A. GENERAL MANAGEMENT & THEIR RELATIONSHIP B. CONTRIBUTIONS/APPROCHES TO MANAGEMENT (SCHOOL OF MANAGEMENT THOUGHT)

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1 A. GENERAL MANAGEMENT & THEIR RELATIONSHIP 1. Introduction to Management 2. Concepts of Management As an art of getting things done As a process As a discipline As a science and an art As an emerging profession 3. Meaning & Definitions 4. Nature of Management/ Salient features of Management 5. Management Vs. Administration 6. Objectives of Management 7. Importance of Management/ Significance of Management 8. Levels of Management 9. Functions of Management & Interrelationship between them 10. Intensity of management functions at different levels 11. Management skills and importance of it at different level 12. Role of Managers B. CONTRIBUTIONS/APPROCHES TO MANAGEMENT (SCHOOL OF MANAGEMENT THOUGHT) Contributions from different Management Theories 1. Classical 2. Behavioural 3. Quantitative 4. Contingency 5. System and Modern theories 1

2 1. Introduction to Management We are all managers of our own lives, and the practice of management is found in every facet of human activity. And we always deal with setting, seeking and reaching objectives. Your mother s role as a manager: - She forecasts the needs of the household She takes stocks of her resources She plans and organizes her resources so that to get maximum benefit out of it. She monitors and controls the household budgets She divides the work among other members of the family and coordinate their activities She is always in search for improvements of the objectives in household. All these are management by your mother. The term MANAGEMENT conveys different meanings depending upon the context in which it is used 2. Concepts of Management In a layman point of view, the concept of management is as follows- It is a central organ or agency, which is required to coordinate the activities and efforts of various individuals working together in an organization so that they can work collectively as a team. Some of the important concepts of management are as follows- Management as an art of getting things done Management as an art of getting things done through others, defined by Mary Parker Follett-, which means that managers achieve organisational objectives by getting work from others, but by their own they do nothing. However, the above definition speaks that workers are termed as a factor of production only. They have no social and psychological needs. They are supposed to do what they are told and they have no say in the organization. And this misleading the definition. Thus management is certainly more than just getting work done through others. Harold Koontz defined management that- the art of getting things done through and with people, in formally orgaised groups; which is most appropriate. 2

3 Management as a process Management is called as a process, because it comprises a series of functions (such as-planning, organizing, staffing, directing and controlling) that lead to the achievement of certain objectives. Again as a process, management has two broad features, like- Management is a continuous process and The functions of management are interrelated and interdependent. Management as a discipline As management implies a field of study or branch of knowledge, it is known as a discipline. It comprises concepts, theories, principles, skills and problem tackling techniques. Management as a science and an art Science is a systematic body of knowledge based on proper findings and verification through different experiments. Here the principles are universally accepted. As management consists of all these activities, it is called up as a science. Again art means to bring a desired result through the application of skills. Which is nothing but the application of knowledge and skills. And the process of management involves these activities, so called as an art. Thus management is both as a science and an art. Management as an emerging profession A profession is an occupation backed by specialized body of knowledge, educational requirement and training, having an ethical code of conduct for self regulation, which is duly recognized by the national body & society. As management covers all the above dimensions, it is widely accepted as a profession. 3

4 3. Meaning and Definitions Management is a distinct social process- consisting of activities like planning, organising, staffing, directing, coordinating and controlling; to determine and accomplish the stated objectives with the proper utilization of human beings and other resources. BASIC RESOURCES Hello! MAN MACHINE MATERIALS METHODS MONEY FUNDAMENTAL FUNCTIONS Planning Organising Staffing Controlling STATED OBJEECTIVES Directing Coordinating The above figure graphically presents the definition of management. The six M s of management, or basic resources, as they are often called, are subjected to the fundamental functions of management- planning, staffing, organizing, directing, controlling and coordinating- to achieve stated objectives. And from this it is clear that MANAGEMENT is an activity that converts disorganized human and physical resources into useful and effective results. 4. Nature of Management/Salient features of Management Management is a social process: - Because it is concerned with interpersonal relations. It is done by people, through people, with people and for people. It is the development of people not the direction of things. Management is a distinct process: - As all the function sin Management are interwoven that one can t lay down the exact sequence and their relative significance. 4

5 Management is a continuous process: - When one starts from the first function in management i.e. planning, he has to go for planning again on the basis of his first observation after controlling of the first activity. It s a never-ending process. Management is an intangible force: - But its presence can be felt everywhere in the form of results. During operation of the functions management is intangible but after the results everybody is feeling it. Management is goal oriented/ purposeful: - Management means/exists toward the accomplishment/achievement of specific goals. The success of management is measured by the extent to which the desired objectives are achieved. Management is an integrative force: - The essence of management lies in the coordination of individual efforts into a team. Management reconciles the individual goals with organizational goals. Management is an economic resource: - As management is a factor of production together with land, labour and capital. Management is situational: - Because there is no one best way of doing things. A successful manager must take into account situational differences. Management is a system of authority: - Management is a team of managers; represent a system of authority, a hierarchy of command and control. Authority enables the managers to perform their functions effectively. Management is a multidisciplinary subject: - Management is grown as a field of study taking the help of so many other disciplines such as engineering, sociology and psychology, etc. Much of the management literature is the association of the se disciplines. Management is essentially an executive function: - As it deals with active direction and control of the activities of people to attain predetermine activities. Management is both science and art: - already defined Management is universal in nature: - Management is required in every form of group activity. The approach/ style of management may differ from one organization to other, but in each case it involves the marshalling of human and physical resources for the attainment of common objectives. The fundamental principles of management are applicable in all areas of organized efforts. Managers at all levels perform the same basic functions. 5

6 5.Management Vs. Administration Points of Distinction 1. MEANING Administration Administration is concerned with the formulation of objectives, plan and policies of the organization. Management Management is a distinct social process- consisting of activities like planning, organising, staffing, directing, coordinating and controlling; to determine and accomplish the stated objectives with the proper utilization of human beings and other resources. 2. NATURE It is a determinative or thinking function. It is an executive or doing function. 3. SCOPE It is concerned with the determination of major objectives and policies. It is concerned with the implementation of policies. 4. LEVEL It is mainly a top-level function. It is largely a middle level or lower level function. 5. INFLUENCE Administrative functions are influenced mainly by public opinion and other outside forces. Management decisions are influenced by the objectives and policies of the organisation. 6. DECISION-MAKING 7. DIRECTION OF HUMAN RESOURCE Administration determines what is to be done and when is it to be done. It is concerned with leading and motivation of middle level executives. Management decides who shall implement the decisions made. It is concerned with leading and motivation of operative workforce for execution of plans. 6

7 It is not directly concerned with direction of human efforts. It is actively concerned with the direction of human efforts in the execution of plans. 8. MAIN FUNCTIONS Planning and control are the main functions of it. Directing and organising are the main functions of it. 9. ENVIRONMENT Administration has direct interaction with external environment of business, which enables it to make strategic plans to deal effectively with the environmental forces. Management is manly concerned with internal forces, i.e., objectives, plans and policies of the organisation. 10. SKILLS REQUIRED Conceptual and human skills are required in administration. Technical and human skills are required in management. 11. USAGE Used largely in government, public sector firms and nonbusiness organizations. Used mainly in private organizations/ business organizations. 6. Objectives of Management The main objective of any business is to go for profit maximization, in the competitive environment. And in order to achieve all this, management has to pursue the following objectives- Efficient use of resources. Satisfaction of customers. Adequate return on Capital. Satisfied workforce. Good working condition. 7

8 7. Importance of Management/ Significance of Management In an organisation, without management, the resources of production remain resources and never become production. Management is an essential activity in every sphere of organisation to achieve the stated objectives. And the significance/ importance of management can be understood by the following points- The management determines the objectives of any organisation. No organisation succeeds, unless its objectives are clearly identified and defined. Again management is an essential activity to accomplish the objectives of an organisation, by perfect coordination of human and non-human resources. Management is no more restricted to the mere exercise of authority; it also involves scientific thinking, deciding & thoughtful organisation, direction & control to ensure better results. Management keeps itself in touch with the current changing environment and supplies foresight to the organisation. It helps in predicting what is going to happen in future, which will influence the working of the organisation. Management reconciles the personal interest of people (attached with the organisation) with the organisational objectives. The development of a country is virtually dependent upon the quality of management of its resources. 8. Levels of Management Levels of management means line of demarcation between various management positions in an organization. In every company, there is a managerial hierarchy or chain of command, which consists of several levels of authority. The levels of management levels differ from company to company. And in general, in a big company, there are four levels of management, such as- Top Level Management Intermediate Management Middle Level Management Lower Level Management/Supervisory level Management Top Level Management: - Consisting of people like Board of Directors, Chief Executives, Managing Directors, etc. 8

9 Main functions of top-level management are: - To establish long term corporate plans (goals/objectives/policies) of the company. To coordinate and integrate the activities of different departments/ subsidiaries or units and divisions of a company. To provide overall direction and leadership to the company. To build the image and goodwill of the company in front of the outside world. To exercise overall review and control of the financial and operating results of the company. Intermediate Management: - Consists of departmental or divisional heads, such as Marketing Manager, Finance Manager, and Human Resource Manager. It is otherwise known as departmental/functional management. Main functions of Intermediate management are: - Lay down plans and policies for the middle level management They put the top management plans into practice. They coordinate the functioning of their respective departments. They give direction and guidelines to the middle level management. They prepare report of their respective departments. Middle Level Management: - Consists of sectional heads like Branch Manager, Chief Accountant, Plant superintendent. Main functions of Middle Level Management are: - To interpret and explain the plans and policies of the top management. To monitor and control the supervisory/operating performance. To integrate the various activities of the concerned departments. To train, motivate and develop the supervisory personnel. To maintain and develop a team spirit in the respective department. Lower Level/ Supervisory Management: - This is the lowest and first level of management in the organization. It consists of supervisors, sales officers, Accountants, etc. Main functions of Lower Level/ Supervisory Level Management are: - 9

10 To plan day-to-day activity within the goals lay down by the higher levels managements. To supervise and control workers operations and to maintain personal contact with them. To advise and assist workers by explaining work procedures, solving their problems, etc. To report feedback information and workers problems to the higher authorities. Board of Directors TOP LEVEL Managing Director INTERMEDIATE LEVEL Marketing Manager Finance Manager Production Manager MIDDLE LEVEL Branch Manager Chief Accountant Plant Superintendent LOWER LEVEL Sales Officers Accountants Supervisors Sales Executives Clerks Workers -LEVELS OF MANAGEMENT- 10

11 9. Functions of Management & Interrelationship between them One can t say the actual number of functions of management, as different social scientists define it differently. So it is universal in nature. When we are in a step to define the functions of management (which are part of management process), we find the following points, basically- Planning Organising Staffing Directing/leading Controlling And all these functions are interdependent and interrelated. The detail study will clear the picture, what the management function is- Planning: - - A basic and primary function of management, at all levels. - It involves determining the objectives and selecting a course of action to achieve them/ a predetermined future course of action. - It involves deciding in advance What to do? When to do? Where to do? How to do? Who is to do? And how the results are evaluated? - It bridges the gap between where we are and where we want to go. - It consists of forecasting, decision-making and problem solving. - A mental process requiring the use of intellectual faculties, foresight, imagination and judgment. - Planning may be long-term or short- term. - In management, planning consists of- 1. Determination of objectives 2. Forecasting the future course of action 3. Formulation of policies, programmes, budgets, schedules, etc. to achieve the objectives. 4. Laying down the procedures and standards of performance. Organising: - - Once plans are determined the next steps is that of organizing. - It is the function of creating a structure of duties and responsibilities. - It is through which, a manager brings the physical and human resources together to achieve the organisation s objectives. - It is the process of establishing harmonious authority-responsibility relationships among the members of the enterprise. 11

12 - In management organizing means,- 1. Determining and define the activities required for the achievement of planned goals. 2. Grouping the activities into logical and convenient units. 3. Assigning the duties and activities to specific positions and people 4. Delegation of authority to these positions and people. 5. Defining and fixing responsibilities for performance, and 6. Establishing vertical and horizontal authority- responsibility relationships throughout the organization. Staffing: - - It means the process of filling all positions in the organization with adequate and qualified personnel. - In management, staffing means, - 1. Manpower planning- involving determination of the number and the kinds of personnel required. 2. Recruitment for attracting suitable personnel to seek jobs in the enterprise. 3. Selection of the most suitable persons for the jobs under consideration. 4. Placement and orientation of employees. 5. Transfer and promotion of employees. 6. Training and development of employees. Directing/leading: - - It means to guide, supervise, motivate and lead people in organization towards the attainment of stated objectives. - It is an executive function, because it involves the execution of plans and policies. - In management directing means,- 1. Issuing orders and instructions. 2. Supervising people at work. 3. Creationg the willingness to work for certain objectives. 4. Establishing understand between employees. 5. Leadership or influencing the behaviour of employees. Controlling: - - It means checking actual performance with the agreed standard that has planned to satisfy the satisfactory performance. - In management, controlling means- 1. Establishing standards for measuring works performance. 2. Measurement of actual performance and comparing it with the standards 3. Finding the variances between the two and the reason therefore, and 12

13 4. Taking corrective action for correcting deviations so as to ensure attainment of objectives. Along with the above functions of management, coordination is another important function of management, which is essential for all the activities at all levels of management. Coordination means orderly arrangement of group efforts and unity of action for the attainment of a common goal. Interrelationship between management functions: - Management functions are practically highly inseparable. They are interdependent and interrelated with each other and that s why it is called, as management is a continuous process. In theoretical percepts, one can define that the functions are being conducted one by one from planning to controlling. But in real situation, management has to do all the activities simultaneously according the situation demands. 10. Intensity of management function at different levels TOP LEVEL INTERMEDIATE LEVEL PLANNING ORGANISING STAFFING MIDDLE LEVEL LOWER LEVEL DIRECTING CONTROLLING From the above picture, it is found that- the top management spends more time in planning and organizing. The intermediate and middle level management put stress upon the staffing and directing. And last but not the least the lower level management do spend more time on coordination and controlling rather than planning, organizing. Thus, the time and effort spent on different functions will depend on the level on which the manager is functioning in the managerial hierarchy. 13

14 11. Management skills and importance of it at different level Skills basically means the ability and talent present there within a man. A manager is successful, when he is able to make a smooth functioning team of people working under him. He has to reconcile, coordinate and appraise various skills (viewpoints and talents) of people. Several skills are, therefore, required in order to be a successful manager. And the skills of a successful and effective manager can be classified into four categories as given below- Conceptual Skills: - - The ability to see the whole organization and the interrelationships between its parts. - The ability to understand how the parts of an organization depend with each other. - Such skills help the manager to conceptualize the environment, to analyze the forces working in a situation and to take a broad and farsighted view of the organization. - Conceptual skills also include the competence to understand a problem in all respects and to use original thinking in solving the problem. - These skills are used for abstract thinking, and for the concept development involved in planning and strategy formulation. - And for which the top-level managers therefore use these skills. Human Skills: - - It consists of the ability to work efficiently with other people both as individuals and as members of a group - These are required to build co-operation of others and to build effective work teams. - Such skills require a sense of feelings for others and capacity to look at things from other s point of view. - Because, all work is done when people work together, human skills are equally important for all levels of management. Technical Skills: - - These skills refer to the ability and knowledge of using the equipments, techniques, and procedures involved in performing specific tasks. - These skills require specialized knowledge and expertise in the mechanics of a particular job. - There are two things a manager should understand about the technical skills, such as- - In the first place, he must know which skills should be employed 14

15 in this particular enterprise and be familiar enough with their potentiality to ask discerning questions of his technical advisors. - A manager must understand both the role of each skill employed and the interrelationships between the skills. - These skills are much important to the lower level/ operative level, and less important to the top-level management. Diagnostic Skills: - - These skills include the ability to determine, by analysis and examination, the nature and circumstances of a particular condition. - It is not only the ability to specify why something happened but also the ability to develop certain possible outcomes. - Diagnostic skills are probably the most difficult ones to develop because they require the proper blend of analytical ability with commonsense and intelligence to be effective. The conceptual skills deal with ideas, the human skills deal with the human relations and the technical skills deal with the jobs. These skills are relatively interrelated, but the proportion of significance of these varies with the levels of management. 12. Roles- A role means the behaviour patterns expected from a person or a group of persons or objects. a). Role of Management: - There are a numerous role performed by management, and these are as follows- - Achievement of group goals. - Optimum utilization of resources. - Fulfillment of social obligations. - Economic growth. - Stability. - Human development. - Meets the challenge of changes. And the role of management increased due to the following- - Growing size and complexity in business. - Changing technologies. - Need for optimum utilization of resources. - Cutthroat competition in the market. - Uncertain business environment. - Increase expectations from the different social groups. - Growth of trade union movements. 15

16 b). Role of Managers: - The job of a modern manager is very complex and multidimensional. Mintzberg has identified ten roles of a manager, which are grouped into three categories. This is a framework for analyzing and understanding the managerial jobs. The brief description of these managerial jobs are as below in a table- Sl. No ROLES SUB ROLES DESCRIPTION INTERPERSONAL ROLES INFORMATIONAL ROLES DECISIONAL ROLES Figurehead Leader Liaison Monitor Disseminator Spokesman Entrepreneur Disturbance Handler Resource allocator Negotiator Symbolic head; performs routine duties of a legal or social nature. Responsible for motivation of subordinates and for staffing and training. Maintains network of outside contacts to obtain favours and information. Seeks and receives information to obtain through understanding of organization and environment. Transmits information received from outsiders or insiders to other organization and environment. Transmits information to outsiders on organization plans, policies and actions. Initiates and supervises design of organizational improvement projects as opportunities arise. Responsible for corrective actions when organization faces unexpected crises. Responsible for allocation of human, monetary and material resources Responsible for representing the organisationin bargaining and negotiations. TYPICAL ACTIVITIES Ceremony and status requests. Almost all managerial activities involving subordinates. Handling mail, external Board work, and telephone calls. Reading periodicals and observational tours. Forwarding mail, review sessions with subordinates. Board meetings, handling mail. Strategy and review sessions regarding change efforts. Strategy and review sessions regarding disturbances. Scheduling, requests for authorization, budgeting. Collective bargaining, purchasing. 16

17 c). Reconciliation of managerial roles and functions: - - Management Roles describes what managers do, generally. But a Management function prescribes what managers should do, generally. - In planning- Managers play informational and decisional roles. They receive, store, monitor and disseminate information. They also take policy and operative decisions. - In organising- Managers play interpersonal and decisional roles. They establish relationships between activities and people; take decisions about utilization of resources and act as liaisons. - In staffing- Managers perform decisional, informational and interpersonal roles. - In Directing also Managers perform decisional, informational and interpersonal roles. - Controlling involves mainly informational roles and for coordination interpersonal roles are required. 17

18 B. CONTRIBUTIONS/APPROCHES TO MANAGEMENT (SCHOOL OF MANAGEMENT THOUGHT) Contributions from different Management Theories 1. Classical 2. Behavioural 3. Quantitative 4. Contingency 5. System and Modern theories Time Line of Management Thought 18

19 Classical Management Theory Classical Management Theory A theory that focused on finding the one best way to perform and manage tasks 1. Originated during England s Industrial Revolution 2. Manufacturers began mass-producing goods in factories 3. Textile industry was among the first 4. Allowed production of standardized goods 5. Depended on a constant flow of labor and materials 6. Owners needed to plan, organize, lead, control 7. Focused on finding the one best way Classical Management Theory Consists of two different viewpoints: Classical Scientific Theory Focused on the manufacturing environment Classical Administrative Theory Emphasized the flow of information and how organizations should operate 19

20 Lessons from Classical Scientific Thinkers Analyze everything Teach effective methods to to others Constantly monitor workers Plan responsibly Control the work and the workers Scientific Management Key concepts used scientific methods to determine the one best way emphasized study of tasks, selection and training of workers, and cooperation between workers and management Contributions improved factory productivity and efficiency introduced scientific analysis to the workplace piecerate system equated worker rewards and performance Limitations simplistic motivational assumptions workers viewed as parts of a machine potential for exploitation of labor 20

21 Contributions from The Theorists Frederick Taylor ( ) Considered the Father of Scientific Management. Replaced old rule-of-thumb methods of how to do work with scientifically-based work methods to eliminate soldiering where employees deliberately worked at a pace slower than their capabilities. Believed in selecting, training, teaching, and developing workers. Pursued four key goals: - Develop a science of management - Select workers scientifically - Develop and train workers scientifically - Create cooperation between management and labor Determined the quickest ways to perform tasks. Frank and Lillian Gilbreth Reduced the number of movements in bricklaying, resulting in increased output of 200%. Henry Gantt Was an early associate of Fredrick Taylor. Developed other techniques, including the Gantt chart, to improve working efficiency through planning/scheduling. Harrington Emerson Advocated job specialization in both managerial and operating jobs. 21

22 Administrative Management Key concepts Focuses on managing the whole organization rather than individuals. Fayol s five functions and 14 principles of management executives formulate the organization s purpose, secure employees, and maintain communications managers must respond to changing developments Contributions viewed management as a profession that can be trained and developed emphasized the broad policy aspects of top-level managers offered universal managerial prescriptions Limitations universal prescriptions need qualifications for contingencies Contributions from The Theorists Henri Fayol : Believed specific management skills could be learned and taught Wrote General and Industrial Management. Helped to systematize the practice of management. Was first to identify the specific management functions : - Planning - Organizing - Leading - Controlling 22

23 Fayol s 14 Principles of Management Division of work Authority Discipline Unity of command Unity of direction Subordination of individual interest to the general interest Remuneration Centralization Scalar chain Order Equity Stability and tenure Initiative Esprit de corps Lyndall Urwick: Integrated the work of previous management theorists. Max Weber : His theory of bureaucracy is based on a rational set of guidelines for structuring organizations. Specialization of labor Formal rules and procedures Impersonality Well-defined hierarchy Career advancement based on merit Chester Barnard: Wrote The Functions of the Executive. Proposed a theory of the acceptance of authority (by subordinates) as the source of power and influence for managers. 23

24 Behavioral Management Theory Behavioral School Recognized employees as individuals with concrete, human needs, as parts of work groups, and as members of a larger society Contributions Provided important insights into motivation, group dynamics, and other interpersonal processes. Focused managerial attention on these critical processes. Challenged the view that employees are tools and furthered the belief that employees are valuable resources. Limitations Complexity of individuals makes behavior difficult to predict. Many concepts not put to use because managers are reluctant to adopt them. Contemporary research findings are not often communicated to practicing managers in an understandable form. 24

25 Contributions from The Theorists Robert Owen The father of modern personnel management The quality and quantity of workers output influenced by conditions on and off the job Abraham Maslow Needs-based theory of motivation physiology security affiliation esteem self-actualization Maslow s Hierarchy of Needs Self-Actualization Need for Self Esteem Need for Social Relations Need for Security Physical Needs McGraw-Hill 2004 The McGraw-Hill Companies, Inc. All rights reserved. 25

26 Behavioral Management Theory Results Managers discover What employees want from work How to enlist cooperation and commitment How to to unleash talents, energy, and creativity Quantitative Management Theory Quantitative School Emphasized mathematical approaches to management problems Management Science The study of complex systems of people, money, equipment, and procedures, with the goal of improving their effectiveness 26

27 Evolution: Emerged during World War II to help the Allied forces manage logistical problems. Focuses on decision making, economic effectiveness, mathematical models, and the use of computers to solve quantitative problems. Contributions: Developed sophisticated quantitative techniques to assist in decision making. Application of models has increased our awareness and understanding of complex processes and situations. Has been useful in the planning and controlling processes. Limitations: Quantitative management cannot fully explain or predict the behavior of people in organizations. Mathematical sophistication may come at the expense of other managerial skills. Quantitative models may require unrealistic or unfounded assumptions, limiting their general applicability. 27