Management Theory & Practice : MABP CHAPTER 1 1 Management Theory & Practice Definition:
Management is the
“Process of working with and through individuals and groups and other resources to accomplish goals” Kenneth Blanchard
Process of designing and maintaining an environment in which individuals, working together in groups efficiently accomplish selected goals – Harold Koontz et.al. Slide 2: MABP CHAPTER 1 2 As Managers people carry out the managerial functions of planning, Organizing, Staffing, Leading, and controlling
Management applies to any kind of organization
It applies to managers at all organizational levels
The aims all managers is the same- Profit maximization
Managing is concerned with productivity – This implies Effectiveness and Efficiency Slide 3: MABP CHAPTER 1 3 Management is absolutely essential when:
There is a scarcity of resources
There is a need to enhance effectiveness and efficiency
We need to adhere to time schedules
Where there is societal obligation/social responsibility
Where there is economic compulsions or profit motives
When there are new opportunities
When there are global challenges Challenges Facing Management : MABP CHAPTER 1 4 Challenges Facing Management Past:
Restructuring the organization
Meet the competitive challenges
“Lean and Mean” organization which offered short run benefits in terms of lowered costs and improved productivity. Present:
Knowledge based organization
Dramatically changing environment
New people oriented solutions
Modern organizations which aim at long term benefits – Survival, Cu : : MABP CHAPTER 1 5 : Specific trends that reshape the workplace:
Traditional hierarchical organizations will give way to a variety of organizational forms, the network of specialists being the foremost of these.
Technicians and knowledge workers will replace manufacturing operatives as the worker elite
The vertical division of labor will be replaced by horizontal division
Work itself will be redefined : Constant learning, more higher order thinking, less of a 9-5 routine configuration
The paradigm (model) of doing the business will shift from making a product to providing a service. Slide 6: MABP CHAPTER 1 6 “We are in the midst of a world wide, fundamental shift in Management Philosophy and Practice. The Traditional resource based organization of the past is giving way to the emerging knowledge based organization”
Architect of Learning Organizations Slide 7: MABP CHAPTER 1 7 PLANNING
Select goals and ways
to attain them LEADING
Use influence to
Monitor activities to
Make corrections Resources
responsibility The Process of Management Nature and Purpose of Management : MABP CHAPTER 1 8 Nature and Purpose of Management Functions of Management:
Controlling Nature and Purpose of Management : MABP CHAPTER 1 9 Nature and Purpose of Management Managerial Roles identified by Mintzberg:
The Liaison Role
The Recipient Role
The Disseminator Role
The spokesperson Role
The Entrepreneurial role
The Disturbance Handler role
The Resource Allocator Role
The Negotiator Role Management – A necessary evil or an essential ingredient? : MABP CHAPTER 1 10 Management – A necessary evil or an essential ingredient? A Manager’s responsibility is to take actions which create an environment for the individuals to make their best contribution towards achieving the organizational goals.
Management applies to all sizes of orgainizations
It is required for both profit or non-profit organizations
It is equally essential in both manufacturing as well as service sectors
It covers government agencies, hospitals, universities, and other organizations including religious organizations. Managerial Skills : MABP CHAPTER 1 11 Managerial Skills Technical Skills Human Skills Conceptual & Design Skills Top Management Middle Management Supervisory Skill The Goal of All Managers : MABP CHAPTER 1 12 The Goal of All Managers The primary goal of all managers is to create surplus – Profits
Accomplishment of goals in least time, money and materials.
Least personal dissatisfaction among personnel
Achievement of desired goals with available resources Productivity, Effectiveness and Efficiency : MABP CHAPTER 1 13 Productivity, Effectiveness and Efficiency Productivity=Output / Input
Effectiveness is the ease with which the objectives are achieved
Efficiency is the achievement of the ends with the least amount of resources.
“The driving force is the GOAL” Is Management – A Science or An Art? : MABP CHAPTER 1 14 Is Management – A Science or An Art? Science is a body of systematic knowledge concerning any department of nature. It involves a search for truth. The scientist studies the problems systematically under controlled conditions, carries out experiments, arrives at generalizations or laws which remain valid under all sets of circumstances, in all countries, at all times Art is a skill and technique which can be learnt through knowledge, effort and practice. It is an attempt to solve particular problems, but it does not bother about generalizations. Art is Imagination and skill blended together Is Management a Science or An Art? : MABP CHAPTER 1 15 Is Management a Science or An Art? In Management as in other sciences there are generalizations or laws, which, though not infallible (Unerring) as those of physical sciences,are nevertheless valid. Management may not be as exact and precise as physical sciences, but nevertheless it retains its character as science Forecasting future developments or visualizing a problem before it has arisen is an art. Is Management a Science or An Art? : MABP CHAPTER 1 16 Is Management a Science or An Art? Thus, Management is a blend of imagination and technicalities. On one hand it tries to solve individual problems, on the other it seeks truth in the form of generalizations and laws.
“IT IS BOTH A SCIENCE AND AN ART” APPROACHES TO THE STUDY OF MANAGEMENT : MABP CHAPTER 1 17 APPROACHES TO THE STUDY OF MANAGEMENT Empirical or Case Approach Contributions:
Studies experiences through cases. Identify success and failures Limitations:
Situations are all different. No attempt to identify principles.
Limited value for developing management theory Slide 18: MABP CHAPTER 1 18 Interpersonal Behavior Approach Contributions:
Focus on Interpersonal behavior, human relations, leadership, and motivation. This is purely based on Psychology Limitations:
Ignores planning, organizing, and controlling. Psychological training alone is not enough to become an effective manager. Slide 19: MABP CHAPTER 1 19 Group Behavior Approach Contributions:
Emphasis on behavior of people in groups.
Based on sociology and social psychology
Study of large groups is often called organizational behavior Limitations:
Not very well integrated with management concepts
There is a need for closer integration with organization structure design, staffing etc. Slide 20: MABP CHAPTER 1 20 Decision Theory Approach Contributions:
Focuses on Decision Making Units and processes.
Boundaries are no longer clearly defined. Limitations:
There is more to managing than making decisions.
Focus is too narrow and too wide. Slide 21: MABP CHAPTER 1 21 Systems Approach Contributions:
Has Broad Applicability
Systems have boundaries but they interact with the environment.
Organizations are open systems
Recognizes the importance of all functions of management Limitations:
Analysis of interrelatedness of systems and subsystems as well as the interactions of with their external environment. Slide 22: MABP CHAPTER 1 22 Contingency or Situational Approach Contributions:
Managerial practices depend on circumstances or situations
This Theory recognizes the influence of given solutions on organizational behavioral patterns Limitations:
Managers have long realized that there is no one best way to do things.
Determining all relevant factors and showing their relationship is difficult
Can be very complex Slide 23: MABP CHAPTER 1 23 Managerial Roles Approach Contributions:
This theory propounds that Managers have three important roles:
Decision Roles Limitations:
Small Sample Size in the study
Some activities were not managerial
Recognizes Management functions
Has missed some important functions like employee appraisal Slide 24: MABP CHAPTER 1 24 McKinsey’s 7S Framework Contributions:
The Seven S’s are:
Terms used are not precise
Topics are not discussed in great depth Slide 25: MABP CHAPTER 1 25 Operational Approach Contributions:
This approach attempts to develop the science and theory of management by drawing upon concepts, principles, techniques, and knowledge from other fields. Limitations:
Does not identify coordination as aseparate function.
Coordination is the essence and purpose of managing Systems Approach to Operational Management : MABP CHAPTER 1 26 Systems Approach to Operational Management Reenergizing the system INPUTS Transformational
Process OUTPUT External
Environment Inputs and Claimants : MABP CHAPTER 1 27 Inputs and Claimants People – Individuals and groups with varying demands
Employees demand higher pay, more benefits and job security
Customers demand safe and reliable products at reasonable prices
Suppliers want assurance that their products will be bought
Stock holders want higher return and security for their money
Government wants taxes
Society wants maximum jobs with minimum pollution
“Many of these claims are incongruent but the manager’s is to integrate the legitimate the objectives.” The Transformation Process : MABP CHAPTER 1 28 The Transformation Process Managers transform the inputs in an effective and efficient into outputs Transformation has diverse perspectives:
Human Behavior school – Interpersonal relationships,
Social systems theorists – Concentration of social Interactions
Decision Theorists – Set of decisions
“Organizing Managerial Knowledge is the key to performance success”
Communication is essential to all phases of managerial process because:
It integrates the mangerial functions
It links the enterprise with the external environment External Variables and Outputs : MABP CHAPTER 1 29 External Variables and Outputs Effective managers will always monitoring the environment and be proactive to the changes they percieve
The Task of the managers is to secure inputs to the enterprise and translate them into outputs through the managerial functions, with due consideration for external variables.
The outputs of an enterprise could be identified as Products, Services, Profits, Satisfaction, Goal integration Major Classification of Management Approaches and their Contributors : MABP CHAPTER 1 30 Major Classification of Management Approaches and their Contributors Major Classification of Management Approaches and their Contributors : MABP CHAPTER 1 31 Major Classification of Management Approaches and their Contributors Pre-classical Contributors to Management Thought : MABP CHAPTER 1 32 Pre-classical Contributors to Management Thought A BRIEF OVERVIEW OF CLASSICAL THEORIES : MABP CHAPTER 1 33 A BRIEF OVERVIEW OF CLASSICAL THEORIES Contributions of Scientific Management : MABP CHAPTER 1 34 Contributions of Scientific Management Develop a science for each element of a job to replace old rule of thumb methods. (Time Study)
Scientifically select employees and then train them to do the job as described
Supervise employees to make sure they follow the prescribed methods for performing their jobs
Continue to plan the job but use workers to actually get the work done
Taylor’s functional organization for multi skilling
Taylor’s differential piece rate system Limitations of Scientific Management : MABP CHAPTER 1 35 Limitations of Scientific Management Scientific Management Principles tackle problems at operational level and not at management level and focus problems from an engineering point of view.
This movement overlooked the social needs and emphasized the economic and physical needs
Totally ignored the human desire for job satisfaction – working conditions, job content etc. Henry Fayol’s Administrative Theory (1841-1925) : MABP CHAPTER 1 36 Henry Fayol’s Administrative Theory (1841-1925) Business Operations of an Organization:
Technical-Producing and Manufacturing products
Commercial – Buying, selling & exchange
Financial – Search for and optimal use of capital
Security – Protecting employees and property
Accounting – Recording and taking stock of costs,, Profits, liabilities, maintaining balance sheets, and compiling statistics
Managerial – Planning, organizing, commanding coordinating, and controlling Fayol’s fourteen principles of management : MABP CHAPTER 1 37 Fayol’s fourteen principles of management Division of work based on specialization
Authority and Responsibility
Unity of command
Unity of direction
Subordination of individual interest to general interest
Stability of tenure
Espirit de corps Contributions of the Behavioral Movement : MABP CHAPTER 1 38 Contributions of the Behavioral Movement Elton Mayo And Roethlisberger’s Hawthorne Studies : MABP CHAPTER 1 39 Elton Mayo And Roethlisberger’s Hawthorne Studies Illumination Experiments
Illumination Independent variable
Performance Dependent Variable
Relay Room Experiments
Working conditions, Payment plans, Hours of work
Bank Wiring Experiments
Standard output 2.5 units 7312 connections
Actual output 2.0 units Elton Mayo And Roethlisberger’s Hawthorne Studies : MABP CHAPTER 1 40 Elton Mayo And Roethlisberger’s Hawthorne Studies Douglas Mc Gregor’s Theory X and Theory Y : MABP CHAPTER 1 41 Douglas Mc Gregor’s Theory X and Theory Y Peter Drucker (1909 – 2005) –Management Expert, Author and Teacher : MABP CHAPTER 1 42 Peter Drucker (1909 – 2005) –Management Expert, Author and Teacher Modern Management Theory is a serious discipline
He influenced or created every facet of its application including decentralization, privatization, and empowerment.
Contributed the concept of Knowledge worker.
Has written on how public and private organizations should operate ethically and morally.
He respected the values of education, personal responsibility and social accountability Contributions of Peter Drucker: : MABP CHAPTER 1 43 Contributions of Peter Drucker: He created an unprecedented focus on human capital management, shaping the way people are managed and deployed.
His mission was to help other people achieve their goals – assuming that they are not immoral or unethical.
He recognized that productivity is not the responsibility of the worker alone but is the responsibility of the management also.
He organized the host of ideas about management contributed by other writers into a discipline that could be taught and practiced
His writing immensely influenced all kinds of leaders Social Responsibility and Social Responsiveness : MABP CHAPTER 1 44 Social Responsibility and Social Responsiveness “Corporate social responsibility is seriously considering the company’s actions on the society.”
“Social Responsiveness is the ability of a corporation to relate its operations and policies to the social environment in ways that are mutually beneficial to both the company and the society” (HOW?)
These concepts are equally applicable to:
Enterprises other than businesses.
Relationships within the enterprise. Arguments For Social Involvement Of Business : MABP CHAPTER 1 45 Arguments For Social Involvement Of Business Business has to respond to the changing needs of the society
Society gains through better neighborhood and employment opportunities; business benefits from a better community – Employees and customers
Social Involvement minimizes governmental regulation and intervention resulting in greater freedom and flexibility in decision making.
Business has great deal of power and should be matched with equal amount of responsibility. Arguments For Social Involvement Of Business : MABP CHAPTER 1 46 Arguments For Social Involvement Of Business Modern society is an interdependent system and the internal activities of an enterprise have an impact on the external environment.
Social involvement creates a good public image.
Business can and should solve problems which others cannot because they have a host of novel ideas and novel methods.
Business should use its human and capital resources to solve the problems of the society.
Better to prevent the social problems than to cure them. Help the unemployed instead of coping with them. Arguments Against Social Involvement Of Business : MABP CHAPTER 1 47 Arguments Against Social Involvement Of Business Primary task is to maximize profits by strictly focusing on economic activities. Social involvement can reduce economic efficiency.
Society ends up paying for the social involvement of business through higher prices.
Social involvement can weaken international balance of payment and reduces competitiveness in the international markets.
Social involvement would enhance the power and influence of business Arguments Against Social Involvement Of Business : MABP CHAPTER 1 48 Arguments Against Social Involvement Of Business Business people lack the social skills to deal with the problems of the society.
There is no accountability on the part of the business enterprise towards the society.
Should it be a Reaction or Pro-action?
Practice ways of anticipating developments through forecasts.
No enterprise should wait for problems to develop before preparing to face them.
There will be a lot of disagreements among groups with different viewpoints. Discharging the Social Responsibility : MABP CHAPTER 1 49 Discharging the Social Responsibility “Pro-action is an essential part of the planning process”
Role of Government:
Social changes can be implemented only by enactment of legislations
Contributing to the solution of social problems does not always involve expense
Society needs the force of legislation to get improvements underway. Discharging the Social Responsibility : MABP CHAPTER 1 50 Discharging the Social Responsibility The influence of values and performance criteria
Managers want their performance positively appraised – They seek approval.
If success is measure in quantifiable terms, Managers tend to strive for excellence
If success is measured in achievement of certain objectives then mangers will strive to achieve them.
Managers will respond to socially approved values and will give priority to those held in high esteem. Classification of social values and rewarding managers for their success is a must. Discharging the Social Responsibility : MABP CHAPTER 1 51 Discharging the Social Responsibility The Social Audit:
Social Audit is defined as a commitment to systematic assessment of and reporting on some meaningful, definable domain of the company’s activities that have social impact.
Required by Govt. – Pollution control, Product performance
Voluntary social programs Discharging the Social Responsibility : MABP CHAPTER 1 52 Discharging the Social Responsibility It is difficult to determine what areas the social audit should encompass
Another difficulty is to determine the amount of money an enterprise spends in selected areas. But cost alone is an inadequate measure. It does not necessarily show the results of social involvement
There is ample evidence that many companies and other organizations honestly attempt to address themselves to this challenge.