You are on page 1of 10

PRODUCTIVITY, EFFICIENCY AND EFFECTIVENESS:

What is Productivity?
In a general sense, productivity is an economic measurer of efficiency that summarizers the value of outputs relative to the value of the inputs used to create them. Productivity can be and often is assessed at different levels and in different forms. Successful companies create a surplus through productive operations. Although there is no complete argument on the true meaning of productivity, let us define it as the input-output ratio within a time period with due consideration for quality. Productivity is a measure of how much value individual employees add to the goods or services that the organization produces. The greater the output per individual, the higher the organizations productivity. Productivity can be defined in simple terms as any ratio of output to one or more corresponding inputs. The unit of output can be anything-dollars, units of products, customers served, patient treated or whatever is meaningful to the job or organization. (Ivancevich & others, Fundamentals of Management, fifth edition, p.49) Productivity can be expressed as follows: Productivity =Output/Input (with a time period, quality considered) This formula indicates that productivity can be improved a) by increasing outputs with the same inputs, b) by decreasing inputs but maintaining the same output, or c) by increasing output and decreasing inputs such as labor, materials, and capital. Total factor productivity combines various inputs to arrive at a composite input. In the past, productivity improvement program were mostly aimed at the worker level. Yet, as P. F. Drucker, one of the most prolific writers in management observed, The greatest opportunity for increasing productivity is surely to be found in knowledge work itself and especially in management.

WHAT IS EFFICIENCY AND EFFECTIVENESS?


Efficiency is a vital part of management. It refers to the relationship between inputs and outputs. If you can get more outputs from the given inputs, you have increased efficiency. Since managers deal with input resources that are scarce-mainly people, money, and equipment they are concerned with efficient use of these resources. Management, therefore, is concerned with minimizing resource costs. Efficiency refers to as doing things right.

Managerial Functions:

The function of managers provides a useful structure for organizing management knowledge. Managerial functions are general administrative duties that need to be carried out in virtually all productive organizations. Henri Fayol, a French industrialist, became the father of the functional approach in 1916 when he identified five managerial functions: planning, organizing, command, coordination and control. Fayol claimed that these five functions were the common denominators of all managerial jobs, whatever the purpose of the organization. Later on management scholars. ROBERT KRETNER, identified eight functions as managerial functions and these are: PLANNING: Commonly referred to as the primary management function, planning is the formulation of future courses of action. Plans and objectives on which they based give purpose and direction to the organization, its subunits, and contributing individuals. Planning involves selecting missions and objectives as well as the actions to achieve them; it requires decision making, that is, choosing future courses of action from among alternatives. DECISION MAKING: Managers choose among alternative courses of action when they make decisions. Making intelligent and ethical decisions in todays complex world is a major management challenge. ORGANIZING: Structural considerations such as the chain of command, division of labor, and assignment of responsibility are part of the organizing function. Careful organizing helps ensure the efficient use of human resources. Organizing is that part of managing which involves establishing an international structure of roles for people to fill in an organization. STAFFING: Organizations are only as good as the people in them. Staffing consists of recruiting, training, and developing people who can contribute to the organized effort. Staffing involves filling and keeping filled, the positions in the organization structure. COMMUNICATING: Todays managers are responsible for communicating to their employees the technical knowledge, instructions, rules and information required to get the job done. Recognizing that communication is two-way process, managers should be responsive to feedback and upward communications. MOTIVATING: An important aspect of management today is motivating individuals to pursue collective objectives by satisfying needs and meeting expectations with meaningful work and valued rewards. LEADING: Managers become inspiring leaders by serving as role models and adapting their management styles to the demands of the situation. The idea of visionary leadership is popular today. Leading is the influencing people so that they will contribute to organizational and group goals; it has to do predominantly with interpersonal aspect of managing. CONTROLLING: When managers compare desired results with actual results and take necessary corrective action, they are keeping on track through the control function. Deviations from the past plans should be considered when formulating new plans. Controlling is measuring and correcting individual and organizational performance to ensure that events conform to plans.

Coordination, the Essence of Managership: Some authorities consider coordination to be a separate function of the manager. It seems more accurate, however, to regard it as the essence of managership; for achieving harmony among individual efforts toward the accomplishment of group goals. Each of the managerial function is an exercise contributing to coordination. Even in the case of a church or a fraternal organization, individuals often interpret similar interest in different ways, and their efforts toward mutual goals do not automatically mesh with the efforts of others. It thus becomes the central task of the manager to reconcile differences in approach, timing, effort, or interest and to harmonize individual goals to contribute organizational goals.

in response to previously unforeseen problems. Managers are required to handle such problems as strikes, copyright infringements, or problems in public relations or corporate image. As resource allocator, managers are responsible for allocating human, physical, and monetary resources. Managers decide how resources are distributed, and with whom he or she will work most closely. Last, managers perform a negotiator role when they discuss and bargain with other groups to gain advantages for their own units. In this role, managers enter into negotiation with other groups or organizations as a representative of the company. These include a union contract, an agreement with a consultant, or a long- term relationship with a supplier. MANAGEMENT SKILLS: Skills allow individuals to perform activities and to function in society. A management skill is the ability to use knowledge, behaviors and training, and aptitudes to performing a task (SKINNER & IVANCEVICH: 1992). During the early 1970s, research by Robert L. Katz found that managers need three essential skills or competencies: technical, human and conceptual. In addition to fulfilling numerous roles, mangers also need a number of specific skills if they are to succeed. The most fundamental management skills are technical, interpersonal, conceptual, diagnostic, communication, decision-making and time management skills. Technical Skills: Technical skills include knowledge about methods, processes and equipments for conducting the specialized activities of the managers organizational unit. Technical skills also include factual knowledge about the organization (rules, structure, management systems, employee characteristics) and knowledge about the organizations products and services (technical specifications, strengths, and limitations). This type of knowledge is acquired by a combination of formal education, training, and job experience. Effective managers are able to obtain information and ideas from many sources and store it away in their memory for use when they need it. Technical skills are those involved in making a product or providing a service (SKINNER & IVANCEVICH: 1992). Technical skill is the knowledge of and ability to use the processes, practices, techniques, or tools of a specialty responsibility area. (Straub and Attner, Introduction to Business, Kent publishing, 2004.p. 96.)Technical skills are necessary to accomplish or understand

the specific kind of work being done in an organization. Technical skills are especially important for first line managers. The managers spend much of their time training subordinates and answering questions about work-related problems. They must know how to perform the tasks assigned to those they supervise if they are to be effective managers. Technical skill refers to a persons knowledge and ability in any type of process or technique. Examples are the skills learned by accountants, Engineers, Word Processing operators and toolmakers. in response to previously unforeseen problems. Managers are required to handle such problems as strikes, copyright infringements, or problems in public relations or corporate image. As resource allocator, managers are responsible for allocating human, physical, and monetary resources. Managers decide how resources are distributed, and with whom he or she will work most closely. Last, managers perform a negotiator role when they discuss and bargain with other groups to gain advantages for their own units. In this role, managers enter into negotiation with other groups or organizations as a representative of the company. These include a union contract, an agreement with a consultant, or a long- term relationship with a supplier. MANAGEMENT SKILLS: Skills allow individuals to perform activities and to function in society. A management skill is the ability to use knowledge, behaviors and training, and aptitudes to performing a task (SKINNER & IVANCEVICH: 1992). During the early 1970s, research by Robert L. Katz found that managers need three essential skills or competencies: technical, human and conceptual. In addition to fulfilling numerous roles, mangers also need a number of specific skills if they are to succeed. The most fundamental management skills are technical, interpersonal, conceptual, diagnostic, communication, decision-making, and time management skills. Technical Skills: Technical skills include knowledge about methods, processes and equipments for conducting the specialized activities of the managers organizational unit. Technical skills also include factual knowledge about the organization (rules, structure, management systems, employee characteristics) and knowledge about the organizations products and services (technical specifications, strengths, and limitations). This type of knowledge is acquired by a combination of formal education, training, and job experience. Effective managers are able to obtain information and ideas from many sources and store it away in their memory for use when they need it. Technical skills are those involved in making a product or providing a service (SKINNER & IVANCEVICH: 1992). Technical skill is the knowledge of and ability to use the processes, practices, techniques, or tools of a specialty responsibility area. (Straub and Attner, Introduction to Business,Kent publishing, 2004.p. 96.)Technical skills are necessary to accomplish or understand the specific kind of work being done in an organization. Technical skills are especially important for first line managers. The managers spend much of their time training subordinates and answering questions about work-related problems. They must know how to perform the tasks assigned to those they supervise if they are to be effective managers. Technical skill refers to a persons knowledge and ability in any type of process or technique. Examples are the skills learned by accountants, Engineers, Word Processing operators and toolmakers. in response to previously unforeseen problems. Managers are required to handle such problems as strikes, copyright infringements, or problems in public relations or corporate image. As resource allocator, managers are responsible for allocating human, physical, and monetary resources. Managers decide how resources are distributed, and with whom he or she will work most closely. Last, managers perform a negotiator role when they discuss and bargain with other groups to gain

advantages for their own units. In this role, managers enter into negotiation with other groups or organizations as a representative of the company. These include a union contract, an agreement with a consultant, or a long- term relationship with a supplier. Human Skills/Interpersonal skills: Interpersonal skills (or social) skills include knowledge about human behavior and group processes, ability to understand the feelings, attitudes, and motives of others and ability to communicate clearly and persuasively. Specific types of interpersonal skills such as apathy, social insight, charm, tact, and diplomacy, persuasiveness and oral communication ability are essential to develop and maintain cooperative relationships with subordinates, superiors, peers, and outsiders. Someone who understands people and is charming, tactful, and diplomatic will have more cooperative relationship than a person who is insensitive and offensive. Human relations skills involve relating and interacting with subordinates, peers, superiors, and customers or clients (SKINNER & IVANCEVICH: 1992). Human skill is the ability to interact with other persons successfully. A manager must be able to understand, work with and relate both individuals and groups to build a teamwork environment. (Straub and Attner, Introduction to Business, Kent publishing, 2004.p. 97.) Human skill is the ability to work effectively withy people and to build teamwork. In the other words it is the ability of a person to work well with other people both individually and in groups. Since managers deal with people, this skill is crucial. Managers have to spend considerable time interacting with people both inside and outside the organization. For obvious reasons, then, managers also need interpersonal skill the ability to communicate with, understand and motivate both individuals and groups. Conceptual Skills: In general terms, conceptual (or cognitive) skills involve good judgment, foresight, intuition, creativity, and the ability to find meaning and order in ambiguous, uncertain events. Specific conceptual skills that can be measured with aptitude test include analytical ability, logical thinking, concept formation, inductive reasoning, and deductive reasoning. Conceptual skills are the managers ability to organize and integrate information to better understand the organization as a whole (SKINNER & IVANCEVICH: 1992). Conceptual skill deals with ideas and abstract relationships. It is the mental ability to view the organization as a whole and to see how the parts of the organization relate to and depend on one another. In addition, conceptual skill is the ability to imagine the integration and coordination of the parts of an organization- all it processes and systems. (Straub and Attner, Introduction to Business, Kent publishing, 2004.p. 97.)Conceptual skills depend on the managers ability to think in the abstract. They must be able to see the organization as a whole and the relationships among its various subunits and to visualize how the organization fits into broader environment. Conceptual skill is the ability to think in terms of models, frameworks, and broad relationships, such as long- range plans. These conceptual skills allow managers to think strategically, to see the big picture, and to make broad-based decisions that serve the organization. These types of conceptual skills are needed by all managers at all levels but become more important as they move up the organizational hierarchy. Diagnostic Skills: Successful managers also posses diagnostic skills or skills that enable a manager to visualize the most appropriate response to a situation. This skill is as like the skill of a physician who diagnoses a patients illness by analyzing symptoms and determining their probable causes. Communication Skills:

Communication skill is now a day considered to be an important skill of successful managers. Communication skills refer to the managers abilities both to convey ideas and information effectively to others and to receive ideas and information effectively from others. These skills enable a manager to transmit ideas to subordinates so that they know what is expected, to coordinate work with peers and colleagues so that they work together properly, and to keep higher -level managers informed about what is going on. Human relations skills involve relating and interacting with subordinates, peers, superiors, and customers or clients (SKINNER & IVANCEVICH: 1992). Human skill is the ability to interact with other persons successfully. A manager must be able to understand, work with and relate both individuals and groups to build a teamwork environment. (Straub and Attner, Introduction to Business, Kent publishing, 2004.p. 97.) Human skill is the ability to work effectively withy people and to build teamwork. In the other words it is the ability of a person to work well with other people both individually and in groups. Since managers deal with people, this skill is crucial. Managers have to spend considerable time interacting with people both inside and outside the organization. For obvious reasons, then, managers also need interpersonal skill the ability to communicate with, understand and motivate both individuals and groups. Conceptual Skills: In general terms, conceptual (or cognitive) skills involve good judgment, foresight, intuition, creativity, and the ability to find meaning and order in ambiguous, uncertain events. Specific conceptual skills that can be measured with aptitude test include analytical ability, logical thinking, concept formation, inductive reasoning, and deductive reasoning. Conceptual skills are the managers ability to organize and integrate information to better understand the organization as a whole (SKINNER & IVANCEVICH: 1992). Conceptual skill deals with ideas and abstract relationships. It is the mental ability to view the organization as a whole and to see how the parts of the organization relate to and depend on one another. In addition, conceptual skill is the ability to imagine the integration and coordination of the parts of an organization- all it processes and systems. (Straub and Attner, Introduction to Business, Kent publishing, 2004.p. 97.) Conceptual skills depend on the managers ability to think in the abstract. They must be able to see the organization as a whole and the relationships among its various subunits and to visualize how the organization fits into broader environment. Conceptual skill is the ability to think in terms of models, frameworks, and broad relationships, such as long- range plans. These conceptual skills allow managers to think strategically, to see the big picture, and to make broad-based decisions that serve the organization. These types of conceptual skills are needed by all managers at all levels but become more important as they move up the organizational hierarchy. Communication Skills: Communication skill is now a day considered to be an important skill of successful managers. Communication skills refer to the managers abilities both to convey ideas and information effectively to others and to receive ideas and information effectively from others. These skills enable a manager to transmit ideas to subordinates so that they know what is expected, to coordinate work with peers and colleagues so that they work together properly, and to keep higher -level managers informed about what is going on. Decision-Making Skills: Management means decision-making. Decision-making skills refer to the managers ability to recognize and define problems and opportunities correctly and then to select an appropriate course of action to solve problems and capitalize on opportunities. No managers make right decision all

the time. However, effective managers make good decisions most of the time. And when they do make a bad decision, they usually recognize their mistake quickly and then make good decisions to recover with as little cost or damage to their organization as possible. Time Management Skills: Finally, effective managers usually have good time management skills. Time management skills refer to the managers ability to prioritize work, to work efficiently, and to delegate appropriately. Managers, work with different pressures and challenges. So, managers need to use their time effectively in order to run their organizations in an effective manner. Managerial Skills and Organizational Hierarchy: Managers need many types of skills to fulfill their role requirements, but the relative importance of the various skills depends on the leadership situation. Relevant situational moderator variables include managerial level, type of organization, and the nature of the external environment. Robert L. Katz identified three kinds of skills for administrators. These skills are prerequisites for successfully running an organization. But the relative importance of these skills is not equally important for all levels of managers in the organizational hierarchy. Basically, we find three levels in an organization: top, middle and lower. The relative importance of these skills for managers is discussed below: Figure : One aspect of the situation influencing skill importance is a managers position in the authority hierarchy of the organization. Skills priorities at different levels of management are related to differing role requirement at each level. Managerial level affects not only the relative importance of the three broad categories of skills described earlier, but also the relative importance of the specific types of skills within each category. In general, higher levels of management have a greater number and variety of activities to be coordinated, the complexity of relationship that need to be understood and managed is greater, and the problems that need to be solved are more unique and ill-defined. Whereas a department supervisor may have to coordinate the work of employees with mostly similar jobs, a CEO must coordinate the diverse activities of several organizational units, each with large number of people. Increasing complexity as one ascends to higher levels in an organization is reflected in increased requirements for conceptual skills. Top executives need to analyze vast amounts of ambiguous and contradictory information about the environment in order to make strategic decisions and to interpret events for other members of the organizations. Executives need to have a long-term perspective and the ability to comprehend complex relationships among variables relevant to the performance of the organization. A top executive must be able to anticipate future events and know how to plan for them. The quality of strategic decisions ultimately depends on conceptual skills, even though some technical knowledge is necessary to make the decisions, and interpersonal skills are necessary for developing relationships, obtaining information, and influencing subordinates to implement decisions. The role of middle-level managers is primarily one of supplementing existing structure and developing ways to implement policies and goals established at higher levels. This role requires a roughly equal mix of technical, interpersonal, and conceptual skills. Low-level managers are mainly responsible for implementing po9licy and maintaining the workflow within the existing organizational structure; for these managers, technical skills are relatively more important than conceptual skills or interpersonal skills. The skill requirements for managers at each level vary somewhat depending on the type of organization, its size, the organization structure, and the degree of centralization of authority. For

example, technical skills are more important for top executives in organizations where operating decisions are highly centralized. Likewise, more technical skill is needed by top executives who have functionally specialized roles (e.g., selling to key customers, product design) in addition to general administrative responsibilities. More conceptual skills are needed by middle-and lowerlevel managers who are expected to participate in strategic planning, product innovation, and leading change. The relative importance of these skills may differ at various levels in the organization hierarchy. Technical skills are of greatest importance at the supervisory level. Because they have to train subordinates and answer the questions as raised by the employees in the workplace. They spend most of their time with the employees. Although, technical skills become less important as managers move into higher levels of management, even top managers need some proficiency in technical aspects of the organization. Technical skills often help top-level managers to run the organization effectively. For example: Horst Schulze, the CEO of Ritz-Carlton, started his career as a dishwasher and other related jobs. But these skills helped him to become the CEO of RitzCarlton, the top of the industry. Human skills-the ability to communicate, understand and motivate both individuals and groups. A manager who has good interpersonal skills is likely to be more successful. The skill is equally important for all levels in the organization hierarchy. Conceptual skill depends on managers ability to think in the abstract. Conceptual skill is needed by all managers but is especially important for top-level managers in the organization. It is assumed, especially in large companies, that chief executive officers (CEO) can utilize the technical abilities of their subordinates. In smaller firms, however, technical experience may still be quite important. implementing policy and maintaining the workflow within the existing organizational structure; for these managers, technical skills are relatively more important than conceptual skills or interpersonal skills. The skill requirements for managers at each level vary somewhat depending on the type of organization, its size, the organization structure, and the degree of centralization of authority. For example, technical skills are more important for top executives in organizations where operating decisions are highly centralized. Likewise, more technical skill is needed by top executives who have functionally specialized roles (e.g., selling to key customers, product design) in addition to general administrative responsibilities. More conceptual skills are needed by middle-and lowerlevel managers who are expected to participate in strategic planning, product innovation, and leading change. The relative importance of these skills may differ at various levels in the organization hierarchy. Technical skills are of greatest importance at the supervisory level. Because they have to train subordinates and answer the questions as raised by the employees in the workplace. They spend most of their time with the employees. Although, technical skills become less important as managers move into higher levels of management, even top managers need some proficiency in technical aspects of the organization. Technical skills often help top-level managers to run the organization effectively. For example: Horst Schulze, the CEO of Ritz-Carlton, started his career as a dishwasher and other related jobs. But these skills helped him to become the CEO of RitzCarlton, the top of the industry. Human skills-the ability to communicate, understand and motivate both individuals and groups. A manager who has good interpersonal skills is likely to be more successful. The skill is equally important for all levels in the organization hierarchy. Conceptual skill depends on managers ability to think in the abstract. Conceptual skill is needed by all managers but is especially important for top-level managers in the organization. It is assumed, especially in large companies, that chief executive officers (CEO) can utilize the technical abilities of their subordinates. In smaller firms, however, technical experience may still be quite important. Management: Science or Art?

Essential Elements of Science: Systematic body of knowledge Universal Principle Scientific Enquiry and experiment Cause and effect relationship Test of validity and predictability The term management refers to the process of getting activities completed effectively and efficiently with and through others. Characteristics of Science: Certain general principles and facts those are universally applicable Establish cause and effect relationship Improve through scientific enquiry and experiments It serves as a guide to action. Characteristics of Art: Personal skills Creativity Achievement oriented Development through continuous practice Practical application Management is both art and science Management is Inexact Science. Management science is the body of systemized knowledge accumulated and accepted with the understanding of general truth concerning management. Management is an inexact science and it is not a pure science as physical science. Because the inclusion of human elements in managing makes this discipline not only complex but also controversial as a pure science. Human behavior is unpredictable, different people think, act or react differently not identical circumstance.
Management: Science or Art? Essential Elements of Science: Systematic body of knowledge Universal Principle Scientific Enquiry and experiment Cause and effect relationship Test of validity and predictability The term management refers to the process of getting activities completed effectively and efficiently with and through others. Characteristics of Science:

Certain general principles and facts those are universally applicable Establish cause and effect relationship Improve through scientific enquiry and experiments It serves as a guide to action. Characteristics of Art: Personal skills Creativity Achievement oriented Development through continuous practice Practical application Management is both art and science.