives and sanctions, supervision and training Formulating purposes and objectives at all levels
b.
c.
Barnard on Communication
1. 2. 3. 4. 5. 6. 7. Principles of Communication: Channels of communication must be definitely known by all These channels must be formally laid down Each channel should be as short as possible Generally communication should go through all stages in the channel People acting as communication centers (managers) should be adequate to their tasks Channels of communications should not be interrupted while the organization is functioning Communications (orders) must come from points where the necessary authority is known to exist
Barnard on Leadership
The real test of the executive or manager is leadership Leaders should recognize that low morality will not sustain leadership long
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Alfred P. Sloan (1875-1966)

Greatly responsible for the success of General Motors Sloan regarded two factors as important for the success of a business: a. Motivation through incentive compensation b. Opportunity through decentralization He said that good management rests on a reconciliation of centralization and decentralization or decentralization with coordination control Decentralization results in initiative, responsibility, development of personnel, decisions close to facts, and flexibility. Coordination results in efficiencies and economies Authority and responsibility must be congruent and commensurate to each other
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Sloans real partnership process with his executives was done by

a. b. c. d. Utilizing their abilities to the full A fair policy of promotion Offering real incentives By using persuasion rather than command
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GM PLAN: IN 1920, INDICATES HIS SEVERAL THOUGHTS

This plan was based on two principles: a. Decentralization of operation and b. Centralized staff services to advise the line on specialized phases of the work, and central measurement of results to check the exercise of delegated authority (staff function = support function; line function = responsible for the earnings for the corporation. Thus only line function is SALES AND ALL OTHER FUNCTIONS INCLUDING MARKETING ARE STAFF FUNCTIONS.
Points emphasized in the PLAN:

a. Relationship of various divisions of a corporation with one another as well as with the central organization b. Status of central organization c. Coordination of operations of the central organization with the corporation as a whole d. Centralization of control of all the executive functions in the CEO e. Limit on the number of executives reporting directly to the President
Sloans Principles of Organization

1. Establishment, by the Board of Directors and its committees, of uniform policies and procedures to govern the overall operations of all divisions in any area in which such consistency is judged to be necessary for the best interests of the corporation as a whole Delegation of full authority, within this framework of uniform policy and procedures, with corresponding responsibility for the use of the authority so delegated A continuous flow of ides and information upward and downward through the management organization, by means of executive visits, formal reports and frequent meetings of line and staff executives at all appropriate levels
2.
3.
ABRAHAM H. MASLOW :THE FATHER OF HUMAN PSYCHOLOGY (1908-1970)

His need based theory of motivation, published in 1943, laid foundation for subsequent psychologists (Renis Likert, Douglas McGregor, Fredrick Herzberg, etc) to analyze human behavior
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Maslows Hierarchy of Needs
Self actualization
Self-esteem Love, Affection & Social Safety & Security Stimulation Physiological
Frederick I. Herzberg a noted behaviorist of USA (1923 His greatest contributions to management thought : his Two-Factor Theory, Two-Human Needs Theory, KITA concept, and illuminating ideas about job loading (vertical and horizontal) ie is job enrichment He assumes that the individual is the center of the workmanagerial situation He said that if anything meaningful was to be found about motivation, the question of factors-attitudes-effects must be studied as a whole and not as an isolated item He believed management is monolithic (huge, massive, single stone like)
109
MOTIVATION HYGIENE THEORY

Hygiene factors (Environment) Policies and administration Supervision Working conditions Interpersonal relations MOTIVATORS (the Job itself) Achievement Recognition for accomplishments Challenging Work Increased responsibility
Money, status, security
Growth and development

Relationship between Maslows and Herzbergs Theories to Motivation

SITUATION MASLOW MOTIVES (NEEDS) BEHAVIOR
GOAL (INCENTIVES) HERZBERG

Douglas M. McGregor-(1906-1964; a social psychologist)

THEORY X
Work is inherently distasteful to most people Most people are not ambitious, have little desire for responsibility, and prefer to be directed Most people have little capacity for creativity in solving organizational problems Motivation occurs only at the psychological and safety levels Most people must be closely controlled and often coerced to achieve organizational objectives THEORY Y Work is as natural as play, if the conditions are favorable Self-control is often indispensable in achieving organizational goals The capacity for creativity in solving organizational problems is widely distributed in the population Motivation occurs at the social, esteem, and selfactualization levels, as well as physiological and security levels People can be self-directed and creative at work if properly motivated
112
David C. McClelland
Best known for his achievement motivation, his research ranges from personality to consciousness. Along with John. W. Atkinson, he developed the scoring system for the THEMATIC APPERCEPTION TEST (TAT) which was used in achievement motivation research
McCllellands need theory

Need for power Need for Affiliation Need for Achievement Need for training
114
Henry Mintzberg (1939 Well known luminary in the field of management Dubbed as ICONOCLAST as he rejected several accepted management practices He is against the B-schools in USA their curriculum, case study methods, etc.
115
Contributions-The managerial roles

He grouped ten basic roles performed by managers into three major classes ( as a result of detailed research on the activities of five practicing CEOs): INTERPERSONAL ROLES INFORMATIONAL ROLES DECISIONAL ROLES
Interpersonal roles
While performing interpersonal roles, mangers work as: 1. Figureheads performing number of routine duties of legal or social nature; these duties include handling ceremonies, signing documents required by law, and officially receiving visitors.
Leaders As leaders, the mangers perform all managerial activities involving subordinates including hiring, training and firing. As leaders they are responsible for motivation and direction of subordinates
118
Liaison persons Serving as liaison between outside contacts (community, suppliers,, etc) and the organization
119
Informational roles
Mintzberg pointed out that managers function as nerve centers in which they obtain information about the environment and their own organization by monitoring them. The three informational roles are: Monitor Disseminator spokesperson
Montiors : As monitors, managers seek and are presented with information about the operations for which they are responsible and bout the environment Disseminators: they are disseminators of information flowing from both external and internal sources; Managers pass information from outside their units to inside and also from one subordinate to another Spokesperson: mangers speak on behalf of their units to outsiders. They transmit information to outsiders on organizations plans, policies, actions and results and serve as experts on organization's industry THESE INFORMATIONAL ROLES PROVIDE A COMMUNICATIONS NETWORK FOR THE ORGANIZATION.
Decisional roles
Four of them as per Mintzberg: Entrepreneur Disturbance handler Resource allocator negotiator
122
As ENTREPRENUEURS : managers are initiators, innovators, problemdiscoverers and designers of improvement projects that direct and control change in the organization. Thus, entrepreneurial work refers to mangers efforts to improve the functioning and accomplishments of their organizations
As disturbance handler: managers take corrective action in response to unforeseen problems such as resignation of subordinates, breakdown of productive equipment, etc. It is worthwhile to mention that while entrepreneurs, managers voluntarily take initiative to improve performance, as disturbance handler
As resource allocator: they are responsible for allocating human, physical, and monetary resources. MAKING DECISIONS ABOUT HOW LIMITED TIME, MONEY, MATERISALS, LABOR HOURS AND OTHER RESOURCES WILL BE APPLIED TO MULTIPLE AND COPETING CLAIMS UPON THEM IN THE WORK OF RESOUCRCE ALLOCATION ROLE Mangers as Negotiators: they discuss issues and bargain with other units to gain advantages for their own units. Mintzberg opines : that negotiation is resource trading in real-time.
Relationship of Managerial roles and process

ROLE PORCESS
PLANNING
INTERPERSONAL
LEADING
INFORMATIONAL ORGANIZIING DECISIONAL
CONTROLLING
124
PETER F. DRUCKER (1909-2005) Austrian by birth

Numerous books around 35/36 Drucker is repeatedly preaching a philosophy of management, that of management by objectives and self-control He pleaded for creative management instead of bureaucratic management He said that managers should go beyond decentralization, and design principles of taskforce team, simulated decentralization and the systems organizations Managers should learn to lead people rather than contain them He said that the Innovative org the org that resists stagnation rather than change is a major challenge to management More and more organizations which are innovative and productive for society, economy and the individuals should come up His first line in practice of management The manager is the dynamic, life-giving element in every business.
Jobs of Management
According to Peter Drucker, management has the following three tasks: ECONOMIC PERFORMANCE PRODUCTIVE WORK AND WORKER ACHIEVEMENT SOCIAL IMPACT AND SOCIAL RESPONSIBILITIES
Business objectives and entrepreneurial functionsDrucker

There is only one valid definition of business purpose : to create a customer According to him, it is the customer who determines what a business is. It is the customer alone whose willingness to pay for a good or for a service converts economic resources into wealth, things into goods. CONCEPT OF PROFIT AS THE OBJECT OF BUSINESS Profit is not the explanation, cause or rationale of business behavior and business decisions but the TETST OF THEIR VALIDITY.
On Profit.Drucker
The profit motive and profit maximization are, in his opinion, irrelevant in managing a business. However, profits are necessary on account of risk in business Profit is the test of performance; it is premium for the risk of uncertainty; profit alone can supply capital for tomorrows jobs, profit pays for the economic satisfaction and services of a society
128
As the purpose of business is to create a customer, the business enterprise has two functions as under : 1. Marketing 2. Innovation Rest is cost.
129
Drucker on Objectives
Objectives are not fate; they are direction They are not commands; they are commitments They do not determine the future; they are means to mobilize the resources and energies of the business for the making of the future
130
The following areas where objectives are to be set:

Marketing; Innovation; Human organization; Financial resources Physical resources; Productivity; Social responsibility Profit requirements
OBJECTIVES IN THESE AREAS ENABLE MANGERS TO :

A. ORGANIZE AND EXPLAIN THE WHOLE RANGE OF BUSINESS PHENOMENA IN A SMALL NUMBER OF GENERAL STATEMENTS B. TEST THESE STATEMENTS IN ACUTAL EXPERIENCE
C. PREDICT BEHAVIOR
D. APPRAISE THE SOUNDNESS OF DECISIONS WHILE THEY RE STILL BEING MADE AND E. ANALYZE THEIR EXPERIENCES AND THUS IMPROVE PERFORMANCE
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MANAGEMENT BY OBJECTIVES AND SELF-CONTROL

The concept is credited to Drucker and George S.Odiorne. The MBO is the central point of discussion in his book The practice of Mangement-writes : Management is not just a creature of the economy; it is a creator as well. And only to the extent to which it masters the economic circumstances, and alters them by conscious, directed action, does it really change. To manage business means, therefore, to mange by objectives.
MBO is a managerial philosophy and technique that attempts to draw on peoples needs for achievement, competence and anatomy by allowing them to set their objectives, goals, and performance criteria This concept applies to employees at any position
Why MBO?
The specialized work of the manager The hierarchy in organizations The existence of difference in vision in businesses Such factors cause conflict and breakdown in the organization and MBO overcomes these deficiencies by relating the task for each manager to the overall goals for he company.
WORK OF MANAGER
To set objectives To organize ie. To analyze the activities, decisions, and relations needed To motivate and communicate To analyze, appraise and measure performance and To develop people, including himself
In 1950s, Druckers 7 tasks to be performed by tomorrows manager

He must manage by objectives He must take more risks and for a longer period ahead He must be able to make strategic decision He msut be ableto build and integrated team He must be able to communicate information fast and clearly He mustbe bale to see the business as a whole and to integrate his function with it, and He must be able to relate his product and industry to the total environment
Social responsibilities for Management

The triple bottom line : Economic profit (profit as by product in a business process) Social profit ( giving to the community) Environmental profit (carbon trading, etc)
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Warren G. Bennis
Manager Characteristics Administers Focuses on systems and structure Leader Characteristics Innovates Focuses on people
Relies on control
Inspires trust
Short range view

Asks how and when Eye on the bottom line
Imitates
Accepts status quo Classic good soldier Does things right
Long range perspective

Asks what and why Eye on the horizon
Originates
Challenges the status quo Own person Dr.R. Krishna - Management Principles Does the right thing 138
Bennis four competencies of leadership

Attention through vision Meaning through communication Trust through positioning being predictable, making your position clear, keeping at it, and Positive self-regard
139
Chris Argyris Immaturity-Maturity model

Immaturity Passive Maturity Active
Dependence
Behave in a few ways Erratic shallow interests
Independence
Capable of behaving in many ways Deeper and stronger interests Long-time perspective (past and future) Equal or superordinate position
Short-time perspective
Subordinates position
Awareness and control over self Lack of awareness of self Dr.R. Krishna - Management
Principles
140
T- Groups
Also known as sensitivity training and laboratory training. T-Group technique had its genesis in the late 1940s, largely as a result of work done by Kurt Lewin and Ronald Lippitt. Argyris contributed to this concept by making several clarifications about it.
141
Definition T-Group
T-Group is .a group experience designed to provide maximum possible opportunity to the individuals to expose their behavior, give and receive feedback, experiment with new behavior and develop an everlasting awareness and acceptance of self and others.
142
Properties of Organizational effectiveness

Properties leading to Ineffectiveness One part or subset of parts, controls the whole Awareness only of random plurality of parts Objectives related only or mainly to parts Inability to influence core activities whether they are internally or externally oriented Core activities only influenced by immediate present Properties leading to effectiveness The whole is created and controlled through the inter-relationship of the parts Awareness of pattern among parts Objectives related to the whole Ability to influence core activities whether they are internally or externally oriented Core activities influenced by past, present and future
143
Argyris other contributions

Leadership Intervention theory (OD) Process consulting: Argyris and Edgar H. Schein are regarded as chief developers of the process consulting method
144
Process consulting method

Process consulting regards groups such as teams, task force, committees or project groups as the basic building blocks of organization. Process consulting deals with tasks, conflicts, between members, work flows, and the processes by which the group achieves its task Process consulting analyzes the roles and functions of group members, group problemsolving-methods, decision making, the development of group norms, and the use of leadership and authority
Process consultingcontd
The process consultant examines the processes at work among group members by using devices such as questionnaires, role playing session, coaching and counseling methods, etc.
146
Argyris 4 principles of organization

Task specialization Individuals should concentrate on a narrow range of task. It increases human skills and output too Chain of command (Hierarchy of authority) Unity of direction Leaders must define and direct the work of those under them Span of control administrative efficiency is increased if there is a limit to the number of people a leader or supervisor can control
William G. Ouchi
Ouchis main contribution to management thought relates to Theory Z. Contrast between Japanese and American corporations leads to identification of the Z theory
148
Z theory
Japanese Corporation
Lifetime employment
American Corporation
Short-term employment
Slow evaluation and promotion

Non-specialized career points Implicit control techniques Collective responsibility
Rapid evaluation and promotion

Specialized career points Explicit control techniques
Individual responsibility
Concern for parts of the organization
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Concern for the whole organization
Participative Management
Ouchi emphasized participative management and consensus decision-making, if Theory Z is to work. Social scientists have described this as a democratic process in which may people are drawn into shaping of important decisions The participative process is one of the mechanisms that provides for the broad dissemination of information and values within the org, and it also serves the symbolic role of signaling in a unmistakable way the cooperative intent of the firm Typically, Theory Z orgs devote a great deal of energy to developing the interpersonal skills necessary to effective group decision making In theory Z companies the decision making may be collective, but the ultimate responsibility for decisions still resides in one individual
150
Tom Peters Seven S Modeldeveloped for McKinsey & Co

Structure
Strategy Superordi nate Goals Systems
Skills
Staff
Style
151
7-S framework for change

Structure refers to the organizational structure Strategy is a plan or course of action leading to the allocation of a firms scarce resources, over time, to reach identified goals Systems consist of all the formal and informal procedures that allow the organization to function Style is the pattern of substantive and symbolic actions under taken by top mangers Staff is another factor. Successful organization view people as valuable resources who should be carefully nurture, developed, guarded and allocated. Skills refer to those activities organizations do best and for which they are known Superordinate Goals referred to guiding concepts, values and aspirations that unite an organization in some common purpose TOM PETERS ADVOCATED : MBWA
Tom Peters books

In search of Excellence Passion for excellence Thriving in chaos And many others
153
THANK YOU
CHEERS.
154

Management Principles Aand Practices

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Management Principles Aand Practices

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MANAGEMENT PRINCIPLES AND PRACTICES

Dr. R. Krishna FT MBA NMIMS FIRST TRIMESTER

Dr.R. Krishna - Management Principles

There can be lots of ambiguity and there will be no recipe book

All is PEOPLE RESOURCE MANAGEMENT

Dr.R. Krishna - Management Principles

Dr.R. Krishna - Management Principles

Peter F. Drucker-Father of Modern Management

Dr.R. Krishna - Management Principles

Terry & Franklin

Dr.R. Krishna - Management Principles

Supervisory level/entry level

Dr.R. Krishna - Management Principles

Description of each of the roles

Dr.R. Krishna - Management Principles

Dr.R. Krishna - Management Principles

Dr.R. Krishna - Management Principles

Dr.R. Krishna - Management Principles

Dr.R. Krishna - Management Principles

The pyramid to the top

Dr.R. Krishna - Management Principles

R1 = RESOURCES R2 = RELATIONSHIPS R3= RESULTS

Dr.R. Krishna - Management Principles

Dr.R. Krishna - Management Principles

5, 5 Middle of the Road Management

1,1 Impoverished Mgmt

Authority Compliance 9,1

CONCERN FOR PRODUCTION

How concerns for Production/People affect Leadership Style:

Dr.R. Krishna - Management Principles

Dr.R. Krishna - Management Principles

Dr.R. Krishna - Management Principles

Most important human activities is managing

Dr.R. Krishna - Management Principles

Dr.R. Krishna - Management Principles

Evolution of Management Thought

Dr.R. Krishna - Management Principles

Schools of Management Thought

Dr.R. Krishna - Management Principles

4 schools of thought (by: Newman, Summer and Warren)

Dr.R. Krishna - Management Principles

Dr.R. Krishna - Management Principles

THE CONTRIBUTORS ON MANAGEMENT PRICIPLES

Dr.R. Krishna - Management Principles

Charles Babbage (1792-1871)

Dr.R. Krishna - Management Principles

Dr.R. Krishna - Management Principles

Henry Metcalfe (1847-1917)

Henry Laurence Gantt (1816-1919)

Dr.R. Krishna - Management Principles

Harrington Emerson (1853-1931)Popularizer of scientific management

Frank Bunker Gilbreth (1868-1924) and Lillian Moller Gilbreth(18781972)

Dr.R. Krishna - Management Principles

Contributions by Frank Gilbreth

Contributions of Lillian Gilbreth

Robert Owen (UK)-The father of personnel management

MODERN GURUS - POM

Dr.R. Krishna - Management Principles

Dr.R. Krishna - Management Principles

Bethlehem Experiments Pig-Iron Handling

Taylors prescription for Managers responsibilities

Taylors Management Principles

HENRY FAYOL= Father of Principles of Management