Mgt Principles

8/3/2019 Mgt Principles

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MANAGEMENT PRINCIPLES

AND

PRACTICE


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What is Management ???

Is the process of using what you have{ RESOURCES }, to do what you want to do .

{GOALS}


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What Is Management ?

The process of getting things done,effectively and efficiently, through and

with other people

Objective - attain organizational goals

Efficiency - doing things rightEffectiveness - doing the right thing !

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Introductory Concepts: What Are

Managerial Competencies?

Competency a combination of knowledge,

skills, behaviors, and attitudes that contribute topersonal effectiveness

Managerial Competencies sets of knowledge,

skill, behaviors, and attitudes that a person

needs to be effective in a wide range of positions

and various types of organizations


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Why are Managerial Competencies

Important?

You need to use your strengths to do your best

You need to know your weaknesses

You need developmental experiences at work to becomesuccessful leaders and address your weakness

You probably like to be challenged with new learning

opportunities

Organizations do not want to waste human resources

Globalization deregulation, restructuring, and new

competitors add to the complexity of running a business


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A Model of Managerial

Competencies

TeamworkCompetency

Global

AwarenessCompetency

Strategic

ActionCompetency

Planning and

AdministrationCompetency

Self-Management

Competency

Communication

Competency

Managerial

Effectiveness


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7 categories of resources:

People

Money

Time Work Procedures

Energy

Materials Equipment


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Management A science or an Art?We can call a discipline scientific if its

1. methods of inquiry are systematic & empirical;

2. information can be ordered and specified; and3. results are cumulative and communicable.

The word science is used to denote two types of

systematic knowledge1. Natural or exact

2.Behavioural or inexact

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We place management

in the category

of Behavioral Science.

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Management A science or an Art? contd.. Art is concerned with the understanding of HOW a

particular work has been done.\

A theoretical body of lessons and principles which amanager has learnt in a classroom will not secure forhim/her the aimed results unless he/ she has also the skill(or art) of applying such principles and body of knowledgeto his/ her special problem.

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In this sense management is an art like the art of amusician or the art of a painter who seeks to achievethe desired effect with the help of his/her own skills.

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Management A professsion? Mcfarland gives following characteristics of a profession:

1. Existence of an organized and systematic knowledge.2. Formalized methods of acquiring training andexperience.

3.Existence of an association with professionalisation as its

goal.4. Existence of an ethical code to regulate the behaviour.

5. Charging the fees base on service.

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No greater damage could be done to our economy or toour society than to attempt to professionalize

management by licensing managers, for instance. Or

by limiting access to management to people with aspecial academic degree.

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Professional management Vs family management contd

Kikkoman Corporation of Japan- the worlds leading

supplier of soya sauce, descendants of the founders stillcontrol and run the firm after 17 generations since its birth,more than 300 years ago.

The phenomenal progress of Ford Motors , Exxon, IBM,DU Pont etc bears testimony to the quality of leadership,

and vision of respective families of Ford, Rockefeller,Watson and Du Pont.

In the words of K. K. Birla,

If people like Sir Jamshetji Tata or Rai Bahadur Gujarmal Modi wereto start their business career again, I would any day put my rupee onthem than on th ebest of the professionals.

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The Evolution of

Management Thought


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The Evolution of Management Theory


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F.W. Taylor and Scientific

ManagementScientific ManagementThe systematic study of the relationships

between people and tasks for the purpose

of redesigning the work process toincrease efficiency.

2-17


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Four Principles of Scientific

Management1) Study the way workers perform their tasks,gather all the informal job knowledge thatworkers possess and experiment with ways of

improving how tasks are performed Time-and-motion study

F P i i l f S i tifi


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Management

2) Codify the newmethods ofperforming tasks into

written rules and

standard operatingprocedures


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Management3) Carefully select workers who possessskills and abilities that match theneeds of the task, and train them to

perform the task according to theestablished rules and procedures


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Management4) Establish a fair or acceptable level ofperformance for a task, and thendevelop a pay system that provides a

reward for performance above theacceptable level


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Administrative Management

TheoryMax Weber Developed the principles of bureaucracy as a formal

system of organization and administration designed toensure efficiency and effectiveness.


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Webers Principles

of Bureaucracy


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Webers Principles of Bureaucracy1) A managers formal authority derives from theposition he holds in the organization.

2) People should occupy positions because of their

performance, not because of their social standingor personal contacts.


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Webers Principles of Bureaucracy3) The extent of each positions formal authority andtask responsibilities and its relationship to otherpositions should be clearly specified.

4) Authority can be exercised effectively when

positions are arranged hierarchically, soemployees know whom to report to and whoreports to them.


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Webers Principles of Bureaucracy5) Managers must create a well-defined system ofrules, standard operating procedures,and norms so theycan effectively

control behavior .


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Fayols Principles of Management Division of Labor: allows for job specialization. jobs can have too much specialization leading to poor

quality and worker dissatisfaction.

Authority and Responsibility

both formal and informal authority resulting fromspecial expertise.

Unity of Command

Employees should have only one boss.


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Fayols Principles of Management

Equity- The provision of justice and the fair andimpartial treatment of all employees.

Order - The arrangement of employees wherethey will be of the most value to the organizationand to provide career opportunities.

Initiative - The fostering of creativity andinnovation by encouraging employees to act on

their own.


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Discipline

Obedient, applied, respectful employees arenecessary for the organization to function.

Remuneration of Personnel An equitable uniform payment system that

motivates contributes to organizational success.


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Stability of Tenure of Personnel

Long-term employment is important for thedevelopment of skills that improve the organizationsperformance.

Subordination of Individual Interest to theCommon Interest

The interest of the organization takes precedence over

that of the individual employee.


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Fayols Principles of ManagementEsprit de corpsComradeship, shared enthusiasm foster

devotion to the common cause

(organization).


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Discussion Question?Which of the following is the most important aspectof Fayols principles of management?

A. Division of Labor

B. Unity of CommandC. Remuneration of Personnel

D. Esprit de corps


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Behavioral Management TheoryBehavioral Management The study of how managers should personally behave

to motivate employees and encourage them toperform at high levels and be committed to theachievement of organizational goals.


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Behavioral ManagementMary Parker FollettConcerned that Taylor ignored the

human side of the organization

Suggested workers help in analyzingtheir jobs

If workers have relevant knowledge of

the task, then they should control thetask


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The Hawthorne StudiesStudies of how characteristics of the work settingaffected worker fatigue and performance at theHawthorne Works of the Western Electric Companyfrom 1924-1932.


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The Hawthorne StudiesWorker productivity was measured atvarious levels of light illumination.

Researchers found that regardless ofwhether the light levels were raised orlowered, worker productivity increased.


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The Hawthorne StudiesHuman Relations Implications Hawthorne effectworkers attitudes toward their

managers affect the level of workers performance


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The Hawthorne Studies Human relations movement advocates thatsupervisors be behaviorally trained to managesubordinates in ways that elicit their cooperationand increase their productivity


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The Hawthorne StudiesImplications Behavior of managers and workers in the work

setting is as important in explaining the level of

performance as the technical aspects of the task Demonstrated the importance of understanding

how the feelings, thoughts, and behavior of work-group members and managers affect performance


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Theory X and Theory YDouglas McGregor proposed the two different setsof assumptions about workers. Theory X assumes the average worker is lazy, dislikes

work and will do as little as possible. Workers have little ambition and wish to avoid

responsibility

Managers must closely supervise and control throughreward and punishment.

Theory X vs Theory Y


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Theory X vs. Theory Y


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Management Science Theory

Contemporary approach to management that

focuses on the use of rigorous quantitativetechniques to help managers make maximum use oforganizational resources to produce goods andservices.

Quantitative management utilizeslinear and nonlinear programming,modeling, simulation, queuing theory

and chaos theory.Operations management

techniques used to analyze any aspect ofthe organizations production system.


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Management Science TheoryTotal Quality Management (TQM)focuses on analyzing input, conversion,and output activities to increase product

quality.Management Information Systems

(MIS) provides information vital for

effective decision making.


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Organizational Environment TheoryOrganizational Environment

The set of forces and conditions that operate beyondan organizations boundaries but affect a managersability to acquire and utilize resources


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Business and Society

Business and society interrelate in amacroenvironment as stakeholders.

BusinessThe collection of private,commercially oriented organizations

SocietyA broad group of people and otherorganizations, interest groups,a community, a nation.


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Society as the Macroenvironment

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Social Economic

Political Technological


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Segments of the

Macroenvironment

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Segment Focus

Social Demographics, lifestyles, social values

PoliticalProcesses for passing of laws and electionof officials. Interactions between firms,politics, and government

EconomicNature and direction of the economy inwhich business operates

TechnologicalChanges in technological advancementstaking place in society


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A Pluralistic Society

Prevents concentration ofpower

Maximizes freedom ofexpression and action

Disperses individual allegiances

Creates diversified set of

loyalties Provides checks and balances

Pursuit of self-interest

Proliferates organizations and

groups with overlapping goals Forces conflicts to center stage

Promotes inefficiency

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Strengths Weaknesses


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Business and Stakeholder Relationships

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Figure 1-2


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Special-Interest Society make life more complex for business and government

number in the tens of thousands

pursue their own focused agenda

are more active, intense, diverse and focused

attract a significant following

often work at cross purposes, with no unified set of goals

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Special Interests groups


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Social Environment, Business Criticism, and

Corporate Response

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Factors in the Social Environment

Affluence Education Awareness

Rising Expectations Rights Movement

EntitlementMentality

VictimizationPhilosophy

Business Criticism

Increased Concern for theSocietal Environment

A Changed Social Contract

Figure 1-3


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Companies Under the Magnifying

GlassAdelphia Comm.Arthur Andersen

Bristol-Meyers

Computer Associates Dynegy

Enron

Global Crossing

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Halliburton

ImClone Systems

Merrill LynchQwest Comm.

Tyco Intl.

WorldComXerox


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What does fraud cost? Cost to corporations: > $400 billion a year Organizations lose $9/day/employee

Median loss caused by males: $185,000

Median loss caused by females: $48,000

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Fraud Group Warns of Theft, Boston Sunday Globe,2/3/2002.


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Eliminating Business Ethics...

A business cant have ethics any more than a buildingcan have ethics. I dont believe the university is a placefor thatfamily & elementary & secondary schools

are. Milton Friedman, Nobel Laureate

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Teaching Idealism or Management

Issues... A business ethics course is not serving its mission

in the curriculum if it just deals with ideological

stuff; its got to deal with the stuff of leadership &management.

Kenneth Goodpaster, University of St. Thomas

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Developing Trust & Confidence in

Business...

Board members

Top management

Attorneys

Accounting firms

Securities analysts

Regulators

Politicians

Mass media

Investors

Colleges of business

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Individuals alone did not cause ourcurrent crisis

Many stakeholders were involved in

supporting deception, fraud &destruction


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How does ethical decision making

occur in organizations? The #1 influencer of ethical/unethical behavior isthe influence of significant others & the corporateculture

Business ethics in an organization relates to a

corporate culture of values, programs, enforcement& leadership

Stakeholders must support organizational ethicsinitiativesits good business

Stop focusing on the short term!!!

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Corporate Social Responsibility

(CSR)Preliminary definitions of CSR

The impact of a companys actions on society

Requires a manager to consider his acts in terms of awhole social system, and holds him responsible for theeffects of his acts anywhere in that system


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(CSR)Corporate Citizenship Concepts

Corporate social responsibility emphasizes obligationand accountability to society

Corporate social responsiveness emphasizes action,activity

Corporate socialperformance emphasizes outcomes,

results

Corporate Social Responsibility (CSR)


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p p y ( )

Business Criticism/ Social Response Cycle

Factors in the Societal Environment

Criticism ofBusiness

Increased concern

for the Social Environment

A Changed

Social Contract

Business Assumption of Corporate Social Responsibility

Social Responsiveness, Social Performance, Corporate Citizenship

A More Satisfied Society

Fewer Factors Leadingto Business Criticism

Increased Expectations Leadingto More Criticism


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(CSR)Historical Perspective

Economic model the invisible hand of the

marketplace protected societal interest Legal model laws protected societal interests


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(CSR)Historical Perspective

Modified the economic model

Philanthropy Community obligations

Paternalism


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(CSR)

Historical Perspective

What was the main motivation? To keep government at arms length


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(CSR) Historical PerspectiveFrom the 1950s to the present the concept of CSR hasgained considerable acceptance and the meaning has

been broadened to include additional components


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(CSR)Evolving Viewpoints

CSR considers the impact of the companys actions on

society (Bauer) CSR requires decision makers to take actions that

protect and improve the welfare of society as a wholealong with their own interests (Davis and Blomstrom)


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(CSR)

Evolving Viewpoints

CSR mandates that the corporation has not onlyeconomic and legal obligations, but also certainresponsibilities to society that extend beyond theseobligations (McGuire)


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(CSR) Evolving Viewpoints CSR relates primarily to achieving outcomes from

organizational decisions concerning specific issuesor problems, which by some normative standardhave beneficial rather than adverse effects uponpertinent corporate stakeholders. The normative

correctness of the products of corporate actionhave been the main focus of CSR (Epstein)


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(CSR)Carrolls Four Part Definition

CSR encompasses the economic, legal, ethical anddiscretionary (philanthropic) expectations that society

has of organizations at a given point in time



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Carrolls Four Part DefinitionUnderstanding the Four Components

Responsibility Societal

Expectation

Examples

Economic Required Be profitable. Maximize sales,minimize costs, etc.

Legal Required Obey laws and regulations.

Ethical Expected Do what is right, fair and just.

Discretionary

(Philanthropic)

Desired/

Expected

Be a good corporate citizen.


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Pyramid of CSR


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Stakeholder ViewStakeholder Group Addressed and Affected

CSRComponent

Owners Con-

sumers

Employees Community Others

Economic 1 4 2 3 5

Legal 3 2 1 4 5

Ethical 4 1 2 3 5Philanthropic 3 4 2 1 5


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Arguments AgainstRestricts the free

market goal of profitmaximization

Business is notequipped to handlesocial activities

Dilutes the primaryaim of business

Increase businesspower

Limits the ability tocompete in a globalmarketplace


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Arguments ForAddresses social issues

business caused andallows business to be

part of the solution Protects business self-

interest

Limits future governmentintervention

Addresses issues by usingbusiness resources andexpertise

Addresses issues by beingproactive


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Business Responsibilities in the 21stCentury Demonstrate a commitment to societys values and

contribute to societys social, environmental, andeconomic goals through action.

Insulate society from the negative impacts ofcompany operations, products and services.

Share benefits of company activities with keystakeholders as well as with shareholders.

Demonstrate that the company can make moremoney by doing the right thing.


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Corporate Social ResponsivenessEvolving ViewpointsAckerman and Bauers action view

Sethis three stage schema

Fredericks CSR1, CSR2, and CSR3

Epsteins process view


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Corporate Social Performance

Carrolls CSP model integrates economic concernsinto a social performance framework


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Corporate Social PerformanceExtensions and ReformulationsWartick and Cochrans extensions

Woods reformulations Swansons Reorientation


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C t S i l P f


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Nonacademic Research Fortune's ranking ofmost and least admired

corporations

Council on Economic Priorities Corporate Conscience

Awards Business Ethics Magazine Awards

WalkerInformations Research on the impact of social

responsibility


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Corporate CitizenshipCorporate citizenship embraces all the facets ofcorporate social responsibility, responsiveness andperformance


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Socialand FinancialPerformance

Good CorporateSocial Performance

Perspective 1: CSP Drives the Relationship

Good CorporateFinancialPerformance

Good CorporateReputation


Perspective 2: CFP Drives the Relationship

Good CorporateSocialPerformance


Good CorporateSocial Performance

Perspective 3: Interactive Relationship Among CSP, CFP, and CR




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Social and Financial Performance

A Multiple Bottom-Line Perspective

S i ll C i Ethi l


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Socially Conscious or Ethical

InvestingSocial screening is a technique

used to screen firms for investmentpurposes


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Ethics and Social Responsibility Ethics

The study of morality and standards of

conduct Corporate Social Responsibility (CSR)

Those actions taken by a firm that are intendedto benefit society beyond the requirements of

the law and the direct interests of the firm


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MNCs and Ethics Challenges for MNCs Widespread perception that MNCs are untrustworthy and

corrupt

Increased capacity of NGOs to mobilize public pressure in

response to perceived ethical lapses

Expectation that MNCs will adhere to higher standards

MNC responses

Adopting internal codes of conduct to establish minimal

social and environmental standards Building alliances with NGOs

Committing international standards such as the UN

Global Compact, SA8000 and ISO14000

I li i f M


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Implications for Managers Need for lifelong learning

The most valuable asset is the ability to learn how to learn(Thomas Friedman, The World is Flat)

Responsiveness Being alert for changes and quick to respond

Adaptability Knowing how to work with others

Being comfortable with uncertainty and ambiguity

Having a global perspective Seeing the big picture (global economy/whole organization)

Developing local knowledge Understanding the details of operating at the local level


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PLANNING

How To Best Meet Your

MissionWe must plan for the future,because people who stay in thepresent will remain in the past.

Abraham Lincoln


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What is Planning?

Planning is a search problem that requires tofind an efficient sequence ofactions thattransform a system from a given startingstate

to the goal statePlanning is the starting point of themanagement process

Predetermines what the business proposes toaccomplish and how it intends realizing itsgoals


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Proper planning accomplishes the following

1. Managing Uncertainty

2. Better Focus

3. Improves Coordination

4. Basis for Control

5. Improves Effectiveness


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Planning is PervasiveCorporation LevelStrategic Business Unit (SBU) LevelFunctional or Department LevelTeam or work group level

Individual level


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Organizational Mission The Mission states the organizations values,aspirations, and reason for existence.

The Mission Statement is the basis for all following

goals and plans.Without a clear mission, goals and plans may be

developed haphazardly causing the organization tofail.


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Goals and Plans

Goals: specify future ends. Desiredfuture state.

Plans: specify the means to futureends. The blueprint for goal

achievement specifies thenecessary resource allocations,schedules, tasks


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Strategic Goals and Plans Strategic Goals pertain to the entire organization (not

specific divisions and departments).

Strategic Plans define the action steps the company

will use to attain strategic goals.


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Tactical Goals and Plans Tactical Goals apply to middle management and

describe what major subunits must do to to enable theorganization to meet its strategic goals.

Tactical Plans: Help execute major Strategic Plans.

Cover a shorter period of time.


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Operational Goals and Plans Operational Goals: the specific results expected of

small units, workgroups, and individuals.

Operational Plans: developed at the lower levels of an

organization to specify actions required to achieveoperational goals and to support tactical plans.


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Goal Characteristics Be specific and measurable

Quantitive Terms

Cover key result areas

Contribute most to company performance

Be challenging but realistic

Be for a defined time period.

Be linked to rewards.

f l


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Types of Plans

Single-use plans are developed to achieveobjectives that are not likely to be repeated inthe future. Single-use plans include programs,budgets and projects.

Standing plans are used to provide guidance fortasks performed repeatedly within theorganization. The primary standing plans areorganizational policies, rules, and procedures

The Planning Process


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The Planning Process

GOAL SETTINGIdentification and formulation of

objectives

DEVELOPING PLANSChoices between alternative plans

IMPLEMENTATIONExecution of the plan

ReactivePlanning

Revisionof goals

andplans


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Successful Planning ProcessEveryone participates

Board and staff educated about planningBoard and staff explore new ideas

Board takes advantages of opportunities

Necessary resources available

Making Planning Effective


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Making Planning Effective

Linked to Long term objectives

Consistency

Everyone participatesFeasible

Flexible

SimpleTop Management Support


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Setting Objectives The purpose is to convert

the mission into SpecificPerformance Targets

Yardsticks for trackingcompany progress andperformance.

Should be set at levelsthat require stretch anddisciplined effort.


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Management By Objectives (MBO)

A method whereby managersand employees define objectives

for every department, project,and person and use them tomonitor subsequent

performance.


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THE NATURE & PURPOSE OF MBO

MBO is concerned with goal setting andplanning for individual managers and theirunits.

The essence of MBO is a process ofjoint goalsetting between a supervisor and a subordinate.

Managers work with their subordinates to

establish performance goals that are consistentwith higher organizational objectives.

MBO helps clarify the hierarchy of objectives as

a series of well-defined means-ends chains

Essential Steps for MBO


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sse t a Steps o O

Set GoalsThe most difficult step.ConcreteSpecific target and timeframeAssign responsibility

Develop Action PlanCourse of actionFor both workgroups andindividuals

Review ProgressPeriodicity?Course corrections

Appraise Overall Performance.How are we doing?Do we need to restate our goals?

Managers tell their subordinates what


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Managers tell their subordinates whatorganizational and unit goals and plans

top management has established.

Managers meet with their subordinates

on a one-to-one basis to arrive at a set ofgoals for each subordinate that bothdevelop and to which both are committed.

Goals are refined to be as verifiable as possibleand achievable within a specified period of time.

G i St t i


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Generic Strategies

Porters Generic Strategies1. Differentiation strategy

An organization seeks to distinguish itself from competitors through thequality of its products or services. Developing an image perceived asunique

2. Overall cost leadership strategy An organization attempts to gain competitive advantage by reducing its

costs below the costs of competing firms.

3. Focus strategy

An organization concentrates on a specific regional market, product line,or group of buyers.

What is Strategic Planning?


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What is Strategic Planning?

Strategic planning is a systematic processthrough which an organization agrees onand builds commitment among key

stakeholders to priorities that are essential toits mission and are responsive to theenvironment.

Strategic Planning guides the acquisition andallocation of resources to achieve thesepriorities.

Strategic Planning


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Strategic Planning

vs. Operational Planning Strategic Planning

formulation

What, where

ends

vision

effectiveness

risk

Operational Planning implementation

how

means

plans

efficiency

control


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Three Big Strategic QuestionsWhere Are We Now?

Where Do we Wantto Go?

How Will We GetThere?


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Strategic Planning Process Developing a Vision and a Mission

Assessment

Setting Objectives

Crafting a Strategy

Implementing and Executing Strategy

Evaluating Performance, Reviewing the Situation and

Initiating Corrective Action


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Strategic Planning

The Vision Communicating to all staff where the

organisation is going and where

it intends to be in the future

Aims and Objectives:

Aims long term target Objectives the way in which you are goingto achieve the aim

Types of Strategy


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yp f gy Market Dominance

Achieved through: Internal growth

Acquisitions mergers and takeovers

New product development:to keep ahead of rivals and set the pace

Contraction/Expansion focus on what you are good at (core competencies) orseek to expand into a range of markets?

Global seeking to expand Global operations


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Strategy Implementation Technology

Human Resource

Reward System

Decision Process

Characteristic of the Good Strategy


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Characteristic of the Good Strategy

Implementation

An ongoing exercise

Proper Communication

Contingency Plan

Emphasis on Organisation Culture

Regular Review

Importance of Planning


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DECISION-MAKING


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What is Decision-Making?

Decision making

The process of choosing a course of action

for dealing with a problem or opportunity.

T f D i i


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Types of Decisions

Programmed decisions. Involve routine problems that arise regularly and can be

addressed through standard responses.

Nonprogrammed decisions. Involve nonroutine problems that require solutions specifically

tailored to the situation at hand

Rationality


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Rationality

Problem is clear and unambiguous.

Single goal.

All alternatives are known.

Clear and constant preferences.

Maximum payoff. The decision is in the best interest of the

organizationnot the manager.


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Group Decision-Making


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Forms of Group Decision Making Interacting groups

Delphi Methods

Nominal groups

Organizing


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g g Lack of organization is a major

contributor to crisis.

A well-organized and efficient unit isone in which: Lines of authority and responsibility are

clearly drawnand observed.

Jobs, procedures, and standards areclearly definedand followed.

People know what to do and how to doitand they do it.

Standards of quality, quantity, andperformance are clearly setand met.

Organizing for Success


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g g Organizing: setting things up to run

efficiently Step 1:Clarify how you an your job fit

into the organization Step 2: Investigate possible sources of

problems Chain of command Job content and procedures Evaluation and controls Standing plans

Step 3: Evaluate the situation Step 4: Plan for improvement


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Management SkillsConceptual Skills : cognitive ability to

see the organization as a whole andthe relationship among its parts

Human Skills : ability to work withand through other people and towork effectively as a group member

Technical Skills : understanding of

and proficiency in the performanceof specific tasks.


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Why Have a Structure?All businesses have to organise

what they do

A clear structure makes it easier to see which partof the business does what

There are many waysto structure a business


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Ways to Structure a Business By function: arranging the business according to

what each sectionor department does

By product or activity: organising according to thedifferent products made

By area: geographical or regional structure


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Ways to Structure a Business By customer: where different customer groups

have different needs

By process: where products have to go throughstages as they are made

What are the advantages/disadvantages ofdifferent types of business structure?


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Functional StructureAdvantages

Specialisation eachdepartment focuses onits own work

Accountabilitysomeone is responsiblefor the section

Clarity know your andothers roles

Disadvantages

Closed communicationcould lead to lackof focus

Departments canbecome resistantto change

Coordination

may take too long Gap between top and

bottom


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The Elements of Structure Work specialization

Chain of command

Span of control

Authority and responsibility

Centralization versus decentralization

Departmentalization


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Work SpecializationDefinition:

Work specialization is a component of organization

structure that involves having eachdiscrete step of

a job done by a different individual rather than

having one individual do the whole job.


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Chain of Command

CEO

ExecutiveVice President

PresidentExecutiveVice President

Vice

President

Vice

President

Vice

President

Vice

President

Vice

President

Region1

Region2

Region3

Region4

Region5

District

A

District

B

District

C

District

D

District

E

District

F

District

G


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Span of Control

Definition

It is the number of subordinates a manager candirect efficiently and effectively.


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Contingency Variables The level in the organization

The quality of employees

Similarity of employee tasks

The complexity of tasks

The physical proximity of employees

The degree of standardization of work procedures

The strength of the organizations value system

The sophistication of the organizations MIS

The preferred managing style of managers


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Authority:

It is the rights inherent in a managerial position

to give orders and expect subordinates to be obeyed.

Responsibility:

It is an obligation to perform assigned activities. Power:

It is an individuals capacity to influence decisions.


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Line Authority and Staff Authority Line authority entitles a manger to direct the work

of an employee.

A manager with line authority has the right to direct the

work of employees and to make certain decisions without

consulting anyone

Staff authority is used to support, assist, and advise

the holders of line authority. Whether a managers function is classified as line

or staff depends on the organizations objectives.

ExecutiveLi h i


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Line Versus Staff Authority

Other

ExecutiveDirector

Assistant to theExecutive Director

Director ofHuman

Resources

Director ofOperations

Director ofPurchasing

Otherdirectors

Unit 1Manager

Unit 2Manager

Humanresources

Operations Purchasing OtherHumanresources

Operations Purchasing

Line authority

Staff authority


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The Types of Power Coercive power:power on fear.

Reward power:power based on the ability to

distribute something that others value.

Legitimate power:power based on ones positionin the formal hierarchy.

Expert power:power based on ones expertise,

special skills, or knowledge. Reference power:power based on identification

with a person who has desirable resources or

personal traits.


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Centralization Versus Decentralization

Centralizationis a function of how much decision-

making authority is pushed down to lower levels in an

organization; the more centralized an organization is,

the higher is the level at which decisions are made.

Decentralizationrefers to the pushing down of

decision-making authority to lowest levels of an

organization. Centralization-decentralization is not an either-or

concept. Its a degree phenomenon.


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UNIT-IV

COORDINATION FUNCTIONS INORGANIZATION

DEPARTMENTALIZATION

HOW TO GROUP JOBS TOGETHER SO THE TASKS CAN BE


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HOW TO GROUP JOBS TOGETHER SO THE TASKS CAN BECOORDINATED

BY FUNCTION (or TASK)MANUFACTURING, MARKETING, HUMAN RESOURCES, ACCOUNTING

BY GEOGRAPHY OR TERRITORYWESTERN DIVISION, CANADIAN DIVISION, EUROPEAN DIVISION

BY PRODUCT OR BUSINESS LINEBICYCLES, MUSICAL INSTRUMENTS, TABLEWARE, BUILDING SUPPLIES

BY PROCESS (Sequential)CASTING, GRINDING, SANDING, FINISHING, PACKING

BY CUSTOMER

RETAIL, WHOLESALE, GOVERNMENT, INDUSTRIAL

WITHIN A SINGLE COMPANY, SEVERAL DIFFERENT APPROACHES TODEPARTMENTALIZATION MAY CO-EXISTFOR EXAMPLE:

Accounting is functionally organized, Marketing is by customer withinterritory, Manufacturing is by process, and Research & Development is byproduct.

THE NEED FOR COORDINATION

If d t t d k i t d d t th t


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If departments and work groups are interdependent; the greaterthe need for coordinationespecially if the departments are

decentralized.

Pooled interdependence When units operate with little interaction; their output is simply

pooled at the organizational level.

Sequential interdependence When the output of one unit becomes the input of another unit in

sequential fashion.

Reciprocal interdependence When activities flow both ways between units.

ARE STRUCTURAL COORDINATING MECHANISMS NEEDED?

Can we rely on the hierarchy, rules and procedures, and an occasionalcommittee meeting to coordinate across these boundaries?

STRUCTURAL COORDINATING MECHANISMS

The Managerial Hierarchy


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The Managerial Hierarchy Going up the hierarchy (chain of command) to find a manager with

the authority to make the decisions that affect the interdependentunits.

Rules and Procedures Coordinating routine activities via rules and procedures that set

priorities and guidelines for actions.

Liaison Roles Designating a specific manager who will facilitate the flow of

information to the interdependent units by acting as a common pointof contact.

Task Forces (Temporary problem-solving groups) Used with multiple units when coordination is complex requiring

more than one individual and the need for coordination is acute.

Committees disbanded when the need for coordination has been met.

Integrating Departments (Permanent structures) Permanent organizational units that maintain internal integration and

coordination on an ongoing basis.

May have authority and budgetary controls.


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Types of Leaders Leader by the position achieved

Leader by personality, charisma

Leader by moral example

Leader by power held

Intellectual leader

Leader because of ability to accomplish things


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Managers vs. LeadersManagersFocus on things

Do things right

Plan

Organize

DirectControl

Follows the rules

LeadersFocus on people

Do the right things

Inspire

Influence

MotivateBuild

Shape entities


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Leadership StylesDelegating

Low relationship/ lowtask

ResponsibilityWilling employees

Participating

High relationship/low task

Facilitate decisions

Able but unwilling

Selling High task/high

relationship

Explain decisionsWilling but unable

Telling

High Task/Lowrelationship

Provide instruction

Closely supervise

Group Communication

Group: Three or more individuals who interact over time, depend on each


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other, and follow shared rules of conduct in order to reach a common goal.

Ideal size: 4-7

Team: Special type of group characterized by different andcomplementary resources of members and a strong sense of collectiveidentity.

Group Communication

1 Cohesion

Factors that affect Group Communication


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1. Cohesion

2. Group Size

3. Power Relationships

4. Interaction PatternsChain

WheelAll-Channel

5. Group Norms: Rules v. Norms

6. Cultural Differences

7. Leadership Styles: Democratic, Autocratic,

Laissez Faire

Group Communication

T f G C i ti


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Types of Group Communication

Task

ProceduralClimate

Egocentric

Group Communication

Types of Groups


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Types of Groups

LearningGroup

GrowthGroup

Problem-SolvingGroup

SocialGroup

Group Communication

D i i M ki i G


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Decision Making in Groups

Consensus: Win-Win

Voting: Win-Lose

Compromise: Lose-Lose

Authority Rule/GroupRatification

Group Communication

Agenda for Decision Making


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Agenda for Decision Making

Define the Problem

Analyze the Problem

Establish Criteria

Generate Solutions

Select Best Solution

Implement Decision

Action Plan to Monitor andFine-tune

Group CommunicationRoles in Groups


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FUNCTIONAL ROLES

Content and Relational

DYSFUNCTIONAL ROLES

Relational

Initiator/Contributor

Information Seeker

Opinion Seeker

Elaborator/Clarifier

Coordinator

Diagnostician

Evaluator/Critic

Supporter

Tension Reliever

Harmonizer

Follower

Blocker

Aggressor

Deserter

Dominator

Recognition Seeker

Joker

Cynic

Controlling as a Management

i


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Function Controlling

A process of monitoring performance and taking actionto ensure desired results.

It sees to it that the right things happen, in the rightways, and at the right time.


F i


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Done well, it ensures that the overall directions ofindividuals and groups are consistent with short andlong range plans.

It helps ensure that objectives and accomplishments areconsistent with one another throughout anorganization.


F i


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It helps maintain compliance with essentialorganizational rules and policies.

Th C t l P


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159

The Control Process Establish objectives and standards.

Measure actual performance.

Compare results with objectives and standards.

Take necessary action.

E t bli h Obj ti d St d d


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Establish Objectives and Standards

The control process begins with planning and theestablishment of performance objectives.

Performance objectives are defined and the standardsfor measuring them are set.

Comparing Results with Objectivesand Standards


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The comparison of actual performance withdesired performance establishes the need for

action.Ways of making such comparisons include:

Historical / Relative / Engineering

Benchmarking

Taking Corrective Action


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g

Taking any action necessary to correct orimprove things.

Management-by-Exception focuses managerialattention on substantial differences betweenactual and desired performance.

Taking Corrective Action


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g

Management-by Exception can save the managerstime, energy, and other resources, and concentratesefforts on areas showing the greatest need.

There are two types of exceptions: Problems - below standard

Opportunities - above standard

Organizational Control Systems


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Organizational Control Systems Management Processes

Strategy and objectives Policies and procedures Selection and training Performance appraisal Job design and work structures Performance modeling, norms, and organization culture



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Compensation and Benefits Attract talented people and retain them. Motivate people to exert maximum effort in their

work. Recognize the value of their performance

contributions.



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Employee Discipline Discipline is defined as influencing behavior through

reprimand. Progressive Discipline ties reprimand to the severity

and frequency of the employees infractions. Positive Discipline tries to involve people more

positively and directly in making decisions to improvetheir behavior.

The Hot Stove Rule


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The Hot Stove Rule

Immediate

Focus on activity notpersonality

Consistent

Informative

Occur in a supportivesetting

Support realistic rules

To be Effective Discipline Should be:

Operations Management and

Control


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Control

Statistical Quality Control Based on the establishment of upper and lower

control limits, that can be graphically andstatistically monitored to ensure that products meetstandards.


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Thank You and Wish You

all The Best

Mgt Principles

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