Ch1 Managemnet and Organization

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Introduction Introduction Management is a critical element in the Management is a critical element in the economic growth of a country. economic growth of a country. There is a need of bringing together There is a need of bringing together the people, money, material and the people, money, material and machines for this purpose. machines for this purpose. A country with enough capital, manpower A country with enough capital, manpower and other natural resources can still and other natural resources can still be poor if it does not have competent be poor if it does not have competent managers to combine and coordinate managers to combine and coordinate these resources. these resources. Peter Drucker rightly observes that Peter Drucker rightly observes that without management, a country's without management, a country's resources of production remain resources of production remain resources and never become production. resources and never become production.

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Transcript of Ch1 Managemnet and Organization

Page 1: Ch1 Managemnet and Organization

IntroductionIntroductionManagement is a critical element in the economic growth Management is a critical element in the economic growth

of a country. of a country. There is a need of bringing together the people, money, There is a need of bringing together the people, money,

material and machines for this purpose.material and machines for this purpose.A country with enough capital, manpower and other A country with enough capital, manpower and other

natural resources can still be poor if it does not have natural resources can still be poor if it does not have competent managers to combine and coordinate these competent managers to combine and coordinate these resources. resources.

Peter Drucker rightly observes that without management, Peter Drucker rightly observes that without management, a country's resources of production remain resources and a country's resources of production remain resources and never become production.never become production.

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Management coordinates current organizational Management coordinates current organizational activities and plans future ones. activities and plans future ones.

In the words of Claude S. George, management is In the words of Claude S. George, management is "the central core of our national as well as "the central core of our national as well as personal activities, and the way we manage personal activities, and the way we manage ourselves and our institutions reflects with ourselves and our institutions reflects with alarming clarity what we and our society will alarming clarity what we and our society will become."become."

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DEFINITION OF MANAGEMENTDEFINITION OF MANAGEMENT Mary Parker Follett. - Management, she says, is Mary Parker Follett. - Management, she says, is

the "art of getting things done through people." the "art of getting things done through people." A manager is one who contributes to the A manager is one who contributes to the

organization's goals indirectly by directing the organization's goals indirectly by directing the efforts of others.efforts of others.

Weaknesses:Weaknesses: It uses the word 'art' in defining management. It uses the word 'art' in defining management. Art deals with the application of knowledge. Art deals with the application of knowledge. Management is not merely application of Management is not merely application of

knowledge. knowledge. It also involves acquisition of knowledge i.e., It also involves acquisition of knowledge i.e.,

science. science.

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George R. Terry defines management as a process George R. Terry defines management as a process "consisting of planning, organizing, actuating and "consisting of planning, organizing, actuating and controlling, performed to determine and controlling, performed to determine and accomplish the objectives by the use of people and accomplish the objectives by the use of people and resources." resources."

The four management activities included in this The four management activities included in this process are: planning, organizing, actuating and process are: planning, organizing, actuating and controlling. controlling.

This definition states that management involves This definition states that management involves the act of achieving the organization's objectives. the act of achieving the organization's objectives.

Whatever the objectives of a particular Whatever the objectives of a particular organization, management is the process by which organization, management is the process by which the objectives are achieved.the objectives are achieved.

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MANAGEMENT FUNCTIONS OR THE MANAGEMENT FUNCTIONS OR THE PROCESS OF MANAGEMENTPROCESS OF MANAGEMENT

Some classify these functions into four types, Some classify these functions into four types, some into five and some into six or seven. some into five and some into six or seven.

Newman and Summer recognize Newman and Summer recognize organizing, organizing, planning, leading and controllingplanning, leading and controlling. .

Henri Fayol identifies Henri Fayol identifies planning, organizing, planning, organizing, commanding, coordinating and controllingcommanding, coordinating and controlling. .

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PlanningPlanning Planning is the function that determines in advance what should Planning is the function that determines in advance what should

be done. be done. It is looking ahead and preparing for the future. It is looking ahead and preparing for the future. It is the determination of what is to be done, how and where it is It is the determination of what is to be done, how and where it is

to be done, who is to do it and how results are to be evaluated. to be done, who is to do it and how results are to be evaluated. It is a function which is performed by managers at all levels—It is a function which is performed by managers at all levels—

top, middle and supervisory.top, middle and supervisory.OrganizingOrganizing Once managers establish objectives and plans they must design Once managers establish objectives and plans they must design

and develop a human organization that will be able to carry out and develop a human organization that will be able to carry out those plans successfully. those plans successfully.

The organization refers to the "structure which results from The organization refers to the "structure which results from identifying and grouping work, defining and delegating identifying and grouping work, defining and delegating responsibility and authority, and establishing relationships;“responsibility and authority, and establishing relationships;“

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DirectingDirecting This can be called by various names: 'leading’, 'directing, This can be called by various names: 'leading’, 'directing,

'motivating", 'actuating", and so on. 'motivating", 'actuating", and so on. Directing involves three sub-functions—communication, Directing involves three sub-functions—communication,

leadership and motivation. leadership and motivation. ControllingControlling The manager must ensure that everything occurs in The manager must ensure that everything occurs in

conformity with the plans adopted, the instructions issued conformity with the plans adopted, the instructions issued and the principles established. and the principles established.

This is the controlling function of management, and This is the controlling function of management, and involves three elements.involves three elements.

Establishing standards of performance.Establishing standards of performance. Measuring current performance and comparing it against Measuring current performance and comparing it against

the established standards.the established standards. Taking action to correct any performance that does not Taking action to correct any performance that does not

meet those standards.meet those standards.

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MANAGEMENT PROCESSMANAGEMENT PROCESS The four functions do not necessarily occur The four functions do not necessarily occur

in the sequence presented in our model. in the sequence presented in our model. Various combinations of these activities Various combinations of these activities

usually go on simultaneously in an usually go on simultaneously in an organization. organization.

Professor Haimann has rightly observed that Professor Haimann has rightly observed that it is helpful to think of these managerial it is helpful to think of these managerial functions as a circular, continuous functions as a circular, continuous movement. movement.

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Controlling Planning

Directing Organizing

Fig. 1 Management Process

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ROLES OF A MANAGERROLES OF A MANAGER HenHenry Mintzberg suggested the manager should be ry Mintzberg suggested the manager should be

regarded as playing some ten different roles:regarded as playing some ten different roles:Interpersonal RolesInterpersonal RolesFigurehead:Figurehead: In this role, every manager has to perform In this role, every manager has to perform

some duties of a ceremonial nature, such as greeting the some duties of a ceremonial nature, such as greeting the touring dignitaries, attending the wedding of an employee touring dignitaries, attending the wedding of an employee etc.etc.

Leader:Leader: As a leader, every manager must motivate and As a leader, every manager must motivate and encourage his/her employees. encourage his/her employees.

Liaison:Liaison: In his role of liaison, every manager must cultivate In his role of liaison, every manager must cultivate contacts outside his vertical chain of command to collect contacts outside his vertical chain of command to collect information useful for his organization.information useful for his organization.

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Informational RolesInformational RolesMonitor:Monitor: As monitor, the manager has to As monitor, the manager has to

perpetually scan his environment for information, perpetually scan his environment for information, interrogate his liaison contacts and his interrogate his liaison contacts and his subordinates, and receive unsolicited information, subordinates, and receive unsolicited information, much of it as a result of the network of personal much of it as a result of the network of personal contacts he has developed. contacts he has developed.

Disseminator: Disseminator: In the role of a disseminator, the In the role of a disseminator, the manager passes some of his privileged manager passes some of his privileged information directly to his subordinates who information directly to his subordinates who would otherwise have no access to it.would otherwise have no access to it.

Spokesman:Spokesman: In this role, the manager informs and In this role, the manager informs and satisfies various groups and people who influence satisfies various groups and people who influence his organization. his organization.

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Decisional RolesDecisional RolesEntrepreneur:Entrepreneur: In this role, the manager constantly In this role, the manager constantly

looks out for new ideas and seeks to improve his looks out for new ideas and seeks to improve his unit by adapting it to changing conditions in the unit by adapting it to changing conditions in the environment.environment.

Disturbance:Disturbance: He must seek solutions of various He must seek solutions of various unanticipated problems—a strike may loom large, unanticipated problems—a strike may loom large, a major customer may go bankrupt, a supplier may a major customer may go bankrupt, a supplier may renege on his contract, and so on.renege on his contract, and so on.

Resource Allocator: Resource Allocator: In this role, the manager must In this role, the manager must divide work and delegate authority among his divide work and delegate authority among his subordinates. He must decide who will get what.subordinates. He must decide who will get what.

Negotiator:Negotiator: The manager has to spend considerable The manager has to spend considerable time in negotiations. time in negotiations.

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LEVELS OF MANAGEMENTLEVELS OF MANAGEMENT Although all managers perform the same functions of Although all managers perform the same functions of

planning, organizing, directing and controlling, there are planning, organizing, directing and controlling, there are levels among them, They are:levels among them, They are:

The lowerThe lower managementmanagement group is made up of foremen and group is made up of foremen and white collar supervisors, men and women who are only white collar supervisors, men and women who are only one step above the rank and file. one step above the rank and file.

The middleThe middle managementmanagement, a vast and diverse group that , a vast and diverse group that includes sales managers, plant managers, personnel includes sales managers, plant managers, personnel managers and many other departments heads. managers and many other departments heads.

The top management The top management consisting of the board chairman, the consisting of the board chairman, the company presidents, the executive vice-presidents, i.e. company presidents, the executive vice-presidents, i.e. the men who coordinate all the specialties and make the men who coordinate all the specialties and make policies for the company as a whole.policies for the company as a whole.

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SKILLS OF MANAGERIAL SKILLS OF MANAGERIAL To discharge roles successfully, a manager should possess To discharge roles successfully, a manager should possess

three major skills. three major skills. These are: These are: conceptual skill, human relations skill and conceptual skill, human relations skill and

technical skilltechnical skill. . Conceptual skill deals with ideas, Technical skill with Conceptual skill deals with ideas, Technical skill with

things and Human skill with people. things and Human skill with people. While both conceptual and technical skills are needed for While both conceptual and technical skills are needed for

good decision-making, human skill is necessary for a good good decision-making, human skill is necessary for a good leader.leader.

Conceptual skillConceptual skill Conceptual skill is his ability to conceptualize the Conceptual skill is his ability to conceptualize the

environment, the organization, and his own job, so that he environment, the organization, and his own job, so that he can set appropriate goals for his organization, for himself can set appropriate goals for his organization, for himself and for his team. and for his team.

This skill seems to increase in importance as a manager This skill seems to increase in importance as a manager move up to higher positions of responsibility in the move up to higher positions of responsibility in the organization.organization.

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The technical skillThe technical skill is the manager's understanding is the manager's understanding of the nature of job that people under him have to of the nature of job that people under him have to perform. perform.

It refers to a person's knowledge and proficiency in It refers to a person's knowledge and proficiency in any type of process or technique. any type of process or technique.

In a production department, this would mean an In a production department, this would mean an understanding of the technicalities of the process understanding of the technicalities of the process of production. of production.

Whereas this type of skill and competence seems Whereas this type of skill and competence seems to be more important at the lower levels of to be more important at the lower levels of management, its relative importance as a part of management, its relative importance as a part of the managerial role diminishes as the manager the managerial role diminishes as the manager moves to higher positions.moves to higher positions.

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Human relations skillHuman relations skill is the ability to interact is the ability to interact effectively with people at all levels. effectively with people at all levels.

to recognize the feelings and sentiments of others; to recognize the feelings and sentiments of others; to judge the possible reactions to, and outcomes of to judge the possible reactions to, and outcomes of various courses of action he may undertake; and various courses of action he may undertake; and

to examine his own concepts and values which may to examine his own concepts and values which may enable him to develop more useful attitudes about enable him to develop more useful attitudes about himself. himself.

This type of skill remains consistently important This type of skill remains consistently important for managers at all levels.for managers at all levels.

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Conceptual Skill

Human Relation Skill

Technical Skill

Top Management

Middle Management

Supervisory Level

• At the top level, technical skill becomes least important. • That is why, people at the top shift with great ease from one organization

to another without an apparent fall in their efficiency. • Their human and conceptual skills seem to make up for their unfamiliarity

with the new job's technical aspects.

Fig. 2 Skill-mix at different management levels

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MANAGEMENT-A SCIENCE OR AN ART?MANAGEMENT-A SCIENCE OR AN ART? Management as a ScienceManagement as a Science What makes a discipline a science? Should the What makes a discipline a science? Should the

discipline involve the use of a laboratory in order discipline involve the use of a laboratory in order to be called a science? Obviously not. to be called a science? Obviously not.

They are implicit in the method of inquiry used by They are implicit in the method of inquiry used by a discipline for gathering the data. a discipline for gathering the data. • We can call a discipline scientific if its methods of We can call a discipline scientific if its methods of

inquiry are systematic and empirical;inquiry are systematic and empirical;• information can be ordered and analysed; andinformation can be ordered and analysed; and• results are cumulative and communicable.results are cumulative and communicable.

Being systematic means being orderly and Being systematic means being orderly and unbiased. unbiased.

Further, the inquiry must be empirical, replicative Further, the inquiry must be empirical, replicative and not merely an armchair speculation. and not merely an armchair speculation.

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Assignment 1:Assignment 1:

Discuss – Management is an Art and Science.Discuss – Management is an Art and Science.Explain the School Management in terms of Explain the School Management in terms of

four functions of managementfour functions of management

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ORGANIZATION - MEANINGORGANIZATION - MEANING What is an organization? What is an organization? According to Amitai Etzioni , an organization is a According to Amitai Etzioni , an organization is a

social unit or human grouping, deliberately social unit or human grouping, deliberately structured for the purpose of attaining specific structured for the purpose of attaining specific goals. goals.

Thus, corporations, armies, schools, hospitals, Thus, corporations, armies, schools, hospitals, churches, prisons, etc. all are organizations. churches, prisons, etc. all are organizations.

But tribes, ethnic and friendship groups and But tribes, ethnic and friendship groups and families are not organizations because they do not families are not organizations because they do not involve any significant amount of conscious involve any significant amount of conscious planning or deliberate structuring.planning or deliberate structuring.

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WHY STUDY ORGANIZATIONS?WHY STUDY ORGANIZATIONS? Organizations pervade all the important phases of man's Organizations pervade all the important phases of man's

life. life. A man is born in organizations (hospitals or clinics), he is A man is born in organizations (hospitals or clinics), he is

educated in organizations (schools, colleges and educated in organizations (schools, colleges and universities) and he works in organizations (offices or universities) and he works in organizations (offices or factories).factories).

Organizations satisfy and sometimes frustrate different Organizations satisfy and sometimes frustrate different kinds of human needs. kinds of human needs.

They also satisfy various types of security, social and They also satisfy various types of security, social and egoistic needs of their people. egoistic needs of their people.

They learn various things, such as how to proact to They learn various things, such as how to proact to environmental needs, how to motivate subordinates, how environmental needs, how to motivate subordinates, how to manage conflict, how to introduce change and so on.to manage conflict, how to introduce change and so on.

To behavioural scientists, organizations serve as a great To behavioural scientists, organizations serve as a great natural laboratory. natural laboratory.

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Characteristics of Organizations:Characteristics of Organizations:• Goal OrientedGoal Oriented• Distinct structureDistinct structure• Require specializationRequire specialization• Relatively Permanent entitiesRelatively Permanent entities

Activities:Activities:• Process some kind of input turning to outputProcess some kind of input turning to output• Interact with other organizational systems and they Interact with other organizational systems and they

have to change internally to keep with external have to change internally to keep with external changes and pressureschanges and pressures

• Develop policies, procedures and practices over time.Develop policies, procedures and practices over time.

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Principles of Organization:Principles of Organization:1.1. Objectives Objectives 2.2. SpecializationSpecialization3.3. Span of ControlSpan of Control4.4. Exception – exceptionally complex problems referred to top Exception – exceptionally complex problems referred to top

management.management.5.5. Scalar Principle – Chain of Command or Line of authorityScalar Principle – Chain of Command or Line of authority6.6. Unity of Command – (one employee – one supervisor)Unity of Command – (one employee – one supervisor)7.7. DelegationDelegation8.8. ResponsibiltyResponsibilty9.9. AuthorityAuthority10.10.EfficiencyEfficiency11.11.Simplicity – structure to be simpleSimplicity – structure to be simple12.12.Flexibility – adaptableFlexibility – adaptable13.13.BalanceBalance14.14.Unity of DirectionUnity of Direction15.15.Personal AbilityPersonal Ability

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Departmentalization:Departmentalization:• Horizontal Distribution of Activities Horizontal Distribution of Activities

Organizational StructureOrganizational Structure • Tall Organizations (Mechanist)Tall Organizations (Mechanist)

Merits & DemeritsMerits & Demerits

• Flat Organization (Organic)Flat Organization (Organic) Merits & DemeritsMerits & Demerits

• Which Type is best?Which Type is best?

• Types of OrganizationsTypes of Organizations Formal or informalFormal or informal

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The contingency view of organizationThe contingency view of organization EnvironmentEnvironment CultureCulture Type of TasksType of Tasks Level of TechnologyLevel of Technology Type of StrategyType of Strategy Size of an OrganizationSize of an Organization Span of ControlSpan of Control Managerial Personal CharacteristicsManagerial Personal Characteristics Employee CharacteristicsEmployee Characteristics