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Principles of Management

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R
ravalhimani

Here are the key differences between policies and procedures: - Policies outline general guidelines and philosophies, while procedures provide specific step-by-step instructions. - Policies explain the "why" behind actions, while procedures explain the "how". - Policies allow for some flexibility, while procedures aim to standardize processes. - Policies communicate values and culture, while procedures ensure tasks are completed consistently. - Policies apply broadly, while procedures focus on specific routine tasks. So in summary, policies provide the overarching framework while procedures operationalize policies into concrete workflows. Both are important for effective planning and management.

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PRINCIPLES OF MANAGEMENT Prepared and presented by: Dr. Himani Raval
LAYOUT OF THE PRESENTATI ON UNIT 1 Meaning Definition Concept Scope & principles of management Evolution of management thought Management theories Classical, Behavioural, system Contingency and contemporary perspectives of management Management an Art or science Management as a profession Process and levels of management Introduction to functions of management: POSDCORB
MANAGEMENT • Henry Fayol defined management as, “Management is to forecast, to plan, to organize, to command, to coordinate and control activities of others.” • In simple terms, management is a means of organizing and delegating the work that needs to be done among people who can do it, and then ensuring that said work is done diligently and timely. • You will see management in almost all walks of life. Sometimes you will be managing things without actually realizing it. The simplest example is, being the class representative. There are so many things a class representative has to manage. An efficient class representative is the one who knows how to delegate duties and take command of the situation.
MEANING OF POM Management is the process of getting things done from others to achieve the goals effectively and efficiently. Principles of management is what a manager does within the organization. This is a traditional approach to management using the leading, organizing, and controlling approach.
DEFINITION POM are the general guidelines that help organizations to function effectively. The Principles guide the managers to make rational decisions. For instance, while ascertaining about the promotion of an employee, a manager may contemplate seniority, whereas the other may follow the principle of quality.
SCOPE OF MANAGEMENT • Subject matter of management • Planning • Organizing • Staffing • Directing • Controlling • Functional areas of management • Financial management • Personnel management • Production management • Marketing management • Office management
HENRY FAYOL’ S POM 1. Division of work – Division of Work, this principle is associated with specializing the tasks of the employees. The employees are divided into their specialization and interest to harness the best result out of them. 2. Authority – Authority should be known to the whole organization; the managers should use the authority analytically. They should maintain a balance of authority over the organization structure. 3. Discipline – The organization must maintain the decorum of the workplace. The employees foremostly must be disciplined.
4. Unity of command – Order or command must come from one manager or the best results. 5. Unity of Direction – Their goals must be unified and directed. They must organizational goals. 6. Subordination of Individual Interest to group Interest – The employees must be clearly stated about the firstly. They should be explained that giving priority goals will automatically secure their individual CONTINUED
7. Remuneration – Correct remuneration policy must be initiated in the must be encouraged with the correct pay scale. 8. Centralization – The orders must be centralized. Priority orders must come 9. Scalar Chain – The scalar chain of the organization must be well defined. This functioning of the organization. As now the employees will and to whom to be accountable for. 10. Order – Order must be clear and must avoid any confusions. CONTINUED
CONTINUED 11. Equity – Equity is mandatory for the organization to work in peace. All the employees treated fairly. 12. Stability of Tenure of Personnel – Employees must not have the fear of getting removed from the organization. Also, must be low. 13. Initiative – Employees must be capable of initiating newer ideas. They should be challenging 14. Morale – High morale employees are desired in the workplace to maintain a decent workplace.
EVOLUTION OF MANAGEMENT THOUGHTS • The classical theory of management: Achieving maximum output, minimum input • Scientific management theory- F W Taylor • Process management theory- Henry Fayol • Bureaucratic management theory- Max Weber • The neo-classical theory of management: Emphasized the man behind the machines • Human relations approach to management- Elton Mayo (Hawthorne Experiments) • Human behavior approach to management- A. H. Maslow, Frederick H., Douglas, McGregor • The modern theory of management • Quantitative approach to management • Systems approach to management • Contingency approach to management
THE CLASSICAL THEORY OF MANAGEMENT • Scientific management theory- F W Taylor • Is concerned essentially with improving the operational efficiency at the shop floor level. • Process management theory- Henry Fayol • Is concerned with the managerial aspect of running the organization. • Bureaucratic management theory- Max Weber • It operates in a rational way instead of irrational emotions and intentions of owners and managers.
THE NEO-CLASSICAL THEORY OF MANAGEMENT • Human relations approach to management- Elton Mayo (Hawthorne Experiments) • It addresses the human dimension of work such as motivation, conflict, expectations and group dynamics. • Human behavior approach to management- A. H. Maslow, Frederick H., Douglas, McGregor • It focused on proving the importance of people for achieving productivity and not the machines and methods.
HAWTHORNE EXPERIMENTS • The Hawthorne experiments were first conducted in November, 1924 at Western Electric Company’s Hawthorne plant in Chicago • After the tests drew unanticipated results, a research team led by George Elton Mayo, from Harvard Business School was invited to join the studies in 1927. • Findings of Hawthorne Experiments o Employees will also work more efficiently, when they believe that the management is interested in their welfare. o When employees are treated with respect and dignity, their performance will improve. o Financial incentives alone cannot increase the performance. Social and psychological needs must also be satisfied in order to increase productivity.
The modern theory of management • Quantitative approach to management • It refers to the problem solving mechanism with the help of mathematical tools and techniques. • Systems approach to management • It is based on the generalization that everything is interrelated and inter dependent. • Contingency approach to management • It is based on the theory that results differ because situations differ, a technique that works in one case will not necessarily work in all the cases.
3 LEVELS OF MANAGEMENT Top Level: Decides Middle level: Directs Lower level: Deals Rank and File of workers: Does BoDs Policy making body Supervisors Supervision and control Functional heads Functional planning
MANAGEMENT AS AN ART/SCIENCE/PROFESSIO N
MANAGEMENT PROCESS
FUNCTIONS OF MANAGEMENT
REFERENCES 1. Robbins, S. P., & DeCenzo, A. D. Fundamentals of Management. New Delhi: Pearson Education. 2. 2. Harold Koontz & Heinj Weihrich, (2018) Essentials of Management, 10th Edition, Tata McGraw-Hill Education, New Delhi. 3. 3. T.Ramasamy (2018) Principles of Management, Himalaya Publishing House, Mumbai. 4. 4. L.M. Prasad, Principle and Practice of Management, Sultan Chand and Sons, 6thedition. 5. 5. Gupta, Sharma and Bhalla; Principles of Business Management; Kalyani Publications; 1st ed. 6. 6. P.C. Tripathi & P.N. Reddy, (2015) Principles of Management, 5th Edition, Tata McGraw-Hill Education, New Delhi. 7. 7. Singh, “Principles and Practices of Management and Organizational Behaviour, 2016 1st ed, Sage Publication. 8. 8. P Subba Rao, “Principles of Management, (2018), HPH.
CASE STUDY: THE FRUSTRATED PLANT MANAGER Hemant Jha, the plant manager of a manufacturing company, attended a seminar of four weeks duration, conducted by a reputed university. The seminar was devoted largely to the topic of executive decision making. During the seminar, he was particularly impressed by Professor Tripathi's lectures on group discussion group decision making. Professor Tripathi was convinced that employee, if given the opportunities, could intelligently consider, and then formulate quality decisions.
Returning to the plant at the conclusion of the seminar, Jha decided to practice some of the principles that he had learned. He called together the 25 employees of his department and told them that the production standard established several years ago were now too low in the view of the recent installation of automated equipment. He wanted the employees to decide among themselves, as a group, what the new standards should be. Jha believed that employees would doubtlessly establish much higher standards than the existing ones. But he was amazed when he came to know that contrary to his belief, the group considered the existing standards as already too high. And therefore decided to reduce them by 10%. These standards, Jha knew, were far too low to provide a fair profit on the owner's investments. Yet it was cleared that his refusal to accept the group decision would be disastrous. Before taking a further course of action, Jha called Professor Tripathi at the University for his opinion.
Summary: This case is about a plant manager of a manufacturing company, Mr. Hemant Jha who attends a seminar for a month which was conducted by a reputed university. The topic was based on “Executive Decision- Making". Mr. Hemant liked the topic of group decision and decision- making so much, that he thought to apply the same formula with his employee of his department. He wanted his employees to work as a group and execute the work with innovative standards giving a new outlook towards work. Unfortunately on the contrary to his belief, the group considered the existing standards as too high and thus they went on to reduce it by 10%. These standards, Jha knew, were far too low to provide a fair profit on the owner's investment. And if he tried to refuse the group's decision, it would result in a huge disaster and so before taking any action he decides to revisit the university and asks them about an opinion to solve his problem.
Questions: 1. How could Jha have avoided the present difficulties? 2. If you were a management consultant, what advice would you give to Mr. Jha? Conclusion: So here we conclude that at times the manager should even as an employee must understand the core value of the standards been given to employees. If the standards are too high a proper training should be given to them so that they'll be much active and dynamic to work on new standards without refusing it. Rather consulting directly to the third-party the manager must first recognize the problems within the employees then only he should seek advise regarding his company.
ACTIVITIES • Henry Fayol • Management • Forecast • Plan • Organize • Command • Coordinate • Control • Delegating • Process • Achieve • Goals • Principles • Manager • Organization • Traditional • Leading • Guidelines • Employee • Quality • Financial • Personnel • Production • Marketing • Directing • Division of work • Authority • Discipline • Unity • Subordination of Individual Interest • Remuneration • Centralization • Scalar Chain • Equity • Morale • Hawthorne experiments
PRESENTATION TOPICS 1. Concept of Management 2. 14 Principles of POM 3. Hawthorne experiments 4. The classical theory 5. The Neo-classical theory 6. The modern Management theory 7. Debate on Management as an Art or Science 8. Functions of Management
Principles of Management
UNIT 2 LAYOUT: PLANNING IMPORTANCE • Planning • Importance of planning • Objectives process • Policies and procedures • Types of planning • Decision making • Process of decision making • Types of decisions • Problems involved in decision making
CONCEPT OF PLANNING • Planning bridges the gap between where we are (present) and where we want to go (future). • In simple words, foreseeing the future contingencies and plan for it to accomplish an objective. • Before doing something, the manager must form an opinion on how to work on a specific job. • It needs holding on to the decisions since it includes selecting a choice from alternative ways of performance.
DEFINITION OF PLANNING • “Planning is deciding in advance what to do, how to do it, when to do it and who is to do it. Planning, bridges the gap from where we are to where we want to go.” – Koontz & O’Donnell • Planning is the important and primary function of management. • It sets all other functions into action.
IMPORTANCE OF PLANNING • Planning provides directions • Planning decreases the chances of risk • Planning decreases overlapping and wasteful activities • Planning encourages innovative ideas • Planning aids decision making
OBJECTIVES OF PLANNING • Micro level: The enterprise level • Maximum results with minimum inputs • Ensuring maximum prosperity for employees and employers • Macro level: The society level • To contribute to economic growth • To ensure high standard of living • To generate employment opportunities • To maintain healthy industrial relations • To convert challenges into opportunities
PLANNING PROCESS
COMPONENTS OF A PLAN • Standing plans: • Standing plans are meant for repeated use or are used as and when the need arises. • Examples of standing plans include policies for employee interaction, emergency operations procedures in the event of a companywide disaster, instructions for reporting internal issues in the company and regulations regarding what is allowable and what is prohibited in the business. • Single use plans: • Single use plans are meant for one-time use. • An advertising campaign for a new product launch or an integration plan for a recent merger or acquisition are examples of a single-use plan.
Difference Between Basis of difference Standing Plan Single-use plan Time Period Standing Plans are formulated for a longer period. Single-use plans are for a shorter period and are only worked out in case of need. Basis Standing Plan is based on the main objective of the organizations Single-use plans are based on the standing plan of an organization. Scope These plans advise the managers in particular matters such as sales policy and price policy. These plans advise in the matters of daily routine.
STANDING PLANS Mission Objectives Policies Strategies Rules Procedures
MISSION & VISION Mission • Defines the purpose of the organization’s existence • It answers what we are here for • It talks about the present • It lists broad goals for which the organization is formed. • It is a path • For e.g. To have happy and satisfied customers. Vision • Defines where the organization wants to go and what it wants to achieve • It answers where do we aim to be • It talks about the future • It lists where you see yourself some years from now • It is a destination • For e.g. To be the world’s largest online selling company.
SINGLE USE PLANS Programs Budget Schedule Forecast Project
MBO & MBE Basis MBO MBE Full Form Management By Objectives Management By Exceptions Definition MBO is a process of defining objectives within an organization so that management and employee agree to the objectives and understand what they need to do in the org. MBE is policy by which management devotes its time to investigate only those situations in which actual results differ significantly from planned results. Decision Making Employee participation is high on decision making Employee Participation is minimal on decision making Appropriate for Experienced Managers Experienced Executives https://www.youtube.com/watch?v=K57rvR2nGu0
POLICIES AND PROCEDURES • Policies are a set of general guidelines. They outline your organization’s plan for tackling certain issues. • The purpose of policies is to communicate an organization’s values, philosophy, and culture. They include, but aren’t limited to, the following: • What employees can expect from the organization (employee benefits, vacation policy) • What the company expects from employees (code of conduct, confidentiality agreements) • What customers and the community can expect from the organization (customer service policies) • Good policy is more than just a list of rules. It should show employees the purpose behind their jobs and provide ways to measure success.
CONTINUED • Policies set some parameters for decision-making but leave room for flexibility. They show the “why” behind an action. • Procedures, on the other hand, explain the “how.” They provide step-by-step instructions for specific routine tasks. They may even include a checklist or process steps to follow. But at the very least, your procedures should outline the following information: • Who is responsible for each task • What steps need to be taken • Who the responsible party reports to • Establishing procedures ensures that employees know what to do and keeps your organization running smoothly, even when key employees are out of the office. • For eg. The vacation policy determines how much vacation days an employee is eligible to take. The procedure lists the steps involved to get the approval.
TYPES OF PLANNING • On the basis of coverage of activities • Corporate planning • Functional planning • On the basis of importance of contents • Strategic planning • Operational planning • On the basis of time dimension • Long term planning • Short term planning
CONTINUED • On the basis of approach adopted • Proactive planning • Reactive planning • On the basis of degree of formalization • Formal planning • Informal planning
DECISION MAKING • Decision making is the core of planning. • A manager’s ability is often judged by the decisions that he makes. • It is the process by which an individual or an organization selects one position or action from several alternatives. • Decision making is the selection based on some criteria from two or more possible alternatives. – George Terry
DECISION MAKING PROCESS Identify the problem Analyze the problem Collecting information Identify alternative course of action Evaluating alternatives Choose the best alternative Conversion of decision into action Progressive review
EXAMPLE 1 One of the most typical examples of decision-making in management is to take a call on production facilities. As your business expands and demand grows, you will be forced to increase your production capacity. The next step would be to decide how much capacity installation is required to meet demand effectively. You will also need to identify the right equipment for the purpose and the workforce to run the production processes. Your decision has to be guided by the fact that the ultimate aim is to increase production sustainably so that you have the flexibility of scaling up or down without incurring a high cost.
EXAMPLE 2 Imagine you are the CEO of an e-commerce start-up. Your work is expanding and you need to hire the right resources to help you realize the vision of creating a leading online retail platform. You would need to hire people who are experienced and proficient in their fields such as software development, marketing, operations, procurement, and logistics. Since the business is an online start-up, you won’t need to hire employees who work on the premises exclusively. You can also get talented, location-independent workers, capable of delivering the required technical support and services online. By ensuring an optimal mix of on-site and remote workers, you can easily carry out the functions in a cost-effective way. Emails and chat communications as well as video interactions can keep the team spirit going. This will also give you the flexibility of hiring talent that might be scattered over different geographic locations and can come together digitally to create path-breaking solutions.
TYPES OF DECISIONS • Programmed and non-programmed decisions (e.g.. Repetitive vs. non repetitive) • Major and minor decisions (e.g.. Purchase of machine vs. purchase of stationary) • Routine and strategic decisions (e.g.. Sending samples for investigation vs. capital expenditure decisions) • Policy and operative decisions (e.g.. Published policy manuals which form the basis for day-to-day operations) • Organizational and personal decisions (decisions pertaining to the organization vs. an individual) • Individual and group decisions (decisions taken by an individual vs. taken by group) • Long term and short term decisions (involves high risk, high investment and longer time period)
PROBLEMS IN DECISION MAKING • Incomplete information • Time constraint • Complex variables • Non-Supporting environment • Dynamic environment • Incorrect timing • Human factor • Involvement of too many people • Non-acceptance by subordinates
Principles of Management
UNIT 3 LAYOUT: ORGANIZING • Meaning, • Importance, • Principles of organizing, • Span of management, • Patterns of organization – formal and informal organizations, • Common organizational structures; • Departmentalization, • Authority- delegation, centralization & decentralization, • Responsibility – line and staff relationship
ORGANIZING IS TO ARRANGE
CONCEPT OF ORGANIZING • Organizing is a systematic process of structuring, integrating, coordinating tasks, goals and activities to resources in order to attain objectives. • Organizing involves assigning tasks, grouping tasks into departments, delegating authority, and allocating resources across the organization. • During the organizing process, managers coordinate employees, resources, policies, and procedures to facilitate the goals identified in the plan.
IMPORTANCE OF ORGANIZING
• Promotes specialization and division of labor • Avoids omissions, overlapping and duplication of efforts • Clarifies authority-responsibility relationships • Facilitates staffing • Facilitates co-ordination • Establishes communication links • Increases efficiency of management • Facilitates management by exception IMPORTANCE OF ORGANIZING
PRINCIPLES OF ORGANIZING
SPAN OF MANAGEMENT • Developed by V. A. Graicunas, a French management consultant in 1953 • Refers to the number of subordinates, an executive can supervise effectively • Also termed as span of supervision, span of control or span of attention. • “Span of control refers to the number of people that a manager can supervise.” Louis Allen
TYPES OF SPAN OF CONTROL • Wide span of control It means a single manager/supervisor oversees a large number of subordinates. • Narrow span of control It means a single manager/supervisor oversees a few number of subordinates.
FACTORS INFLUENCING SOC Factors relating to work Factors relating to a manager Factors relating to subordinates Nature of work Ability of the manager Ability of subordinates Quality of allocation of work Time availability for supervision Degree of motivation Organizational planning Degree of decentralization Communication system Availability of staff assistance
PATTERNS OF ORGANIZATION Formal organisation when the two or more than two persons come together to accomplish a common objective, and they follow a formal relationship, rules, and policies are established for compliance, and there exists a system of authority. Informal Org: which is formed under the formal organisation as a system of social relationship, which comes into existence when people in an organisation, meet, interact and associate with each other.
Creation Deliberately by top management. Spontaneously by members. Purpose To fulfill, the ultimate objective of the organization. To satisfy their social and psychological needs. Nature Stable, it continues for a long time. Not stable Communication Official communication Grapevine Control mechanism Rules and Regulations Norms, values and beliefs Focus on Work performance Interpersonal relationship Authority Members are bound by hierarchical structure. All members are equal. Size Large Small BASIS FOR COMPARISON FORMAL ORGANIZATION INFORMAL ORGANIZATION
COMMON ORGANIZATIONAL STRUCTURES • Line organization: Line organization structure is the oldest and simplest form of organization. • In these organizations, a supervisor exercises direct supervision over a subordinate. • Also, authority flows from the top- most person in the organization to the person in the lowest rung.
CONTINUED • Functional organization • A functional structure is a business structure that is based on the function of each position within the business and the knowledge and skills of the team members that perform each role. • A functional structure is the one that divides the major functions of a firm into different groups, for example, information technology (IT) department, finance department, marketing department and production department.
CONTINUED • Line and staff organization • Line and staff organization is a modification of line organization and it is more complex than line organization. • Staff groups are in tasks that provide support to the line groups. Their work is like that of advisory (legal), service (human resource), or control (the accounting) groups. • The power of command always remains with the line executives and staff supervisors guide, advice and council the line executives.
CONTINUED • Committee organization • A committee organizational structure chart can be defined as a group of members who discuss and develop strategic solutions to problems. • The objective of setting up the Committee is to develop broader organizational goals, finalize plans, and policies for the organization. • Such committees are important as the members of the committee bring rich experiences, expertise, diverse perspectives, and information which are not one man’s job.
CONTINUED • Matrix organization • Matrix organizational structures are quite popular, as they emphasize efficiency, creativity, and innovation. They combine two or more organizational structures. • Matrix organizational structures are so named because reporting relationships resemble a grid (or matrix) rather than the typical hierarchy. • Typically team members report to more than one boss: the head of their department, and the project manager charged with overseeing a specific initiative.
CONTINUED • Virtual organization • A virtual organization is a temporary or permanent collection of geographically dispersed individuals, groups, organizational units, or entire organizations that depend on electronic linking in order to complete the production process. • The term virtual organization implies the novel and innovative relationships between organizations and individuals. Technology and globalization both support this particular type of organization.
DEPARTMENTALIZATIO N • It refers to the grouping of operating tasks into jobs, the combining of jobs into effective work groups and the combining of groups into divisions often termed as 'Departments'. • It means the grouping of tasks into departments and sub departments and delegating of authority for accomplishment of the tasks. • Basis of departmentation: Departmentation by function Departmentation by customers Departmentation by Product/services Departmentation by time Departmentation by geographical coverage Hybrid organization structure Departmentation by process
BASES OF DEPARTMENTATION
CONTINUED
AUTHORITY- DELEGATION • The delegation of authority refers to the division of labor and decision-making responsibility to an individual that reports to a leader or manager. • It is the organizational process of a manager dividing their own work among all their people. • A quick guide to delegating authority is explained by the acronym SMARTER S Specific M Measurable A Agreed R Realistic T Time bound E Ethical R Recorded
Principles of Management

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Principles of Management

  • 1. PRINCIPLES OF MANAGEMENT Prepared and presented by: Dr. Himani Raval
  • 2. LAYOUT OF THE PRESENTATI ON UNIT 1 Meaning Definition Concept Scope & principles of management Evolution of management thought Management theories Classical, Behavioural, system Contingency and contemporary perspectives of management Management an Art or science Management as a profession Process and levels of management Introduction to functions of management: POSDCORB
  • 3. MANAGEMENT • Henry Fayol defined management as, “Management is to forecast, to plan, to organize, to command, to coordinate and control activities of others.” • In simple terms, management is a means of organizing and delegating the work that needs to be done among people who can do it, and then ensuring that said work is done diligently and timely. • You will see management in almost all walks of life. Sometimes you will be managing things without actually realizing it. The simplest example is, being the class representative. There are so many things a class representative has to manage. An efficient class representative is the one who knows how to delegate duties and take command of the situation.
  • 4. MEANING OF POM Management is the process of getting things done from others to achieve the goals effectively and efficiently. Principles of management is what a manager does within the organization. This is a traditional approach to management using the leading, organizing, and controlling approach.
  • 5. DEFINITION POM are the general guidelines that help organizations to function effectively. The Principles guide the managers to make rational decisions. For instance, while ascertaining about the promotion of an employee, a manager may contemplate seniority, whereas the other may follow the principle of quality.
  • 6. SCOPE OF MANAGEMENT • Subject matter of management • Planning • Organizing • Staffing • Directing • Controlling • Functional areas of management • Financial management • Personnel management • Production management • Marketing management • Office management
  • 7. HENRY FAYOL’ S POM 1. Division of work – Division of Work, this principle is associated with specializing the tasks of the employees. The employees are divided into their specialization and interest to harness the best result out of them. 2. Authority – Authority should be known to the whole organization; the managers should use the authority analytically. They should maintain a balance of authority over the organization structure. 3. Discipline – The organization must maintain the decorum of the workplace. The employees foremostly must be disciplined.
  • 8. 4. Unity of command – Order or command must come from one manager or the best results. 5. Unity of Direction – Their goals must be unified and directed. They must organizational goals. 6. Subordination of Individual Interest to group Interest – The employees must be clearly stated about the firstly. They should be explained that giving priority goals will automatically secure their individual CONTINUED
  • 9. 7. Remuneration – Correct remuneration policy must be initiated in the must be encouraged with the correct pay scale. 8. Centralization – The orders must be centralized. Priority orders must come 9. Scalar Chain – The scalar chain of the organization must be well defined. This functioning of the organization. As now the employees will and to whom to be accountable for. 10. Order – Order must be clear and must avoid any confusions. CONTINUED
  • 10. CONTINUED 11. Equity – Equity is mandatory for the organization to work in peace. All the employees treated fairly. 12. Stability of Tenure of Personnel – Employees must not have the fear of getting removed from the organization. Also, must be low. 13. Initiative – Employees must be capable of initiating newer ideas. They should be challenging 14. Morale – High morale employees are desired in the workplace to maintain a decent workplace.
  • 11. EVOLUTION OF MANAGEMENT THOUGHTS • The classical theory of management: Achieving maximum output, minimum input • Scientific management theory- F W Taylor • Process management theory- Henry Fayol • Bureaucratic management theory- Max Weber • The neo-classical theory of management: Emphasized the man behind the machines • Human relations approach to management- Elton Mayo (Hawthorne Experiments) • Human behavior approach to management- A. H. Maslow, Frederick H., Douglas, McGregor • The modern theory of management • Quantitative approach to management • Systems approach to management • Contingency approach to management
  • 12. THE CLASSICAL THEORY OF MANAGEMENT • Scientific management theory- F W Taylor • Is concerned essentially with improving the operational efficiency at the shop floor level. • Process management theory- Henry Fayol • Is concerned with the managerial aspect of running the organization. • Bureaucratic management theory- Max Weber • It operates in a rational way instead of irrational emotions and intentions of owners and managers.
  • 13. THE NEO-CLASSICAL THEORY OF MANAGEMENT • Human relations approach to management- Elton Mayo (Hawthorne Experiments) • It addresses the human dimension of work such as motivation, conflict, expectations and group dynamics. • Human behavior approach to management- A. H. Maslow, Frederick H., Douglas, McGregor • It focused on proving the importance of people for achieving productivity and not the machines and methods.
  • 14. HAWTHORNE EXPERIMENTS • The Hawthorne experiments were first conducted in November, 1924 at Western Electric Company’s Hawthorne plant in Chicago • After the tests drew unanticipated results, a research team led by George Elton Mayo, from Harvard Business School was invited to join the studies in 1927. • Findings of Hawthorne Experiments o Employees will also work more efficiently, when they believe that the management is interested in their welfare. o When employees are treated with respect and dignity, their performance will improve. o Financial incentives alone cannot increase the performance. Social and psychological needs must also be satisfied in order to increase productivity.
  • 15. The modern theory of management • Quantitative approach to management • It refers to the problem solving mechanism with the help of mathematical tools and techniques. • Systems approach to management • It is based on the generalization that everything is interrelated and inter dependent. • Contingency approach to management • It is based on the theory that results differ because situations differ, a technique that works in one case will not necessarily work in all the cases.
  • 16. 3 LEVELS OF MANAGEMENT Top Level: Decides Middle level: Directs Lower level: Deals Rank and File of workers: Does BoDs Policy making body Supervisors Supervision and control Functional heads Functional planning
  • 20. REFERENCES 1. Robbins, S. P., & DeCenzo, A. D. Fundamentals of Management. New Delhi: Pearson Education. 2. 2. Harold Koontz & Heinj Weihrich, (2018) Essentials of Management, 10th Edition, Tata McGraw-Hill Education, New Delhi. 3. 3. T.Ramasamy (2018) Principles of Management, Himalaya Publishing House, Mumbai. 4. 4. L.M. Prasad, Principle and Practice of Management, Sultan Chand and Sons, 6thedition. 5. 5. Gupta, Sharma and Bhalla; Principles of Business Management; Kalyani Publications; 1st ed. 6. 6. P.C. Tripathi & P.N. Reddy, (2015) Principles of Management, 5th Edition, Tata McGraw-Hill Education, New Delhi. 7. 7. Singh, “Principles and Practices of Management and Organizational Behaviour, 2016 1st ed, Sage Publication. 8. 8. P Subba Rao, “Principles of Management, (2018), HPH.
  • 21. CASE STUDY: THE FRUSTRATED PLANT MANAGER Hemant Jha, the plant manager of a manufacturing company, attended a seminar of four weeks duration, conducted by a reputed university. The seminar was devoted largely to the topic of executive decision making. During the seminar, he was particularly impressed by Professor Tripathi's lectures on group discussion group decision making. Professor Tripathi was convinced that employee, if given the opportunities, could intelligently consider, and then formulate quality decisions.
  • 22. Returning to the plant at the conclusion of the seminar, Jha decided to practice some of the principles that he had learned. He called together the 25 employees of his department and told them that the production standard established several years ago were now too low in the view of the recent installation of automated equipment. He wanted the employees to decide among themselves, as a group, what the new standards should be. Jha believed that employees would doubtlessly establish much higher standards than the existing ones. But he was amazed when he came to know that contrary to his belief, the group considered the existing standards as already too high. And therefore decided to reduce them by 10%. These standards, Jha knew, were far too low to provide a fair profit on the owner's investments. Yet it was cleared that his refusal to accept the group decision would be disastrous. Before taking a further course of action, Jha called Professor Tripathi at the University for his opinion.
  • 23. Summary: This case is about a plant manager of a manufacturing company, Mr. Hemant Jha who attends a seminar for a month which was conducted by a reputed university. The topic was based on “Executive Decision- Making". Mr. Hemant liked the topic of group decision and decision- making so much, that he thought to apply the same formula with his employee of his department. He wanted his employees to work as a group and execute the work with innovative standards giving a new outlook towards work. Unfortunately on the contrary to his belief, the group considered the existing standards as too high and thus they went on to reduce it by 10%. These standards, Jha knew, were far too low to provide a fair profit on the owner's investment. And if he tried to refuse the group's decision, it would result in a huge disaster and so before taking any action he decides to revisit the university and asks them about an opinion to solve his problem.
  • 24. Questions: 1. How could Jha have avoided the present difficulties? 2. If you were a management consultant, what advice would you give to Mr. Jha? Conclusion: So here we conclude that at times the manager should even as an employee must understand the core value of the standards been given to employees. If the standards are too high a proper training should be given to them so that they'll be much active and dynamic to work on new standards without refusing it. Rather consulting directly to the third-party the manager must first recognize the problems within the employees then only he should seek advise regarding his company.
  • 25. ACTIVITIES • Henry Fayol • Management • Forecast • Plan • Organize • Command • Coordinate • Control • Delegating • Process • Achieve • Goals • Principles • Manager • Organization • Traditional • Leading • Guidelines • Employee • Quality • Financial • Personnel • Production • Marketing • Directing • Division of work • Authority • Discipline • Unity • Subordination of Individual Interest • Remuneration • Centralization • Scalar Chain • Equity • Morale • Hawthorne experiments
  • 26. PRESENTATION TOPICS 1. Concept of Management 2. 14 Principles of POM 3. Hawthorne experiments 4. The classical theory 5. The Neo-classical theory 6. The modern Management theory 7. Debate on Management as an Art or Science 8. Functions of Management
  • 28. UNIT 2 LAYOUT: PLANNING IMPORTANCE • Planning • Importance of planning • Objectives process • Policies and procedures • Types of planning • Decision making • Process of decision making • Types of decisions • Problems involved in decision making
  • 29. CONCEPT OF PLANNING • Planning bridges the gap between where we are (present) and where we want to go (future). • In simple words, foreseeing the future contingencies and plan for it to accomplish an objective. • Before doing something, the manager must form an opinion on how to work on a specific job. • It needs holding on to the decisions since it includes selecting a choice from alternative ways of performance.
  • 30. DEFINITION OF PLANNING • “Planning is deciding in advance what to do, how to do it, when to do it and who is to do it. Planning, bridges the gap from where we are to where we want to go.” – Koontz & O’Donnell • Planning is the important and primary function of management. • It sets all other functions into action.
  • 31. IMPORTANCE OF PLANNING • Planning provides directions • Planning decreases the chances of risk • Planning decreases overlapping and wasteful activities • Planning encourages innovative ideas • Planning aids decision making
  • 32. OBJECTIVES OF PLANNING • Micro level: The enterprise level • Maximum results with minimum inputs • Ensuring maximum prosperity for employees and employers • Macro level: The society level • To contribute to economic growth • To ensure high standard of living • To generate employment opportunities • To maintain healthy industrial relations • To convert challenges into opportunities
  • 34. COMPONENTS OF A PLAN • Standing plans: • Standing plans are meant for repeated use or are used as and when the need arises. • Examples of standing plans include policies for employee interaction, emergency operations procedures in the event of a companywide disaster, instructions for reporting internal issues in the company and regulations regarding what is allowable and what is prohibited in the business. • Single use plans: • Single use plans are meant for one-time use. • An advertising campaign for a new product launch or an integration plan for a recent merger or acquisition are examples of a single-use plan.
  • 35. Difference Between Basis of difference Standing Plan Single-use plan Time Period Standing Plans are formulated for a longer period. Single-use plans are for a shorter period and are only worked out in case of need. Basis Standing Plan is based on the main objective of the organizations Single-use plans are based on the standing plan of an organization. Scope These plans advise the managers in particular matters such as sales policy and price policy. These plans advise in the matters of daily routine.
  • 37. MISSION & VISION Mission • Defines the purpose of the organization’s existence • It answers what we are here for • It talks about the present • It lists broad goals for which the organization is formed. • It is a path • For e.g. To have happy and satisfied customers. Vision • Defines where the organization wants to go and what it wants to achieve • It answers where do we aim to be • It talks about the future • It lists where you see yourself some years from now • It is a destination • For e.g. To be the world’s largest online selling company.
  • 38. SINGLE USE PLANS Programs Budget Schedule Forecast Project
  • 39. MBO & MBE Basis MBO MBE Full Form Management By Objectives Management By Exceptions Definition MBO is a process of defining objectives within an organization so that management and employee agree to the objectives and understand what they need to do in the org. MBE is policy by which management devotes its time to investigate only those situations in which actual results differ significantly from planned results. Decision Making Employee participation is high on decision making Employee Participation is minimal on decision making Appropriate for Experienced Managers Experienced Executives https://www.youtube.com/watch?v=K57rvR2nGu0
  • 40. POLICIES AND PROCEDURES • Policies are a set of general guidelines. They outline your organization’s plan for tackling certain issues. • The purpose of policies is to communicate an organization’s values, philosophy, and culture. They include, but aren’t limited to, the following: • What employees can expect from the organization (employee benefits, vacation policy) • What the company expects from employees (code of conduct, confidentiality agreements) • What customers and the community can expect from the organization (customer service policies) • Good policy is more than just a list of rules. It should show employees the purpose behind their jobs and provide ways to measure success.
  • 41. CONTINUED • Policies set some parameters for decision-making but leave room for flexibility. They show the “why” behind an action. • Procedures, on the other hand, explain the “how.” They provide step-by-step instructions for specific routine tasks. They may even include a checklist or process steps to follow. But at the very least, your procedures should outline the following information: • Who is responsible for each task • What steps need to be taken • Who the responsible party reports to • Establishing procedures ensures that employees know what to do and keeps your organization running smoothly, even when key employees are out of the office. • For eg. The vacation policy determines how much vacation days an employee is eligible to take. The procedure lists the steps involved to get the approval.
  • 42. TYPES OF PLANNING • On the basis of coverage of activities • Corporate planning • Functional planning • On the basis of importance of contents • Strategic planning • Operational planning • On the basis of time dimension • Long term planning • Short term planning
  • 43. CONTINUED • On the basis of approach adopted • Proactive planning • Reactive planning • On the basis of degree of formalization • Formal planning • Informal planning
  • 44. DECISION MAKING • Decision making is the core of planning. • A manager’s ability is often judged by the decisions that he makes. • It is the process by which an individual or an organization selects one position or action from several alternatives. • Decision making is the selection based on some criteria from two or more possible alternatives. – George Terry
  • 45. DECISION MAKING PROCESS Identify the problem Analyze the problem Collecting information Identify alternative course of action Evaluating alternatives Choose the best alternative Conversion of decision into action Progressive review
  • 46. EXAMPLE 1 One of the most typical examples of decision-making in management is to take a call on production facilities. As your business expands and demand grows, you will be forced to increase your production capacity. The next step would be to decide how much capacity installation is required to meet demand effectively. You will also need to identify the right equipment for the purpose and the workforce to run the production processes. Your decision has to be guided by the fact that the ultimate aim is to increase production sustainably so that you have the flexibility of scaling up or down without incurring a high cost.
  • 47. EXAMPLE 2 Imagine you are the CEO of an e-commerce start-up. Your work is expanding and you need to hire the right resources to help you realize the vision of creating a leading online retail platform. You would need to hire people who are experienced and proficient in their fields such as software development, marketing, operations, procurement, and logistics. Since the business is an online start-up, you won’t need to hire employees who work on the premises exclusively. You can also get talented, location-independent workers, capable of delivering the required technical support and services online. By ensuring an optimal mix of on-site and remote workers, you can easily carry out the functions in a cost-effective way. Emails and chat communications as well as video interactions can keep the team spirit going. This will also give you the flexibility of hiring talent that might be scattered over different geographic locations and can come together digitally to create path-breaking solutions.
  • 48. TYPES OF DECISIONS • Programmed and non-programmed decisions (e.g.. Repetitive vs. non repetitive) • Major and minor decisions (e.g.. Purchase of machine vs. purchase of stationary) • Routine and strategic decisions (e.g.. Sending samples for investigation vs. capital expenditure decisions) • Policy and operative decisions (e.g.. Published policy manuals which form the basis for day-to-day operations) • Organizational and personal decisions (decisions pertaining to the organization vs. an individual) • Individual and group decisions (decisions taken by an individual vs. taken by group) • Long term and short term decisions (involves high risk, high investment and longer time period)
  • 49. PROBLEMS IN DECISION MAKING • Incomplete information • Time constraint • Complex variables • Non-Supporting environment • Dynamic environment • Incorrect timing • Human factor • Involvement of too many people • Non-acceptance by subordinates
  • 51. UNIT 3 LAYOUT: ORGANIZING • Meaning, • Importance, • Principles of organizing, • Span of management, • Patterns of organization – formal and informal organizations, • Common organizational structures; • Departmentalization, • Authority- delegation, centralization & decentralization, • Responsibility – line and staff relationship
  • 53. CONCEPT OF ORGANIZING • Organizing is a systematic process of structuring, integrating, coordinating tasks, goals and activities to resources in order to attain objectives. • Organizing involves assigning tasks, grouping tasks into departments, delegating authority, and allocating resources across the organization. • During the organizing process, managers coordinate employees, resources, policies, and procedures to facilitate the goals identified in the plan.
  • 55. • Promotes specialization and division of labor • Avoids omissions, overlapping and duplication of efforts • Clarifies authority-responsibility relationships • Facilitates staffing • Facilitates co-ordination • Establishes communication links • Increases efficiency of management • Facilitates management by exception IMPORTANCE OF ORGANIZING
  • 57. SPAN OF MANAGEMENT • Developed by V. A. Graicunas, a French management consultant in 1953 • Refers to the number of subordinates, an executive can supervise effectively • Also termed as span of supervision, span of control or span of attention. • “Span of control refers to the number of people that a manager can supervise.” Louis Allen
  • 58. TYPES OF SPAN OF CONTROL • Wide span of control It means a single manager/supervisor oversees a large number of subordinates. • Narrow span of control It means a single manager/supervisor oversees a few number of subordinates.
  • 59. FACTORS INFLUENCING SOC Factors relating to work Factors relating to a manager Factors relating to subordinates Nature of work Ability of the manager Ability of subordinates Quality of allocation of work Time availability for supervision Degree of motivation Organizational planning Degree of decentralization Communication system Availability of staff assistance
  • 60. PATTERNS OF ORGANIZATION Formal organisation when the two or more than two persons come together to accomplish a common objective, and they follow a formal relationship, rules, and policies are established for compliance, and there exists a system of authority. Informal Org: which is formed under the formal organisation as a system of social relationship, which comes into existence when people in an organisation, meet, interact and associate with each other.
  • 61. Creation Deliberately by top management. Spontaneously by members. Purpose To fulfill, the ultimate objective of the organization. To satisfy their social and psychological needs. Nature Stable, it continues for a long time. Not stable Communication Official communication Grapevine Control mechanism Rules and Regulations Norms, values and beliefs Focus on Work performance Interpersonal relationship Authority Members are bound by hierarchical structure. All members are equal. Size Large Small BASIS FOR COMPARISON FORMAL ORGANIZATION INFORMAL ORGANIZATION
  • 62. COMMON ORGANIZATIONAL STRUCTURES • Line organization: Line organization structure is the oldest and simplest form of organization. • In these organizations, a supervisor exercises direct supervision over a subordinate. • Also, authority flows from the top- most person in the organization to the person in the lowest rung.
  • 63. CONTINUED • Functional organization • A functional structure is a business structure that is based on the function of each position within the business and the knowledge and skills of the team members that perform each role. • A functional structure is the one that divides the major functions of a firm into different groups, for example, information technology (IT) department, finance department, marketing department and production department.
  • 64. CONTINUED • Line and staff organization • Line and staff organization is a modification of line organization and it is more complex than line organization. • Staff groups are in tasks that provide support to the line groups. Their work is like that of advisory (legal), service (human resource), or control (the accounting) groups. • The power of command always remains with the line executives and staff supervisors guide, advice and council the line executives.
  • 65. CONTINUED • Committee organization • A committee organizational structure chart can be defined as a group of members who discuss and develop strategic solutions to problems. • The objective of setting up the Committee is to develop broader organizational goals, finalize plans, and policies for the organization. • Such committees are important as the members of the committee bring rich experiences, expertise, diverse perspectives, and information which are not one man’s job.
  • 66. CONTINUED • Matrix organization • Matrix organizational structures are quite popular, as they emphasize efficiency, creativity, and innovation. They combine two or more organizational structures. • Matrix organizational structures are so named because reporting relationships resemble a grid (or matrix) rather than the typical hierarchy. • Typically team members report to more than one boss: the head of their department, and the project manager charged with overseeing a specific initiative.
  • 67. CONTINUED • Virtual organization • A virtual organization is a temporary or permanent collection of geographically dispersed individuals, groups, organizational units, or entire organizations that depend on electronic linking in order to complete the production process. • The term virtual organization implies the novel and innovative relationships between organizations and individuals. Technology and globalization both support this particular type of organization.
  • 68. DEPARTMENTALIZATIO N • It refers to the grouping of operating tasks into jobs, the combining of jobs into effective work groups and the combining of groups into divisions often termed as 'Departments'. • It means the grouping of tasks into departments and sub departments and delegating of authority for accomplishment of the tasks. • Basis of departmentation: Departmentation by function Departmentation by customers Departmentation by Product/services Departmentation by time Departmentation by geographical coverage Hybrid organization structure Departmentation by process
  • 71. AUTHORITY- DELEGATION • The delegation of authority refers to the division of labor and decision-making responsibility to an individual that reports to a leader or manager. • It is the organizational process of a manager dividing their own work among all their people. • A quick guide to delegating authority is explained by the acronym SMARTER S Specific M Measurable A Agreed R Realistic T Time bound E Ethical R Recorded