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Management Aspects

Functions of Management, Project Management, Value Engineering, Project Evaluation, Decision Making.

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ManagementF.W Taylor defined management with emphasis on engineering aspects “Management is art of knowing what you want to do and seeing that they do it in best and cheapest manner”

George R Terry defined management with emphasis on decision making aspects “Management is a distinct process consisting of planning, organizing, actuating and controlling; utilizing in both science and arts, and followed in order to accomplish pre determined objectives ”

Management can be summarized as a process of planning; organizing, directing, and controlling of an entity to achieve organizational goals.

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Functions of ManagementMost widely accepted are functions of management given by KOONTZ and O’DONNE • Planning • Organizing• Staffing• Directing or leading• Controlling to achieve organizational goals

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Functions of Management

Planning : deals with chalking out future course of action for achievement of pre-determined objectives. According to KOONTZ, “Planning is deciding in advance - what to do, when to do & how to do. It bridges the gap from where we are & where we want to be”.

Thus, planning is a systematic process of thinking ways & means for accomplishment of pre-determined goals.

Planning is necessary to ensure proper utilization of human & material resources. it is an intellectual activity and it also helps in avoiding confusion, uncertainties, risks, wastages etc.

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Functions of ManagementOrganizing is the process of bringing together necessary resources; physical, financial and human, and developing productive relationship amongst them for achievement of organizational goals.

According to Henry Fayol, “To organize a business is to provide it with everything useful or its functioning i.e. raw material, tools, capital and personnel’s”.

Organizing involves:Identification of activities.Classification & grouping of activities.Assignment of duties.Delegation of authority and creation of responsibility.Coordinating authority and responsibility relationships.

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Functions of ManagementStaffing: is manning the organization structure and keeping it manned. The purpose of staffing is to put right man on right job

According to Kootz & O’Donell, “Managerial function of staffing involves manning the organization structure through proper and effective selection, appraisal & development of personnel to fill the roles designed un the structure”.

Staffing involves:Manpower Planning Recruitment, Selection & Placement.Training & Development.Remuneration.Performance Appraisal.Promotions & Transfer.

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Functions of ManagementDirecting : Direction is that inert-personnel aspect of management which deals directly with influencing, guiding, supervising, motivating sub-ordinate for the achievement of organizational goals

Direction has following elements:Supervision : is the act of watching & directing work & workersMotivation : inspiring, stimulating or encouraging the sub-ordinates with

zeal to work. Monetary, Non-monetary incentives is usedLeadership : a process by which manager guides and influences the work

of subordinates in desired directionCommunication : is the process of passing information, experience,

opinion etc from one person to another.

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Functions of ManagementControlling : implies measurement of activities progress against the standards and correction of variation if any to ensure achievement of organizational objectivesAccording to Theo Haimann, “Controlling is the process of checking whether or not proper progress is being made towards the objectives and goals and acting if necessary, to correct any deviation”. Controlling has following steps:–Establishment of standard performance.–Measurement of actual performance.–finding deviation if any–Corrective action.

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Project ManagementProject can be defined as “A unique set of interrelated activities developed to achieve well defined objective, constrained with resource, time and cost.”

Ex. Launch of new product, Organizing an event, A building project, Making a tunnelProject is a temporary endeavour to achieve a particular aimProject is a temporary endeavour ; it has a definite start and endFundamental purpose of any project is either to earn money or save moneyA project is unique a one time undertaking: it will never be done again in same way, by same set of people, in same environment

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Project Managementproject management can be defined as “ a set of skills, planning, organizing and managing a project to its successful completion”

Project management is both an art and a science. The art lies in interpersonal aspects i.e leading people to achieve project objectives. The science includes understanding of processes, tools and techniques

project management is complex and broad as it requires a large variety of different skills.

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Project ManagementSteps in project management:• Identifying the frame of problem or opportunity• Identify and define the suitable solution• Identify tasks and resource requirement• Prepare the control and resource allocation• Cost estimation and budgeting• Risk analysis and stakeholder relationship• Execution, monitoring and control• Orderly closeout

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Project Management

Project lifecycle:Initiation Planning Execution Close out

Initiation•Need•Deliverables•Feasibility & Justification•Workgroups

Planning•Formulating strategy•Interim deliverables•Defining tasks•Sequencing of tasks•Estimation

Execution•Tasks execution•Monitoring•Corrective actions

Closeout•Verification of project deliverables•Deliverables utilization•Resource Redeployment

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Project Evaluation“Evaluation refers to systematically collection, analysis and reporting information that can be used for learning, and to improve the operation of a project/ future decision making.

Project evaluation involves systematic collection of information about activities, characteristics and outcomes of tasks or action to determine its worth or merit

Monitoring is about finding the gaps between performance and expectations while evaluation is about explaining why the gaps exist.

Monitoring is descriptive rather than interpretive while evaluation is aimed to learning. However, evaluation is almost impossible if there is no monitoring system in place

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Project EvaluationEvaluation characteristics and benefitsEvaluation is purposeful, it is a means to an end not an end in itself. Evaluation of activities, helps in future decisions.Evaluation is based on asking questions and finding answers. It is an investigative process. Evaluation is systematic and scientific; It involves collecting

information's, making comparisons, and measuring against criteria. Evaluation implies outputs must be interpretive and not descriptiveEvaluation brings accountabilityEvaluation leads to improvement.

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Project Evaluation

Steps of evaluation Identifying purpose of the evaluation: scope & methodDefining outcome parameters of evaluationEvaluation approachDimensions of evaluation : outcome or implementation evaluationRole and authority of evaluator Identifying source and method of collection of data Identifying tool of analysis and presentationPerforming evaluation and reporting

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Value EngineeringAccording to Larry Miles “Value is the minimum price one must pay to a reliable product or service”

Value = Worth/ Cost = Utility or Functionality/ Cost

A product or service have good value if the product has appropriate performance and cost.

•Value increase if cost decreases while maintaining performance•Value decrease if cost increases while maintaining performance

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Value EngineeringValue engineering is the process that seeks best balance between functionality, reliability, performance and cost of product/ service/ process/ activity.

Function : The basic purpose of every expenditure whether it is hardware, group of people or process is to perform certain function

Basic function of a product are Use function Aesthetic function Basic function Secondary function

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Value EngineeringValue engineering is a function oriented systemic approach used to analysis of product and to improve value. By increasing value characteristics, value engineering increases customer satisfaction and is therefore a long term business strategy

Value Engineering Approaches

Cost reduction approach

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Function increase approach

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Compound approach

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Expand growth

approach

---------ValueFunction

Cost= ----------------

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Benefits of Value EngineeringExpanding new market by increasing functionality

Volume increase due to increased satisfaction

Reduce costs

Reduce Operation & Maintenance cost

Improve resource efficiency

Improve workforce efficiency

Build teamwork

Simplifies procedures

On-time delivery

High quality

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Decision MakingMaking effective decisions, recognising decisions gone bad, and taking decisions on corrective actions is a key to organizational effectiveness.

Decision making can be defined as “choosing a course of action among alternatives”

Steps of decision makingRecognizing the need & nature of decision making situationIdentify the alternativesChoose the alternative most suitable to achieve goals

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Decision making processDecisions are made to Maximize ex. sales, valuation, Minimize ex. cost, inventory Optimize ex. profitability,

Decisions are made to Solve Problems (undesirable) ex. closing a loss making unit Avail Opportunities (desirable) ex. enter in new market,

Decisions may be programmed (frequent in nature and structured) ex. Purchase new supplies Non programmed (rare situations and less structured) ex. Mergers, takeovers

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Decision making processDecisions making conditionsDecision making under certainty (outcome of alternatives are fairly certain)Decision making under risk (all alternatives not known or outcome risky) Decision making under uncertainty (all alternatives not known or outcome not clear)

Uncertainty Certainty

High Moderate low

Certainty of outcome

Degree of Risk in decision making

Decision Making Conditions

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Rational Decision makingSteps of rational decision making processRecognizing and understanding decision making situations

Identifying alternatives & constraints

Evaluating alternatives; feasibility, suitability and affordability

Choosing an alternative

Implementing the decision

Follow-up and evaluation