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Management- Historical Perspective

Doc :No: RICS-


SBE/XX/XX/S006/R02
Revised on: 24-05-2019

MODULE-2
Introduction to management
Evolution of management theories
Management functions- POLC framework
Understanding organization design
Organizational culture & Typical organizations in Built
Environment
Organization Strategy, Goals , values, ethics and Structure,
Corporate Culture and Ethics in a Global environment
Organizational conflicts- power and politics
Organizational decision making
Understanding the role of a manager and a leader,
Organizational Metrics.
Major Approaches to Management

Deming
and Juran

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Management Chronology

Industrial Revolution

Job – Specialization Industrial revolution: a


period during the late
eighteenth century when
Early Management In 1776 Adam Smith machine power was
published “The Wealth of substituted for human
Nations” power, making it more
• division of labor (job
economical to
The Egyptian pyramids manufacture goods in
specialization): the breakdown
and the Great Wall of of jobs into narrow and factories than at home
China are proof that repetitive tasks
projects of tremendous
scope, employing tens of
thousands of people,
were completed in
ancient times.

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Classical Approach

Classical approach: first studies of management, which emphasized


rationality and making organizations and workers as efficient as possible

• Scientific management: an approach


Scientific that involves using the scientific method
Management to find the “one best way” for a job to be
done
Frank and • Therbligs: a classification scheme for
Lillian
labeling basic hand motions
Gilbreth

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Scientific approach
F.W. Taylor is called the father of scientific management.
He laid emphasis on accepting the scientific approach in the management of the organization.
Scientific management aims at
1. Achieving higher productivity
2. Better Quality Control
3. Reduction in cost
4. Elimination of wastages
5. Person-Job fit
6. Incentive Wages

Techniques of Scientific Management


1.Time Study
2. Motion Study
3. Fatigue Study
4. Standardization and simplification.
5. Differential piece wage rate system.
6. Functional foremanship.

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Taylor’s Scientific Management Principles

Principles

1. Develop a science for each element of an individual’s work to replace the old
rule-of-thumb method.

2. Scientifically select and then train, teach, and develop the worker.
3. Heartily
cooperate with the workers to ensure that all work is done in
accordance with the principles of the science that has been developed.

4. Divide
work and responsibility almost equally between management and
workers. Management does all work for which it is better suited than the workers.

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General Administrative Theory

General administrative theory: an approach to management that


focuses on describing what managers do and what constitutes good
management practice

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Henri Fayol

Principles of management: fundamental rules of management that could be applied in all


organizational situations and taught in schools

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Fayol’s 14 Principles of Management (1 of 2)

Principles
1. Division of work. Specialization increases output by making employees more
efficient.
2. Authority. Managers must be able to give orders, and authority gives them this
right.
3. Discipline. Employees must obey and respect the rules that govern the
organization.
4. Unity of command. Every employee should receive orders from only one superior.
5. Unity of direction. The organization should have a single plan of action to guide
managers and workers.
6. Subordination of individual interests to the general interest. The interests of
any one employee or group of employees should not take precedence over the
interests of the organization as a whole.
7. Remuneration. Workers must be paid a fair wage for their services.

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Fayol’s 14 Principles of Management (2 of 2)

Principles
8. Centralization. This term refers to the degree to which subordinates are involved
in decision making.
9. Scalar chain. The line of authority from top management to the lowest ranks is
the scalar chain.
10. Order. People and materials should be in the right place at the right time.
11. Equity. Managers should be kind and fair to their subordinates.
12. Stability of tenure of personnel. Management should provide orderly
personnel planning and ensure that replacements are available to fill vacancies.

13. Initiative. Employees allowed to originate and carry out plans will exert high
levels of effort.
14. Esprit de corps. Promoting team spirit will build harmony and unity within the
organization.

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Max Weber

Bureaucracy: a form of organization characterized by division of labor, a clearly defined hierarchy,


detailed rules and regulations, and impersonal relationships

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Administration and management
Administration : it represents the higher level or top management. It is in charge of thinking
function i.e. determination of corporate objectives, formulation of plans and policies,
coordination of all functional areas of business and overall control and supervision of entire
business. It also determines the formal organizational structure.
It is a determinative function

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Administration and management

Management is an executive function.


It assumes direct responsibility in the conduct of the business and in realization of
stated goals and objectives.
Departmental heads, middle and lower management are the agencies of operating
management. Administration devises the organization, management uses the
organization to discharge the managerial functions to accomplish the set goals.

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Exhibit MH-4
Characteristics of Weber’s Bureaucracy

Exhibit MH-4 shows Weber’s ideal bureaucracy.

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Limitation of classical theories
 Viewed organization as a giant machine
 Assumed that employees could be motivated by financial incentives alone,
and ignored the psychological needs of employees.
 Assumed that productivity was the only criterion of organizational
efficiency and neglected the multiplicity of organization objectives.
 Thought employee always acted rationally.

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Neo- Classical theory-people oriented approach

Built on the basis of classical theory and is modified, improved and extended version
of classical theory.
It gives a greater emphasis to man behind the machine.
It pointed out the role of psychology and sociology in the understanding of individual
as well as group behavior in an organization.
The 2 theories are Human relation, Behavioral theory.

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Behavioral sciences theory.

It is the refinement of human relations theory and it covered


much wider scope in interpersonal roles and relationship.
Behavioral scientist did an intensive research on
understanding individuals and their interpersonal relations.

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Behavioral Approach

Organizational behavior (OB): the study of the actions of people at work

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Some of the important elements of behavioral theory are outlined below.:

Individual behavior is closely linked with the behavior of the group.

The employee can also be motivated by many social and psychological


wants and not solely by economic incentives.
Democratic rather than autocratic leadership.

Effective 2 way communication is essential to establish common flow of


understanding in an organisation.
Informal group and informal organization must be recognised.

Job structure and job design should receive secondary importance.

Managers attitude towards human behavior should be positive.

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Hawthorne Studies

Hawthorne studies: a series of studies during the 1920s and 1930s that provided new insights into
individual and group behavior

Elton mayo and his associates –did a research in western Electrical plant in Chicago
( 1927 -34 )
The expt. Conducted are:
• Illumination expt
• Relay assembly test room expt
• Bank wiring room expt
• Mass interviewing programme.

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Human relations theory

Human Resource
perspective- Looked as
the aspect of motivation
in job design. Two
distinct theories and
Douglas :

Abram Maslow-
Maslow’s

McGregor- Theory
X&Y

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Factors that influence the performance and productivity are

Physical environment at work


place don’t have any material
Fulfillment of workers social
impact on efficiency of work,
and psychological needs had
rather favorable attitude of
a beneficial effect on the
workers and work team
morale and efficiency of
towards their work were more
workmen.
important factors determining
efficiency.

Employees groups based on


social interactions and
common in the rest periods
exercised a strong influence
on workers performance.

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Quantitative Approach

Quantitative approach: the use of quantitative techniques to improve


decision-making

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Total Quality Management

Total quality management (TQM): a philosophy of management that is driven by continuous improvement
and responsiveness to customer needs and expectations

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What is Quality Management?
Characteristic

1. Intense focus on the customer. The customer includes outsiders who buy the
organization’s products or services and internal customers who interact with and serve others
in the organization.
2. Concern for continual improvement. Quality management is a commitment to never
being satisfied. “Very good” is not good enough. Quality can always be improved.
3. Process focused. Quality management focuses on work processes as the quality of
goods and services is continually improved.
4. Improvement in the quality of everything the organization does. This relates to the
final product, how the organization handles deliveries, how rapidly it responds to complaints,
how politely the phones are answered, and the like.
5. Accurate measurement. Quality management uses statistical techniques to measure
every critical variable in the organization’s operations. These are compared against standards
to identify problems, trace them to their roots, and eliminate their causes.

6. Empowerment of employees. Quality management involves the people on the line in the
improvement process. Teams are widely used in quality management programs as
empowerment vehicles for finding and solving problems.

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Contemporary Approaches

System: a set of
Closed systems:
interrelated and
systems that are Open systems:
interdependent
not influenced by systems that
parts arranged in a
and do not interact interact with their
manner that
with their environment
produces a unified
environment
whole

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Organization as an Open System

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Contingency Approach

Contingency approach: a management approach that recognizes organizations as different,


which means they face different situations (contingencies) and require different ways of
managing

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Contingency Variables
Contingency Variable
Organization Size. As size increases, so do the problems of coordination. For in-
stance, the type of organization structure appropriate for an organization of 50,000
employees is likely to be inefficient for an organization of 50 employees.
Routineness of Task Technology. To achieve its purpose, an organization uses
technology. Routine technologies require organizational structures, leadership
styles, and control systems that differ from those required by customized or
nonroutine technologies.
Environmental Uncertainty. The degree of uncertainty caused by environmental
changes influences the management process. What works best in a stable and
predictable environment may be totally inappropriate in a rapidly changing and
unpredictable environment.
Individual Differences. Individuals differ in terms of their desire for growth,
autonomy, tolerance of ambiguity, and expectations. These and other individual
differences are particularly important when managers select motivation techniques,
leadership styles, and job designs.

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Functions of Management
Who Is a Manager?

Manager: someone who coordinates and oversees the work of


other people so that organizational goals can be accomplished

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Levels of Management
 First-Line Managers: manage the work of non-managerial employees
 Middle Managers: manage the work of first-line managers
 Top Managers: responsible for making organization-wide decisions
and establishing plans and goals that affect the entire organization

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Need for Management

All organizational areas


All sizes of organizations (Manufacturing , marketing,
(small to large) human resource, accounting,
construction, real estate)
Management is
needed in

All organizational levels All types of organizations


(Bottom to top) (Profit-non profit)

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Skills Needed at Different Managerial Levels

Exhibit 1-6 shows the relationships of conceptual, human, and technical skills to managerial levels.

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Where Do Managers Work?

Organization: a deliberate arrangement of people


to accomplish some specific purpose

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Exhibit 1-2
Characteristics of Organizations

Exhibit 1-2 shows the three common characteristics of organizations: distinct purpose, deliberate
structure, and people.

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Nature of Management:
1. Management as a science ( an organized and
systematized body of knowledge)
2. Management as an art
3. Management as a profession.

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Why Are Managers Important?

Organizations need their managerial skills and


abilities now more than ever
Managers are critical to getting things done
Managers do matter to organizations

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What Do Managers Do?

Management involves coordinating and overseeing the work activities of others so that their activities are
completed efficiently and effectively.

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Efficiency and Effectiveness

Efficiency: doing things right


getting the most output from the least amount of
input
Effectiveness: doing the right things
attaining organizational goals

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Exhibit 1-3
Efficiency and Effectiveness in Management

Whereas efficiency is concerned with the means of getting things done, effectiveness is concerned with
the ends, or attainment of organizational goals.

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Management Functions

Planning: Defining
goals, establishing Organizing: Arranging
strategies to achieve and structuring work to
goals, and developing accomplish
plans to integrate and organizational goals
coordinate activities

Leading: Working with Controlling:


and through people to Monitoring, comparing,
accomplish goals and correcting work

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Four Functions of Management

Exhibit 1-4 shows the four functions used to describe a manager’s work: planning, organizing, leading,
and controlling.

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Doc :No: RICS-SBE/XX/XX/S006/R02
Revised on: 24-05-2019

POLC FRAMEWORK
Introduction-Planning

Planning is the process of accomplishing purposes.


It is the blueprint of a business, how it grows, how it implements
various actions required for growth.

Planning should always end in decision because that is the


purpose of planning.

Decision making forms the first two steps of management process


i.e. planning and organising.
Definition and Importance of Planning

► Planning can be defined as a basic management


function which enables one to select the purpose of
business and how the resources should be mustered to
achieve that purpose to include using the available
resources optimally.
► Plan is a blueprint that specifies the necessary resource

allocations, schedules, tasks and other actions to


achieve the purpose.

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Importance of Planning

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Importance of planning

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Types of Planning

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STEPS IN PLANNING

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STEPS IN PLANNING

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Organizing

► When managers organize, they determine what tasks are to be done, who is to
do them, how the tasks are to be grouped, who reports to whom, and where
decisions are to be made.

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Doc :No: RICS-SBE/XX/XX/S006/R02
Revised on: 24-05-2019

LEADING

In the manufacturing economy, once people have been positioned to do


various activities, the next step is to pass instructions to the people on
how to accomplish a task.
When services economy set in, direction-giving changes. Here, people
take their own initiatives to complete tasks, if the company had to be
competitive.
In due course, the need for innovation and continuous improvement
compelled even large manufacturing shop floors to shift to leading than
directing.
Organizations where shop floor or front end managers showed leading
capability became more competitive therefore, management felt that
leading was necessary in the organisation rather than directing.
► Leading can be defined as the process of setting direction, creating
alignment and creating engagement to deliver high productivity and
to facilitate change.
► Directing can be defined as the process by which the managers

instruct, guide and oversee the performance of the workers to


achieve pre-determined goals.
► Southwest Airlines of the U.S is a classical example wherein it

reported profit quarter after quarter for over 30 years without a


break when every other airline was reporting loss.
► Directing is therefore an essential part of leading but is insufficient

to compete in the contemporary world; where leading is the key to


creating competitive advantage.

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Characteristics of Leading

► Pervasiveness: Leading is required at all levels of


organisation. In team based working, the team leader
has to act much like a CEO except that the level of
working may be much smaller.
► Continuity: It is a continuous activity which takes place

on a day to day basis.


► Human factor: Human factor is complex and

behaviour is unpredictable, leading function is important


and people have to learn the art of leading.
► Creativity: Leading is a creative activity because of the

human factors and individual variances and group


variances.

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►Executive function: Leading is carried out by all
managers and executives at all levels throughout the
working of an enterprise. Leading implies that the followers
execute the functions, which the leader and the follower
agree that it is important for achieving the organisational
goals and through the individual goals.
► Delegating function: Leading implies guiding followers to

the destination. Hence, delegating is natural fallout of


leading. Therefore, delegating function based on mutual
trust is a characteristic of leading.

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► Leading or leadership function is said to be the heart of
management process. Therefore, it is the central point
around which accomplishment of goals take place.
► Being the central character of an enterprise, it provides

many benefits to a concern which are as follows:


1. Initiates actions: Leading is the function which starts
the work performance of the followers or
subordinates. It initiates the actions by giving goals to
the employees.
2. Sustains actions: Leading on the other hand
ensures that the actions go on and course corrections
are done automatically by the followers because of
their innate belief in the goal being something
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Importance of Leading

3. Integrates efforts: The superiors are able to guide, inspire


and instruct the subordinates to work through leading.
When every employee, team leader and division leader
knows that his/her reaching the goal is dependent on
other's effort, there is a natural flow of inter team and
interdepartmental information.
4. Means of motivation: A manager makes use of the
element of motivation to improve the performances of
subordinates. This can be done by providing incentives or
compensation, whether monetary or non-monetary, which
serves as a "morale booster" to the subordinates.
5. Provides stability: Stability and balance can be brought
by the managers with the help of four tools or elements of
leading function judicious blend of persuasive leadership,
effective communication, clear performance goals and
efficient motivation. Copyright © 2018 Pearson Education, Ltd. All Rights Reserved
6. Copes with the changes: Adaptability with changing
environment helps in sustaining planned growth and
becoming a market leader. It is the role of manager to
communicate the nature and contents of changes
required for reaching the goal very clearly to the
subordinates. This helps in clarifications, easy
adaptations and smooth running of an enterprise.
7. Utilises resources efficiently: Goal setting helps in
clarifying the role of every subordinate towards his
work. The resources can be utilised properly only
when less of wastages, duplication of efforts,
overlapping of performances, etc. don't take place.

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Role and Functions of Leading

Functions of Leading
► Leading is an essential management process. The three main

functions of leading are as follows:


 Setting direction

 Creating alignment

 Creating engagement

Setting direction
► Direction setting can be defined as 'fixing the purpose and the

mission of an organisation along with the values’.


► Leaders set direction which are broad and point towards where we

have to move. Directions lack flexibility and the one who issues it
has to change it

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Role and Functions of Leading

► Direction setting has full flexibility as the employees work in


different ways but in the same direction.
► Direction setting is much more difficult to communicate and needs

people who are genuine in heart and enthusiastic to learn but it


brings rich dividend.
Creating alignment
► Creating alignment can be defined as ‘making the organisation act

in unions with the mission statement’.


Aligning the product portfolio: The top management level
decides on the product portfolio, the middle management
improves product and innovation, which makes the product more
aligned and the lower level adheres to the quality and processes,
fine tuning the processes and contributing ideas to enrich the
processes and products.

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► Aligning the delivery: The top management level, identifies the
right segment and matches the segment and the product
proposition. The middle level enables the customers to procure the
product and service by having appropriate distribution system,
information process, etc. The lower level, provides service
leadership by faultless delivery, prompt support, providing feedback
to the customers and the management.
► Aligning the HR process: The top level, says the way people are

treated, how coaching is done, growth is enabled and trust is


created through communication. The middle level, is about being
fair, transparent, equitable, empathetic and about translating the
top management policies into actions. The lower level, is about
striving to excel and being committed.

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Creating engagement
► Engagement can be defined as ‘capturing the mind space of the

stake holders’. It connects the individual to the organisation.


► The top management achieves engagement by creating high

performance work arrangement, recruiting and nurturing


exceptional talent (as applicable to the company).
► The middle management creates engagement by giving feedback,

supporting development by sending people to various


programmes, job rotation, employing people in jobs that are
challenging to them and coaching.
► The lower management engages its employees by giving day to

day guidance, listening to their opinions, ensuring safer work


environment, educating on safety, interpreting and explaining
policies.

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Roles of leading
Leading is a function that every manager and supervisor does in an
organisation.
 Planning role: A leader takes the planning role at various levels. It is

dividing the work to various workers according to their abilities.


 Managing role: Everyone has to undertake the managing role which

implies fulfilling the management functions depending on the level. E.g.,


the CEO may be managing the macro resources while the shop floor
team leader may be managing the HR and inventory of the day.
 Guiding role: A CEO would be guiding the strategy and other actions

while a supervisor guides his/her co-worker and subordinates on how to


optimise their productivity.

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► Mediator: While the CEO mediates with the board and
external clients, the lower level leaders mediate with the
immediate superiors, customers, suppliers,
subordinates, etc.
► Inspector role: Every manager irrespective of his/her

level has to inspect so that he/she can control the


variance and ensure that discipline is maintained in day
to day activities and productivity.
► Counselling role: While a CEO acts as a counsel to

the top management and their personal problems, the


lower level manager would do that to the employee.

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INTRODUCTION- CONTROL

► Control is the last in the management process and is


perhaps the most important.
► Control is the rudder of business because it ensures

that a process is going in the right direction by making


continuous corrections.
► Without control, the business will perhaps go to where

it should never go and do what it should never do.


► A business will be able to expand in product portfolio

and geography and delegate and outsource only


because controls are possible and in fact real time
control can be exercised through IT.

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Definition, Importance and Process of Controlling

► Controlling
► Defined as measuring and correcting of performance to achieve

the organisational goals.


► Planning and controlling are integral parts of an organisation as

both are important for smooth running of an enterprise


Planning and Controlling relationship
► Planning precedes controlling and controlling succeeds planning.

► Planning and controlling are inseparable functions of management.

►Activities are put on rails by planning and they are kept at a right
place through controlling.
The process of planning and controlling works on systems approach,
which is as follows:
Planning --> Results --> Corrective Action (through control)

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Control is important because of the following reasons
► Creates the basis for the future

► Guides to keep goals on track

► Prevents repetition of mistakes

► Enables future planning and follow up action

► Enables decentralisation

► Enable management by exception

► Assists co-ordination

► Enables HR functions and motivation

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Steps in Controlling:
► Establishment of standards: Standards can be defined as selected

points that are critical in execution of a plan measurement, which identifies


the efficiency of execution of the plan. It has two types:
► Tangible standards: These standards can be measured, such as profit,

return on investment, rejection rate, customer complaints, etc


► Intangibles standards: These include attitude of workers, job

satisfaction, managerial effectiveness, etc.


► Measurement of performance: Measurement is necessary for finding out

deviations and is perhaps the most difficult step in controlling.


► Comparison of actual and standard performance: Deviation can be

defined as the gap between actual performance and the planned targets.
► Taking remedial actions: Once the causes and extent of deviations are

known, the manager has to detect those errors and take remedial
measures.

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Critical Control Points

► The managers have to exercise control by exception.


► They have to find out those deviations. which are critical and important for

business.
► If a manager controls everything, he / she ends up controlling nothing.

Broad classification of critical control points are as follows


► Physical standards

► Cost standards

► Capital standards

► Revenue standards

► Programme standards

► Intangible standards

► Goals as standards

► Strategic plans and control points

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Control as a Feedback System

► Management control is a feedback mechanism much like a


thermostat in a refrigerator.
Real time information and control
► Real time information at a given time can be gathered in many

cases.
► It is due to information technology.

► Control requires analysis of the cause of deviation, which cannot

take place in real time.


From Feedback to feed-forward
► The system is focused on the input, which can create a variation in

the output and rectified in time

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Control as a Feedback System

• Feedback Loop of Management Control

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Control as a Feedback System

► It is not about criticizing but of proactive action.


► Most management systems fall short of it primarily because we tend to

use the financial data for management control.


► We need to use feed-forward since it enables one to prevent mistakes.

Requirements for feed-forward control


► In order to create a feed-forward system some of the following will be

required:
► Identify important input variables.

► Develop a model for the system.

► Review regularly to see whether the input variables are identified and the

inter-relationships continue to represent realities.


► Assess the actual input data regularly from planned-for inputs and

evaluate the impact on the expected end results.


► All managers like to have controls because without them their plans would

go awry.

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Prerequisites of Effective Control

Prerequisites for an effective control system is mentioned


► Tailoring controls to plans and positions

► Tailoring controls to individual manager

► Designing 'point to the exceptions at critical point‘

► Objectivity of controls

► Flexibility

► Fitting to the organisational culture

► Economy of controls

► Ability to lead to corrective action

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Control Techniques

Overall Performance Control


► It is important to control the overall performance and not confine to
some processes.
► Many overall controls in business are financial in nature. The

reasons for overall control are:


► Since overall planning is applied to the enterprise as a whole,

control should also be applied to the entire organisation.


► Planning without controlling is not an effective method as we

saw in earlier sections.


► Decentralisation of authority is required in product and territorial

divisions and in semi independent units, which makes controlling


important.
► Overall control permits the measurement of an integrated area

manger's total effort rather than parts.

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Mintzberg’s Managerial Roles and a Contemporary Model of
Managing

Roles: specific actions or behaviors expected of and


exhibited by a manager
Mintzberg identified 10 roles grouped around
interpersonal relationships, the transfer of
information, and decision-making

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Mintzberg’s Managerial Roles

Exhibit 1-4 shows the four functions used to describe a manager’s work: planning, organizing, leading,
and controlling.

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Informational Roles

MONITOR: Collecting information from organizations, both from inside and outside of the
organization.
Identifiable activities: reading periodicals and reports, maintaining personal contacts.

DISSEMINATOR: Transmits information received from outside or from other subordinates to members
of the organization.
Identifiable activities: holding informational meetings, making phone calls to relay information.

SPOKESPERSON: Transmits information to outsiders on organizations plans, policies, actions,


results etc.; serves as expert on organizations industry.
Identifiable activities: HOLIDNG BOARD MEETINGS, GIVING INFORMATION TO THE MEDIA.
 

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Decisional Roles
ENTREPRENEUR: initiating new ideas to improve organizational performance.
Identifiable activities: Organizing strategy and review sessions to develop new programs.

DISTRUBANCE HANDLER: Responsible for corrective action when organization faces


important, unexpected disturbances and crisis.

RESOURCE ALLOCATOR: Responsible for the allocation of organizational resources of


all kinds- in effect, the human, physical and monetary resources.

NEGOTIATOR: Negotiating with trade unions, or any other stake holders.

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Interpersonal Role

 FIGUREHEAD: obliged to perform a number of routine duties of a legal and social nature.
Identifiable activities: greeting visitors, signing legal documents.

 LEADER: Responsible for the motivation and activation of subordinates, responsible for
staffing, training and associated duties.

 LIAISON: Maintains self-developed network of outside contacts and informers who provide
favors and information. Liasoning with external bodies and public relation activities.

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Management Skills

Technical skills
• Knowledge and proficiency
in a specific field

Conceptual skills
• The ability to think and Human skills
conceptualize about • The ability to work well
abstract and complex
with other people
situations concerning the
organization

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Exhibit 1-7
Important Managerial Skills

Exhibit 1-7 shows other important managerial skills.

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The process involves different implications like
1. Social Process : interaction with people to achieve the goal

2. Integrated Process : management bring human, physical, financial


resources together to put into effect. It integrates human efforts to
maintain harmony among them.

3. Continuous process :of identifying problems and solving them.

4. Interactive process: it requires interaction with internal and


external factors.

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Copyright © 2018 Pearson Education, Ltd. All Rights Reserved

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