Introduction to management
Transcript of Introduction to management
Management Chapter 1 Contd..
MANAGEMENT : Art or science ??
SCIENCE: Science means a systematic body of knowledge pertaining to a specific field of study capable of general application.
Properties:
• Systematic body of knowledge:based on the cause and effect relationship between different variables.
• Scientific inquiry and observation: objective or unbiased assessment of the problem situation and the action chosen to solve it can be explained logically. Scientific principles do not reflect the opinion of an individual or of a religious guru.
For example:the principle that the earth revolves around the sun has been scientifically proved.
• Experiments:
• Universal truth: based on basic facts which can be applied in all situations and at all times.
Management as science• Systematic body of knowledge: consisting of general principles and techniques.(Henry Fayol
14 principles)These help to explain events and serve as guidelines for managers in different types of organisations.
• Universal principles: Scientific principles represent basic facts about a particular field enquiry. For example, the Law of Gravitation states that if you throw an object in the air it will fall on the ground due to the gravitational force of the earth. This law can be applied in all countries and at all points of time. It is as applicable to a football as it is to an apple falling from tree. For instance,(Management) the principle of unity of command states that at a time one employee should be answerable to only one boss.
• Scientific enquiry and experiments: Management principles are also based on scientific enquiry and investigation. These have been developed through experiments and practical experience of a large number of managers.For example, it has been observed that wherever one employee has two or more bosses simultaneously, confusion and indiscipline are likely to arise, with regard to following the instructions.
• Cause and effect relationship: For example, when water is heated up to 100ºC, it starts boiling and turns into vapour. Similarly, the principles of management establish cause and effect relationship between different variables.For instance lack of balance between authority and responsibility will cause management to become ineffective.
• Tests of validity and predictability: Validity of scientific principles can be tested at any time and any number of times. Every time the test will give the same result. For example, the Law of Gravitation can be tested by throwing various things in the air and every time the object will fall on the ground. Principles of management can also be tested for their validity. For example, the principle of unity of command can be tested by comparing two persons, one having a single boss and other having two bosses. The performance of the first person will be higher than that of the second.
ART
Art implies the application of knowledge and skills to bring about the desired results.
• Practical knowledge
• Personal skill
• Result oriented approach
• Creativity
• Improvement through continuous practice
Management as an art• Practical knowledge: For example, a person may have adequate technical knowledge of
painting but he cannot become a good painter unless he knows how to make use of the brush and colors. Similarly, a person cannot become a successful manager simply by reading the theory and getting a degree or diploma in management. He must also learn to apply his knowledge in solving managerial problems in practical life.
• Personal skill: Every artist has his own style and approach to his job.. For example, there are several qualified singers but Lata Mangeshkar has achieved the highest degree of success. Similarly, management is personalized. Every manager has his individual approach and style in solving managerial problems. The success of a manager depends on his personality in addition to his technical knowledge.
• Result-oriented approach: Arts seeks to achieve concrete results. The process of management is also directed towards the accomplishment of desirable goals. Every manager applies certain knowledge and skills to achieve the desired results. He uses men, money, materials and machinery to promote the growth of the organization.
• Creativity: Art is basically creative and an artist aims at producing something that had not existed before. Therefore, every piece of art requires imagination and intelligence to create. Like any other art, management is creative. A manager effectively combines and coordinates the factors of production to create goods and services. Moulding the attitudes and behavior of people at work, towards the achievement of the desired goals is an art of the highest order.
• Improvement through practice: Practice makes one perfect. Every artist become more and more efficient through constant practice. A dancer, for example, learns to perform better by continuously practicing a dance. Similarly, manager gains experience through regular practice and becomes more effective.
Management: science and art
• Management is a science because it is an organised body of knowledge consisting of certain universal facts.
• Management is known as an art because it involves creating results through practical application of knowledge and skills.
• Science teaches one to know and art to do. • Art without science has no guide and science without art is knowledge
wasted.For example, a person cannot be a good surgeon unless he has scientific knowledge of human anatomy and the practical skill of applying that knowledge in conducting an operation.A successful manager must know the principles of management and also acquire the skill of applying those principles for solving managerial problems in different situations. Knowledge of principles and theory is essential, but practical application is required to make this knowledge fruitful. One cannot become an effective manager simply by learning management principles by heart. Science (theory) and art (practice) are both essential for the success ofmanagement.
Management:profession
• A profession is an occupation that requires specialisedknowledge,training and skills.
• Elements:
1. Well defined body of knowledge
2. Restricted entry
3. Service motive
4. Code of Conduct
5. Representative professional association
Contd..• Specialised body of knowledge: In order to practice a profession, a person requires
specialised knowledge of its principles and techniques.• Restricted entry: There exists institutions and universities to impart education and training
for a profession. No one can enter a profession without going through the prescribed course of learning. For example one must pass the Chartered Accountancy examination to practice accountancy profession.
• Service motive: A profession is a source of livelihood but professionals are primarily motivated by the desire to serve the community.eg doctors. A manager of a factory is responsible not only to its owners, but he is also expected to produce quality goods at a reasonable cost and to contribute to the well-being of the community.
• Representative association: In every profession there is a statutory association or institution which regulates that profession. For example, the Institute of the Chartered Accountants of India establishes and administers standards of competence for the auditors. In Management , Managers have formed associations for the regular exchange of knowledge and experience. In India, there is the All India Management Association for this purpose.
• Code of conduct: Members of one profession have to abide by a code of conduct which contains rules and regulations providing the norms of honesty, integrity and professional ethics. For example, the Institute of the Chartered Accountants of India establishes and administers standards of code of conduct for the auditors. In Management , Managers have formed associations for the regular exchange of knowledge and experience. In India, there is the All India Management Association.
Functions of Management(Henry fayol)
• Planning,
• Organizing,
• Staffing,
• Leading,
• Controlling
Functions of Management(Planning)
• Planning is a process of • Defining goals and objectives• Developing course of actions and determining the resources needed to
achieve the organization’s goals & objectives. i.e.Formulation of Objectives, Policies, Procedure, Rules, Programmes and Budgets
Determining organizational goals and a means for achieving them
Functions of Management(Organizing)• Organizing is a process of
• Determining what tasks are to be done, how the tasks are to be done, who is to do them i.e. assignment of authority for action, who will make decision, who reports to whom.
Development of proper organizational structure.
Functions of Management(Staffing)
• Staffing is a process of • Getting right people, for right job, at right time.
• People are asset for an organisation.• Attracting people to the organization(Recruitment).
• Creating good working conditions.
(retention, promotion, job rotation))
• Specifying job responsibilities and development.
(Job Description and training)
Functions of Management(directing)• Directing is an act of:
• guiding, supervising and leading people.
• Motivation, leadership, decision making.
Directing is telling people what to do and seeing that they do it to the best of their ability.
- Dale
Functions of Management(Controlling)
• Controlling is a process of• Setting standards of performance.
• Measuring actual performance.
• Comparing actual performance with planned/set goals.
• Taking corrective actions to ensure goal accomplishment.
Functions of Management
• All managers carry out managerial functions. However, time spent for each function may differ.
• Top Level Mgt (Planning & Organizing)
• Middle Level Mgt (Controlling)
• First line Mgt (Leading)
Schools of thought
• Classical theory: Emphasised the need for a structure with well defined rules,regulations and lines of authority.
• Behavioural approach: Shifted focus to human and social needs.
• Systems approach: Organisation is a series of inputs, transformation processes and outputs.
• Situational approach:Application of theories depending upon the situations.
Traditional Viewpoint
Behavioral Viewpoint
Systems Viewpoint
Contingency Viewpoint
Quality Viewpoint
1890 1900 1910 1920 1930 1940 1950 1960 1970 1980 1990 2000
Goals:
Efficiency
Consistency
Administrative
Management
Bureaucratic
Management
Scientific
Management
Bureaucratic Management(1920)
Max Weber
Bureaucratic Management
Use of rules, interpersonal relationships,
hierarchy, a clear division of labor, and detailed
procedures to guide employees’ behaviors
Seven characteristics
Rules and procedures—formal guidelines for
the behavior of employees on the job
Interpersonal relationships—employees are
evaluated according to rules and objective
data.
Division of Labor—splitting work into simple
routine and well defined tasks. Employees
work under boundaries.
Caliper Technologies Corporation
CEO
Director ofQualityControl
ChiefFinancialOfficer
VP ofOperations
VP ofSales &
Marketing
VP ofResearch
VP ofProduct
Development
VP ofCorporate
Development
PlantManager
USA
Controller
PlantManagerGermany
Manager ofChemical
Engineering
Manager ofChip
Manufacturing
Manager ofEngineering& Software
Directorof
Manufacturing
Directorof
Manufacturing
Employees Employees
Hierarchical Structure—ranks jobs according
to the amount of authority in each job
Authority—who has the right to make
decisions of varying importance at different
organizational levels. Authority is given on the
basis of their skills and competence.
Lifelong Career Commitment—both the employee
and the organization view themselves committed to
each other over the working life of the employee
Rationality—the use of the most efficient
means available to accomplish a goal
Potential Benefits of Bureaucracy
Efficiency due to division of work.
Consistency
Functions best when routine tasks are performed
Performance based on objective criteria
Most effective when
Large amounts of standard information have to be processed
The needs of the customer are known and are unlikely to
change
The technology is routine and stable (e.g., mass production)
The organization has to coordinate the activities of employees
in order to deliver a standardized service/product to the
customer
Potential Costs of Bureaucracy
Rigid rules
and
red tape
Protection of authority:
focus on their goals
rather than having
broad perspective
Slow decision making
i.e delays in working
Incompatible with
changing
technology
Incompatible with
21st century workers’
values for freedom
and participative
management
Scientific Management
Frederick W. Taylor
The father of Scientific Management – the 1st Efficiency Expert.
A philosophy and set of management
practices that are based on fact and
observation, not on guesswork
Scientific Management
Believed in scientific task planning and standardization i.e.
standards are to be set in advance for the task, materials,
work methods, quality,time,cost etc.
Used time-and-motion studies to analyze work flows,
supervisory techniques, and worker fatigue to eliminate
wasteful resources.
Used functional foremanship, where work is assigned to eight
foremen namely route clerk, instruction card clerk, cost and
time clerk, gang boss, inspector, repair boss and shop
disciplinarian to each work area. Thereby providing expert
advice to the workers to achieve better production results.
Assumed workers motivated by money $$ i.e incentives
money as per their work.
• He was interested in machines --
apprenticeship in industry: Midvale Steel
• Shocked by how inefficient his fellow
workers were
• timed workers with stopwatches
• break down job into parts, make parts
efficient
• figure out how to hire the right worker for
the job
• give the worker appropriate training
Taylor’s Work?
• introduced incentive pay plans
(workers were assumed to be motivated
only by money).
• Believed would lead to cooperation--
management and worker
• Studied design of shovels and introduced
a better design at Bethlehem Steel Works,
reducing the number of people shoveling
from 500 to 140
Taylor’s Work? Contd.
Insights from Scientific Management
Many companies have used scientific management
principles to improve efficiency, employee selection
and training
Scientific management failed to recognize the
social needs of workers as it considered humans as
tools and the importance of working conditions
and job satisfaction which cannot be quantified.
Administrative Management: Overview
Henry Fayol
Focuses on the manager and basic managerial functions of planning, organizing, staffing,
controlling and leading.
An approach that focuses on the
principles that can be used by
managers to coordinate the internal
activities of organizations.
Fayol’s 14 UNIVERSAL Principles of Effective Management• Division of Work: allows for job specialization.
• Work should be divided among individuals and groups.
• Authority and Responsibility
• Authority right to give orders
• Responsibility involves being answerable
Whoever assumes authority assumes responsibility
• Discipline
• Common efforts of workers to follow rules that govern
the enterprise. Penalties in case of violation.
• Unity of Command
• Employees should have only one boss.
• Unity of Direction
• A single plan of action to guide the organization.eg. Single HR policy.
• Subordination of individual interests to the general interests of organization: honesty,integrity,fair dealings.
• Remuneration
• Fair and equitable uniform payment system that motivates employees to contribute to organizational success.
• Centralization
• The degree to which authority rests at the top of the organization. Fayol felt that proper balance needs to be maintained between centralization and decentralization.
• Scalar Chain
• Chainlike authority scale from top to bottom through which all communications flow.
• If communication delays, then gangplank principle(cross communication) can also be permitted.
• Order
• The arrangement of employees and materials where
they will be of the most value to the organization and
to provide career opportunities.
• Equity
• The provision of justice and the fair and impartial
treatment of all employees.to get loyalty and devotion
of the employees.
• Stability of Tenure of Personnel
• Long-term employment is important for the
development of skills that improve the organization’s
performance. Therefore, Management must implement
practices which encourages long term commitment of
employees.
• Initiative
• The fostering of creativity and innovation by
encouraging employees to act on their own.
• Esprit de corps (Union is Strength)
• Harmony, team spirit, general good feeling among
employees, shared enthusiasm, foster devotion to the
common cause (organization).
Insights from Administrative Theory
Fayols 5 functions of Management as well as 14
principles are applied universally to improve
efficiency, employee selection and training
Scientific management failed to offer guidelines as
to when, where and how the principles have to be
applied.
Not applicable in the present volatile market
scenario.
The focus was more on control and discipline
rather than morale.
Behavioral Viewpoint: Overview
Focuses on dealing effectively with the
human aspects of organizations
Started in the 1930’s
Applied knowledge of behavior sciences
such as psychology, sociology and
anthropology to develop to manage
people.
Concluded that with increase in
social interactions job performance
increases.
Mary Parker Follett’s Contributions
Managers need to establish
good working relationships
with employees
Goal:
Improve
Coordination
“Managers need to have a common
touch and to be a team leader and not a
drill sergeant. When their people shine,
they shine.”
Vickie Yoke, Senior Vice President, Alcatel
Snapshot
The Hawthorne Studies
• Studies how characteristics of the work setting
affected worker fatigue and performance at the
Hawthorne of the Western Electric Company
from 1924-1932.• Worker productivity was measured at various levels of light
illumination.
• Two groups: in one group the intensity of light was systematically
varied, In other group light was constant.
• Researchers found that regardless of whether the light levels
were raised or lowered, worker productivity increased.
The Hawthorne StudiesThe Hawthorne Studies
•The Relay Assembly Test Room Experiments
Working conditions, wages, rest periods, financial incentives were increased leading to rise in productivity
•The Bank Wiring Observation Room Experiment
Analyze the social relationships in a work group
14 male workers were formed into a small working group and incentives were paid according to their effort and output. work of individual affected the output of the group. therefore highly efficient workers put pressure on the less efficient ones leading to erroneous reports.
Thus work group norms, beliefs, sentiments have great influence on individual behavior.
Employees are
motivated by social
needs and association
with others
Employees’ performance
is more a result of peer
pressure than
management’s incentives
and rules
Managers need to
involve subordinates
in coordinating their
work to improve
efficiency
If treated well, human
beings can expand
their energies and
show good results
Lessons from the Hawthrone Studies Behavioral Viewpoint
Snapshot
“Teamwork is one of the most beautiful
experiences in life. Teamwork is our
core value and a primary way that the
Container Store enriches the quality
of employees’ work life.”
Kip Tindell, President, The Container Store
System approach considers organisation
as an association of interrelated and
interdependent parts
Systems viewpoint: an approach to solving
problems by diagnosing them within a
framework of transformation processes,
outputs, and feedback
Systems Viewpoint: Systems Concepts
InputsHuman, physical,
financial, and
information
resources
Transformation
Process
OutputsProducts
and
services
Feedback Loops
Basic Systems View of Organizations
All departments are interrelated. Efficiency of one
department affects efficiency of other department.
Closed system: limits its interactions with
the environment (e.g., stamping department
in GM assembly plant)
Open system: interacts with the external
environment (e.g., marketing department)
System Types
An organisation which is not adaptive and
responsive to its environment would not
survive or grow over a period of time.
Flow: In an open system, inputs are
received from its environment and are
transformed into output. Thus all the
information, materials and energy flows
within the organization
Feedback: warning signals regarding
impending dangers. e.g. customer
complaints.
System Types
The Contingency Approach
What managers do in practice depends on a
given set of circumstances – a situation.
Management practices should be consistent
with the requirements of the external
environment, the technology used to make a
product or provide a service, and capabilities
of the people who work for the organization
Uses concepts of the traditional, behavioral
and system viewpoints
External environment—stable or
changing
Technology—simple or complex
People—ways they are similar and
different from each other
Contingency Variables
Behavioral ViewpointHow managers influence others;
Informal group
Cooperation among employees
Employee’s social needs
Systems Viewpoint
How the parts fit together.
Inputs
Transformations
Outputs
Traditional Viewpoint
What managers do:
Plan
Organize
Lead
Control
Contingency ViewpointManagers’ use of other viewpoints
to solve problems involving: External environment
Technology
Individuals
Contingency Viewpoint: Draws onOther Viewpoints, As Necessary
Quality: how well a product or service
does what it is supposed to do—how closely
and reliably it satisfies the specifications to
which it is built or provided
Total Quality Management (TQM): a
philosophy that makes quality values the
driving force behind leadership, design,
planning, and improvement initiatives
Inputs or raw materials
Operations
Outputs
Measuring by variable or a product’s characteristics
Measuring by attribute or a product’s acceptable/
unacceptable characteristics
Statistical process control
Quality of a process (e.g., sigma)
Quality Control Process
Lower Costs
and Higher
Market Share
Decreased
Product
Liability Quality
Positive
Company
Image
Learning from the Quality Viewpoint