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MANAGEMENT PRINCIPLES AND PRACTICES

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Definition of Management
• Management : On expanding : Manage – men – tactfully Manage – Men – technology Manage – men – as team Manage – competencies Manage – objectives (MBO) Manage – men and things (resources – physical, inanimate) MANAGE – f ( RISKS, REWARDS) Competencies = f (SKATE)

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• A manager is someone who works with and through other people by coordinating their work with and through other people by coordinating their work activities in order to accomplish organizational goals.

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Definition of “Management”
• By Griffin: “A set of management functions directed at the efficient and effective utilization of resources in the pursuit of organization goals.”

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Definition….contd….
• By Koontz and Weihrich: “Management is the process of designing and maintaining an environment in which individuals working together in groups, efficiently accomplish selected aims.”

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Peter F. Drucker-Father of Modern Management
• Management is an organ, organs can be described and defined only through their functions

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• The difference between Management Principles and Management Functions: • “What should I do (principles) to ensure that I do my job (functions) with effectiveness and efficiency.” • Principles are strategies / processes which enable the individual to do their functions better to achieve laid down goals and objectives • GOALS – qualitative achievements • Objectives – could have a mix of quantitative and qualitative
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Terry & Franklin…
• Management is a distinct process consisting of activities of planning, organizing, actuating, and controlling, performed to determine and accomplish stated objectives with the use of human beings and other resources.”

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Definitions
• Planning : Management functions that involves the process of defining goals, establishing strategies for achieving those goals and developing plans to integrate and coordinate activities • Organizing: management function that involves the process of determining what tasks are to be done, who is to do them, how the tasks have to be grouped, who reports to whom, and where decisions are to be made
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• Leading : management functions that involves motivating subordinates, influencing individuals or teams as they work, selecting the most effective communicating channels or dealing with any with employee behavior issues • Controlling : Management functions that involving monitoring actual performance, compiling actual to standard, and taking action if necessary • Management process : The set of ongoing decisions and work activities in which managers engage as they plan, organize, lead and control.

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Henry Mintzberg…
• He has categorized these roles into three groups interpersonal roles Informational roles Decisional roles

Description of each of the roles……
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Interpersonal Roles
• A manager serves as a figurehead – a symbol; as a leader, ie., hires, trains, encourages, fires, remunerates, judges; and as a liaison between people in organisation and between outside contacts and the organizational

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Informational roles
• A manager serves as a monitor by gathering information; • As a disseminator of information • As a spokesperson of the organization

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Decisional Roles
• A manager serves as an entrepreneur by being: Entrepreneur (An initiator,Innovator,Problem discoverer, Designer of improvement projects) As a disturbance handler of unexpected situations As a resource allocator and As a negotiator
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• ALL THE THREE ROLES PUT TOGETHER IS CALLED AS: THE MANAGERIAL WORK ACTIVITY APPROACH

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• The whole management process is actually an integration of the work activity (Mintzberg) and the management functions • MANAGEMENT FUNCTIONS : Planning, Organization, Co-ordination, motivation, and control are Universal. These functions are performed in all organizations – SMEs, Large, not-for-profit organizations, etc.

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Management Skills
• Technical Skills • Human Skills • Conceptual Skills

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The pyramid to the top
• • • • Top level middle level Front line supervision Non-managerial work force

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CONCEPTUAL SKILLS

Top level

H

U
M A

TE CH NI

Middle level

N S K

CAL
SKI LLS

Supervisory level/entry level

ILL

S

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Importance of Management
• • • • • Effective utilization of resources Development of resources To incorporate Innovations Integrating various interest groups Stability in the society

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Most important human activities is managing
Mackenzie King remarked: “Labor cannot do anything without capital, Capital nothing without labor and neither Can do anything without the guiding genius of management.”

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Nature of Management
• • • • • • Multidisciplinary Dynamic Nature of Principle Relative, not absolute principles Mgmt as science and art. Mgmt as profession Universality of Management

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Management…..
• Is based on a systematic body of knowledgelaws, principles and concepts – • And this knowledge is universal • If a manager has this fundamental knowledge • And knows how to apply it to a given situation • He should be able to perform the managerial functions efficiently and effectively

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Management……
• Management Practice is regarded as an art • But, organized knowledge about management is a science • THUS MANAGEMENT IS BOTH AN ART AND A SCIENCE

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Management …..
• Is also a profession Separation of ownership from control The rules and regulations framed by the govt to protect citizens from exploitation The growth of trade union movement The desired of business leaders for social status And the Impetus of the scientific management philosophy which stresses the need for technically trained professional managers – contributed to the PROFESSIONALIZATION OF MANAGEMENT.
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• This should have enabled you to understand what management is at a fundamental level of definition and understanding……..

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Schools of Management Thought
• It was during the 20th century that a systematic study of management began

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The Evolution of Management Thought can be studied in 4 parts:
• 1. Early classical approaches – represented by
Scientific management, administrative management & bureaucracy. • 2. Neo-Classical approaches – represented by human relations movement and behavioral approach. • 3. Modern approaches- represented by qualitative approach, systems approach, &

• 4. Contingency approach.

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• THE CONTRIBUTORS ON MANAGEMENT PRICIPLES…

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The Scientific Management School
• Scientific Management perspective
• theoretical approach to organizations that emphasizes organizational design,worker training for efficiency, chains of command, and division of labor. The perspective rests on the assumption that work and organizations can be rationally or “scientifically” designed and developed.

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Henry Laurence Gantt (1816-1919)
• Educated from John Hopkins College • Engineer, as draughtsman and later Asst. engineer • His publications: Work, Wage and Profits (1910); Industrial Leadership(1916); and Organizing for Work.(1919)

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Gantt‟s Thoughts….
• Task and Bonus Plan • Daily Balance Chart (Gantt Chart) • Humanizing Science of Management • Important of Leadership • Training of Workers • Social Responsibility of Business (Also called as : Forerunner of modern industrial democracy; also called as “apostle of industrial peace”)
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Frank Bunker Gilbreth (1868-1924) and Lillian Moller Gilbreth(18781972)
• FBG: authored: Concrete Systems (1908); Field System (1908); Motion Study (1911); Power of Scientific Management (1912); Fatigue Study (1916); Applied Motion Study (1917, with Lillian Gilbreth); and Motion study for the Handicapped (1920) • The Father of Motion Study was a contemporary of Taylor and Gantt
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• Lillian Moller Gilbreth:Professor of Management at Purdue University. Her famous works: The Psychology of Management (1914) and Quest for the Best Way (1924)

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Contributions by Frank Gilbreth
• • • • • Motion study Time Study One best way Training of personnel Three position plan of promotion (each worker should be considered to occupy three positions: a. the job he held before promotion to his present position b. his present position and c. the next higher job • Part of his work, then would be teaching the man below him and learning from the man above him. In this way, he would qualify for promotion himself and help to provide a successor to his current job.
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Contributions of Lillian Gilbreth
• It should be noted that FBG was greatly assisted by Lillian Gilbreth whom he married in 1904 • Both of them used motion picture films to analyze and improve motion sequences • Both developed the process of chart and the flow diagram to record process and flow patterns used in a work situation • They emphasized written instructions to avoid confusion and misunderstanding (the white list card system) • The Gilbreths urged tha the POM and motion analysis could effectively be applied to huge untapped area of self-management. They started to search into the area of fatigue and its impact o health and productivity.
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Fredrick Taylor
• The credit of systematic study and practice of management goes to FWT, very well known as FATHER OF SCIENTIFIC MANAGEMENT • Experiments of Taylor ……

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Midvale experience
• At Midvale Steel Company, he found that individual workers had their own notions about work and different workers performed the same task in different ways • He realized that greater output was possible on the part of the workers but most of them were engaged in what he called „systematic soldiering.‟ • The solution: the first task of management was to know what constituted a proper day‟s work • He conducted time studies at Midvale Steel Company which proved of immense use to him
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Bethlehem Experiments – Pig-Iron Handling
• Taylor was hired by the Bethlehem Steel Company to increase the output of one of the larger machine shops which had been a serious production bottleneck • Conclusion: Periodic rests enabled a worker to produce more than continuous work. By a systematic resting time and improved methods average productivity was raised from 12.5 tons to 47.5 tons per day. • Taylor began selecting workers and training them in handling pig-iron • The original crew was 75, this reduced dramatically • The earnings of the crew increased from USD1.15 to USD 1.85 per man per day.
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Major Scientific Management Theories
• Principles of Scientific Management: Frederick Taylor (1856-1915)
• Four Essential Elements
• Discovering the scientific method for tasks and jobs • Careful selection of workers • Inducing and training the worker by the scientific method • Equal division of work between management and workers
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Major Scientific Management Theories
• Principles of Scientific Management: Frederick Taylor (1856-1915)
• Time and Motion Study
• a technique for determining the efficiency of production through work observation and time measurements; used to develop work standards that can be measured for efficiency.

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Motion Study
It is a technique of standardization of work methods. Involves observation of all motions comprised in a particular job and then determination of the best set of motions. It is one best way of doing job.

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Time Study
• Used to determine standard Time for completion of work. It facilitates the planning of large daily task.

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Differential Piece Rate Plan
• Taylor suggested pay by piece rates on basis of standards set by motion and time studies. Under this plan workers are paid a low piece rate upto standard, a large bonus at standard and a higher piece rate above the standard.

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Exception Principle
• It involves setting up a large daily task by the management with rewards for achieving targets and penalty for not meeting the targets. Taylor suggested that manager should be interested in exceptional items that vary from standard performance.

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Taylor‟s Management Principles
• Large, daily, defined task • Standard conditions – skill sets and tool sets to be made available with authority along with clear cut objectives and expectations; this is called as ACCOUNTABILITY • High Pay for success • Loss in case of failure • Separation of planning from doing – the most valuable insights of TAYLOR
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HENRY FAYOL= Father of Principles of Management
• • • • Division of labor Authority and Responsibility Discipline Unity of command (one boss--subordinate) • Unity of Direction (one head and one plan) • Subordination of Individual Interests to General Interest (FIRM, FAST AND FAIR)
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• Remuneration of Personnel (Pay by Results; motivational – ESOPS, etc) • Centralization (optimization between centralization and decentralization; as the human body – brain is the centralized organ) • Scalar Chain – This is “the chain of superiors” ranging from the ultimate authority to the lowest ranks. THE ORGANOGRAM • Order: Right man in the right place; competency specific; man should fit the job and not the other way round; or else this will be like A SQUARE PEG IN A ROUND HOLE.
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• Stability of tenure of personnel – retention of talent; attrition; turnover of people • Initiative – encourage initiative among subordinates • Esprit-de-Corps : UNION IS STRENGTH; team work; cohesiveness among the members

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Fayol‟s Elements of Management
• Fayol made a distinction between “General Principles of Management” and “elements of Management.” • The latter was regarded as functions of management. Dividing them into: PLANNING, ORGANIZATION, COMMAND, COORDINATION AND CONTROL

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Planning
• Planning : most important and difficult managerial function. • Planning meant “looking ahead” and to foresee – both to assess the future and make provision for it • He considered – unity, continuity, flexibility and provision as the broad features of a good plan of action • A GOOD PLAN IS A PRECIOUS MANAGERIAL INSTRUMENT • A GOOL PLAN ALSO HAS TO BE IMPLEMENTABLE

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ORGANIZING
• Means : “to organize a business is to provide it with everything useful to its functioning, raw materials, tools, capital, personnel.” • Fayol concerned himself both with structure and process, listing 16 managerial duties and emphasizing the necessity for clear objectives, authority, decisions and task
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COMMAND/DIRECTION
• After the organization is formed, it is the mission of command to set it going. • For every manager, the object of command is to get the optimum return from all employees of his unit in the interest of the whole concern • The art of command, according to Fayol, rests on certain personal qualities and knowledge of general principles of management

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COORDINATION
• • 1. 2. To coordinate is to harmonize all the activities of a concern so as to facilitate its working and its success According to him, in a well coordinated enterprise the following facts are to be observed; Every dept works in harmony with the rest Divisions or sub-divisions in each dept are precisely informed as to the share they must take in the commercial task and the reciprocal aid they are to afford one another The working schedule of the various departments and sub-divisions thereof is constantly attuned to circumstances
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3.

CONTROL/MEASUREMENT AND FEEDBACK
• According to Fayol, control consists in verifying whether everything occurs in conformity with the plan adopted, the instruction issued and the principles established • Its object is to point out weaknesses and errors in order to rectify them and prevent recurrence. • It operates on everything – resources (things), people and actions

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Key principles of Mgmt of FAYOL
• • • • Unity of command Unity of direction Responsibility equal to authority and Scalar Chain

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The Bureaucratic Theory
• The term Bureaucracy was coined by Vincent De Gourney. • Weber differentiated between power and authority

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• A person could be said to possess power if his will could be enforced in a social relationship despite resistance. • For Weber authority was identical with authoritarian power of command. • He identified 5 essential components of authority-

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1. An individual or body of individuals who rule. 2. An individual or body of individuals who are ruled. 3. The will of rulers to influence the conduct of the ruled.

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4. The evidence of influence of rulers in terms of objective degree of command. 5. The direct or indirect influence of that command in terms of subjective acceptance. • Authority exists as long as it is accepted by ruled as legitimate.

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Three types of authority
• Charismatic Authority – based on the personal magnetism of the leader • CHARISMA : PERSONAL QUALITY OR GIT THAT ENABLES AN INDIVIDUAL TO IMPRESS AND INFLUENCE MANY OF HIS FELLOWS, A LEADER DOMINATES DECISION MAKING

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TRADITIONAL AUTHORITY
• In this type of authority system – the leader has authority by virtue of his status that he has inherited • The extent of his authority is fixed by custom • The officials who carry out the orders are like „household staff‟ of the master

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Rational-Legal authority = bureaucracy
• This authority system dominates, and it is most efficient one • This system is characterized by rationality and legality • The system is rational because the means are expressly designed to achieve certain specific goals • The org is like a well designed machine with a certain function to perform, and every part of the machine contributes to the attainment of maximum performance of that function. • It is legal, because authority is exercised by means of a system of rules and procedures through the office which the individual occupies at a particular time
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BUREAUCRATIC FUNCTIONS ARE:
• Regular activities aimed at organizational goals – so that they are distributed as fixed official duties • All activities follow the organizational principles of hierarchy • Operations receive equal treatment under a consistent systems of abstract rules • Officials operate as formalistic personalities without becoming emotionally involved.
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• Principle of Objective (purpose/mission/objectives and vision) • Principle of Specialization : the activities of every member of any organized group should be confined, as far as possible, to the performance of a single function • Principle of coordination: The purpose of organizing per se, as distinguished from the purpose of the undertaking, is to facilitate coordination and unity of effort.
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George Elton Mayo (1880-1949)
• He has been called the founder of the “human relations school.” • He became famous on account of the Hawthorne experiments • These experiments had a significant impact on management thought, and considerably influenced the “human relations movement.” • Experiments conducted in the Hawthorne Plant of the Western Electric Company in Chicago – from 1927 to 1932.
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Hawthorne studies – three general phases
• Test Room Studies : the object being to assess the effect of single variables upon employee performance. They were experimental in nature • Interviewing Studies: these were largely concerned with improving employee attitudes and were psychological in nature • Observations Studies: these were undertaken to understand and describe the factors influencing the informal organization of work groups and were sociological in nature
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TEST ROOM STUDIES
• Illumination Experiments: Two test groups – varied effects of lighting on output vs. no change situation; the results were that in both the groups the output increased. Conclusion that environmental factors like lighting may not be the only factor, there could be other variables • Relay Assembly Test Room Experiments: This study was made to discover the anomalies of the previous experiments. Numerous variables were put into action – room conditions, pauses during work, piece-work, work without pauses and shorter working hours. After 12 week study, the output went up to a record level

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Interviewing studies: An interview program of thousands of workers was conducted with the object of finding out the attitude of the employees towards their job, working conditions and supervision The interviewing program revealed the following points: a. Merely giving a person an opportunity to talk and air his grievance has a beneficial effect on his morale b. Complaints are not necessarily objective statements of facts. They are often symptoms of more deep-seated disturbances c. Workers are influenced in their demands by experience both inside and outside the factory d. Worker is satisfied or dissatisfied not in terms of any objective frame of reference but rather in terms of how he regards his social status in the firm and what he feels he is entitled to in the way of rewards
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Observational studies
• The Bank Wiring Observation Group Study constituted the last phase of Hawthorne studies • It was conducted to investigate the social pattern of a group of fourteen workers and their associated supervisors • The main point of difference between this study and the earlier test room studies was that no experimental changes were planned but efforts were directed to study the group in its customary functioning • This study revealed that there existed a GROUP NORM in terms of which the behavior of different individuals was in some sense being regulated
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• This group was restricting the output on account of various forms of social pressures • The group had for itself a standard of a day‟s work which was not imposed upon them, but had apparently been evolved by workmen themselves • The group had various social pressures to see that the workers did not exceed the group output norm, and nobody attempted to attain official production targets • Those who attempted to exceed became targets of social disapproval, verbally or physically • This study showed the importance of informal, social group in business organization • A member of such a group cared more for the opinion of the group rather than for financial incentives of the management • IT WAS THE GROUP THAT DECIDED HIS ATTITUDE TO WORK, MANAGEMENT AND LEVEL OF PRODUCTION • THESE STUDIES FURTHER REAFFIRMED THE IMPORTANCE OF INFORMAL GROUP IN THE MOTIVATION OF WORKERS.

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CONCLUSIONS OF HAWTHORNE STUDIES
1. Environmental factors not the sole factors affecting productivity 2. Worker is not an economic man (not purely motivated by money alone) 3. Importance of recognition, Security and Morale 4. Importance of Informal group 5. Importance of total work situation 6. Complaints as symptoms
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CHESTER I. BARNARD (18861961)
• While Fayol developed the principles of management, Barnard proved that such principles could be applied in practice • He defined organization as : “ a system of consciously coordinated activities or forces of two or more persons.” • He believed people in organization contributed services and not themselves • Barnard tried to analyze how organization functions as a „living body.‟ • For him, to understand the small organization was to understand the large organization because all organizations possess certain common characteristics
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Elements of Organization
• Willingness to cooperate • Common purpose and • Communication Are the elements of an organization

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Equilibrium internal and external
• Barnard firmly believe that an organization is separate from the environment in which it operates • The person who contribute services to the orgs has two distinct roles – the personal role and the an organizational role • He suggested that orgs must maintain internal and external equilibrium • Internal equilibrium he meant: reward and satisfaction for the participation; thus the balance between what employees get out of work (money, status, reward, etc) and what they contribute (time, worry, discomfort, etc) must be maintained • The relationship of the org to the environment is not static but functional
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Acceptance theory of authority
• Barnard disagreed with the classical view that authority transcends from top to bottom • He said that authority transcends from bottom to top i.e. it is delegated upwards • Authority does not depend on commands, but on a reciprocal relationship; a communication becomes authoritative by virtue of its acceptance by a contributor. • Thus AUTHORITY DEPENDS ON COMMUNICATION
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1. 2. 3.

4.

A PERSON CAN AND WILL ACCEPT A COMMUNICATION AS AUTHORITATIVE ONNLY WHEN FOUR CONDITIONS ARE SIMULTANEOUSLY FULFILLED: S/HE can and does understand communication At the time of his/her decision, he believes that it is not inconsistent with the purpose of the organization At the time of his/her decision, s/he believes it to be compatible with his / her personal interest as a whole , and s/he is able, mentally and physically, to comply with it.

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Zone of Indifference
• Barnard developed the concept of „zone of indifference.‟ • He believed that the form and nature of the acceptance of the communication differ and it depends upon the zone of indifference • Certain orders are acceptable, certain barely acceptable, and certain orders are unquestionable • Those orders which are unquestionably acceptable lie within the zone of indifference, ie. They lie within the range that in a general way was anticipated at the time of undertaking the connection with their organization

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Barnard‟s views on Incentives
• a. b. c. d. e. f. g. h. Incentives are prerequisites of cooperation in any organization. Barnard was of the view that people in the org do not work for money alone. Some of the incentive types are: Material or financial inducements Personal opportunities, such as status, power, et Good physical conditions Attractiveness of social conditions General conditions adapted or suitable to the individual‟s ideas and attitudes Opportunities for participation Good communication and Opportunities for satisfying perosnal motivation such as pride in work, sense of adequacy, etc.

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Executive decisions and functions
• a. The executive who occupies a crucial position in the organization has three basic functions. They are: Maintaining org communication. It includes determining the scheme of organization, fostering loyalty in subordinates and maintaining the informal system Obtaining essential services from individuals: It includes correct selection of individuals, and provision of the necessary inducements, maintaining morale (subjective feeling toward work), providing incentives and sanctions, supervision and training Formulating purposes and objectives at all levels
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b.

c.

Barnard on Communication
• 1. 2. 3. 4. 5. 6. 7. Principles of Communication: Channels of communication must be definitely known by all These channels must be formally laid down Each channel should be as short as possible Generally communication should go through all stages in the channel People acting as communication centers (managers) should be adequate to their tasks Channels of communications should not be interrupted while the organization is functioning Communications (orders) must come from points where the necessary authority is known to exist
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Barnard on Leadership
• The real test of the executive or manager is leadership • Leaders should recognize that low morality will not sustain leadership long

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ABRAHAM H. MASLOW :THE FATHER OF HUMAN PSYCHOLOGY (1908-1970)
• His need based theory of motivation, published in 1943, laid foundation for subsequent psychologists (Renis Likert, Douglas McGregor, Fredrick Herzberg, etc) to analyze human behavior

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Maslow‟s Hierarchy of Needs

Self actualization

Self-esteem Love, Affection & Social Safety & Security Stimulation Physiological
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Frederick I. Herzberg – a noted behaviorist of USA (1923• His greatest contributions to management thought : his Two-Factor Theory, Two-Human Needs Theory, KITA concept, and illuminating ideas about job loading (vertical and horizontal) ie is job enrichment • He assumes that the individual is the center of the workmanagerial situation • He said that if anything meaningful was to be found about motivation, the question of factors-attitudes-effects must be studied as a whole and not as an isolated item • He believed management is monolithic (huge, massive, single stone like)

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MOTIVATION HYGIENE THEORY
Hygiene factors (Environment) Policies and administration Supervision Working conditions Interpersonal relations MOTIVATORS (the Job itself) Achievement Recognition for accomplishments Challenging Work Increased responsibility

Money, status, security

Growth and development
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Relationship between Maslow‟s and Herzberg‟s Theories to Motivation
SITUATION MASLOW MOTIVES (NEEDS) BEHAVIOR

GOAL (INCENTIVES) HERZBERG
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Douglas M. McGregor-(1906-1964; a social psychologist)
THEORY X
Work is inherently distasteful to most people Most people are not ambitious, have little desire for responsibility, and prefer to be directed Most people have little capacity for creativity in solving organizational problems Motivation occurs only at the psychological and safety levels Most people must be closely controlled and often coerced to achieve organizational objectives THEORY Y Work is as natural as play, if the conditions are favorable Self-control is often indispensable in achieving organizational goals The capacity for creativity in solving organizational problems is widely distributed in the population Motivation occurs at the social, esteem, and selfactualization levels, as well as physiological and security levels People can be self-directed and creative at work if properly motivated

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David C. McClelland
• Best known for his achievement motivation, his research ranges from personality to consciousness. • Along with John. W. Atkinson, he developed the scoring system for the THEMATIC APPERCEPTION TEST (TAT) which was used in achievement motivation research
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McCllelland‟s need theory
• • • • Need for power Need for Affiliation Need for Achievement Need for training

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Henry Mintzberg (1939• Well known luminary in the field of management • Dubbed as ICONOCLAST – as he rejected several accepted management practices • He is against the B-schools in USA – their curriculum, case study methods, etc.

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Contributions-The managerial roles
• He grouped ten basic roles performed by managers into three major classes ( as a result of detailed research on the activities of five practicing CEOs): INTERPERSONAL ROLES INFORMATIONAL ROLES DECISIONAL ROLES
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Interpersonal roles
• While performing interpersonal roles, mangers work as: 1. Figureheads performing number of routine duties of legal or social nature; these duties include handling ceremonies, signing documents required by law, and officially receiving visitors.
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• Leaders As leaders, the mangers perform all managerial activities involving subordinates including hiring, training and firing. As leaders they are responsible for motivation and direction of subordinates

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• Liaison persons Serving as liaison between outside contacts (community, suppliers,, etc) and the organization

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Informational roles
• Mintzberg pointed out that managers function as nerve centers in which they obtain information about the environment and their own organization by monitoring them. The three informational roles are: Monitor Disseminator spokesperson
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• Montiors : As monitors, managers seek and are presented with information about the operations for which they are responsible and bout the environment • Disseminators: they are disseminators of information flowing from both external and internal sources; Managers pass information from outside their units to inside and also from one subordinate to another • Spokesperson: mangers speak on behalf of their units to outsiders. They transmit information to outsiders on organization‟s plans, policies, actions and results and serve as experts on organization's industry THESE INFORMATIONAL ROLES PROVIDE A COMMUNICATIONS NETWORK FOR THE ORGANIZATION.
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Decisional roles
• Four of them as per Mintzberg: Entrepreneur Disturbance handler Resource allocator negotiator

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As ENTREPRENUEURS : managers are initiators, innovators, problemdiscoverers and designers of improvement projects that direct and control change in the organization. Thus, entrepreneurial work refers to mangers‟ efforts to improve the functioning and accomplishments of their organizations

As disturbance handler: managers take corrective action in response to unforeseen problems such as resignation of subordinates, breakdown of productive equipment, etc. It is worthwhile to mention that while entrepreneurs, managers voluntarily take initiative to improve performance, as disturbance handler

As resource allocator: they are responsible for allocating human, physical, and monetary resources. MAKING DECISIONS ABOUT HOW LIMITED TIME, MONEY, MATERISALS, LABOR HOURS AND OTHER RESOURCES WILL BE APPLIED TO MULTIPLE AND COPETING CLAIMS UPON THEM IN THE WORK OF RESOUCRCE ALLOCATION ROLE Mangers as Negotiators: they discuss issues and bargain with other units to gain advantages for their own units. Mintzberg opines : that “negotiation is resource trading in real-time.”
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Relationship of Managerial roles and process
ROLE PORCESS
PLANNING

INTERPERSONAL

LEADING
INFORMATIONAL ORGANIZIING DECISIONAL

CONTROLLING

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PETER F. DRUCKER (1909-2005) Austrian by birth
• Numerous books – around 35/36 • Drucker is repeatedly preaching a philosophy of management, that of management by objectives and self-control • He pleaded for creative management instead of bureaucratic management • He said that managers should go beyond decentralization, and design principles of taskforce team, simulated decentralization and the systems organizations • Managers should learn to lead people rather than contain them • He said that the Innovative org – the org that resists stagnation rather than change – is a major challenge to management • More and more organizations which are innovative and productive for society, economy and the individuals should come up • His first line in “practice of management” – “The manager is the dynamic, life-giving element in every business.”
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Jobs of Management
• According to Peter Drucker, management has the following three tasks: ECONOMIC PERFORMANCE PRODUCTIVE WORK AND WORKER ACHIEVEMENT SOCIAL IMPACT AND SOCIAL RESPONSIBILITIES
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Business objectives and entrepreneurial functions…Drucker
• There is only one valid definition of business purpose : to create a customer • According to him, “it is the customer who determines what a business is. It is the customer alone whose willingness to pay for a good or for a service converts economic resources into wealth, things into goods.” • CONCEPT OF PROFIT AS THE OBJECT OF BUSINESS • Profit is not the explanation, cause or rationale of business behavior and business decisions but the TETST OF THEIR VALIDITY.
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On Profit….Drucker
• The profit motive and profit maximization are, in his opinion, „irrelevant‟ in managing a business. • However, profits are necessary on account of risk in business • Profit is the test of performance; it is premium for the risk of uncertainty; profit alone can supply capital for tomorrow‟s jobs, profit pays for the economic satisfaction and services of a society

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As the purpose of business is to create a customer, the business enterprise has two functions as under : 1. Marketing 2. Innovation Rest is cost.

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Drucker on Objectives…
• Objectives are not fate; they are direction • They are not commands; they are commitments • They do not determine the future; they are means to mobilize the resources and energies of the business for the making of the future

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The following areas where objectives are to be set:
Marketing; Innovation; Human organization; Financial resources Physical resources; Productivity; Social responsibility Profit requirements

OBJECTIVES IN THESE AREAS ENABLE MANGERS TO :
A. ORGANIZE AND EXPLAIN THE WHOLE RANGE OF BUSINESS PHENOMENA IN A SMALL NUMBER OF GENERAL STATEMENTS B. TEST THESE STATEMENTS IN ACUTAL EXPERIENCE

C. PREDICT BEHAVIOR
D. APPRAISE THE SOUNDNESS OF DECISIONS WHILE THEY RE STILL BEING MADE AND E. ANALYZE THEIR EXPERIENCES AND THUS IMPROVE PERFORMANCE

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MANAGEMENT BY OBJECTIVES AND SELF-CONTROL
• The concept is credited to Drucker and George S.Odiorne. • The MBO is the central point of discussion in his book – The practice of Mangement-writes : “Management is not just a creature of the economy; it is a creator as well. And only to the extent to which it masters the economic circumstances, and alters them by conscious, directed action, does it really change. To manage business means, therefore, to mange by objectives.”
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• MBO is a managerial philosophy and technique that attempts to draw on people‟s needs for achievement, competence and anatomy by allowing them to set their objectives, goals, and performance criteria • This concept applies to employees at any position
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Why MBO?
• The specialized work of the manager • The hierarchy in organizations • The existence of difference in vision in businesses Such factors cause conflict and breakdown in the organization and MBO overcomes these deficiencies by relating the task for each manager to the overall goals for he company.
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WORK OF MANAGER
• To set objectives • To organize ie. To analyze the activities, decisions, and relations needed • To motivate and communicate • To analyze, appraise and measure performance and • To develop people, including himself
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In 1950s, Drucker‟s 7 tasks to be performed by tomorrow‟s manager
• He must manage by objectives • He must take more risks and for a longer period ahead • He must be able to make strategic decision • He msut be ableto build and integrated team • He must be able to communicate information fast and clearly • He mustbe bale to see the business as a whole and to integrate his function with it, and • He must be able to relate his product and industry to the total environment
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Social responsibilities for Management
• The triple bottom line : Economic profit (profit as by product in a business process) Social profit ( giving to the community) Environmental profit (carbon trading, etc)

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Warren G. Bennis
Manager Characteristics Administers Focuses on systems and structure Leader Characteristics Innovates Focuses on people

Relies on control

Inspires trust

Short range view
Asks how and when Eye on the bottom line
Imitates
Accepts status quo Classic good soldier Does things right

Long range perspective
Asks what and why Eye on the horizon
Originates
Challenges the status quo Own person 114 Does the right thing

Bennis‟ four competencies of leadership
• Attention through vision • Meaning through communication • Trust through positioning – being predictable, making your position clear, keeping at it, and • Positive self-regard

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Chris Argyris‟ Immaturity-Maturity model
Immaturity Passive Maturity Active

Dependence
Behave in a few ways Erratic shallow interests

Independence
Capable of behaving in many ways Deeper and stronger interests Long-time perspective (past and future) Equal or superordinate position Awareness and control over self
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Short-time perspective
Subordinates position Lack of awareness of self

T- Groups
• Also known as sensitivity training and laboratory training. T-Group technique had its genesis in the late 1940s, largely as a result of work done by Kurt Lewin and Ronald Lippitt. Argyris contributed to this concept by making several clarifications about it.

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Definition T-Group
• T-Group is ….a group experience designed to provide maximum possible opportunity to the individuals to expose their behavior, give and receive feedback, experiment with new behavior and develop an everlasting awareness and acceptance of self and others.”

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Properties of Organizational effectiveness
Properties leading to Ineffectiveness One part or subset of parts, controls the whole Awareness only of random plurality of parts Objectives related only or mainly to parts Inability to influence core activities whether they are internally or externally oriented Core activities only influenced by immediate present Properties leading to effectiveness The whole is created and controlled through the inter-relationship of the parts Awareness of pattern among parts Objectives related to the whole Ability to influence core activities whether they are internally or externally oriented Core activities influenced by past, present and future

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Argyris‟ other contributions
• Leadership • Intervention theory (OD) • Process consulting: Argyris and Edgar H. Schein are regarded as chief developers of the process consulting method

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Process consulting method
• Process consulting regards groups such as teams, task force, committees or project groups as the basic building blocks of organization. • Process consulting deals with tasks, conflicts, between members, work flows, and the processes by which the group achieves its task • Process consulting analyzes the roles and functions of group members, group problemsolving-methods, decision making, the development of group norms, and the use of leadership and authority
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Process consulting…contd…
• The process consultant examines the processes at work among group members by using devices such as questionnaires, role playing session, coaching and counseling methods, etc.

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Argyris‟ – 4 principles of organization
• Task specialization – Individuals should concentrate on a narrow range of task. It increases human skills and output too • Chain of command (Hierarchy of authority) • Unity of direction – Leaders must define and direct the work of those under them • Span of control – administrative efficiency is increased if there is a limit to the number of people a leader or supervisor can control
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William G. Ouchi
• Ouchi‟s main contribution to management thought relates to Theory Z. Contrast between Japanese and American corporations leads to identification of the Z theory

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Z theory
Japanese Corporation
Lifetime employment

American Corporation
Short-term employment

Slow evaluation and promotion
Non-specialized career points Implicit control techniques Collective responsibility

Rapid evaluation and promotion
Specialized career points Explicit control techniques

Individual responsibility
Concern for parts of the organization
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Concern for the whole organization

Participative Management
• Ouchi emphasized participative management and consensus decision-making, if Theory Z is to work. • Social scientists have described this as a democratic process in which may people are drawn into shaping of important decisions • The participative process is one of the mechanisms that provides for the broad dissemination of information and values within the org, and it also serves the symbolic role of signaling in a unmistakable way the cooperative intent of the firm • Typically, Theory Z orgs devote a great deal of energy to developing the interpersonal skills necessary to effective group decision making • In theory Z companies the decision making may be collective, but the ultimate responsibility for decisions still resides in one individual

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Tom Peters Seven S Modeldeveloped for McKinsey & Co
Structure

Strategy Superordi nate Goals Systems

Skills

Staff

Style

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7-S framework for change
• Structure refers to the organizational structure • Strategy is a plan or course of action leading to the allocation of a firm‟s scarce resources, over time, to reach identified goals • Systems consist of all the formal and informal procedures that allow the organization to function • Style is the pattern of substantive and symbolic actions under taken by top mangers • Staff is another factor. Successful organization view people as valuable resources who should be carefully nurture, developed, guarded and allocated. • Skills refer to those activities organizations do best and for which they are known • Superordinate Goals referred to guiding concepts, values and aspirations that unite an organization in some common purpose • TOM PETERS ADVOCATED : MBWA
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Tom Peter‟s books
• • • • In search of Excellence Passion for excellence Thriving in chaos And many others

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