PRINCIPLES OF MANAGEMENT

Prepared By
Dr Ashvini Vora
MANAGING AND MANAGERS
• Organization- Two or more people who work
together in a structured way to achieve a
specific goal or set of goals. All organizations
develop systematic structure which defines and
limits the behavior of its members.
• Goal- The purpose that an organization strives
to achieve . Goals are functional elements of
organization.
 MANAGEMENT FUNCTIONS
• Management is the process of planning, organizing,
leading and controlling.
• Planning is the process of defining goals and
developing suitable course of actions to achieve these
goals.
• Organizing is the process of arranging and allocating
work authority and resources among an organization's
members.
• Leading involves directing, influencing and motivating
employees to perform essential tasks.
• Controlling- is the process to ensure that things are
going as they should. A manager must monitor the
organization’s performance.
 DEFINATIONS
• According to Peter Drucker –
• Efficiency- means doing things right or
efficiency means ability to the things right and
it is the input- output concept.
• Effectiveness- means doing the right things.
 MANAGERIAL ROLES
• According to Henry Mintzberg- Manager
perform ten different but highly interrelated
functions/roles.
• They are grouped under three primary headings-
Interpersonal, informational and decisional roles.
• Interpersonal roles are as- figurehead ,leader and
liaison.
• Informational roles are as monitor, disseminator
and spokesperson.
• Decisional roles are as –entrepreneur, negotiator,
resource allocator and disturbance handler.
 MANAGERIAL SKILLS
• Management skills that are crucial to success
in a managerial position are-
• Technical skills- It is the ability to use
knowledge of a specialized field.
• Human skills- is the ability to work with.
Understand and motivate other people.
• Conceptual skills-is the ability to coordinate
and integrate all of the organization's activities.
 PLANNING
• Planning is a continuous managerial function
involving complex processes of perception,
analysis, conceptual thoughts, communication,
decision and action.
• It is a bridge between what we are and where
we want to be in future.
• Planning is all about setting the goals and
choosing the means to achieve them.
STEPS IN PLANNING PROCESS
Mission

Analyzing opportunities

Establish Objectives

Determining Planning Premises

Identifying Alternatives

Evaluating Available Alternatives

Selecting Best Alternative

Implementing The Plan

Reviewing The Plan

 TYPES OF PLANS
a) Plans based on organizational level- strategic
plans, Tactical plans and Operational plans.
b) Plans based on frequency of use- Single use
plan and Standing plan.
c) Plans based on their time frame- Short term
plan, Intermediate plan and Long term plan.
LIMITATIONS OF PLANNING
• Lack of accurate planning
• Time consuming process
• Resistance to change
• Expensive
• Inflexible
• Environmental constraints
• Lack of ability & commitment
• False sense of security
 GOALS
• Why are goals important?
• Goals provide direction
• Goals focus our efforts
• Goals guide our plans and decisions
• Goals help us to evaluate our progress
 THE HIERARCHY OF
ORGANIZATIONAL PLANS
Mission statement

Corporate Plan

Tactical Plan

Operational Plan
 STRATEGY IMPLEMENTATION

Definition
• It is basically administrative tasks needed to
put strategy into practice.
 CHANDLER’S THESIS

• Alfred Chandler examined the growth and development of 70

of the largest businesses in USA and observed a common
pattern in their development.
• According to him , organization passes through three stages of
development, moving from a unit structure to a functional
structure and then to a multidivisional structure.
• At first the organizations are small. There is a single location ,
a single product and single entrepreneurial decision maker.
• As an organization grows ,volume increases and additional
locations create new challenges. It goes for vertical
integration.
 CONTI…
• When vertical integration creates problems, it goes for
functional and subsequently for multidivisional
structure.
• Chandler observed that transition from one structure to
another was often delayed and painful.
• He concluded that organizations do not readily change
structures because their entrepreneurial founders excel
at strategy but are neither interested in or
knowledgeable about organizational structure. When
restructured the founder often leaves.
 SEVEN ‘S’ MODEL
• Mckinsey has proposed the Seven S Model for
successful strategy implementation.
• According to them, neglecting any of the seven
factors could make the effort to change a slow,
painful and even a doomed process.
• Each one is equally important and interacts
with all other factors.
 POLICY
• Definition- A policy is a general guideline for
decision making, It sets up boundaries around
decisions telling managers which decisions can
be made and which cannot. Some policies have
rules. Most policies are accompanied by
procedures.
 ORGANIZATION & NATURAL
ENVIRONMENT
• System theory says- organizations are neither self
sufficient nor self contained.
• They exchange resources with and are dependent
upon the External environment.
• Organizations take inputs from the external
environment, transform them into products/services
and then send them back to external environment as
outputs.
• The external environment has both Direct action and
indirect action elements.
 CONTI…
• Direct action elements are known as Stakeholders
which include shareholders, unions, suppliers and
many other which directly influence the organization.
• Indirect action elements are technology, economy,
and politics of the society also affect.
DIRECT ACTION ELEMENTS
• Direct action elements fall into two categories.
• External stakeholders which include unions,
suppliers, competitors, customers, special
interest groups and government agencies
• Internal stakeholders include employees,
shareholders and board of directors.
 ELEMENTS OF INDIRECT
ACTION
• Four broad factors are-social, economic,
political and technological.
• Social factors are again divided into
demographic, lifestyle and social values.
 NATURAL ENVIRONMENT
• In recent years concerns about damaging the natural
environment have taken new importance.
• Many organizations are involved in developing new
processes that either do no environmental harm or
clean up environmental damages.
 CURRENT ENVIRONMENTAL
CONCERNS
• Pollution-It comes in many forms. Such as Polychlorinated
biphenyl which are used as coolants in power transformers,
pesticides, Lead found in pipes and asbestos, hazardous
nuclear waste and toxic chemicals- byproducts of industry.
• Ozone depletion- It has led to an international agreement to
limit the production of Chlorofluorocarbons.
• Climate changes- We worry about human induced climate
changes such as Global warming and changes in seasons
cycle.
• Other issues are biodiversity, adequate water supplies,
population and food security.
 GLOBALISATION
• What is globalization of management?
• The phenomenon of globalization is consisting if
three factors: –
a) Proximity
b) location and
c) attitude
• These three factors emphasize complexity of
relationships that confront a global manager.
 PROXIMITY
• Managers now operate in much closer proximity than ever
before to a greater number and range of customers,
suppliers, competitors and government regulators.
• This proximity-function of ‘shrinking globe’ is partly due
to telecommunication technology and another aspect is
technical and managerial capabilities of people around the
globe.
• Managers find themselves competing and collaborating
with new cast of global players.
• Global business organizations should urge the managers to
treat all customers as ‘Equidistant’ from their organization.
 LOCATION AND ATTITUDE
• Location-Location and integration of an organization’s
operations across several international boundaries is a part of
globalization.
• Sumantra Ghosal of NUMMI use the term transnational
management to describe this growing practice of spreading an
organization’s operations across many nations.
• Attitude- Globalization refers to a new , open attitude about
practicing management internationally.
• This attitude combines a curiosity about the world outside
one’s national borders with a willingness to develop
capabilities for participating in global economy.
 COMPETITIVENESS
• Competitiveness is relative standing of one competitor against
other competitors.
• Competitiveness is like a game of musical chair where there
are a finite number of places to sit and some are more
desirable than others.
• It has become a prominent business and government concern
as a contest among nations.
• Two different competitiveness criteria are useful in
understanding globalization and management. They both
involve relative standing but differ in terms of their time
perspective- looking forward or looking back.
 HOW COMPANIES GO
INTERNATIONAL?
• Few organizations start multinational. They proceed through
several stages where each stage represents a way of
conducting business.
• First stage is exporting. In Second stage companies deal
directly with overseas interests. At this stage managers may
establish contractual relationships.
• They can use licensing or they can use Franchises.
• They have another option of Joint venture where domestic
and foreign companies share the cost of developing new
product or building production facilities.
 EPG MODEL
• Dealing with employees from other countries often
forces managers to confront their own prejudices.
• Three primary attitudes are identified.
• Ethnocentric managers-who see foreign countries and
their people inferior.
• Polycentric managers- who see all countries difficult
and hard and tend to leave their foreign offices.
• Geocentric managers- They recognize similarities and
differences among the countries. Such managers
attempt to draw on most effective techniques and
practices. They are adoptive.
 ETHICS
• What is Corporate social responsibility? Corporate
social responsibility focuses on what an organization
does that affects the society in which it exists.
• Ethics and SR are concepts that are fundamentally
about quality of our relationships over time.
• SR permitted executives to choose their corporations
social obligations according to their own convictions.
 SOCIAL PRINCIPLES
• In 1899, Andrew Carnegi set forth the statement of CSR. His view
was based on two principles- The charity principle and Stewardship
principle.
• The Charity principle says that more fortunate members of the
society should assist less fortunate members of the society.
• The Stewardship Principle is derived from Bible which says
businesses and wealthy individuals should view themselves as
stewards or care takers of their wealth.
• Keith Davis said it is in the enlightened self interest of
organizations to be socially responsible.
• According to Friedman, There is one and only one responsibility
of business is to use resources and energy in activities designed to
increase its profits so long as it stays within rules without deception
and fraud.
 CORPORATE SOCIAL
RESPONSIVENESS
• It means how organizations become aware of and then respond to social
issues. It takes two basic approaches-on one hand how individual
companies respond to social issues and on the other hand how the forces
that determine the social issues to which businesses should respond.
• These two approaches were combined as single theory of Corporate Social
Performance.
• According to this theory arena of SR is shaped by economic , legal and
ethical principles.
• We support free market( economic principle). Safe work place (legal), and
equal employment opportunities(ethical).
• Together these principles create social contrast so we must take underlying
assumptions about organization and society and turn to ethics.
 MANAGERS AND ETHICS
• Definition- Ethics is the study of how our decisions affect other
people. It is also the study of people’s rights and duties, the moral
rules that people apply in taking decisions, the nature of
relationships among people.
• Tools of ethics are values, rights ,duties, moral rules and human
relationships.
• There are four levels of Ethical questions :-
• Level-1 Society
• Leval-2 Stakeholders
• Leval-3 Internal policy level
• Leval-4 Personal level
 BEHAVIOR IN ORGANIZATION
a) Hire the right people.
b) Establish codes of ethics and decision rules.
c) Lead by example .
d) Set realistic goals and include ethics in performance
appraisals.
e) Provide ethical training.
f) Conduct independent social audits.
g) Provide support to employees who are facing ethical
dilemmas.
 CODES OF ETHICS
• Be a dependable organizational citizen
1) Comply with safety, health and security
regulations.
2) Illegal drugs and alcohol at work are prohibited.
3) Follow directives of the supervisors.
4) Do not use abusive language.
5) Dress un business attire.
6) Exhibit good attendance and punctuality.
7) Demonstrate respect, courtesy and honesty
 CONTI…
• Do not do anything unlawful that harm organization
1.Conduct business in compliance with laws
2. Bribes are prohibited.
3. Maintain confidentiality of records.
4.Donot propagate false or misleading information.
5. Make decisions without regard for personal gain
6. Do not use company’s property for personal use.
7. Comply with all accounting rules and controls.
• Be good to customers
1. Convey true claims in advertisements.
2. Perform assigned duties to the best of your ability.
3. Provide products and services of the highest quality.
 COMMON MORALITY
• Common morality is the body of moral rules
governing ordinary ethical problems. These are the
rules we live by most of the time and which are used
to understand managerial problems. E.g. promise
keeping, mutual aid, respect for person and respect
for property.
 RELATIVISM
• Moral relativism- The idea that we cannot decide matters
of right and wrong, good and evil in any rational way. It says
that constructive moral argument is impossible.
• Naïve Relativism- The idea that all human beings are
themselves the standard by which their actions should be
judged.
• Cultural Relativism- The idea that morality is relative to a
particular culture, society or community. It tells us to try to
understand and not judge.
• Managers must be aware of and avoid temptations of Naïve
relativism and cultural relativism.
 DECISION MAKING
• It is the process of identifying and selecting a course
of actions to solve a specific problem.
• Decision making connects organization’s present
circumstances to actions that will take the
organization into the future.
• Time and human relationships are crucial elements in
the process of making decisions.
 PROBLEM AND OPPORTUNITY
• Problem- It is the situation that occurs when an actual
state of affairs differs from a desired state of affairs.
• Problem Finding Process- William Pounds has argued
that problem finding process is often informal and
intuitive. Four situations usually alert managers to
possible problems.
1. A deviation from past experience
2. A deviation from a set plan
3.Other people
4. The performance of competitors
 OPPORTUNITY FINDING
• It is the situation that occurs when circumstances
offer an organization the chance to exceed stated
goals and objectives.
• Dialectical Inquiry Method- It is useful in
problem solving and opportunity findings. It is
also known as ‘Devil’s advocate method’. It is a
method of analysis in which decision maker
determines negates his or her assumptions and
then creates ‘counter solution ’based on negative
assumptions.
 NATURE OF MANAGERIAL
DECISION

• Programmed decisions- Solutions to routine

problems determined by rule, procedure or habit.
They are also used for recurring problems.
• Non-programmed decisions- Specific solutions
created through an unstructured process to deal with
non-routine problems.
 CERTAINTY, RISK, UNCERTAINTY

• Certainty- Decision making condition in which

managers have accurate , measurable and reliable
information.
• Risk- Decision making condition in which
managers know the probability a given alternative
will lead to a desired goal or outcome.
• Uncertainty-Decision making condition in which
managers face unpredictable external conditions
or lack the information.
 THE RATIONAL MODEL
• It is a four steps process that helps managers weigh
alternatives with the best chance of success.
• It is normally useful in making non programmed decisions. No
approach can give the guarantee that a manager will always
make the right decision.
• Stage-1 Investigate the situation
* Define the problem
*Diagnose the causes
* Identify the decision objectives
• Stage-2 Develop alternatives through brainstorming.
 CONTI…

• Stage-3 Evaluate alternatives and select the best one

available on the basis of three questions- Is the
alternative feasible? Is the alternative a satisfactory
solution? What are the possible consequences for the
rest of the organization?
• Stage-4 Implement and monitor the decision.
 OTHER METHODS
• Bounded rationality model
• Satisficing
• Incremental model
• Garbage can model
• Heuristics
 SYSTEM APPROACH FOR
DECISION MAKING

• MIS( Management Information system)

• DSS ( Decision Support System)
• There are various decision making techniques like-
Marginal analysis, Financial analysis, Breakeven
analysis, Game theory, Linear programming and
Decision Tree.
ORGANIZATIONAL DESIGN AND
STRUCTURE
• Organization is a pattern of relationships through
which people under the direction of managers pursue
their common goals.
• Managers must take into consideration two kinds of
factors when they organize.
• First, they must outline their goals and strategic plans
and the capabilities at their organizations. Second,
they must consider what is going on now and what is
likely to happen in future.
 CONTI…
• Organizational design- The determination of organizational structure
that is most appropriate for the strategy, people, technology and tasks of
the organization.
• It is the crucial first step in organizing which logically follows from
planning.
• Organizational design is a decision making process by which managers
choose an organizational structure appropriate to the strategy.
• Organizational structure-The way in which an organization’s
activities are divided, organized and coordinated.
• Strategies and environmental circumstances differ from one
organization to the next so there are a variety of possible organizational
structures.
 FOUR BUILDING BLOCKS
• Managers take four functional steps of organizational design when they
begin to make decisions about organizing.
• Division of labor-The breakdown of a complex task into components
so that individuals are responsible for a limited set of activities instead
if task as a whole.
• Departmentalization- Combine tasks in a logical and efficient manner.
The grouping of employees and tasks is referred to as
departmentalization.
• Organizational hierarchy- Specify who reports to whom in the
organization. The linkage of departments results in organizational
hierarchy.
• In organizational hierarchy the questions arise about span of control,
chain of command and type of structure.
 CONTI…
• Span of control/span of management- The number
of subordinates reporting directly to a given manager.
• Chain of command- After work is divided, span of
control chosen, managers can decide on reporting
lines.
• Coordination-It means integration of the activities of
the separate parts of the organization to accomplish
organizational goals. Differentiation in attitudes and
styles among employees can complicate the
coordination.
 APPROACHES FOR EFFECTIVE
COORDINATION
1. By using basic management techniques like-
managerial hierarchy, , rules and procedures and
clear plans and goals.
2. Increase coordination potential by creating
vertical information system, lateral
relationships and boundary spanning.
3. Reduce need for coordination through slack
(additional) resources and independent
business units.
 APPROACHES TO
ORGANIZATIONAL DESIGN
1) The classical approach- Early management people
sought to principles for creating organizational
structure. Max Weber, Fredrick Taylor and Henri
Fayol were major contributors to the classical
approach.
2) The Task Technology Approach.
3) Environmental Approach
 TYPES OF ORGANIZATIONAL
STRUCTURES

1) Functional/ Departmental
2) Product/Market/Divisional
3) Matrix/ Hybrid structure
4) Formal/Informal
HUMAN RESOURCE MANAGEMENT

• HRM is the management function through which

managers recruit, select, train and develop
organizational members. It is a staff function.
• It is an ongoing process that tries to supply the
organization the right people in the right positions.
 SEVEN BASIC ACTIVITIES OF HRM
PROCESS
1. Human resource planning- It is designed to ensure
that personnel needs will be constantly and
appropriately met.
2. Recruitment- is concerned with developing a pool of
job candidates in line with human resource plan.
3. Selection- involves using application forms, resumes,
interviews, skill tests and reference checks to evaluate
and screen job candidates for the managers.
 CONTI….
4. Socialization ( orientation)-is designed to help the
selected individuals fit smoothly into the
organization.
5. Training and development- both aim to increase
employees to contribute to organizational
effectiveness.
6. Performance appraisal-compares an individual’s job
performance to standard or objectives developed
for the individual’s position.
7. Promotions , transfers ,demotions and separations-
reflect the employee’s value to the organization.
 HUMAN RESOURCE PLANNING

• It means planning for the future needs of an organization, taking into

consideration both internal activities and factors in the external
environment.
• The introduction of high tech equipment such as robotics requires human
resource planning.
• Human resource planning has four basic aspects.
1) planning for future needs by deciding how many people with what
skills will need.
2) planning for future balance by comparing the number of needed
employees to the number of present employees.
3) planning for recruiting or lay off employees
4) planning for the development of employees.
 RECRUITMENT
• It is the development of a pool of the candidates in
accordance with human resource plan. To provide a
group of candidates that is large enough to let managers
select the qualified employees they need.
• Job description- Before employees can be recruited,
recruiters must have clear ideas regarding the activities
and responsibilities required in the job being filled.
Once a specific job is analyzed, a written statement of
its contents and location is incorporated into the
organizational chart. This statement is called job
description.
SOURCES OF RECRUITMENT
• Recruitment takes place within the labor market either
from outside or promoted from within the organization.
• Large companies use outside sources like Campus
recruiting, placement agencies or purchase of
expensive ads in news papers and national
publications.
• Many firms recruit or promote from within due to three
advantages. First they are familiar with organization,
Second promotion from within fosters loyalty and
inspires greater efforts. Third it is less expensive.
 SELECTION
• The selection process is a mutual decision. The organization decides
whether to make a job offer and how much attractive the offer should be,
and the job candidate decides whether organization and job offer fit his or
her needs and goals.
• Steps in selection process- The standard hiring process is a seven steps
procedure.
1) Completed job application
2) Initial screening interview
3) Testing-to measure applicant’s skills and ability to learn.
4) Background investigation.
5) In-depth selection interview conducted by manager whom the candidate
will report.
6) Physical examination
7) Job offer which offers salary plus benefit package.
SOCIALIZATION OR ORIENTATION

• It is designed to provide new employees with the

information needed to function comfortably and
effectively in the organization.
• Typically socialization conveys three types of
information. (1) general information about daily work
routine (2) a review of organization’s history, purpose
and products/services (3) a detail presentation of
company’s policies, work rules and employee
benefits.
TRAINING AND DEVELOPMENT
• Training is the process to maintain or improve current job
performance.
• Development is a process designed to develop skills necessary for
future work activities.
• Training programs- New employees have to learn new skills and
since their motivation is high, they can be easily acquainted with
skills and behaviors expected in their new position.
• Managers can use four procedures to determine the training needs
of individuals in the organization.
1) Performance appraisal- Each employee is measured against the
performance standards.
2) Analysis of job requirements-skills and knowledge specified in the
job description are examined.
 CONTI…
3) Organizational analysis-The effectiveness of the organization and
its success in meeting its goals are analyzed.
4) Employee survey-Managers and non managers describe what
problems they are facing and what actions they believe are
necessary to solve them.
• Once training needs are identified, the human resource manager
initiates the appropriate training effort.
• The most common is on-the-job training methods. That includes
Job rotation, in which the employee over a period of time, works
on a series of jobs, thereby learning a broad variety of skills.
Internship, in which job training is combined with related
classroom instructions and the apprenticeship , in which the
employee is trained under the guidance of skilled worker.
 CONTI…
• Off-job training takes place outside the work place.
This type of training includes- Vestibule training, in
which employees are trained on the actual equipment
and in realistic job setting. In behaviorally
experienced training, the activities such as simulation,
business games and cases are employed so that trainee
can learn the behavior appropriate for the job through
role playing.
• Off-job training may focus on seminars, lectures and
films or may involve Computer Assisted Instruction.
INNOVATION AND CREATIVITY
• Creativity is defined as the generation of ideas while
innovation is defined as the translation of these ideas
into new companies, products, services, processes and
methods of production.
• Creativity and innovation are seen as being the key to
survival in a more competitive and global economy.
• Creative process has three steps- idea generation,
problem solving and idea implementation.
 MANAGING ORGANIZATIONAL
CHANGE
• Kurt Lewin Model of change- According to him people are
unwilling to change to alter long established attitudes and
behavior. He believed that after a brief period of trying to do
things differently, people tend to return to their habitual
patterns of behavior.
• To overcome this obstacle, he developed a three-step
sequential model of change process.
• It involves “unfreezing” the present behavior pattern,
“changing” or developing a new behavior pattern, a trained
change agent leads entire organization through the process and
“refreezing” or reinforcing the new behavior. So that it
becomes a new norm.
 CONTI…
• Organizational Development(OD)-A long range
effort supported by top management to increase an
organization’s problem-solving and renewal
processes through effective management of
organizational culture. OD frequently includes
structural and technological changes. Primary focus is
on changing people and their working conditions.
 DIAGRAM
• KURT LEWIN MODEL OF CHANGE-
 MOTIVATION
• Motivation is a human psychological characteristic
that contributes to a person’s degree of commitment.
• It includes the factors that cause, channel and
sustain human behavior in a particular committed
direction.
• Motivating is the management process of influencing
people’s behavior.
 Need theory
• Need theory focuses on what people requires to
live fulfilling lives. Needs are the motivators.
• According to need theory, a person is motivated
when he or she has not yet attained certain levels
of satisfaction with his or her life.
• Maslow developed this theory and viewed human
motivation as a hierarchy of five needs ranging
from most basic physiological needs to the
highest needs for self-actualization.
 DIAGRAM
• Pyramid representing Maslow’s hierarchy of
needs-

Self
Actualization

Esteem

Social /Affiliation

Safety
Physiological
 OTHER THEORIES
• ERG THEORY-Alderfer agreed with Maslow but he broke
needs down into three components-Existence needs similar
to Maslow’s basic needs, Relatedness needs like Maslow’s
social or interpersonal needs and last is Growth needs for
personal creativity.
• Alderfer stressed that when higher needs are frustrated,
lower needs will return. Maslow felt that a need once met
lost its power to motivate.
• Maslow saw people steadily moving up whereas Alderfer
saw people moving up and down from time to time.
• McClleland indicated that a strong need for achievement
(nAch) is related to how well the individuals are motivated.
 CONTI…
• He proposed three needs= nAch, nAff and nPow. nAff
suggests how managers want to be around the co-
workers. nPow deals with the degree of control a
person desires over his or her situation. It means how
people deal with their failure and success.
• Goal setting theory says that individuals are motivated
when they behave in ways that move them to certain
clear goals that they accept and can reasonably expect
to attain.
• So it is a process theory of motivation that focuses on
the process of setting goals.
 LEADERSHIP
• It is the process of directing and influencing the task-related
activities of group members.
• Leadership styles- The various patterns of behavior favored by
leaders during the process of directing and influencing.
• Transformational leaders- Leaders who , through their personal
vision and energy, inspire followers and have a major impact on
their organizations, are called Transformational leaders.
• They motivate to do more than we expect by raising our sense of the
importance and value of our tasks.
• A Charismatic leader- Occasionally a leader emerges whose high
visibility and personal charisma catches the public consciousness.
• Their personal characteristics do make a difference.
 TEAMS AND TEAMWORK
• A team is defined as two or more people who interact and
influence each other toward a common purpose.
• Traditionally two types of teams exist- Formal and Informal.
Formal teams are created managers and charged with carrying
out specific tasks.
• Most common formal team is Command team which includes
manager and all employees who report to him.
• Another type of formal team is committee, usually long lived,
created to carry with recurrent problems and decisions.
• Some teams are temporary. They are Task Forces or Project
Teams. These teams are created to deal with a specific problem
are usually disbanded when the task is completed.
 CONTI…
• Informal teams or groups emerge whenever people
come together and interact regularly. Such groups are
developed within formal organizational structure.
• Some groups today have characteristics of both formal
and informal teams. They are called High Performance
teams or Super teams.
• They are groups of 3 to 30 workers drawn from
different areas of corporation.
• Super teams which manage themselves without any
supervision are called Self- managed teams.
 STAGES OF TEAM DEVELOPMENT

• Forming-The group forms and learns what sort of

behavior is acceptable to the group.
• Storming- As group members become more
comfortable they may oppose the formation of a
group structure as they begin to assert their individual
personalities.
• Norming- At this time, the conflicts that arose in the
previous stage are addressed and resolved.
• Performing- The group begins to operate as a unit
• Adjourning- Finally the temporary teams wrap up
their activities.
 ENTREPRENEURSHIP
• Entrepreneur is the originator of a new business venture and a new
organization for that venture.
• The entrepreneur perceives opportunities that other business
executives do not see or do not care about.
• Entrepreneurship is different from management. It is a discontinuous
process of combining resources to produce new goods or services.
Whereas management involves ongoing coordination of production
process at an existing organization.
• Entrepreneurs always search for change, responds to it and exploits
it as an opportunity.
• Start-up- Business founded by individuals intending to change the
environment of a given industry by the introduction of either a new
product or a new production process.
 CONTI…
• Before 1970, the function of entrepreneurs was to expand supply but
after 1970 entrepreneurs were less interested in managing demand.
They focused on ‘ heroic creativity’.
• In mid 1980, Boyd and Begley identified some psychological and
sociological characteristics in entrepreneurs different from other
people doing businesses.
• They are: Need for achievement ( McClelland’s nAch), Locus of
control(individuals not the luck or fate control their own lives),
Tolerance for risk, Tolerance for ambiguity (every manager
should have this as many decisions are taken with incomplete and
unclear information) and Type A behavior which refers to the drive
to get more in less time.
 CONTI…

• Intrapreneurship- It is the practice of developing

new business ventures within the structure of an
existing organization. Thus managers can keep
organizations from stagnating, make organizations
adaptive and promote organizational climate that
supports creative learning.
 QUALITY
• Quality is a complex concept that has become
universally appealing. Quality in workplace has gone
beyond creating a better –than- average product at a
good price. Now it refers to achieving increasingly
better products and services at progressively more
competitive prices.
• This includes doing the things right the first time
rather than making and correcting mistakes.
• Thus organizations avoid the high costs associated
with rework.
 TOTAL QUALITY MANAGEMENT

• Definition-An organizational cultural commitment to

satisfying customers through the use of an integrated
system of tools, techniques and training. TQM involves
the continuous improvement of organizational processes,
resulting in high-quality products and services.
• Deming and Juran applied four ideas to TQM method-
1) A system approach- A system is a series of functions or
activities within the organization that work together to
fulfill the purpose. People must cooperate for the
company.
 CONTI…
2) The tools of TQM- Ishikawa popularized the tool known as Fishbone
diagram. It is also referred to as cause-and-effect diagram. Another
tool is Benchmarking or comparing your own products or services
against the very best.
3) A focus on customers- If customer needs are not the starting point,
though, use of quality tools may result in products and services that
no one wants to buy.
4) The role of management-Many managers blame workers for quality
problem but senior management should receive quality training before
training lower level employees.
5) Employee participation-Without empowered employees TQM will
not work. Empowerment is the act of providing , knowledge and
resources to individuals so they can achieve work objectives.