Unit 1_introduction.pptx

Unit 1_introduction.pptx

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  UNIT I OVERVIEW OFMANAGEMENT
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  Definition • According toHenri Fayol. • “Management is the process of planning, organizing, leading and controlling the efforts of organization members and of using all other organizational resources to achieve stated organizational goals”. • It is defined as the art of getting things done by others
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  Nature of Management 1.Multidisciplinary in nature –It draws ideas from various disciplines as economic , statistics, mathematics, psychology, sociology, anthropology. 2. Continuous process – continues till the objective is achieved. 3. Universal activity- management is not applicable to business undertakings. It is applicable to political, education,. Required when group effort is required.
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  4. Management isscience or art Definite principles of management –art Predetermined objectives can be achieved by application of these principles - science 5. Dynamic not static – adapt itself to social changes. 6. Profession – Established principles of management are being applied in practice and involves specialized training It is governed by ethical code arising out of social obligations.
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  7. Group activity– common objective and group effort 8. Aims at obtaining wealthy results – manager’s primary job is assure productivity through planning, direction and control. Rational utilization of available resources to maximize the profit is the economic function of manager. 9. Implies skills and experiences in getting things done through people. Profitable return cannot be achieved without people co-operation 10. System of authority- power to make others act in predetermined manner. Management formalizes a standard set of rules and procedure to be followed by the sub-ordinates.
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  11. Intangible –cannot be seen through eyes and evidenced by quality of organization and results. 12. Implies good leadership – manager must have ability to lead and get desired course of action from the sub-ordinates.
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  Scope of management 1.FUNCTIONAL AREAS OF MANAGEMENT Financial management includes forecasting, cost control, budgetary management, statistical control, financial planning. HR management covers marketing management, production mgt, material management, purchase management, maintenance management, office management. Marketting management includes marketting of goods, sales promotion, advertisement and publicity. Production management includes planning , quality control and inspection. Material management includes purchase of materials, issue of materials, storage and maintanence of records.
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  2. Subject matterof management- made up of basic management functions like planning, organizing, staffing, directing, controlling. 3. Inter-disciplinary approach- commerce, economics, sociology 4. Principle of management – universal applications to achieve common goals 5. Agent of change – technique of management can be improved by proper research and development. 6. The essentials of management includes scientific method, human relations, and quantitative techniques.
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  What Is Management? •Managerial Concerns – Efficiency • “Doing things right” – Getting the most output for the least inputs – Effectiveness • “Doing the right things” – Attaining organizational goals 1–9
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  Exhibit 1–3 Effectivenessand Efficiency in Management 1–10
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  Functions of Management
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  Planning Defining goals, establishing strategiesto achieve goals, developing plans to integrate and coordinate activities.
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  • Planning involves 1.Determination of goal 2. Formulating policy, rules, procedures 3. Forecasting the future based on the past and present activities.
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  Organizing •Arranging and structuring workto accomplish organizational goals.
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  Process 1. Identification andanalysis of goals 2. Assignment of duties to individual concern. 3. Follow up the activities.
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  Staffing • The selectionand training of individuals for specific job functions, and charging them with the associated responsibilities. • The act of keeping positions filled in organization structure 1–16
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  Leading/Directing Involves motivating subordinates, influencingindividuals or teams as they work, selecting the most effective communication channels
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  • Motivation, leadership,communication are three important sub functions of directing • Communication provides a proper information to the subordinates for improved and effective management. • Leadership is the process by which a manager guides and it influences the work of his subordinates.
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  Controlling Monitoring, comparing, and correcting work.
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  CONTROLLING • Checking andverifying the activities against predetermined standards. • Process of ensuring the proper activities with planned activities. PROCESS • Establishing standards • Measuring current performance • Comparing with established standards • Taking corrective action if deviation is detected
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  IS MANAGEMENT ASCIENCE OR AN ART
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  • Management isthe oldest of science and youngest of art. • Science : It is a systematized body of knowledge which establishes relationship between cause and effect
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  Characteristics of science 1.It is the existence of a systematic body of knowledge with array of principles 2. Based on scientific enquiry. 3. Principle should be verifiable. 4. It is reliable basis for predicting future events.
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  • Science isclassified as exact and inexact • Management is inexact 1. HR are different in attitudes aspirations and perceptions. So standard result are not obtained. 2. Readymade and standard solutions cannot be obtained. 3. Mgt is complex and unpredictable. 4. Every organization decisions are influenced by environment . But the environment is so complex and unexpected.
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  • Art :bringing about of desired results through the application of skills. • Entirely on the inherent capacity of a persons. • Learned from practice and experience.
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  Important characteristics ofmgt • Application of science. Putting principles into mgt. • Practice or experiences is needed to become skilful. • It is undertaken for accomplishing an end through deliberate efforts.
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  Management is theart • Because 1. Involves the use of practical knowledge and personal skills. 2. Creative. 3. Implies capacity to apply accurately the knowledge to solve the problems.
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  • Management isboth science and art • Science – because contain general principles. • Art- requires certain personal skills
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  Management vs Administration
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  1. Admn isabove mgt • According to Oliver sheldon, Milward Lansberg • Admn is concerned with decision- making and policy formulation • Mgt is concerned with execution laid down by admn
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  2. Admn isa part of mgt • Admn become a subordinate function to overall mgt function- according to E.F.L. Brech 3. Admn and mgt are same
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  S.No Admn Mgt 1.Top level function Middle or lower level function 2. Owner Employee 3. Concerned with decision making Concerned with execution of decision 4. Acts through mgt Acts through the organisation 5. Lay down board policies and principles for guidance Executes these policies into practice 6. Function is broad and conceptual Narrow and operation 7. External factors are affecting the decision Internal factors affecting the decision 8. Employer – Employee relation Entrepreneurs and owners Between employee
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  S.No Entrepreneur Manager 1.Starts business Runs the business 2. Considers various risk Does not get any risk 3. Driven by opportunity or demand in the present market Uses present available resources to produce the final product 4. Rights to implement the changes Can only follow the rules 5. Owner Hired 6. All kinds of rewards from public Fixed rewards in term of salary. 7. More risk taker Less risk taker 8. Desire for the control over the business Delegation of authority 9. One man army Leader of team
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  10. Aims toimplement creativity and innovation Establish and preserve the status of company 11. Informal and flexible Not informal 12. Sensitive in decision making Collect and wait for advice 13. Full responsible for accident and failures Avoids mistakes and failures
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  Types of Managers/Manageriallevels/Types of Management Top level Managers Middle level Managers Lower level Managers
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  Top level managementor manager  Having the authority and ultimately responsible for the entire organisation  Titles such as executive vice president,president,managing director,chief operating officier,chief executive officier or chairman of the board  Main functions are *Formulate the goals, policies & budgets *Appoint the top executives *Provide the overall direction & leadership of the company *Decide the distribution of profits
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  Middle level managers •Directly supervise other managers below them • Titles such as department head, project leader, plant managers or division manager • Main functions are *Monitor & control the operating performance of sub units and individual managers *Implement the overall organisational plans *Train, motivate & develop the supervisory level *Implement changes or strategies by top managers *Coordinate among themselves to integrate the various activities of a department
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  Lower level orsupervisory managers • Having the least authority • Responsible for work of operating employees • Main functions are, *Train & develop the efficiency of workers *Assign job to workers *Give orders & instructions *Maintain discipline & good human relations among workers *Report feedback information about workers
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  Managerial roles orroles of manager Roles of manager classified into 1.Interpersonal roles a)Figurehead b)Leader c)Liasion 2.Informational roles a)Monitor b)Disseminator c)Spokesperson 3.Decisional roles a)Entrepreneur b)Disturbance handler c)Resource allocator d)Negotiator
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  Interpersonal roles 1.Figurehead role ceremonialand symbolic duties such as Greeting visitors and signing legal documents 2.Leader Directs and motivates subordinates 3.Liasion Maintains the information link both inside & outside organisation.
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  Informational roles 1.Monitor Person whoseeks & receives information & maintains the personal contact with stakeholder. 2.Disseminator Forward information to organisation members via memos, reports and phone calls 3.Spokesperson Transmits the information to outsiders via reports, memos and speeches
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  Decisional roles 1.Entrepreneur Initiates improvementin project & identifies new ideas 2.Disturbance handler Takes corrective action during disputes 3.Resource allocator Decides who gets resources and determines priorities 4.Negotiator person who represents the department during negotiation
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  Managerial skills 1.Technical Skill 2.HumanSkill 3.Conceptual Skill(design and problem solving)
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  Technical skills • Reflectsboth understanding and a proficiency in a specialized field such as engineering , accounting or manufacturing • More important at low level mgt.
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  Human skills • Abilityof the manager to work effectively as a group member and to build cooperative team. • Know how to communicate, motivate, lead, inspire, enthusiasm and trust.
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  Conceptual skills • Alsocalled design and problem solving skills. • To understand how its various parts and function mesh together. • To foresee how changes in any one of them may affect all of the others.
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  Evolution of ManagementTheory Pre-scientific or pre-classical management period Classical management theory Administrative management of Fayol Scientific management of Taylor Bureaucratic management theory Neo classical or behavioural theory Modern theory Systems approach Contingency approach
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  1.Pre-scientific management period Certain pioneers tried to challenge the traditional character of management by introducing new ideas & approaches. 1.Robert Owen (1771- 1858)  Group Textile mills in lanark,scotland  He used Ideas of human relations  Promoter of co-operative and trade union in England  Worker’s performance based on working condition & treatment the workers  Shorter working hours, housing facilities, training workers in hygiene, education of their children, provision of canteen  Father of personnel management
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  Pre-scientific management period 2.Charles Babbage (1792- 1871) Father of modern computing Professor of maths at Cambridge university Manufactures little use of science & mathematics Accurate observation, Measurement and precise knowledge for taking business decision Profit sharing to improve productivity.
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  Pre-scientific management period 3.Henry Robinson Towne (1844- 1924) President of the famous lock manufacturing company Yale and town Combination of engineers and economists as industrial managers Successful management of industrial workers.
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  2. CLASSICAL MANAGEMENTTHEORY *Developed industrial revolution when new problems related to the factory system started to appear. *Managers don't know how to train the employees and don't know how to deal with labour dissatisfaction. *As a result classical management theory developed to find “one best way” to perform and manage task.
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  • SCIENTIFIC MANAGEMENTTHEORY • ADMINISTRATIVE MANAGEMENT THEORY • BUREAUCRATIC MANAGEMENT THEORY
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  Henri Fayol's administrativemanagement theory  It concentrates on developing the organisational structure that leads to high efficiency & effectiveness  Father of modern theory of general and industrial management Book-“The general and industrial administration” in which Fayol divides the industrial activities into 6 categories  Technical (production, manufacture)  Commercial (buying, selling, exchange)  Financial (search for and optimum use of capital)  Security (protection of property and persons)  Accounting (balance sheets, cost statistics)  Management (Planning, Organising, Co-ordinating, Directing, Controlling)
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  Henri Fayol's administrativemanagement theory  DIVISION OF WORK OR SPECIALIZATION(divide the work & already work allotted)  AUTHORITY AND RESPONSIBILITY(power & superior)  DISCIPLINE(all levels – smooth running)  UNITY OF COMMAND (receive orders and instructions from superior)  UNITY OF DIRECTION (group of activities having one head and one plan, coordinate work)  SUBORDINATION OF INDIVIDUAL TO GENERAL INTEREST (earn money)  REMUNERATION (employees and employers, satisfy the workers)  CENTRALIZATION (power is distributed subordinates)  LINE OF COMMAND/SCALAR CHAIN (instructions & orders from top to bottom)  ORDER (material & social)  EQUITY (treatment employees equally)  STABILITY OF STAFF(turnover equally)  INITIATIVE (thinking & execution of plan, employees idea also concern)  ESPRIT DE CORPS (union)
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  1.Division of work •Divide the work in proper way with reference to time • Workers on the same job acquire the sureness and accuracy which increases the output 2.Authority and responsibility • Authority- power given to the person to get the work from the subordinate • Responsibility –amount of work expected by the supervisors
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  3.Discipline • Essential forsmoothing running of organization • To Fayol discipline will result in good leadership • Fair agreement and judiciously enforced penalties for violations 4.Unity of command • Orders and instruction from one supervisor • Multiple commands-conflict • Good management should avoid dual command 5.Unity of direction • Each group of activities having the same objective with one head and one command.
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  6.Subordination of individualinterest to general interest • Employee earn money to meet his personal needs • But employee should give importance to organization interest • Organization’s interest -should develop and progress 7.Remuneration of personnel • Wage payment system should satisfy the employee 8.Centralization • Centralized- power is concentrated with one person • Decentralization- power is fully distributed • Effective management • Quick decision
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  9.Scalar chain • Instructionand order should be from top management to bottom management 10.Order • Material order- a place for everything and everything in it place • Social order- a place for every one and everyone has place 11.Equity • Treatment of employee equally • Helps to achieve the goal
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  12.Stability of tenureof personnel • High employee turnover rate is not good for the effective functioning of any organization 13.Initiative • Concern with thinking and execution of plan • Come forward with new ideas they must be encouraged by supervisors 14.Esprit- de- corps • Union is strength • Employee should be harmony (synchronization) and unity
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  Scientific management theory Developed for - Increase productivity & efficiency  One best way for a job to be done  Examining how the work process was actually accomplished  Scrutinizing the skills of the workforce 1.Frederick W.Taylor (1856-1915)  Father of scientific management  Bethlehem steel plant  Time and motion study – eliminating unnecessary motions  Shoveling & pig-iron handling  1898,47.5 ton daily & 12.5 ,500 - 140
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  Scientific management theory 2.HenryGantt (1861-1919)  Bar graph – planned & completed work of each stage of production  Based on time instead of quantity, volume or weight, the visual display chart is used.  Daily work, bonus
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  Scientific management theory F.W.Taylor’sscientific management:  Labor at Midvale steel company in U.S.A 1878  Became Chief engineer 1884  Publised Journal “price rate system” and “ shop management”  Book “principle of scientific management” in 1911  Scientific approach four types 1.Study each part of the task scientifically & develop the best method 2.Carefully select workers & train them 3.Cooperate fully with workers 4.Divide the work and responsibility
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  Bureaucratic management theory MaxWeber (1864 – 1920)  German sociologist  Specific rules were followed was important  He thought that authority should do something which was the part of person’s job & passed from individual to individual.  3 types of authority, 1.Traditional –custom or tradition(king,queen) 2.Charismatic-special personal qualities (gandhi, nehru, Dr.A.P.J Abdual Kalam) 3.Rational – position held by the supervisor (police officer, executives, supervisors)
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  Bureaucratic system ofadministration is based on the following characteristics  A well-defined hierarchy (higher control to lower level)  Division of labor and specialization (all responsibilities & particular task)  System of written rules and regulations  Impersonal relationship between managers and employees  Selection and evaluation system  Records
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  3.Behavioral management theory Pointed out Psychology and sociology in understanding of individual and group behaviour in an organisation 1.Mary Parker Follett(1868-1933) *Management ignores the employee’s contribution to the organisation. *managers are needed to coordinate and harmonize group effort rather than force and compel people.
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  2.Elton Mayo(1880-1949) *Conducted experimentsknown as Hawthorne studies  Informal groupings  Informal relationship  Patterns of communication  Patterns of informal leadership 3.Hawthorne studies(1924-1932) (i)Illumination experiment (ii)Relay assembly test room experiment (iii)Bank wiring test room experiment (iv)Mass interview programme-upward communication in an org creates a positive attitude in the work environment
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  4.Modern Theory i)System approach *Basedon belief that organisation can be visualized as system of interrelated parts or subsystems operate as a whole to achieve common goal. 1.Input 2.Transformation process 3.Output 4.Feedback 5.Environment The following terminologies important for system approach, (i)closed system –interacts less with external environment (ii)Open system - interacts more with external environment (iii) Entropy-breakdown overtime (iv)Synergy-making the output is higher *Managerial levels based on system Approach 1.Technical level 2.organizational level 3. institutional level (activities of org)
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  ii) Contingency approach *Contingencyapproach/Situational approach *Depends on experience and judgement of manager in a given organisational environment. Task of manager is to identify which technique will be suitable in particular situation under particular circumstances.  Characteristics of environment  Determine the design of an organization’s structure and control systems  Organizations in stable environment(centralized authority)  Organizations in changing environment(decentralized authority)
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  Types of Businessorganisation • Classified into 2 types, 1.Individual organisation i)Sole trades ii)partnership iii)Joint stock company iv)Co-operative v)Multinational companies 2.Government organisation i)Departmental undertaking ii)Public corporation iii)Government company state enterprises
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  1.Sole Trading • Businessunit owned and controlled by a single individual called sole trading concern • Use his own savings for his business • Purchases, sells and maintains accounts on his own • He alone enjoys all profits & losses in business • Sole trader-person who contributes capital and manages the business • According to Wheeler, The sole proprietorship is that form of business organisation which is owned & controlled by a single individual. He receives all the profits & risks all of his property in the success or failure of the enterprise.
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  Characteristics of soleproprietorship 1.One man ownership and control 2.Unlimited liability(responsiblity) 3.Enjoyment of entire profit 4.No separate legal entity 5.Simplicity 6.Self employment 7.Secrecy
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  Advantages *Easy to form& close the business *Easy for decision making *Full control of business activities *Promotes self employment of individual *Liberal legal formalities to start the business *Easy to expand or reduce the size of the business *Easy to accessibility of consumers *Easy to maintain healthy relations with employee
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  Disadvantages: 1.Limited resources 2.Short life 3.Lackof consultation 4.Risk of entire loss 5.Uncertainty
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  Partnership • Association ofpersons who agree to combine their financial resources & managerial abilities to run a business & share profits in an agreed ratio • Need for expansion of business with more capital,better supervision and control,division of work and spreading of risk. • According to Indian partnership act, The relation between person who have agreed to share the profits of a business carried on by all or any of them acting for all.
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  Features of partnership 1.Agreement 2.Multiplicityof person 3.Lawful business-legal 4.Sharing of profits 5.Contractual relations 6.Mutual agency-dual role in orgnisation 7.Unlimited liability 8.Registration 9.Common management 10.Utmost good faith
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  Kinds of partners 1.Activepartner-represents all others in business orgnisation 2.Sleeping or dormant partner- does not express his intention 3.Normal partner 4. Partner in profit only 5. Partner by estoppel- for outsiders belief 6.Sub-partner-strange to contact 7.Secret partner- whose name is not disclosed 8.Minor as a partner-below 18 years.
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  Rights of partner 1.Rightto express his option 2.Right of participation 3.Right of access to books 4.Right to share profits 5.Right to get interest on the capital 6.Right of idemnity -protection
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  Advantages: *Easy to formation *Registrationis not compulsory *Larger financial resources *Promptness in decision making *Risk of business is shared by more persons *More possibility of growth & expansion of business *Close supervision is possible and reduces wastages. *Easy dissolution
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  Disadvantages: *Unlimited liability increasesthe dissolution of firm *Lack of harmony among partners *Difficulties in expansion & modernization *lack of public faith *Limited resources *Limitation on transfer of share
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  Joint stock company •As per the definition, there must a group of persons who voluntarily agree to form a company. • Once formed the company becomes a separate legal entity with a distinct name of its own. • Its existence not affected by change of members. • According to lord justice lindleg, By a company, we mean an association of many persons who contribute money or money’s worth to a common stock and employ it in some trade or business and also share the profit and loss as the case may be arising there from.
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  Advantages *Limited liability *More stable *Sharesare freely transferable *Company can easily expand *Company is charged lesser amount of taxes *Democratic setup is made *possible for large financial resources
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  Disadvantages *Time consuming legalformalities *Lack of motivation *difficult to maintain resources *Promotion of frauds *Delayed decisions and actions
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  Types of companies (i)Onthe basis of formation (a)Statutory company-by special act of parliament (b)Registered company- companies act (c)Government company- 51 % is held by the central government (ii)On the basis of public interest (a)Private limited company-minimum paid up capital (b)Public limited company- large scale (iii)On the basis of control (a)Holding company -for ex if company A hold more than 51% of paid up share capital of company B Then A- holding company, B- subsidiary company (b)Subsidiary company
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  (iv) On thebasis of Nationality (a)Indian company (b)Foreign company (v) On the basis of Area (a)National company (b)Multi national company
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  Private limited company •Minimum paid up capital is Rs.1,00,000 • Minimum number of members is 2 • Limits the number of its members to 50 • Restricts the right to transfer the shares • Prohibits any invitation to the public to subscribe the shares
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  Public limited company •Minimum paid up capital is Rs.5,00,000 • Minimum number member is 7,the maximum is unlimited • Capital is collected from the public by issuing shares • No restriction on the transfer of shares • Company should send the financial statement to members and registrar • Must have 3 directors • Necessary to follow certain legal formalities
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  Public Enterprises • Formof business organisation owned and managed by the state government or any other public authority(departmental undertaking) • Owned and controlled by local or state or central government • Whole or most of the investment is made by the government • According to N.N.Mallya, Public enterprises are autonomous or semi autonomous corporations and companies established, owned and controlled by the state and engaged in industrial and commercial activities
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  Characteristics of publicenterprises 1.Financed by government 2.Financial Independence 3.Government management 4.Public services 5.Legislative control 6.Monopoly enterprises(eg: Railway, post & energy production enterprises)
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  Merits: *Helps in implementinggovernment policy *Complete government control *Income for government *Useful for developing enterprises *Funds are properly used Demerits: *Excessive government interference *Shortage of competent staff *Tax burden to public *Delay
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  Public corporation • Createdby special act of state or central government (ONGC,FCI) • Such act defines the power, duties, privileges and pattern of management of these organisation • Power of government but possessed with flexibility & initiative of private enterprises
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  Merits: *Finance from government *Internalautonomy *Free from government interference *Protect public welfare *Service to society *Flexibility Demerits: *Limited autonomy *Misuse of power *Inefficient operation *Lack of interest *Government control
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  Cooperative Organization • Itis a voluntary association of persons for mutual benefits and it aims are accomplished through self help and collective effort. • Every state government has appointed a registrar of co-operative societies for registering controlling and supervising the societies.
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  Organization culture • Canbe characterized in a similar way we classify people, for example rigid, friendly. • Attributes and behavior can be predicated with the use of these behaviors. • Organization culture prescribes norms and procedures for the employee’s actions towards client’s competitors, supervisors, subordinates.
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  • Organization cultureis a system of shared assumptions, values, beliefs which govern how people behave in organization. • These shared values have a strong influence on the people in the organization and dictate how they dress, act, and perform their jobs. • This culture provides guidelines and boundaries for the behavior of the people in one organization. • The attributes and behavior of the people in one org will vary in other organization.
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  Definition • A systemof informal rules that spells out how people have to behave most of the time. - Deal and Kennedy • Organisational culture is a relatively uniform perception held by organisation. It has common characteristics. - Stephen P. Robbins
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  Characteristics of organizational culture •Risk tolerance- employees are encouraged to be innovative and risk taking • Direction – org culture creates clear objective and performance expectations. • Unit integration – org culture leads to coordination
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  • Management contract– clear communication assistance and support to sub-ordinates • Identity – members identify the org as whole rather than particular work group • Reward system- salary increase, incentives, promotions • Conflict tolerance – conflicts and criticism openly • Control – rules and regulation to control employ behaviour • Communication patterns- org communication are restricted to the hierarchy of authority • Individual initiative – resposibility , freedom
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  Sources of culture •Rituals • Language • Material symbols • Stories
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  1.Rituals – arerepetitive sequence of activities which express and reinforce the key values of organization • If an organization organizes annual award meeting, sales persons are awarded for achieving the targets • The meeting conveys achieving target and performing better through hard work is important