MANAGEMENT

DEFINITION : by Peter Drucker

Function of Managers is to give Directions, provide Leadership & Decide how to use Organisational Resources to accomplish Goals

MANAGEMENT DEFINITION : by Mary Parker Follet

Management is the Art of getting things done through People.

SCOPE OF MANAGEMENT
Management is an EFFECTIVE RESOURCE along with Land, labour & Capital ; effective use of:
Men Material Money Machines Methods

SCOPE OF MANAGEMENT
Management is a SYSTEM OF AUTHORITY
Rule Making & Rule Enforcing Body Web of authority relationships

Management as a CLASS or ELITE

CHARACTERISTICS of MANAGEMENT
GOAL-ORIENTED UNIVERSAL SOCIAL PROCESS GROUP ACTIVITY SYSTEM OF AUTHORITY SCIENCE & an ART MULTIDISCIPLINARY

IMPORTANCE of MANAGEMENT
OPTIMUM USE OF RESOURCES

EFFECTIVE LEADERSHIP & MOTIVATION

SOUND INDUSTRIAL RELATIONS ACHIEVEMENT OF GOALS CHANGE & GROWTH

IMPORTANCE of MANAGEMENT
IMPROVES STANDARD OF LIVING
SCARCE RESOURCES EFICIENTLY USED FOR PROFITS SURVIVAL INSPITE OF CHANGES EXPLOITING NEW IDEAS DEVELOPING EMPLOYEE TALENTS FOR PEAK PERFORMANCE

MANAGERIAL ROLES
Informational
Monitor Disseminator Spokesperson Figurehead Leader Liaison Entrepreneur Disturbance Handler Resource Allocator Negotiator

Interpersonal

Decisional

EVOLUTION OF MANAGEMENT THOUGHT

CLASSICAL PERSPECTIVE: BUREAUCRATIC ORGANISATIONS ( Max Weber): HIERARCHY DIVISION OF WORK; specialised jobs RULES & PROCEDURE RECORDS IMPERSONAL RELATIONSHIPS ADMINISTRATIVE CLASS; beaurocrats

EVOLUTION OF MANAGEMENT THOUGHT SCIENTIFIC MANAGEMENT (Taylor):

Scientific task planning Time & motion studies Standardisation Differential Piece rate Functional Foremanship

EVOLUTION OF MANAGEMENT THOUGHT

ADMINISTRATIVE THEORY (HENRY FAYOL):

Division of Work; Specialisation of labour & productivity Authority; must accompany responsibility Discipline; systemmatic functioning Unity of Command; each subordinate having one Boss Unity of Direction; all efforts focussed to Orgns Goal Subordination of individual interests to organisations interest Remuneration; fair

EVOLUTION OF MANAGEMENT THOUGHT ADMINISTRATIVE THEORY (HENRY FAYOL): Balance between centralisation & decentralisation concentration vs. distribution of power Scalar chain; observe Formal chain of Command, Top to Bottom Order; orderly arrangement of men & material Equity; fair treatment Initiative; opportunity to initiate & implement Plans Stability & tenure of Personnel Esprit de Corps; Strength in Unity

EVOLUTION OF MANAGEMENT THOUGHT

NEO-CLASSICAL / HUMAN RELATIONS PERSPECTIVE: Hawthorne experiments Illumination Experiments Financial Incentives Experiments Conclusion: Special Attention, feeling of Belongingness & sympathetic Supervision are the motivating factors rather than physical working conditions / financial incentives

HUMAN RELATIONS AS A REFINEMENT

CLASSICAL THEORY IMPERSONAL ORGNS O.B. PRODUCT OF RULES FOCUS IS ECO NEEDS OF WORKERS AUTHORITARIAN PRACTICES RESULT: WORK ALIENATION DISSATISFACTION NEO CLASSICAL THEORY ORGNS A SOCIAL SYSTEM O.B. PRODUCT OF FEELINGS FOCUS IS EMOTIONS DEMOCRATIC PRACTICES RESULT: HAPPY EMPLOYEES &HIGHER PRODUCTIVITY

EVOLUTION OF MANAGEMENT THOUGHT

BEHAVIOURAL SCIENCES THEORY:

Elton Mayo, Abraham Maslow, Douglas Mcgregor People inherently love work People are more self-driven & creative than opportunities given Create Positive Work Environment
Clearly defined Goals Incentives designed to Improve Performance Participative decisions Conflicts confronted openly

BEHAVIOURAL SCIENCES; A REFINEMENT

HUMAN RELATIONS People want to Belong Seek participation on Routine matters Subordinates involvement will increase belongingness BEHAVIOURAL SCIENCES People want to Belong & Contribute Participation in Routine plus Important Matters Subordinates involvement will increase productivity, quality of decision making, self-direction & motivation

EVOLUTION OF MANAGEMENT THOUGHT

QUANTITATIVE APPROACH:
Use of maths & stats for managerial decision making Criteria such as costs, revenues,return on investment etc determine decision making Focus: Computer based MIS

EVOLUTION OF MANAGEMENT THOUGHT

MODERN MANAGEMENT THOUGHT:
Mary Parker Follet Constructive Conflict Law of the Situation; Market conditions Group Ethics over Individualism Authority & Responsibilty

EVOLUTION OF MANAGEMENT THOUGHT Peter Drucker:

MBO; Joint Goal Setting Decentralisation; criticised functional specialisations & favoured self contained independent Product divisions Structure; reduction of Layers Executive Development

MANAGEMENT IN THE NEW WORKPLACE (CHARACTERISTICS)

OLD WORK PLACE RESOURCES:PHYSICAL ASSETS WORK: STRUCTURED WORKERS: LOYAL EMPLOYEES NEW WORK PLACE BITS; INFO, IDEAS FLEXIBLE, VIRTUAL EMPOWERED EMPLOYEES, FREE AGENTS, RESPOD TO CHANGING MARKETS,COMPETITION, SEIZE OPPORTUNITIES & SOLVE RECURRING PROBLEMS

MANAGEMENT IN THE NEW WORKPLACE (CHARACTERISTICS)

OLD WORK PLACE STRUCTURE: TALL HIERARCHY DECISION MAKING: CENTRALISED WORK: REAL NEW WORK PLACE FLAT DECENTRALISED VIRTUAL TEAMS,FLEXI TIME EX: IBM needs to staff a Project;
Team raised consisting of suppliers, customers, interim Managers (skill; risk takers, quick learners, live with ambiguity & change, share knowledge

MANAGEMENT IN THE NEW WORKPLACE (FORCES)

Old Work Place TECHNOLOGY: MECHANICAL WORKFORCE: HOMOGENEOUS VALUES: STABILITY, EFFICIENCY EVENTS; CALM, PREDICTABLE New Work Place DIGITAL, E-BUSINESS DIVERSE(GLOBALISATION) CHANGE, SPEED

TURBULENT, UNPREDICTABLE

MANAGEMENT IN THE NEW WORKPLACE (MANAGEMENT COMPETENCIES)

OLD WORK PLACE
Leadership : autocratic Focus: profits Doing work: individuals Relationships: conflicts Design: efficiency in performance

NEW WORK PLACE

EMPOWERING CONNECT WITH CUSTOMERS, EMPLOYEES TEAMS COLLABORATION BUILD LEARNING ORGANISATION; VALUES EXPERIMENTATION, RISK TAKING, TECHNOLOGY & KNOWLEDGE SHARING Ex:WIPRO;writes software, performs consulting work,integrates back-office solutions,gives techn support

PLANNING & GOAL SETTING

GOAL- DEFINES PURPOSE OF EXISTENCE OF THE ORGANISATION
PLAN- BLUEPRINT FOR SPECIFYING RESOURCE ALLOCATIONS,SCHEDULES, & TASKS

PURPOSE OF GOALS & PLANS

LEGITIMACY: PURPOSE OF EXISTENCE SOURCE OF MOTIVATION & COMMITMENT:identification with Co, reduces uncertainty & clarifies goals for accomplishment RESOURCE ALLOCATION:employees, equipment, Capital GUIDE TO ACTION:sense of direction RATIONALE FOR DECISIONS:on roles, performances, structure, products,expenses

PURPOSE OF GOALS & PLANS

STANDARDS FOR PERFORMANCE:specifies desired outcomes & performance criteria

SINGLE USE & STANDING PLANS

SINGLE USE PROGRAMS:
PLANS TO ACHIEVE ONE-TIME GOALS LARGE IN SCOPE EX:BLDNG NEW HQ, CONVERTING ALL PAPER FILES INTO DIGITAL

STANDING PLANS

POLICY:
BROAD RULES, GENERAL GUIDES TO ACTION EX: SEXUAL HARRASSMENT POLICY, EMAIL USAGE POLICY

PROJECT:
PLANS TO ACHIEVE ONE-TIME GOALS SMALLER IN SCOPE EX:RENOVATING OFFICE, SETTING UP INTRANET

PROCEDURE: PRECISE STEPS TO ATTAIN

GOALS EX:EMPLOYEE GRIEVANCES, HANDLING REFUNDS

STRATEGIC MANAGEMENT
SET OF DECISIONS USED TO FORMULATE STRATEGIES TO PROVIDE A FIT BETWEEN ORGANISATION & ITS ENVIROMENT TO ACHIEVE ORGANISATIONAL GOALS

GRAND STRATEGY
GROWTH:
INTERNALLY: BY EXPANSION;NEW PRODUCTS, NEW MARKETS EXTERNALLY:ACQUISITIONS RELATED TO CURENT BUSINESSES EX: CITIBANK & TRAVELERS MERGE TO FORM CITICORP

GRAND STRATEGY
STABILITY:
AFTER RAPID GROWTH INTEGRATE BUSINESSES

RETRENCHMENT:
DECLINE IN DEMAND leads to FORCED LIQUIDATION OF BUSINESSES

SM PROCESS
EVALUATE EXISTING MISSION, GOALS &PLANS (SITUATIONAL ANALYSIS) SWOT: INTERNAL STRENGTHS & WEAKNESSES: P&L STATEMENTS, BUDGETS, EMPLOYEE MORALE SURVEYS MARKET SHARE CUSTOMER SATISFACTION DISTRIBUTION CHANNELS PROFIT-MARGINS RETURN ON INVESTMENT QUALITY CONTROL SYSTEM STATE OF TECHNOLOGY SALES FORCE TURNOVER

SM PROCESS
EXTERNAL OPPORTUNITIES & THREATS:
COMPETITORS CUSTOMERS SUPPLIERS LABOUR SUPPLY TECHNOLOGICAL DEVELOPMENTS POTICAL & INTERNATIONAL EVENTS SOCIO CULTURAL CHANGES

SM PROCESS
FORMULATE STRATEGY:
CORPORATE STRATEGY:BOSTON CONSULTING GROUP (BCG) MATRIX
STAR; HIGH MKT SHARE, HIGH BUSN GROWTH RATE CASH COWS; HIGH MKT SHARE, LOW BUSN GROWTH RATE Q MARKS; LOW MKT SHARE, HIGH BUSN GROWTH RATE DOGS; LOW MKT SHARE, LOW BUSN GROWTH RATE

SM PROCESS
MICHAEL PORTERS BUSINESS STRATEGY:
DIFFERENTIATION
CREATIVE FLAIR STRONG MARKETING CAPABILITIES REWARDS EMPLOYEE INNOVATION CORPORATE REPUTATION FOR QUALITY FLEXIBILTY IN OPERATIONS STRONG CUSTOMER LOYALTY EX: REEBOK, NIKE

SM PROCESS
COST LEADERSHIP:
STRONG CENTRAL AUTHORITY TIGHT COST CONTROLS SOPS FOLLOWED EFFICIENT PROCURING & DISTRIBUTION SYSTEMS CLOSE SUPERVISION EX:BIG BAZAAR RETAIL, LOE COST DELL COMPUTERS

SM PROCESS
FOCUS:
CONCENTRATES ON A NARROW TARGET MARKET EX: LOW-COST AIRLINES JET LITE PLYING LIMITED ROUTES & STILL MAKING PROFITS

SM PROCESS
STRATEGY IMPLEMENTATION:THROUGH CHANGES IN LEADERSHIP
PERSUASION, MOTIVATION

ORGANISATION STRUCTURE
ORGN CHARTS,DECENTRALISATION

INFO & CONTROL SYSTEMS

REVISE REWARDS, BUDGET ALLOCATIONS

HR
RECRUITMENT, LAYOFFS, TRANSFERS

ORGANISING
ORGANISING: DEPLOYMENT OF ORGANISATIONAL RESOURCES TO ACHIEVE STRATEGIC GOALS

ORGANISATION STRUCTURE: FRAMEWORK DEFINING HOW TASKS ARE DIVIDED, HOW RESOURCES ARE DEPLOYED & DEPARTMENTS COORDINATED

ORGANISING
WORK SPECIALISATION: The degree to which organisational Tasks are subdivided into individual jobs; also called division of labour. CHAIN OF COMMAND: Unbroken line of authority which links all individuals in the orgn. & specifies who reports to whom.

ORGANISING
AUTHORITY: Formal & legitimate Right of a Manager to make decisions, issue orders & allocate resources. RESPONSIBILITY: Duty to perform the Task

ORGANISING
ACCOUNTABILITY: Mechanism which makes people with Authority & Responsibility answerable to people in their Chain of Command Delegation: Process used to transfer Authority & Responsibilty to subordinates

ORGANISING
Line Dept: which performs tasks related to the Primary Goal of the orgn. Ex;Production, Sales, Accounts Staff Dept: which provides Advisory services Centralisation: location of decision making near top organisational levels Decentralisation: location of decision making near lower organisational levels

Functional Structure
President

VP-Finance

VPManufacturing

VP-Marketing

GM-Finance

GM-MFG

GM-MKTG

MGR-Finance

MGR-MFG

MGR-MKTG

Divisional Structure
PRESIDENT VP-PRODUCT 1(Consumer Product) VP-PRODUCT 2(Consumer Product)

MGR-Finance

MGRManufacturing

MGR-Marketing

MATRIX STRUCTURE
Combines both Functional & Structural features:
Functional hierarchy runs Vertically (provides traditional control within depts) Divisional reporting exists Horizontally (Provides coordination across depts)

MATRIX STRUCTURE

LEADING FOR HIGH PERFORMANCE

LEADERSHIP: the ability to influence people towards the attainment of organisational goals LEADERSHIP VS. MANAGEMENT: MANAGEMENT: promotes stability, order, problem solving, within the organisational structure & systems LEADERSHIP: promotes vision, creativity & change

LEADERSHIP VS. MANAGEMENT:

LEADERSHIP Visionary Passionate Creative Flexible Inspiring Innovative Courageous Imaginative Initiates change MANAGEMENT Rational Consulting Persistent Problem solving Tough-minded Analytical Structured Deliberated stabilizing

TRANSACTIONAL vs.TRANSFORMATIONAL LEADERSHIP

TRANSACTIONAL Clarifies role & tasks of subordinates Provides rewards Tolerant & fair Pride in smooth functioning of organisation Concern;impersonal aspects like plans, budgets

TRANSFORMATIONAL
Ability to inspire & motivate people to perform more than their capabilities through personal sacrifice Obsessed by visionary ideas to drive people Lofty visions, communicate to followers & win trust Ability to make the vision feel real, personal & meaningful to followers

Example of Transformational Leaders:

Richard Kovacevich of WELLS FARGO (Financial Institution)
For selling motivated 1st line employees with slogan;Mind share plus Heart share = Market share Rewards employees Spends time with employees interacting, giving pep talks Awarded Banker of the Year 2003; cr to his 1,40, 000 employees.

Effective Leader

COMBINE Transactional + Transformational Qualities

THE LEVEL 5 LEADER

Level 5: No ego,not pretentious,accepts respty for failures, gives cr for success,personal humility,fierce determination for orgnss success thru successn plng level 4:Effective Exec, clear vision, builds commitment for high performance Level 3: Competent Manager;sets plans & executes efficiently Level 2: Contributing Team member; team goals & Team leader
Level 1: Highly capable Individual;Talent , knowledge & skills