Principles

of
Management
Learning Session # 1
Dr. A. Rashid Kausar
Management
Overview
 Managers
Management
Otganizations
 Managers
perform
Management
in the
Organizations
Organizations
 Organizations ?
An entity where
2 persons or more
working together
for a common purpose
Organizations:
NAMES ?
People
Purpose
Process
(POLCA)
 People
Performance
Goals
Egyptian Pyramids
Massive Stone Design
Built 4500 years ago
2.3 mil stone blocks
Egyptian Pyramids
Base 230 m long
Height 146 m
Built using rollers,
ropes, and levers
 Great China Wall
688 BC to 1644 AD
300 yrs – 500 KM
Total 6000 KM
Renovation took 200 yrs
Great China Wall
Base 20 feet wide
Top 11 feet wide
Height 7 to 37 feet
All made by Hands
 Great China Wall
To mark Territories
To defend the area
To protect Silk Road
And ?
Sydney Opera House
Completed 1940-1973
645 KM -- power cable
1000 Rooms
5 Theatres +++
Sydney Opera House
Hall for 2679 persons
House for 1547 seats
183 m tall / 120 m wide
Organ – 10,000 pipes
Sydney Opera House
Roof is made of
1,056,000 tiles
imported from Sweden
Cost – $102 mil
Original estimate $7m
Sydney Opera House
Project late by 10 yrs
Architect Mr. Utzon
Got Attention during
Sydney Olympics 2000
Sydney Opera House
To
provide
entertainment !
Flying colors on PC
Dozens of Engineers
Several Years
1 CD for many $ Mil
People / Managers
Perform
To achieve
Common Goals
Common Purpose
People / Managers
Achieve goals
Using Management
Process(POLCA)
 Manager
is the one who
achieve goals
By working with or
through people
Management
Overview
 Principles
of
Management
Learning Session # 20
Dr. A. Rashid Kausar
 Re-cap
of
Session # 19
 Planning and
Decision Aids

Management Science
Or
Operation Research
For ?
 Planning and
Decision Aids

Increasing Decision
Effectiveness by
using Mathematical,
Statistical, &
Qualitative Models.
 Planning and
Decision Aids
1.For Assessing Environment:
1.1 Environmental Scanning
1.2 Forecasting
1.3 Benchmarking
 Planning and
Decision Aids
2.For Allocating Resources:
2.1 Budgeting
2.2 Scheduling
2.3 Break even Analysis
2.4 Linear Programming
 Planning and
Decision Aids
3. Contemporary Planning
Techniques:
3.1 Project Management
3.2 Scenarios Analysis
 Planning and
Decision Aids
1.For Assessing Environment:
1.1 Environmental Scanning;
The screening of large
amounts of information to
anticipate and interpret
changes in the environment.
 Planning and
Decision Aids
1.For Assessing Environment:
1.1.1 SWOT Analysis
Strengths
Weaknesses
Opportunities
Threats
 Planning and
Decision Aids
1.For Assessing Environment:
1.1.2 Competitive Intelligence;
An activity that seeks to identify
who are our competitors, what
are they doing, and how their
actions will affect our
organization.
 Planning and
Decision Aids
1.For Assessing Environment:

1.2 Forecasting;
 Planning and
Decision Aids
1.2 FORECASTING
Process of making
predictions about
changing conditions
and future events that
may affect the business
of an organization.
 Planning and
Decision Aids
1.2 FORECASTING
Methods are of
3 Types !
Planning and
Decision Aids
1.2 FORECASTING
1.2.1 Quantitative
1.2.2 Qualitative or
Technological
1.2.3 Judgmental
 Planning and
Decision Aids
1.2 FORECASTING
1.2.1 Quantitative
Forecast relies on
numerical data and
mathematical models to
predict future conditions.
Planning and
Decision Aids
1.2 FORECASTING
1.2.1 Quantitative
1.2.1.1 Time Series
Methods
1.2.1.2 Explanatory /
Causal Methods
Planning and
Decision Aids
1.2 FORECASTING
1.2.1 Quantitative
1.2.1.1 Time Series
Methods
It uses historical data to
forecast the future.
 Planning and
Decision Aids
1.2 FORECASTING
1.2.1 Quantitative
1.2.1.2 Explanatory /
Causal Methods… focus
on major variables
Regression, Econometric and Leading Indicators
 Planning and
Decision Aids
1.2 FORECASTING
1.2.2 Qualitative or
Technological..
Aim to predict long term
technology trends by relying on
creativity, judgements and
experts knowledge.(Delphi Analysis)
Planning and
Decision Aids
1.2 FORECASTING
1.2.3 Judgmental
Relies on individual
judgments or committee
agreements about
future conditions
 Planning and
Decision Aids
1.For Assessing Environment:
1.3 Benchmarking; The
search for the best practices
among competitors or non-
competitors that lead to their
superior performance.
 Planning and
Decision Aids
2.For Allocating Resources:
2.1 Budgeting
2.2 Scheduling
2.3 Break even Analysis
2.4 Linear Programming
 Planning and
Decision Aids
2. For Allocating Resources:
2.1 Budgeting; The Budget is a
numerical plan for allocating
resources to specific
activities in a specific period.
 Principles
of
Management
Learning Session # 21
Dr. A. Rashid Kausar
 Re-cap
of
Session # 20
 Planning and
Decision Aids
2.For Allocating Resources:
2.1 Budgeting
2.2 Scheduling
2.3 Break even Analysis
2.4 Linear Programming
 Planning and
Decision Aids
2. For Allocating Resources:
2.1 Budgeting; The Budget is a
numerical plan for allocating
resources to specific
activities in a specific period.
 Planning and
Decision Aids
2. For Allocating Resources:
2.2 Scheduling; Detailing what
activities have to be done,
the order in which they are to
be completed, who is to do
each, and when they are to
be completed.
 Planning and
Decision Aids
2. For Allocating Resources:
2.2 Scheduling
GANTT Charts: A scheduling
chart developed by Henry Gantt
that shows actual and planned
output over a operiod of time.
 Planning and
Decision Aids
2. For Allocating Resources:
2.2 Scheduling
PERT Network; A flow chart like
diagram showing the sequence of
activities needed to complete a
project and the time or costs
associated with each.
 Planning and
Decision Aids
2.For Allocating Resources:
2.3 Break even Analysis;
A technique for identifying the
point at which total revenue is
just sufficient to cover total
costs.
 Planning and
Decision Aids
2.For Allocating Resources:
2.4 Linear Programming;
A mathematical technique
that solves resource
allocation problems.
 Planning and
Decision Aids
3. Contemporary Planning
Techniques:
3.1 Project Management
3.2 Scenarios Analysis
 Planning and
Decision Aids
3. Contemporary Planning
Techniques:
3.1 Project Management;
A Project is a one time only set
of activities that has a definite
beginning and ending point in
time.
 Planning and
Decision Aids
3. Contemporary Planning
Techniques:
3.1 Project Management;
The task of getting a project’s
activities done on time, within
budget, and according to
specifications.
 Planning and
Decision Aids
3. Contemporary Planning
Techniques:
3.2 Scenarios Analysis;
A consistent view of what the
future is likely to be.
 Planning and
Decision Aids
4. Other Methods:
4.1 Queuing
4.2 Simulation Models
4.3 Decision Trees
 Principles
of
Management
Learning Session # 22
Dr. A. Rashid Kausar
 Re-cap
of
Session # 21
Why Do Managers
Plan?
Purposes of Planning:
1.Planning is the primary
management function
that establishes the
basis for all other
management functions.
Why Do Managers
Plan?
Purposes of Planning:
Planning in POLCA
Planning for Planning
Planning for Organizing
Planning for Leading
Planning for Controlling
Planning for Assurance
Why Do Managers
Plan?
Purposes of Planning:
2.Planning establishes
coordinated effort.
3.Planning reduces
uncertainty.
Why Do Managers
Plan?
Purposes of Planning:
4. Planning reduces
overlapping and wasteful
activities.
5.Planning establishes
goals and standards used
in controlling.
 Why Do Managers
Plan?
Planning and Performance
1.Generally speaking,
formal planning is
associated with:
1.1Higher profits
1.2Higher return on assets
Why Do Managers
Plan?
2.Quality of the planning
process and the
appropriate
implementation of the
plans contribute more to
high performance than
does the extent of
planning.
Why Do Managers
Plan?
3.External environment may
undermine the effects of
formal planning.
4.Planning/Performance
relationship is influenced
by the planning time frame.
What Is Planning?
Planning
It involves defining the
organization’s goals,
establishing an overall strategy,
and developing a comprehensive
set of plans to integrate and
coordinate organizational work.
 Planning

Planning is choosing a goal

and developing a strategy
to achieve that goal.
Benefits of Planning
Benefits
of Planning

Persistence Direction

Creation
Intensified
of Task
Effort
Strategies
Functions of Planning
1) Identifying future
opportunities
2) Exploring and
avoiding future
problems
Functions of Planning
3) Developing courses of
action
4) Understanding the risks
and uncertainties
associated with
various options
How Do Managers Plan?
The Role of Goals and Plans in
Planning
Goals
desired outcomes
Provide direction for all management
decisions
Represent the criteria against which actual
work accomplishments can be measured
Plans
Outline how goals are going to be met!
How Do Managers Plan?
Characteristics of Well-
Designed Goals
1.Should be written in terms
of outcomes
2.Should be measurable and
quantifiable
3.Should be clear as to a
time frame
How Do Managers Plan?
Characteristics of Well-
Designed Goals
4.Should be challenging but
attainable
5.Should be written down
6.Should be communicated
to all organization members
who need to know the goals
How Do Managers Plan?

Types of Goals
All organizations have
multiple objectives.
No single measure can
evaluate whether an
organization is successful or
not.
How Do Managers Plan?

Financial Goals
Relate to financial performance
Strategic Goals
Relate to other areas of
performance
How Do Managers Plan?
Type of Plans
Strategic Plans
Apply to the entire
organization. Establish
organization’s overall long
term goals to position the
organization in terms of its
environment.
How Do Managers Plan?

Type of Plans
Operational Plans
Specify the details of how the
overall goals are to be
achieved. Tend to cover
short time periods.
 Principles
of
Management
Learning Session # 2
Dr. A. Rashid Kausar
Management
Overview
(Re-cap)
 Managers
perform
Management
in the
Organizations
 Organizations ?
An entity where
2 persons or more
working together
for a common purpose
People
Purpose
Process
(POLCA)
Bringing Quality in
Organizations
Purpose
Process
(Edward Deming)
 Manager
is the one who
achieve goals
By working with or
through people
 Managers
Performance
Goals
 What
do
actually
Managers
do ?
 Managers
perform
various Roles !
Management Role !
Specific Set of
behavior
associated with
manager’s office or
position
Management Roles !
 Principles
of
Management
Learning Session # 3
Dr. A. Rashid Kausar
 Re-cap
of
Lecture # 2
 Managers
perform
Management
in the
Organizations
 Managers
perform
various Roles !
(Henry Mintzberg)
 Roles
1.Inter-personal
2.Informational
3.Decisional
1.Interpersonal Role
Figurehead
Leader
Liasion
Interpersonal Role
Involves developing
and maintaining
positive
relationship
with others !
2.Informational Role
Monitor
Disseminator
Spokesperson
Informational Role
pertains to
receiving and
transmitting info
to other org. units.
 3.Decisional Role
Entrepreneur
Disturbance Handler
Resource Allocator
Negotiator
Decisional Role
involves making
significant
decisions that
affect the
organization !
 Managers
perform
various Functions !
(Peter Drucker)
(Henri Fayol)
 Management is a
process of carrying
POLCA Functions
to achieve
organizational goals
and/or purpose!
 So Managers
perform
POLCA Functions !
Good Managers
perform these
POLCA functions
with
Efficiency and
Effectiveness
 Efficiency means
The ability to make
the best use of
available resources in
the process of
achieving goals !
Effectiveness means
The ability to choose
appropriate goals and
achieve them !
 Principles
of
Management
Learning Session # 4
Dr. A. Rashid Kausar
 Recap
Session # 3
 Managers
perform
Management
in the
Organizations
Good Managers
perform these
POLCA functions
with
Efficiency and
Effectiveness
POLCA Functions
Planning
Organizing
Leading
Controlling
 Management Functions

Planning

Assurance
Controlling Organizing

Leading
 Management Functions
Planning:
setting goals and deciding
how best to achieve them

Controlling: Organizing:
Assurance
regulating activities to allocating and
reach goals arranging resources

Leading:
influencing others to
work towards goals
Mangement Functions

Planning
The process of setting
goals and deciding how
best to achieve them.
Mangement Functions

Organising
The process of
allocating human and
non-human resources
so that plans can be
carried out
successfully.
Mangement Functions
Leading
The process of
influencing others to
engage in the work
behaviours necessary
to reach
organisational goals.
Mangement Functions
Controlling
The process of
regulating
organisational activities
so that actual
performance conforms
to expected
organisational
standards and goals.
Efficiency (Means) Effectiveness (Ends)

Resource Goal
Usage Attainment

Low Waste High Attainment

Management Strives For:

Low resource waste (high efficiency)
High goal attainment (high effectiveness)
Efficiency - getting the
most output from the least
amount of inputs
“doing things right”
concerned with means
Effectiveness -
completing activities so
that organizational goals
are attained
“doing the right things”
concerned with ends
 Management
Henri Fayol
Peter Drucker
Edward Deming
Henry Mintzberg
While performing
Managers
use
various Skills !
 Characteristics of
Entrepreneurs
Key
Personal
Attributes
Technical Successful
Proficiency Entrepreneur

Managerial
Competencies
 Business Plan ?
Questions:
1.What are my motivations for owning a
business?
2.Should I start a business?
3.What and where is the market for my
product or service?
4.How much will it cost to own the business,
where will I get the money?
5.Can I get help from relatives or friends?
6.Should my company be domestic or global?
7.How will growth be managed?
 Assignment
Which Activity?
1. Assigning Job Duties
2. Provide incentives for employees
3. Check that pizzas or Qeema Nan’s are
prepared on time
4. Hire Experienced cooks
5. Monitor the pizza shop or Qeema Nan shop
opening and closing times as compared to
the schedule.
 Principles
of
Management
Learning Session # 5
Dr. A. Rashid Kausar
Key Management
Skills !
Technical Skills
Human Skills
Conceptual Skills
Management Skills
Technical - knowledge of
and proficiency in a
certain specialized field
Human - ability to work
well with other people
both individually and in a
group
Management Skills
Conceptual - ability to think
and to conceptualize about
abstract and complex
situations
see the organization as a whole
understand the relationships
among subunits
visualize how the organization
fits into its broader
environment
 Vertical differences in
management roles

Top managers —planning, conceptual skills

Middle managers —mixed skill needs

First line managers/supervisors —leading, technical skills

Operational level staff

Levels of Management

Top Managers
Middle Managers

First-Line Managers

Nonmanagers
 Management Process
(Adapted from Carroll & Gillen 1987)

Knowledge base
and key
management skills

Work Work Performance

Management
agenda methods (Goal
Functions:
and roles Achievement)
Planing
Organizing
Leading
Controlling
Levels of Management

Top Managers
Middle Managers

First-Line Managers

Nonmanagers
The Evolving Structure of
Organizations
1990
1980

2000
Y1 Y2 Y3
 Top
Manager

Middle Middle
Manager Manager

First-Line First-Line First-Line First-Line

Manager Manager Manager Manager

Work Work Work Work Work Work Work Work

Group Group Group Group Group Group Group Group
Managerial Titles
First-line managers - manage
the work of non-managerial
individuals who are directly
involved with the production
or creation of the
organization’s products
Managerial Titles
Middle managers - all
managers between the
first-line level and the top
level of the organization
manage the first-line
managers
Managerial Titles
Top managers - responsible
for making organization-wide
decisions and establishing
the plans and goals that
affect the entire organization
SKILLS NEEDED AT DIFFERENT
MANAGEMENT LEVELS
Horizontal management
roles
Entrepreneurial managers
Growth focus
Functional managers
Specific, technical focus
General managers
Broad, whole of organisation/unit
responsibilities
Project managers
Integrative, team focus
 Cross-road
Organization ABC is an IT company
developing soft-wares for an international
market. Due to dot com crisis , its export
market is disappeared. However,when the
budget was made, the expected income
from exports had been included. This
meant that the organization ABC stood to
make an big loss.
Q. If you were GM of this organization what
would you do? Why?
Managerial Competencies

Communication
Competency

Teamwork Planning and

Competency Administration
Managerial Competency
Effectiveness
Global Strategic
Awareness Action
Competency Competency
Self-
Management
Competency
21st century management
Change & innovation
Markets & technology
Diversity: markets, products & staff
Globalisation
Quality & organisational
development
Managing Diversity

What? Why?
Global Perspective
What? Why?
Importance of Quality

Lower
Costs &
Positive Higher
Company Market
Image Share
QUALITY

Decreased
Product
Liability
 Principles
of
Management
Learning Session # 6
Dr. A. Rashid Kausar
 Re-cap
of
Session # 5
 The
MD’s Diary
 The MD’s Diary
If you talk about my role in the organization and where I put
my efforts then the first area is in the strategic direction of
the organization. I spend most of my time thinking about
where the organization is going and how we are going to
move it there. The vision of the organization and strategic
direction is of critical importance.
That’s what I see my role. So a lot of my time is making sure
that I am coaching, and directing and leading people in the
direction that will deliver that vision and those key strategic
objectives. That’s where most of my effort goes.
We do the work today but I try to maintain my focus out
another year or two all the time and where we want to be in
3 years time.
Apart from that are normal operational requirements of ---
making sure that costs are under control, quality and safety
is addressed to and customers are being supported in the
right way. That’s my time !
 The
Subordinate’s
Log
 The subordinate’s Log
Being the first line manager means you are the meat in the
sandwich. You have responsibilities for subordinates and are
yourself a subordinate.
Since I was promoted from the ranks (non-managers), I face
a number of challenges. Those who were friends and
colleagues yesterday were all of a sudden individuals I
needed to direct. I needed to deal with the personal internal
conflict of what was best for the firm , and what was best for
my subordinates. What was comfortable for me and what
was satisfying senior management.
Another issue was that I had to manage senior individuals
with greater experience and knowledge of the business than
I had.
I am trying to keep balance between colleagues, customers
and the administrative and reporting functions that senior
management required.
Pioneering
Ideas
in
Management
Management
Yesterday and
Today
 Management
Links to other
Fields of Study
Management
Economics
Sociology
Psychology
Political Science
Maths and Stats
 MANAGEMENT THEORIES

Pre-classical Classical Behavioral Quantitative Contemporary

Contributors Viewpoint Viewpoint Viewpoint Viewpoint

Scientific Early Operations Systems

Management Behaviorists Research Theory

Administrative Hawthorne Operations Contingency

Management Studies Management Theory

Human Management
Bureaucratic Emerging
Relations Information
Management Views
Movements Science

Behavioral
Science
Approach
Major viewpoints in the development of modern management
 Pre-classical
1.Pyramids and Walls
2.Adam Smith (1776)
3.Industrial Revolution
Prior to 1900s
 Classical
1. Scientific Management
2. Bureaucratic
Management
3. Administrative
Management
 Behavioral
1. Hawthorne Experiments
2. Human Relation Views
3. Behavioral Science
 Quantitative
1. Operations Research
2. Operations Management
3. MIS
 Contemporary
1. Systems Theory
2. Contingency Theory
3. Emerging Theories
(Theory Z, TQM, KM, LO)
 Pre-classical
1.Pyramids and Walls
2.Adam Smith (1776)
3.Industrial Revolution
Prior to 1900s
 Pre-classical
1.Pyramids and Walls
500 to 5000
Years ago !
 Pre-classical
2.Adam Smith (1776)
Division of Labor !
 Pre-classical
Division of Labor
The breakdown of
jobs into narrow and
repetitive tasks
Early Management
ideas
1. Robert Owen
(1771–1858)
2. Charles Babbage
(1792–1871)
3. Henry R. Towne
(1844 –1924)
Early Management
ideas
Robert Owen
Advocated concern
for the working and
living conditions for
the employees.
 Principles
of
Management
Learning Session # 7
Dr. A. Rashid Kausar
 Re-cap
of
Session # 6
Management
Yesterday and
Today
 MANAGEMENT THEORIES

Pre-classical Classical Behavioral Quantitative Contemporary

Contributors Viewpoint Viewpoint Viewpoint Viewpoint

Scientific Early Operations Systems

Management Behaviorists Research Theory

Administrative Hawthorne Operations Contingency

Management Studies Management Theory

Human Management
Bureaucratic Emerging
Relations Information
Management Views
Movements Science

Behavioral
Science
Approach
Major viewpoints in the development of modern management
Early Management
ideas
1. Robert Owen
(1771–1858)
2. Charles Babbage
(1792–1871)
3. Henry R. Towne
(1844 –1924)
Early Management
ideas
Charles Babbage
Interest in operations of
factories.Built 1st mechanical
calculator, ideas on work
(physical & mental)
specialisation, production
efficiency, costing, incentive
and profit-sharing plans.
 Pre-classical
3.Industrial Revolution
Prior to 1900s
Machine Power Vs
Human Power !
Early Management Ideas
Assessing the early
contributions:
1.Uncoordinated efforts.
2.Contributions tended to
relate to specific
problems.
3.Did not see ‘Management’
as a separate field or skill
(until Towne).
Early Management
ideas
Henry R. Towne
(1844–1924)
Called for a ‘management
science’ and for
development of “Principles
of Management”.
 Classical
1. Scientific Management
2. Bureaucratic
Management
3. Administrative
Management
Classical Viewpoint
This viewpoint
emphasises on finding
ways to manage
Work and Organizations
more efficiently !
Classical Theorists
1.Scientific Management
F. W. Taylor, F. & L. Gilbreth,
H. Gantt
2.Bureaucratic Management
M. Weber
3.Administrative
Management
H. Fayol
 Classical
1. Scientific Management
Frederick W. Taylor
(1865-1915)
Modern Management Theory
Principles of Scientific
Management published (1911)
 Scientific
Management
The use of scientific
methods to determine,
“the one best way”
for a job to be done!
OR
 Scientific
Management
An approach focusing on
scientific study of work
methods
to improve worker’s
efficiency.
 Taylor’s
Four Principles of Scientific
Management

1.Study each part of a

task scientifically,
and develop a best
method to perform it.
 Taylor’s
Four Principles of Scientific
Management

2.Carefully select
workers and train them
to perform a task using
the scientifically
developed method.
 Taylor’s
Four Principles of Scientific
Management

3.Co-operate fully with

workers to ensure
they use the proper
method.
 Taylor’s
Four Principles of Scientific
Management
4.Divide work and responsibility
so management is responsible
for planning work methods using
scientific principles and
workers are responsible for
executing work accordingly.
Scientific Management
Frank & Lillian Gilbreth
Time & motion studie
Human implications of
Scientific Management

Henry Gantt
Pay incentives
Gantt chart
 Classical
2.Beurocrative Management
German Sociologist
(Max Weber .. 1864 -1920 )
An approach emphasising the
need for organizations to
operate in a rational manner
rather than relying on owner’s
and manager’s whims!
 Classical
Weber’s Ideal Bureaucracy
A form of organization
characterized by:
division of labor, clear defined
hierarchy, detailed rules and
regulations, and impersonal
relationships.
 Classical
Weber’s Ideal Bureaucracy
1.Impersonality: Rules,
procedures, sanctions be
applied uniformly
regardless of individual
personalities and personal
considerations.
 Classical
Weber’s Ideal Bureaucracy
2.Formal Rules & Procedures:
Written rules should specify
the work behavior desired
from organization members
and ensuring uniformity.
 Classical
Weber’s Ideal Bureaucracy
3. Well-defined Hierarchy:
Multiple levels of positions
with clear reporting
relationships among levels
with an ability to establish
accountability of actions.
 Classical
Weber’s Ideal Bureaucracy
4. Specialization of Labor:
Jobs are broken down into
well-defined tasks so
members know what is
expected of them and hence
they can become extremely
competent at their tasks.
 Classical
Weber’s Ideal Bureaucracy
5. Career Advancement on
basis of Merit:
Selection and promotion is
based on member’s
qualification and
performance.
 Principles
of
Management
Learning Session # 8
Dr. A. Rashid Kausar
 Classical
1. Scientific Management
2. Bureaucratic
Management
3. Administrative
Management
 Classical Theorist
3. Administrative
Management
Henri Fayol (1841-1925)
Mining Eng. and then became MD
in 1888. A French Industrialist
His Mining & Metallurgical Co.
still survives today in central
France
 Administrative
Management
Being a top manager, Fayol
developed his management
theory so to be taught to
individuals who had
administrative responsibilities.
Fayol isolated the main activity
types in industry or business!
Within “Managerial Activities”,
Fayol identified five followings:

Planning
Organizing
Commanding
Co-ordinating
Controlling
 Administrative
management
Organising
Planning

Commanding

Henri Fayol

Co-ordinating
Controlling
 Administrative Management

An approach focusing on
principles used by
managers to co-ordinate
the internal activities of
the organization.
Fayol published his 14 principles
of Management in 1949.
FAYOL’S 14 PRINCIPLES OF
MANAGEMENT
14 Principles of Management

1. Division of Work: Work

specialization can result in
efficiencies and is applicable
to both managerial and
technical functions. There
may be some limitations how
much you can divide the
work.
14 Principles of Management

2. Authority: Authority is the

right to give orders and the
power to exact the
obedience. It is derived from
the formal auhority of the
office and from personal
factors like intelligence and
experience. With Authority
comes Responsibility.
14 Principles of Management

3. Discipline: Discipline is
absolutely necessary for the
smooth running of an
organization, BUT state of
discipline shall depend
essentially on its leader’s
worthiness.
14 Principles of Management

4. Unity of Command: An
employee should receive
orders from one superior
only.
14 Principles of Management

5. Unity of Direction:
Activities aimed at the same
objective should be
organized so there is one
plan and one person in-
charge.
14 Principles of Management

6. Subordination of
individual interest to
general interest: The
interests of one employee or
group of employees should
not prevail over the
organization’s interests and
goals.
14 Principles of Management

7. Remuneration:
Compensation should be fair
to both employee and
employer.
14 Principles of Management

8. Centralization: The
proper amount of
centralization or de-
centralization depends on
the situation. The objective
is optimum use of personnel
capibilities.
14 Principles of Management

9. Scalar Chain: A scalar

(hierarchical) chain of authority
extends from top to bottom of
an organization and defines the
communication path. However,
horizontal communication is
also encouraged as long as
managers in the chain are kept
informed.
14 Principles of Management

10. Order: Materials should

be kept in well-chosen places
to facilitate activities.
Similarly, due to good
organization and selection,
the right person should be in
the right place.
14 Principles of Management

11. Equity: Employees

should be treated with
kindness and justice.
14 Principles of Management

12. Stability of Personnel

Tenure: Because time is
required to become effective
in new jobs, high turnover
should be prevented.
14 Principles of Management

13. Initiative: Managers

should encourage and
develop subordinate’s
initiative to the fullest.
14 Principles of Management

14. Esprit de Corps: Since

union is strength, promoting
team spirit will build
harmony and unity within the
organization.
Which Theory is That ?
1.How am I managing lectures
of your sessions?
2.What is your role in the class
room?
3.What is my theory of Learning
i.e. How people learn?
Reflect yourself first , then
discuss with your peer!
 Behavioral
1. Hawthorne Experiments
2. Human Relation Views
3. Behavioral Science
Behavioral Viewpoint
This viewpoint emphasizes
the importance of
attempting to understand
various factors affecting
human behavior in
organizations.
 Principles
of
Management
Learning Session # 9
Dr. A. Rashid Kausar
 Re-cap
of
Session # 8
Management
Yesterday and
Today
 MANAGEMENT THEORIES

Pre-classical Classical Behavioral Quantitative Contemporary

Contributors Viewpoint Viewpoint Viewpoint Viewpoint

Scientific Early Operations Systems

Management Behaviorists Research Theory

Administrative Hawthorne Operations Contingency

Management Studies Management Theory

Human Management
Bureaucratic Emerging
Relations Information
Management Views
Movements Science

Behavioral
Science
Approach
Major viewpoints in the development of modern management
 Management
Prior 1900 :Worker as a Social
Animal
After 1900:Worker as a
Machine
After Hawthorne Studies by
(E.Mayo) Worker should be
taken as a human!
“Father of Human Relation”
 Behavioral
1. Hawthorne Experiments
2. Human Relation Views
3. Behavioral Science
Behavioral Viewpoint
This viewpoint emphasizes
the importance of
attempting to understand
various factors affecting
human behavior in
organizations.
Behavioral Theorists

1.Hawthorne
Experiments
 Hawthorne Studies
Group of studies conducted
at Hawthorne plant of an
Electric company during
1920s and 1930s , the
result of which ultimately
led to the human relation
view of Management.
 Hawthorne Studies
Studies conducted by Elton
Mayo in 3 set of experiments.
Q: How productivity varies by
varying work environmental
factors like Light, Heat, Room
Color, and Social interaction
among Group members?
A: Productivity is largely a
Function of Worker’s Attitude!
 Hawthorne Studies
Studies demonstrated that:
1.Human’s social ang psychol-
ogical needs are as important
as money.
2.Social interaction of Work
Group is as important as
Organization of actual work.
3. Human factor can’t be ignored
in any management planning.
 Hawthorne Effect
Possibility that individuals
singled out for a study may
improve their performance
simply because of the added
attention received from
researchers, rather than
because of any specific
factors being tested.
Behavioral Theorists

2.Human
Relation Views
 Behavioral Theorists
2. Human Relation Views and
Human Relation Movements.

• Abraham Maslow(1908-70)
(Hierarchy of Needs)
• Douglas McGregor(1906-
64)
Maslow’s Hierarchy of
Needs
Self-actualisation

Esteem

Social

Safety

Physiological
McGregor’s Theory X & Y

Theory X Theory Y

Work avoiding Work is natural

Need to control Capable of self-direction

Avoid responsibility Seek responsibility

Workers seek security Can make good decisions

Behavioral Theorists

3. Behavioral
Science
 Behavioral Theorists
3.Behavioral Science : This
approach emphasising
scientific research as the
basis for developing theories
about human behavior in
organizations, and provide
practical guidelines for
managers.
 Quantitative
1. Operations Research
2. Operations Management
3. MIS
 Principles
of
Management
Learning Session # 10
Dr. A. Rashid Kausar
 Re-cap
of
Session # 9
 Quantitative
1. Operations Research
2. Operations Management
3. MIS
 Quantitative
Management Viewpoint
‘Focuses on Mathematics,
Statistics and Information Aids
to support managerial
decision making and
organizational effectiveness.’
 Quantitative
Management Viewpoint

1.Management Science or
Operations Research
‘Approach aimed at increasing
decision effectiveness through
use of sophisticated
Mathematical models &
Statistical methods.’
 Quantitative
Management Viewpoint

2. Operations Management
‘Function or field of expertise
primarily responsible for
managing Production & Delivery
of an organisation’s Products
and Services.’
 Quantitative
Management Viewpoint
3. Management information
systems (MIS)

‘Field of Management focused

on designing & implementing
computer-based information
systems for use by
management.’
 Contemporary
1. Systems Theory
2. Contingency Theory
3. Emerging Theories
(Theory Z, TQM, KM, LO)
 Contemporary
viewpoints
1. Systems theory
‘Approach based on the
idea that organisations can
be viewed as systems.’
 Contemporary
viewpoints
2. Contingency theory
‘Viewpoint arguing that
appropriate managerial
action depends on the
particular parameters of
the situation.’
 Contemporary
viewpoints
3. Emerging Theories
Theory Z
‘Concept combining positive aspects
of American and Japanese
management styles into a modified
approach aimed at increasing
managerial effectiveness while
remaining compatible with the norms
and values of society and culture.’
 Contemporary
Viewpoints
3. Emerging Theories
Total Quality Management (TQM)
‘Approach highlighting collective
responsibility for product and service
quality, and encouraging individuals
to work together to improve quality.’
 Contemporary
Viewpoints
3. Emerging Theories
Knowledge Management (KM)
‘Art of creating value from
organization’s intangible assets
 Contemporary
Viewpoints
3. Emerging Theories
Learning Organization (LO)
‘An organization that has
developed the capacity to
continuously learn, adapt, and
change.
 Principles
of
Management
Learning Session # 11
Dr. A. Rashid Kausar
 Re-cap
of
Session # 10
System Levels
General
Level Component
Global Multinational Corp.

Corporate Corporation

Organizational Division

Group Work Group / Dept.

Organismic Individual

Organic Heart / Kidneys

Cellular Individual Cells

Specific
 System’s View of
Organization
Environment

INPUTS
Human, physical, TRANS- OUTPUTS
financial, and FORMATION Products
information and
PROCESS Services
resources

Feedback Loops
Managing Systems
System - a set of interrelated
and interdependent parts
arranged in a manner that
produces a unified whole.

System Theory provides a more

general and broader picture of
what managers do than the
other perspectives of
Management provide.
Organization as a System
Environmental Factors
Cultural influences Political influences Market influences

Customer contact

Inputs Outputs
Transformations
1.Managers 1.Goods
2.Workers 1 3
2.Services
3.Equipment 3.Waste
4.Facilities 5 4.Profits &
5.Materials Losses
6.Money 2 5.Staff Growth
4
7.Energy Managerial and Tech. Abilities and
8.Information (POLCA & Technology) Satisfaction

Performance feedback
( Info about Results & Org. Status)
Managing Systems
Closed system - not
influenced by and do not
interact with their
environment
Open system - dramatically
interacts with its
environment.
Organizations -- take inputs
from their environments
and transform or process
the inputs into outputs and
outputs are distributed into
the environment .
Organization As An Open System
Environment

System

Inputs Transformation Outputs

Raw materials Employee’s work Products and services
Human resources activities Financial results
Capital Management Information
Technology activities Human results
Information Technology and
operations methods

Feedback

Environment
 Principles
of
Management
Learning Session # 12
Dr. A. Rashid Kausar
 Re-cap
of
Session # 11
General Environment and Environmental
Forces Affecting Organizations

General Environment
Cultural Forces
Political - Legal Forces
Technological Forces
Competitive Forces

Organization
 External
Environment
‘Major forces outside the
organisation with potential to
influence significantly a
product or service’s likely
success.’
External Environment
External environment is made up of:
1.The Mega-Environment
The broad conditions and trends in
societies in which an organisation
operates.
2.The Task Environment
Specific outside elements with which
an organisation interfaces in the
course of conducting its business.
 The External Environment

Mega or General
Environment

Suppliers Customers

The
Organization

Public
Pressure Competitors
Groups

Task or Specific
Environment
The Mega-Environment
Technological Economic
element element

Legal–political
The element

organisation
International Sociocultural
element element
The Mega-Environment
Five major elements:
1.Technological element
Current state of knowledge regarding
production of products & services.
2.Economic element
Systems of producing, distributing &
consuming wealth.
3.Legal-political element
Legal & governmental systems within
which an organisation must function.
The Mega-Environment
4.Socio-cultural element
Attitudes, values, norms, beliefs,
behaviours & associated demographic
trends characteristic of a given geographic
area.
5.International element
Developments in countries outside of an
organisation’s home country with potential
to influence the organisation.
The Task Environment
Competitors

Government &
regulators Customers
The /clients
Organisation
The
employment Suppliers
market Public pressure
groups
The Task Environment
Five elements:
1.Customers and clients
Individuals and organizations purchasing
products/services.
2.Competitors
Other organizations either offering (or a
high potential of offering) rival
products/services.
3.Suppliers
Organizations and individuals supplying
resources an organization needs to
conduct its operations.
The Task Environment
4.Labour supply
Individuals potentially employable by an
organization.
5.Government agencies
Agencies providing services and
monitoring compliance with laws and
regulations at local, State or regional and
national levels.
Competitive Forces in the Task
Environment
Threat
of new
competitors

Suppliers Rivalry among Buyers

bargaining existing firms bargaining
power in industry power

Threat of
substitute
goods/services
Internal Environment
Nature of organisational culture:
‘A system of shared values,
assumption, beliefs and norms
uniting organisational
members’ .‘The way we do
things around here.’
The ‘glue’ binding all the parts
(or the oil that keeps them
moving).
 The Organization’s Culture

A system of shared
meaning and beliefs held
by organizational
members.
 The Organization’s Culture
The Source of Culture:
Usually reflects the vision or mission of
the founder’s image of what the
organization should be.
How Employees Learn Culture:
Stories - a narrative of significant events or people
Rituals - repetitive sequences of activities
Material symbols – essential in creating an
organization’s personality.
Language - Members of an organization develop
unique terminology or jargon.
ORGANIZATIONAL STAKEHOLDERS
 6.8

Stakeholders’ Concerns
Stakeholder Group Examples of Concerns

Owners and 1.Financial Soundness

Investors 2.Consistency in meeting
shareholder expectations
3.Sustained profitability
4.Average return on assets
5.Timely and accurate
disclosure of financial
information
 Stakeholders’ Concerns
6.9

(contd.)
Stakeholder Group Examples of Concerns

Customers 1.Product/service quality, and

availability
2.Responsible management of
defective or harmful
products/services
3.Safety records for
products/services
4.Pricing policies and practices
5.Honest, accurate, and
responsible advertising
 Stakeholders’ Concerns
6.10

(contd.)
Stakeholder Group Examples of Concerns
Employees 1.Nondiscriminatory, merit-
based hiring and promotion
2.Diversity of the workforce
3.Wage and salary levels and
equitable distribution
4.Availability of training and
development
5.Workplace safety and privacy

Adapted from Table 6.2

 Stakeholders’ Concerns
6.11

(contd.)
Stakeholder Group Examples of Concerns
Community Environmental issues
1.Environmental sensitivity
in packaging and product
design
2.Recycling efforts and use
of recycled materials
3.Pollution prevention
4.Global application of
environmental standards
 Organisational Social
Responsibility
‘The obligation of an
organisation
to seek actions protecting and
improving society’s welfare
along with its own interests.’
 Principles
of
Management
Learning Session # 13
Dr. A. Rashid Kausar
 Re-cap
of
Session # 12
 Organisational
Social
Responsibility
‘The obligation of an
organisation to seek actions
protecting and improving
society’s welfare along
with its own interests.’
Ethical Guidelines
for Managers
1.Obey the law.
2.Tell the truth.
3.Show respect for
people.
Ethical Guidelines
for Managers
5.Above all, do no harm.
6.Participation not
paternalism.
7.Responsibility
requires action.
 21st
Century
Trends And Issues
Entrepreneurship
Three important themes:
1.Pursuit of opportunities
Capitalizing on
environmental change to
create value.
 21st
Century
Trends And Issues
Entrepreneurship
2.Innovation –Introducing
new approaches to satisfy
unfulfilled market needs.
3.Growth - Not content,
to remain small
 21st
Century
Trends And Issues
Managing in an
E-Business World
E-Business - The way an
organization does its work by
using (Internet-based) e-
linkages with key stakeholders.
 21st
Century
Trends And Issues
Managing in an
E-Business World
May include e-commerce
i.e. any form of business
exchange or transaction in which
parties interact electronically.
 21st
Century
Trends And Issues
Intranet - an internal
organizational communication
system that uses Internet
technology and is accessible only
by organizational employees.
 21st
Century
Trends And Issues
Workplace Spirituality
A recognition of an inner life.
Growing interest in spirituality
at all levels and in all areas of
organizations …. Because
employees are looking for
meaning, purpose, and a sense
of feeling of community from
their work and their workplace.
 21st
Century
Trends And Issues
Globalization:
All organizations are
faced with the
opportunities and
challenges of operating
in a global market,
no longer constrained by
national borders.
 Principles
of
Management
Learning Session # 14
Dr. A. Rashid Kausar
 Re-cap
of
Session # 13
 21st
Century
Trends And Issues
Globalization:
All organizations are
faced with the
opportunities and
challenges of operating
in a global market,
no longer constrained by
national borders.
Understanding
The Global
Environment
and

WTO
Regional Trading Alliances

Global competition is
influenced by
regional trading and
cooperation agreements.
EU SARC
NAFTA ASEAN
European Union (EU)
 Goals of the EU
Create a single market among

the 15 member countries

Eliminate existing barriers

between countries
Regional Trading Alliance
The European Union - created
by Maastricht Treaty in 1992
1.A unified economic and
trade entity.
2.A single market without
barriers to travel,
employment, investment,
and trade.
Regional Trading Alliance

3.Economic and Monetary

Union (EMU)
Euro - common currency
4.Asertion of economic power
5.Created one of the world’s
richest markets
Goals of NAFTA
Create a U.S., Canadian,
and Mexican trade zone

1.Promote liberalized trade,

not free trade
2.Increase efficiency and
customer satisfaction
Regional Trading Alliance

Association of Southeast
Asian Nations (ASEAN)

1.Alliance of 10 Southeast Asian

nations
2.Created in one of the fastest
growing economic regions in
the world
3.Could compete NAFTA and EU
ASEAN Members
 The “Greening” Of
Management

Definition
Recognition of the close
link between an
organization’s decisions
and activities and its
impact on the natural
environment.
 POLCA
Functions
 P
For
Planning
 If You …
fail to Plan,
You are …
Planning to Fail !
All the Flowers
of the Future
are
the Seeds of Today !
 Question ?
Do U want
To go Anywhere
Or Somewhere ?
Get a Plan
I played with life like a game
To find life would be but the same
I wondered why at the end of each day
Nothing worthwhile had come my way.

Then I decided to get myself a Plan

And told myself “ I Can”
Sure enough it happened on that day
Everything started to come my way.

Now you can do the same as me

For that matter so can any body
Simply get yourself a Plan
And tell yourself “ I know I can “.
 Planning
Is
in Advance
Decision Making
DECISION MAKING:
THE ESSENCE OF
THE MANAGER’S
JOB
 Alice
in Wonderland

Alice
and the Clever Cat
 A Person …
Going Nowhere,
Will Usually …
Get There !
 If You don’t
Stand for something
You ‘ll
Fall for any thing !
DECISION MAKING
DECISION TAKING

THE JOB OF
THE MANAGER
 Principles
of
Management
Learning Session # 15
Dr. A. Rashid Kausar
 Re-cap
of
Session # 14
DECISION MAKING
DECISION TAKING

THE JOB OF
THE MANAGER
 The Manager’s
Performance
Results after Actions
Action after Planning
Planning after Decisions
Decisions after Analysis
Analysis after Needs/Goals
Goals Setting after Analysis
Conditions Under Which
Decisions Are Made

Certainty Risk Uncertainty

Objective probabilities Subjective probabilities
 Decision Making
Decisions
All organizational members
make decisions
Choices from two or more
alternatives
 A Decision
is not allowing
events to take
their course
willy-nilly.
If you don’t decide,
an outcome would
still occur BUT ?
Effective Decision
Making
Problem Solving
Or
Decision Making
and
Decision Taking
Decision Making
‘The process by
which managers
identify
organisational
problems and try
to
resolve them.’
Decision Taking
‘The process
by which
managers
take actions
to effect
the decision.’
Decision Taking
‘Unless this step
is taken,
no real decision
has been made
and it has been
an exercise in
futility !
The Rational Decision
Making Process
Define Identify Choose
Gather and a
the
Information assess course
Problem Alter- of
natives Action
 Principles
of
Management
Learning Session # 16
Dr. A. Rashid Kausar
 Re-cap
of
Session # 15
An Optimal Decision
is Possible

All Relevant Information

is Available
Rational
All Relevant Information is
Understandable Decision
All Alternatives are Known
Making
All Possible Outcomes Known
The Rational Decision
Making Process
Define Identify Choose
Gather and a
the
Information assess course
Problem Alter- of
natives Action
Effective Decision
Making
Steps to effective decision
making:
1.Identify the Problem
Scan for change,
categorise as problem/non-
problem, diagnose nature
and cause.
Effective Decision
Making
2.Generate alternative
solutions
Uncritically brainstorm
to develop alternatives,
combine & improve
ideas.
Effective Decision
Making
3.Evaluate & choose an
alternative
Feasibility, Quality, Cost,
Speed, Ethics,
Acceptability.
Effective Decision
Making
4.Implement and monitor
Plan and implement,
evaluate effect on
others, monitor.
The Rational Decision
Making Process
Define Identify Choose
Gather and a
the
Information assess course
Problem Alter- of
natives Action
 Steps in Decision-
Identification Making
of the Problem

Generate Alternative Solutions

Evaluate Alternatives Evaluation

of Decision
Effectiveness
Choose
an Alternative

Implementation and Monitoring

of the Chosen Alternative
 Nature of
Managerial
Decision Making
Types of problems faced:
1.Crisis problems
Serious. Requires
immediate action.
 Nature of
Managerial
Decision Making
2.Non-crisis problems
Requires resolution
but not both immediate
and important.
 Nature of
Managerial
Decision Making
3.Opportunity problems
Opportunity for
organisational gain
IF appropriate action
taken.
 Nature of
Managerial
Decision Making
Decision Making Situations:
1.Programmed decisions
Routine, repetitive, well-
structured situations by
use of pre-determined
decision rules.
 Nature of
Managerial
Decision Making
2.Non-programmed
Decision Making
Pre-determined decision
rules are impractical due
to novel &/or ill-
structured situations.