Introduction to Management

• Millions of men and women around the world

work as managers.
• They confront many challenges.
• All about ‘Managing me’ and ‘Managing Men’.
 Organizations and the need for
management
• Organization:
• People who work together in a structured way
to achieve a goal.
• Goal:
• The purpose that an organization strives to
achieve.
• May have more than 1 goal.
• Goals: fundamental element of organizations.
 Definition of ‘Management’ and
‘Manager’
• Management:
• Planning, organizing, leading and controlling
the work of organization members; and using
resources to realise goals.
• Manager:
• Responsible in organizations achieving their
goals.
 3 compelling reasons why study
management
• 1) organizations contribute to standards of
living of people.
• We rely on organizations daily for:
• Food.
• Clothing.
• Shelter.
• Medical care.
• Communications.
 Why study organizations and
management…
• 2) Organizations build a desirable future.
• Organizations have an impact – positive or
negative – on the future.
 Why study organizations and
management…
• 3) Organizations connect people to their
pasts.
• We define ourselves in terms of our
organizations– schools, teams, political
groups, or businesses.
• Organizations keep records and value its
history.
 Importance of Management
• Management: a critical element in economic
growth.
• Using 4 factors of production (men, machines,
materials, money), management helps
develop companies.
• Without management, country’s resources
cannot be used productively.
 Importance of management…
• Essential in all organised efforts.
• Principles of management: universally applied.
• Educational, social, military and government
areas.
 Importance of management…
• Is dynamic, life-giving element.
• Coordinates current activities and future ones.
• Good management give it a competitive
advantage.
• Management: central core of all national and
personal activities.
 Definition of ‘Management’
• “Management: art of getting things done
through other people”. – Mary Parker Follett.
• Contributes to organisation’s goals indirectly.
• “Environment in which individuals, working
together, efficiently accomplish selected
aims”.
 Meaning of management…
• The objective of a hospital: medical care.
• The objective of a university: give students a
well-grounded education.
 The expanded form of the definition
• managerial functions of planning, organizing,
staffing, leading and controlling.
• Applies to:
• Any kind of organization.
• All organizational levels.
• Concerned with productivity.
 Organization
• Group of people working together.
• In charitable organizations, satisfaction of
needs.
• Universities generate and disseminate
knowledge, and serve the community or
society.
 Managerial Functions
• ‘POSDCCORB’.
• Planning.
• Organizing.
• Staffing.
• Directing/Leading.
• Coordinating.
• Controlling.
• Operating.
• Reporting.
• Budgeting.
 Planning
• What should be done in advance.
• Looking ahead and preparing for future.
• E.g. Course plan.
• Deciding business objectives.
• Performed by managers at all levels – top,
middle and supervisory.
 Organising
• To provide: personnel, raw materials, tools,
capital.
• Human organisation and
• Materials organisation.
 Organising…
• Human organisation: identifying and grouping
work, delegating responsibility and authority,
and establish relationships”.
• Staffing: find the right person for each job.
• Staffing: responsibility to recruit, and fill
positions, in the organisation.
 Directing
• Move towards defined objectives.
• “Leading”, “directing”, “motivating”.
• Explains to people what they have to do and
helps them do it to the best .
 Directing…
• 3 sub-functions:
• Communication.
• Leadership.
• Motivation.
• Communication: passing information from one
person to another.
• Leadership: guiding and influencing the work of
his subordinates.
• Motivation: arousing desire in workers.
 2 types of Motivation
• Financial and non-financial.
• Financial motivation: salary, bonus,
profit-sharing etc.
• Non-financial motivation: job security, job
satisfaction, opportunity to advance, get
recognition and praise and respect.
 Controlling
• Everything occurs in conformity with:
• Plans adopted.
• Instructions issued and
• Principles established.
3 elements of Controlling function
• Establishing standards of performance.
• Comparing actual and expected performance.
• Correct performance that does not meet
standards.
 Innovation
• Creating new ideas.
• Development of new products or
• Finding new uses for the old ones.
 Types of private organisations
• Sole proprietorship.
• Partnership.
• Joint stock companies.
• Cooperative societies.
Types of business organisations based
on geographical spread
• Domestic business.
• Multinational companies.
 Objectives of Business
• General and corporate objectives.
• Production/service objectives.
• Financial objectives.
• Marketing objectives.
• Human resource objectives.
• Social objectives.
• Corporate governance objectives.
• National objectives.
• Global objectives.
 General and Corporate objectives
• Survival even during recessionary periods.
• Survival and growth.
• Sustainable growth.
• Maximisation of shareholders’ wealth.
• Maximisation of corporate brand image.
 Production/Service objectives
• Maximisation of production in terms of
quantity.
• Producing best quality first time itself.
• Producing at the lowest cost.
• Producing and rendering services based on
customer needs.
 Financial objectives
• Profit maximisation.
• Maximisation of RoI (Return on Investment).
 Marketing objectives
• Expansion of markets.
• Maximisation of customer satisfaction.
 Human resource objectives
• Maximisation of employee productivity.
• Maximisation of employee job satisfaction.
• Maximisation of employee commitment and
loyalty to the organisation.
• Maximisation of human resource
development.
 Social objectives
• Ethical business practices.
• Rendering service to society.
• Providing education, medical care, and
recreation, to society.
 Corporate governance objectives
• Following laws/regulations fully.
• Be a responsible corporate citizen.
• Maintenance of disclosures.
• Transparency of business operations.
• Treating shareholders equally and discharging
obligations to them.
 National objectives
• Create employment opportunities.
• Utilisation of natural resources more
responsibly.
 Global objectives
• Balanced development of various countries.
• Practice best and acceptable culture and
norms.
• Overall development of countries.
• Sustainable and responsible use of natural
resources.
 Roles of a Manager
• Pattern of actions expected.
• Arise as a result of position he occupies.
• Plays different roles, because people in each
situation have different expectations of him.
 10 Roles of a Manager
(by Henry Mintzberg)
• Interpersonal Roles:
• Figurehead.
• Leader.
• Liaison.
• Informational Roles:
• Monitor.
• Disseminator.
• Spokesman.
• Decisional Roles:
• Entrepreneur.
• Disturbance Handler.
• Resource Allocator.
• Negotiator.
 Interpersonal Roles
• Figurehead: perform duties of ceremonial nature:
• E.g. Greeting the touring dignitaries.
• Attending wedding of an employee,
• Taking an important customer to lunch.
• Leader: motivate and encourage his employees.
• Reconcile individual needs with organisational
goals.
• Liaison: Cultivate contacts outside his chain of
command, and collect useful information.
 Informational Roles
• Monitor:
• Scan his environment.
• Interrogate his contacts and subordinates.
• Receive unsolicited information, due to his
personal networking.
• Disseminator: Passes information to his
subordinates who have no access to it.
 Informational Roles…
• Spokesman:
• Spend some time in representing his
organisation before various outside groups.
• Interact with government officials, labour
unions, financial institutions, suppliers,
customers etc.
• Must win their support.
 Informational Roles…
• Spokesman:
• Advise shareholders about financial
performance.
• Assures consumer groups that organisation is
fulfilling responsibilities.
• Satisfies government that organisation is
abiding by the law.
 Decisional Roles
• Entrepreneur:
• Manager looks for innovation.
• Necessary that the organisation grows.
• Creating new ideas.
• Development of new products or services.
• Finding new uses for old ones.
 Decisional roles…
• Disturbance Handler:
• Work reactively like a fire-fighter.
• Seeks solutions of various unanticipated
problems:
• Strike.
• Bankruptcy of a customer.
• Supplier may retreat from his contract.
 Decisional Roles…
• Resource Allocator:
• Divide work, and
• Delegate authority among subordinates.
• Negotiator:
• The president of a company may negotiate
with the union leaders a strike issue.
• Foreman may negotiate with the workers a
grievance problem etc.
 Guidelines for Top Managers
(W. Edwards Deming) (14 principles of the
Quality movement)
• Create constancy of purpose for improvement of
product and service.
• Adopt the new philosophy.
• Cease dependence on mass inspection.
• End the practice of awarding business on price tag
alone.
• Constantly and forever improve the system of
production and service.
• Institute modern methods of training on the job.
• Institute leadership.
 Deming’s guidelines for
managers…
• Drive out fear.
• Break down barriers between staff areas.
• Eliminate slogans, exhortations, and targets for
the workforce.
• Eliminate numerical quotas.
• Remove barriers to pride of workmanship.
• Institute a vigorous programme of education and
training.
• Take action to accomplish the transformation.
 Levels of Management
• 3 levels among them.
• First-line (lower level).
• Middle managers.
• Top managers.
 Levels of management…
• Lower management level: foremen and white-collar
supervisors.
• Middle management level:
• sales managers,
• plant managers,
• personnel managers, and
• many other department heads.
• Top management:
• Board of directors and chairman.
• Company presidents.
• Executive vice-presidents etc.
• Make policies for the company as a whole.
Elements of Business Environment
• Managers cannot perform their tasks well unless
they understand business environment:
• Political.
• Economic.
• Socio-Cultural.
• Technological.
• Legal.
• Environmental.
• ‘PESTLE’ analysis.
• Analysis of the external environment.
 Managerial skills identified by
Robert L Katz
• Technical skills.
• Human skills.
• Conceptual skills.
• Design skills.
• The relative importance of these skills vary at
various levels of management.
 Managerial Skills and the
Organizational Hierarchy
• Technical skills are important at the
supervisory (lower) level.
• Human skills are helpful in frequent
interactions with subordinates.
• At the middle management level, the need for
technical skills decreases, human skills are still
essential, while conceptual skills gain in
importance.
 Managerial skills and Organizational
hierarchy…
• At top management level, conceptual and
design abilities and human skills are especially
valuable, but need for technical abilities
decrease.
• In large companies, CEOs can utilize the
technical abilities of their subordinates.
 Technical skill
• Person’s knowledge and proficiency in any
type of process.
• Understanding of the technicalities of the
process of production.
• Its relative importance diminishes as the
manager moves to higher positions.
 Human Relations skill
• It is the ability to interact effectively with
people at all levels.
• Recognise the feelings and sentiments of
others.
• Judge the possible reactions to, and outcomes
of various courses of action he takes.
• Examine his own concepts and values helping
him to develop more useful attitudes about
himself.
 Conceptual skill
• Ability to take a broad and farsighted view of
the organisation and its future.
• Think in abstract.
• Analyse the forces working in a situation.
• Creative and innovative ability.
• Assess the environment and the changes in it.
 Conceptual skill…
• This skill increases in importance, as a
manager moves up to higher positions in the
organisation.
 Management: Science or Art???
• Managing, like all other practices – whether
medicine, music composition, engineering,
accountancy – is an art.
• It is a know-how.
• Doing things in light of the realities.
• It is this knowledge that constitutes a science.
 Administration and Management
• Administration: Determination of plans,
policies and objectives of an enterprise.
• On the other hand, management involves
“doing”.
• It is a function which is concerned with the
execution and direction of policies and
operations.
Administration and Management…
• Each manager performs both activities.
• Spends part of his time administering and part
of his time managing.
Administration and Management…
• Brech regards ‘Management’ as a generic
function embracing the entire process of
planning, organising, directing and controlling.
• Administration: includes only planning and
control.
Administration and Management…
• According to Peter Drucker:
• The governance of non-business institutions
(such as government, army, church etc.) is
called ‘administration’ and
• The governance of business enterprises, is
called ‘management’.
• Economic performance is the chief dimension
of management.
 Management as a Profession
• Characteristics of a profession, according to
McFarland:
• Organised and systematic knowledge.
• Formalised methods of training and
experience.
• Ethical code to regulate the behaviour of the
members.
• Charging of fees based on service.
 Is Management a profession???
• Unlike medicine or law, management does not
have any fixed norms of managerial
behaviour.
• There is no uniform code of conduct for
managers.
• Entry to managerial jobs is not restricted to
individuals with special academic degree only.
• Conclude that management cannot be called a
profession per se.
 Goals of all managers and
organizations
• Create surplus, by accomplishing group goals,
using least amount of men, machine, material,
money and time.
• i.e. to achieve ‘Optimization’.
 Characteristics of Excellent and most
admired companies
• Thomas Peters and Robert Waterman, in
‘In Search of Excellence’.
• Oriented toward action.
• Learned about needs of customers.
• Promote managerial autonomy and
entrepreneurship.
• Achieved productivity by paying close attention to
the needs of employees.
• Company philosophy based on values.
• Simple organization structure.
 st
Challenges in Management of 21
Century
• Commercial risks and challenges.
• Economic risks and challenges.
• Political risks and challenges.
• Social risks and challenges.
• Technological risks and challenges.
• Natural risks and challenges.
 Economic risks and challenges
• Economic fluctuations like economic boom,
economic recession of:
• The total global economy.
• The entire national economy.
• A particular industry.
 Political risks and challenges
• Changes in political parties in power.
• Changes in policies of the government.
• Involvement of politicians in business
activities and industrial relations, in a negative
way.
 Social risks and challenges
• Changes in the social structure of business
activities like entry of various castes and
communities into business.
• Culture changes like eating habits, dressing
habits, usage of variety of goods and services
and shifts in housing.
• Changes in customers’ tastes and preferences.
Technological risks and challenges
• Developments in the service technology like
transportation technology, new banking
services and modern machines etc.
• Development of new versions of computers,
new gadgets, new softwares etc.
 Natural risks and challenges
• Natural calamities:
• Floods.
• Earthquakes.
• Fire.
• Accidents.
• Climate changes due to global warming.
 st
Challenges in Management of 21
century…
• Advances in Technology.
• Trends in Globalization.
• Focus on Entrepreneurship.
Technological advances (E-commerce
and M-commerce)
• Information Technology (IT): Impact on both
organizations and individuals.
• The World Wide Web and the Internet
connect people and organizations.
• Electronic-commerce (E-commerce) is
increasingly used for transactions between
individuals and companies (C2B) as well as
between businesses (B2B).
 M-commerce
• Mobile or wireless commerce for buying and
selling goods, through smartphones.
• People can communicate without computers
by using wireless devices.
 Globalization
• Most major corporations have an
international presence.
• The World Trade Organization (WTO), was
established in 1995, to govern international
trade.
• Not only benefit Western corporations but
also result in higher income for people in
other countries.
 Entrepreneurship
• Setting up a business or businesses, taking on
financial risks, in the hope of profit.
• Creative process of identifying market
opportunities and unmet needs.
 Productivity, Effectiveness and
Efficiency
• Successful companies create a surplus through
productive operations.
• Productivity is defined as the output-input
ratio, within a time period, with due
consideration for quality.
• Productivity = (Output/Input).
 Ways to increase Productivity
• Increasing outputs with the same inputs.
• Decreasing inputs, but maintaining the same
outputs.
• Different inputs are 4Ms (Men, Machine,
Material, Money).
• Simultaneously increasing outputs and
decreasing inputs, to change the ratio
favourably.
• Optimization (Operations Research concept).
 Effectiveness and Efficiency
• Effectiveness is the achievement of objectives.
• Efficiency is the achievement of the ends with
the least amount of resources.