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Management thought & practice is contextual, and has changed & adapted to the needs of the environment The Village Economy

 Subsistence level, farm based economy  Local RMs, Labour, Markets  Technology – Tradition bound -passed from father to son  Very low productivity  Poor infrastructure  Political Entity - Feudal Lord  ‘Value Creation’ difficult
The Industrial Revolution

 Application of power for manufacturing process  Beginning of application of ‘Modern Technology’  Beginning of Innovation in industry  Productivity ↑  Management focused on increasing production & productivity  Expansion of markets due to increase in Real Wages  Capital formation ↑  Exploitative use of labour  Continued dependence on skilled worker  Society divided into Feudal Rich & Peasants – no middle
class Mass Production

 Manufacturing process broken down into small relatively simple
tasks.

 Workers job was to complete given simple task within given time
to given quality standards

 Quality & productivity was delivered by the production system  Dependence on skilled worker for production broken, skilled
employees required for setting up & monitoring system

 Management focused on increasing production & productivity  Dramatic increase in productivity
Management Process
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AJAY NAGRE

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 Markets size ↑↑

due to increase in Real Wages, focus was on meeting basic needs of society standardised products at low cost through extensive distribution network

 Attitude to the customer was paternalistic, focus was on selling  Management orientation to the market place
Production Concept → Product Concept → Selling Concept

 Capital formation ↑↑  Some of the benefits of prosperity passed on to labour
Market Fragmentation – Differentiated Marketing

 Prosperity in the society led to customers preference shifting  Management focused on finding out what customers want &
satisfying needs of customers Marketing Concept

from mass marketed standardised products to those products which met their needs more specifically

 Management orientation to the market place  Dramatic increase in product variety  Competition ↑  Total markets size ↑↑ due to increase in choice, market size for
specific product ↓ due to fragmentation of market. variety & loss of economies of scale Global Markets

 Cost pressure on manufacturers due to providing increased

 Manufacturers sought foreign markets to offset loss of
economies of scale in home markets

 Attempt to create ‘Global Markets’ to sell a standardised
‘Portfolio” of products across national markets. Evolution of Management Thought Three Eras    Pre – Scientific o Early 1800s – Robert Owen &Charles Babbage Scientific Human Relations

Management Process
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AJAY NAGRE

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Henry L. Pre – Scientific Era Robert Owen  Manager of several cotton mills in the early 1800s in New Lanark. Frank & Lillian Gilbreths o Classical Organisation Theory  Henri Fayol. Tom Peters etc. Taylor.161336059. Gantt.  Cut standard working hours to 10½  Refused to hire children below the age of 10  Started a daily open rating of employee’s work o Helps manager identify problem areas o Instils pride in workers o Increases competition Charles Babbage  British Professor of mathematics – early 1800s  Advocated application of scientific principles to work processes o Analysis of operations to isolate skills o Division of labour o Specialisation Management Process . AJAY NAGRE 3 . Max Webber o Transitional Theories – people oriented  Mary Parker Follett. Mac Gregor & Argyris – concept of self actualising man  The Management Science School o Operations Research – OR  Integrative Approaches o Systems Approach o Contingencies Approach o Neo – Human Relations Movement  W. Edward Deming. Chester Bernard  The Behavioural School o The Human Relations Movement  Elton Mayo – Hawthorne effect – concept of social man o Behaviour Science Approach  Maslow. Scotland  Believed that improving the condition of workers would lead to increased production & profits o Built better housing for workers etc.doc Three Schools of Management Thought  Classical – Two Branches o Scientific Management – 1890 – 1930  Fredrick W.

161336059. Gantt    Consulting Industrial Engineer Worked with Taylor on various projects Abandoned the differential rate system & developed one where worker + supervisor received bonuses for attaining standards   Built upon Owen’s idea of rating employees publicly Developed a charting system for production scheduling ‘Gantt Chart’ which is still in use  Was the forerunner of PERT – Program Evaluation & Review Technique Frank & Lillian Gilbreths  Frank Gilberth was a bricklayer who went on to become a building contractor Management Process . Fredrick        W.doc Scientific Management Theory A management approach that sought to determine scientifically the best method for performing any task & for selecting. Taylor – the Father of Scientific Management Consulting management engineer Wrote “The Principles of Scientific Management” Based management systems on time studies Broke down each job into its components & designed the quickest & best method of performing each component Established standards for performance Trained workers in the best methods – laid off/transferred inefficient workers Encouraged employers to pay productive workers higher. based on a incentive scheme he called Differential Rate System Cut standard working hours from 10½ to 8½ Introduced rest periods Ideas worked well initially Were misused by employers Resisted by unions      Henry L. training & motivating workers. AJAY NAGRE 4 .

politics. Planning 2. AJAY NAGRE 5     Management Process . Commercial – Buying. Financial 4. Accounting 6. Selling & exchanging 3. religion etc. Security 5. . Controlling Believed that management can be taught & Principles of management are universal – can be applied to business. Coordinating & 5.161336059. Commanding 4. Organising 3. Technical/Production 2. Managerial Believed that the last function was neglected & therefore focused his attention on it Examined in detail management elements/functions 1. Focus – the whole organisation Henri Fayol – the real Father of Modern Management      French industrialist Founder of the classical management school Believed sound management practice falls into certain patterns that can be identified & analysed Built a cohesive doctrine of management which continues to be relevant today Found that activities of an industrial undertaking could be divided into 6 groups 1.doc  Studied the different motions of bricklaying and developed a technique which reduced motions from 18 to 5 & doubled output without increased effort   Collaborated with Lillian on fatigue & motion studies Became a consultant on improvement of human productivity    Met Taylor in 1907 & combined his ideas with Taylor’s Lillian did her doctorate in industrial psychology Focused on ways to promote worker’s welfare Classical Organisation Theory A management approach based on identifying the principles and skills needed for effective management.

3. 11. 8. 12.  Members of the organisation are guided by their sense of duty to the organisation &   A set of rational rules & regulations Organisation characterised by o Specialisation of tasks o Appointment by merit o Provision of career opportunities for members o Routinization of activities & o Impersonal organisational climate Objective was to make the organisation predictable & efficient Management Process . 9.   Division of work .doc Fayol’s 14 Principles of Management 1. 14. 10. 6.specialisation Authority & responsibility – are interlinked Discipline – respect of rules Unity of command – report to only one superior Unity of direction – operations having the same objective must have one head & one plan Subordination of individual interest to common good Remuneration – should be fair to both employer & employee Centralisation – find right balance Scalar Chain/Hierarchy – lines of authority running from top to bottom Order – a place for everything (one). & everything (one) in its place Equity – managers should be friendly & fair to employees Stability of tenure Initiative – subordinates should be given to show Esprit de corps – promoting team spirit Fayol emphasised that this is not an exhaustive list These are (guiding) principles & not laws or rules Theory of Bureaucratic Management Bureaucracy – an organisation with a legalised formal & hierarchical structure  Developed by Max Webber. 13. 2. AJAY NAGRE 6 . a German sociologist  Stressed the need for a strictly defined hierarchy governed by clearly defined rules & lines of authority. 5.161336059. 4. 7.

line & staff. principles & techniques that underlie the task of managing Distinguishes between managerial & non – managerial knowledge Believes that there is a central core of knowledge about managing that is pertinent only to the field of management e. Henry Mintzberg Refers to the usual method of classifying managerial functions – planning. -Integrates concepts.g. sociology.doc Management Process Approach also known as The Operational Approach Believes that fundamentals of management are universal  Treats management as a science. staffing. leading & controlling – as folklore Studied activities of 5 chief executives in different organisations & concluded that managers actually fill a series of 10 roles The Ten Managerial Roles Interpersonal Roles Management Process . Also draws on knowledge from other fields e. Success in managing depends on: o Managerial knowledge o Special/Technical knowledge  Marketing. AJAY NAGRE 7 . psychology. Production Has developed a classification system built around managerial functions      The Functions of a Manager      Planning – selecting missions & objectives & the actions to achieve them Organizing – establishing an intentional structure of roles for people to fill in an organisation Staffing – filling & keeping filled the positions in the organisation structure Leading – influencing people to contribute to organisation & group goals Controlling – measuring & correcting individual & organisational performance to ensure conformity to plans The Managerial Roles Approach    Popularised by Prof.g. organising.161336059. departmentation etc. mathematics etc. Finance.

Disseminator – passing information 6. Entrepreneur 8. no road will get you there. outside the org. Recipient – receiving information 5. – Anon Research at Harvard revealed that 3% of people who had written down goals had become worth more financially than the other 97% put together. Negotiator Planning If you don’t know where you are going. Spokesperson – transmitting info. Leader 3. Plan – course of future action Planning – process of establishing goals & suitable course of action for achieving these goals Steps in Planning         Being aware of opportunities Setting Objectives or Goals Planning premises – assumptions about the environment Identifying Alternatives Evaluating Alternatives Decision Making/Choosing an alternative Formulating supporting plans Numberizing plans by budgeting AJAY NAGRE 8 Management Process . Decision Role 7. . Recourse allocator 10. Figurehead – organisation’s representative at ceremonial & social duties 2. Liaison – particularly with outsiders Informational Roles 4. Disturbance handler 9.doc 1.161336059.

Establishing starting & ending dates for each part Techniques for programming – Gantt Charts. Fixing responsibilities – who? 4. Projection or forecast of present business activities over the planning period 2. Estimating the time required to accomplish each part 6. PERT/CPM Objectives – ends towards which organisational & individual activities are directed Nature of Objectives  Structured in a hierarchy  Objectives form a network / Complementary  Multiplicity of objectives  Mutual reinforcement of organisational & individual objectives Management Process .doc The Time Dimension o Strategic/Corporate/Long Term o Medium Term o Short Term Strategic Plan – is the intended relationship between the organisation & its environment. Dividing program into projects or parts 2.161336059. AJAY NAGRE 9 . How to accomplish each part & the resources required 5. It answers basic questions like: o o o o o What business are we in? Who are our customers? What is the value to the customer? What will our business be? What should our business be? Medium Range Plan – period between 1 – 5 years Has two distinct but related parts 1. Development & scheduling of new programs & business actions for the future Programming – steps for 1. Determining the relationships & sequence between each of the parts 3.

Dhirubhai H.’ . Our commitment deeper. 1969 Hotel Owner. Our ambitions higher.’ ‘To keep our guests as happy as pigs in shit. Think ahead. Hierarchy of Objectives Socio-economic Purpose or Vision I Mission I Goals & Targets o Divisional o Departmental o Individual Vision – desired future state of the organisation. Aim for the best. values & aspirations that unite an organisation in some common purpose. Kennedy Space Center. AJAY NAGRE 10 . Think differently.doc  Superordinate objectives contain subordinate objectives Superordinate Objectives – guiding concepts.’ ‘To entertain everyone. This is my dream for Reliance & for India. Ambani Thomas Edison Sony Janitor.’ ‘Helping to put a man on the moon. everywhere.’ ‘Our dreams have to be bigger. Also called Strategic Intent by Hamel ‘To light the globe at night.161336059. Think fast. Means – ends chain Objectives (ends) achieved at lower levels are the means by which objectives at a higher level are reached.’ Management Process . And our efforts greater. 1996 ‘Think big.

Quantified or more precise statement of goals G oal ' T o im p r o v e c u s t o m e r c a r e R e d u c e o rd e r to d e s p a t c h t im e b y 2 0 % Two approaches to targets o Visionary o SMART SMART o S – Specific o M – Measurable o A – Achievable/Agreed o R – Realistic/Recorded o T – Time Bound MBO – Management by Objectives is a formal set of procedures that establishes & reviews progress towards common goals for managers & subordinates R e d u c e c u s t o m e r c o m p la in t s t o m a x im u m o f 1 a w e e k R a is e s a t is f a c t io n le v e l fro m 9 0 % to 9 5 %  Proposed by Peter Drucker in 1954. General statement of aim or purpose. short term objectives.Corporate Philosophy of Reliance.161336059. Targets – specific.doc . Mission or Purpose – essential purpose of the organisation in line with the values & expectations of major stakeholders o Tangible expression of vision o Broad direction & focus Goals – broad. medium term objectives. in his book Practice of Management The Logic  Performance is higher when people had specific objectives  Timely feedback leads to better performance  Participation in goal setting leads to higher performance Management Process . AJAY NAGRE 11 .

are discussed  Final performance appraisal based on attainment of objectives Advantages  Improves Planning   Focuses planning on results rather than on activities Helps in integrating & focusing action towards organisational goals & strategy  Clarification of organisation – roles & structure  Greater employee involvement & commitment  More realistic objectives  More opportunity for autonomy & self control  Improved performance appraisal – objective & predetermined criteria Limitation  Difficulty in setting verifiable goals  Danger of inflexibility  Emphasis on short term objectives  Time consuming process  Ends may justify means  Subordinates tend to depress targets Management Process . AJAY NAGRE 12 .161336059.doc Process of MBO  Top Management sets preliminary goals  Clarifying Organisational Roles & Structure  Objectives set for Manager/Superior  Superior gives preliminary recommendation of objectives for subordinate  Subordinate prepares preliminary statement of objectives  Superior & subordinate sit together & finalise subordinates targets  Major areas of responsibilities are clearly defined in terms of measurable expected results  Recycling – superiors targets are reviewed in light of final sub. if any. Targets  Objectives are used by subordinate to plan his activities  Subordinate has autonomy in planning & implementing  Superior monitors progress periodically based on attainment of objectives  Corrective measures.

within the organisation Management Process .Sales & Revenue Forecast Advantages  Compels managers to look into the future  Discloses areas of inadequacy & lack of control  Increases participation within the organisation  Brings singleness of purpose of plans Effective Premising  Selection of relevant premises  Development of alternative premises for contingency planning  Verification of consistency of premises . AJAY NAGRE 13 .  Known/Existing conditions o Internal – Policies. Rules etc.161336059. & include assumptions or forecasts of the future & of known conditions that will affect the operation of plans.doc  Failure to teach philosophy of MBO       What is How it works Why it is being done Corporate goals Planning premises How their own activities fit  Failure to give guidelines to goal setters Planning Premise Planning Premise – anticipated environment in which plans are expected to operate. o External – PEST  Unknown/Uncertain/Future conditions Forecast o Macro Environment & Business conditions – PEST/EPISTLE o Forecast about effect of firms actions/Micro Environment . Assumptions that form the basis of a plan.

o Time Series analysis o Causal/Co-relation Analysis  Regression Analysis Qualitative Forecasting – a technique that transforms judgements opinions & knowledge into quantitative estimates o Delphi Technique – uses group brainstorming of experts to reach a consensus & insight into the future o Multi . Profit Flows.Industrial buyers o Deductive methods – application of judgement Management Process .doc  Communication of the premises Forecasting is like trying to drive a car blindfolded & following directions given by a person who is looking out of the back window. .Anon Forecasting – the process of using past events to make systematic predictions about future outcomes & trends Forecast o Macro Environment & Business conditions – PEST/EPISTLE o Forecast about effect of firms actions/Micro Environment .161336059.Sales & Revenue Forecast o Derivative Forecasts – Results of plans .Criteria Analysis – a technique in which a jury of experts evaluate various alternatives by assigning numerical scores to criteria identified by consensus Sales Forecasting Quantitative o Time Series analysis o Causal/Co-relation Analysis Qualitative o Jury of executive opinion o Sales force composite method o Users’/Buyers Expectation method . AJAY NAGRE 14 . Cash Flows etc Forecasting o Quantitative o Qualitative Quantitative Forecasting – based on use of mathematical rules to manipulate existing data to predict the future.BEV.

doc Level Enterprise Corporate Business Functional Focus Legitimacy Economic Competitive Departmental Objectives Strategy Created by Founder / Top Mgt. AJAY NAGRE 15 . Middle & First Line Mgt. Top & Middle Mgt. They define the boundaries within which decisions are made. Are required to achieve a high degree of  Management Process . Top Mgt.  Plans –  Standing Plans • • •  Policies Procedures Rules Single Use Plans – for non – recurring activities • • • Programs Projects Budgets  Policies – General statements that guide decision making. Vision Statement Enterprise Strategy Mission Statement Goals/ Targets Goals/ Targets Corporate Strategy Competitive Strategy Functional Strategy Types of Plans  Plans –  Strategic Plans – incorporate uncertainty & interface with the environment – what to achieve  Operational Plans – Administrative or Tactical – how to achieve. and they direct decisions towards the accomplishment of objectives.161336059. Procedures – plans that establish a required method of handling future activities.

g. Deciding to decide o Can it be dealt with? o Will it resolve itself? o Is it my job to decide it? Types of Decisions o Programmed decisions – solutions to routine problems made in accordance with written or unwritten policies.  Budget – formal quantified statements of resources allocated to specific programs or projects for a given period. e. AJAY NAGRE 16 . They allow no room for discretion. procedures. & timing & the unit responsible for each.doc regularity in frequently occurring events.161336059.are specific statements of what may or may not be done. their order.  Program – a single use plan that covers a relatively large set of organisational activities & specific major steps. They are guides for action not thinking. Expansion program. Building a new plant. Managerial Situation o Problem (solving) – actual state of affairs differ from a desired state of affairs o Opportunity (finding) – circumstances offer a chance to exceed stated goals & objectives Decision Making – the process of identifying & selecting a course of action to deal with a specific problem or to take advantage of an opportunity. o Non-programmed decisions – specific solutions created to deal with non-routine problems Rational Decision Making Process/Steps o Investigate the situation  Define the problem  Identify the decision objectives  Diagnose the causes o Develop / Search Alternatives o Evaluate Alternatives & Select Alternative o Implement & Monitor the decision Management Process .g. E.  Rules . rules or habit.  Project – a smaller & separate portion of a program.

organised & co-ordinated. money Availability (in the memory of the person) Representativeness – stereotyping Anchoring & Adjustment Easy Recall (then it must be right) Easy (lazy) Search Stereotyping Insensitivity to sample size Misconception of chance (random events) Insufficient adjustment Overconfidence The confirmation trap  Heuristics – rule of thumb  Biases in Decision Making  Hindsight Evaluation of Alternatives Qualitative Selection of Alternatives      Quantities Past Experience Experimentation – trying out one alternative Research & Analysis Decision Tree SWOT/TOWS analysis Techniques   Organizing Organisational Structure – the way in which an organisation’s activities are divided. time. Formal Organisation – intentional structure of roles in a formally organised enterprise o Well     .doc Limitations of Rational Decision Making  Bounded Rationality              Satisficing Constraints of info.161336059. defined structure that describes its Authority Power Accountability Responsibility relationship & AJAY NAGRE 17 Management Process .

AJAY NAGRE 18 . relatively simple  Alienation  Job enlargement & job enrichment Management Process . policies & plans o Identify & classify activities necessary to accomplish these o Divide total work into tasks that can be logically & comfortably performed by individuals or groups .161336059.Division of work o Grouping/Combining tasks & employees in a logical & efficient manner (value creating manner) – Departmentalisation o Set up mechanism for co-ordination .doc  Channels of communication Durable & planned Inflexible Membership gained consciously at a specified time Clearly specified jobs for every member Hierarchy of objectives is clearly & explicitly stated Status. Steps in Organising o Establish enterprise objectives o Formulate supporting objectives. pay & other perks well ordered & controlled o o o o o o Informal Organisation – a network of personal & social relations not established or required by the formal organisation but arise spontaneously as people associate with one another Loose Flexible Ill-defined Spontaneous Membership gained consciously or unconsciously Exact time when person becomes a member difficult to determine o Membership or involvement may grow through time o Exact nature of relationship amongst members & goals of the organisation may be unspecified o o o o o o Formal Organisations can get converted to an informal one if defined & structured relationships are not enforced & are replaced by new. prestige. unspecified & uncontrolled relationships.Integration o Monitor effectiveness & make adjustments Issues in Organising o Job specialisation – division of work into standardised.

doc o Span of Management (Control) – the number of subordinated reporting directly to a given manager o Levels of Management – layers  Tall structures – Stable environments  Flat structures – Dynamic environments o Power – ability of individuals or groups to induce or influence the beliefs or actions of other people or groups  Legitimate power – accepted by subordinates/society  Expertise power  Referent power – when people want to be like or identify with the influencer  Reward power  Coercive power – ability to punish o Authority –power vested in a position in an organisational setting o Line authority – the authority of managers who are directly responsible throughout the organisational chain of command for achieving organisational goals o Staff Authority – authority of managers who provide line managers with advice & services o Functional authority – the right delegated to an individual or a department to control specified processes. . policies or other matters relating to activities undertaken by persons in other departments o Decentralisation – the tendency to disperse decision making authority in an organisation structure o Delegation – assigning formal authority & responsibility for completion of specific activities to a subordinate Departmentalisation o Numbers o Time .shifts o Functional o Territory or Geography o Customer o Process o Product o Matrix Staffing What is meant by HRM?  The management function that deals with recruitment. placement.161336059. practices. training & development of organization members AJAY NAGRE 19 Management Process .

doc  Staffing – filling and keeping filled positions in an organization structure Process of HRM or Steps in HRM          Enterprise Plan Organizational Plan HR Planning  Forecasting  Auditing Recruitment  External / Internal Selection Orientation/Socialization Training & Development Performance Appraisal Promotion. .Steps    Establish standards & methods for measuring performance Measuring performance Comparing performance with standards AJAY NAGRE 20 Management Process . Demotion or Separation Issues in HRM       Promotion from within Peter’s Principle Glass Ceiling Affirmative action / Job Reservation Core Team – Outsourcing Global HRM Control .161336059. Transfer.The process of ensuring that actual activities conform to planned activities Examples of Control     ISO 9000 Examinations Financial Audits Inspection Control Process .

& Methods Measure Per. Action Key Result Areas (KRA)   Critical Points or Key Performance Areas Those aspects of an organization that must function effectively if the entire organization or unit is to succeed  Physical Standards  Capital Standards  Revenue Standards  Cost Standards  Intangible Standards  Strategic Plans Types of Control     Pre – Action Control Steering Control / Cybernetic Control Yes – No or Screening Control Post Action Control Issues in Control     Future Directed Efficiencies of Control Preventive Control Suitability to specific organization.161336059. Yes Do Nothing No Corr.doc  Take corrective action Control Process – Est. Stds. Per. . > Std. task or technology AJAY NAGRE 21 Management Process .

AJAY NAGRE 22 .doc    MBE – Management by Exception Flexibility of Control Action Oriented Management Process .161336059.