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Modern Management Techniques

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Plan of Presentation

Introduction to Management Management techniques

Characteristics of management techniques Classification of management techniques Network Analysis PERT CPM Management by Objectives Total Quality Management Summary Conclusion

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Introduction

• What is Management?– To co-ordinate the efforts of people

• to accomplish goals • objectives • using available resources • efficiently and effectively

• Transforming resources to utility.

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Forecasting

Planning

Organizing

Commanding

Co-ordinating

Controlling

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Management Techniques

Definition :Systematic and analytical methods used to assist in decision-making, the improvement of efficiency and effectiveness and in particular, the conduct of the two key managerial activities of planning and control

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Characteristics of management techniques:

• Systematic :– Consist of specified and often sequential methods

of tackling a problem, providing information for decision making or improving operational efficiency.

– Ensure that each step is carried out in prescribed manner.

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• Analytical – Techniques have been developed by considering what and

possibly quantitative methods are required to deal with every aspect of a situation and achieve an end result.

– They subject complex situations to close and systematic examination and resolve them into their key elements.

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• Quantitative– Management techniques measure in numerical or financial

terms what is happening and quantify forecasts of future trends.

– Management techniques place monetary values on performance reports, forecasts, plans.

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• Applications of management techniques.– General management– Marketing management– Operations management– Financial management– Human resource management– Information technology– Management science– Planning and resource allocation– Efficiency and effectiveness

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• Traditional methods of management are primarily based on behavioural sciences.– Personnel selection– Training and retraining– Motivational methods– Development of communication channels and skills– Supervision– Leadership development– Team building and conflict resolution

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• The conventional methods of management are no longer adequate to meet the demand of today’s projects

• With larger and complicated organisations with their own unique organisational and structural issues a need has been felt for better, more effective and innovative managerial methods

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Modern managementtechniques

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A. Statistical techniques1) Time trends and forecasting

2) Decision theory and tree

B. Activity analysis1) Time motion studies

2) Work sampling and activity analysis

3) Queuing theory

4) Gantt chart and work shedule.

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C. Mathematical techniques1) Simulation study /model

2) System analysis

3) Linear programming

4) Inventory control

5) Precedence and arrow diagramming

6) Network analysis

7) PERT

8) CPM

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D. Financial techniques1) Monitoring expenditure

2) Cost accounting and analysis

3) DALY

4) Cost Benefit Analysis

5) Cost effective analysis

6) Performance budget

7) PPBS

8) Zero base budgeting

9) Input output analysis

10) Out come budget

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E) Miscellaneous1) Management by Objectives and appraisal by results

2) Management by exception

3) Situation analysis

4) Current state assesment

5) SWOT Analysis

6) Log frame Analysis

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Network analysis

• Network is a graphical representation of all the Activities and Events arranged in a logical and sequential order– A project is broken up into small operations which are

arranged into logical sequence.– The order in which these actions are to be performed is

decided and a network diagram shows the relationship between the various operations involved.

– Time required for accomplishment of different tasks can also be considered.

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• Activity: Activity is the actual performance of the job. This consumes resources (Time, human resources, money, and material)

• Event: An event refers to start or completion of a job. This does not consume any resources

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1. In a network diagram, arrows represent the activities and circles represent the events.

2. The tail of an arrow represents the start of an activity and the head represent the completion of the activity.

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-involved 250 prime contractors-9000 job contractors. It had about 19 million components.

-In such projects it ispossible that a delay in the delivery of a small component might hold the progress ofentire project.

-PERT was used successfully and the total time of completion was reduced from 7 years to 5 years.

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• PERT and CPM are the two most popular network analysis technique used to assist managers in planning and controlling large scale projects

• PERT- (Programme Evaluation Review Technique)

• CPM - (Critical Path Method)

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• Network representation: There are two types of• systems –

AOA system(Activity on Arrowsystem)

AON system(Activity on Nodesystem )

In this activities arerepresented by anarrows

In this method activitiesare represented in thecircles.

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Program evaluation review technique

• PERT involves planning, monitoring and controlling of projects where time taken for each activity in the project is not known.

• Consists of identification of various events necessary in the final achievement of the objective/

• Flow diagram consisting of events shown by circles or squares in their logical sequence is drawn.

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• It uses probability to estimate the timings of various activities in the project

• classically used in long-term projects like construction of hospitals, ships, roadways and buildings, in planning & launching of new health programs, products & services, in publication of books etc where exact time for each phase is not known with certainty

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• Draw the PERT network for the following project• Event A is followed by events B & C• Event D is preceded by events B & C• Event H is the successor to event E• Event E is the successor to event B• Event F is the successor to event D & G• Event C is the predecessor to event G• Event J is preceded by events F,G, & H

H

E

B

A

C

D

F

G

J

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• Under PERT, three time-estimates are made, as under:a) Most Likely Time ;is the time taken most frequently in

completing a particular activity.

b) Optimistic Time is time in which an activity can be completed, if all goes as per the pre-determined plan.

c) Pessimistic Time is the time taken to complete an activity under most adverse conditions. This is thus the longest possible time taken to complete a project.

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• From the above estimates, expected time for completion of an activity is computed as :

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Critical Path Method (CPM)

• Here, it is assumed that durations of individual activities in a project are known with certainty

• The method thus helps to determine the earliest possible start time & latest possible start time for each activity

• Identifies the critical activities, which are critical because if any of these activities are delayed by even a short period, the entire project will be delayed

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• CRITICAL PATH– Meaning: The longest path in a project network which

determine the duration of the project is known as critical path.

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E

B

A

C

F

D

H

G

2

3

4

5

4

5

2

2

3

16

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• Float (Slack)– refers to the amount of time by which a particular event or

an activity can be delayed without affecting the time schedule of the network.

• Float (Slack) is defined as the difference between latest allowable and the earliest expected time.

• Event Float/Slack = LS – ES• Where LS = Latest start time• ES = Early start time.

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Management by Objectives (MBO)

Is a process of defining objectives within an organization so that management and employees agree to the objectives and understand what they need to do in the organization in order to achieve them.

The term "management by objectives" was first popularized by Peter Drucker in his 1954 book ”The Practice of Management.”

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• According to George Odiorne“MBO is a process whereby the superior and the subordinates managers of an enterprise jointly identify its common goals, define each individual’s major areas of responsibility in terms of the result expected of him, and us these measures as guides for operating the unit and assessing the contribution of each of its members”.

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• The important feature of MBO which distinguishes it from other planning and control– processes is the emphasis on results (objectives) rather than on

activities & processes

• MBO, being based on behavioural approach to management, is based on concepts as under :(a) Emphasis on results rather than activities.

(b) Defining objectives (expected results) for specific

positions.

(c) Participatory or Joint objective setting.

(d) Identification of Key Result Areas (KRAs)

(e) Establishing a Periodic Review System

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• Concept of MBO– Let people know what is expected of them:

This concept assumes “People perform better when they know what is expected and can establish a relationship between individual goals and organisational goals.”

– Allow employees to participate in setting goals:This concept assumes “People want to participate in the determination of goals.”

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– Tell people how they are doing:This concept assumes that “people need to know how are they performing”

– Reward on the basis of accomplishment: This concept assumes that “people need recognition, opportunities for growth, and a sense of achievement in their work.”

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Process Of MBO

Identifying the Key Result Areas

(KRAs)

Setting up Objectives Action Planning

Performance Review

Performance appraisal

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Identifying the Key Result Areas (KRAs) : KRAs delineate

• The broad areas on which the organisation must focus its attention

• They are based on the concept that a smaller part of manager’s activities yield larger proportion of his results

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• The process of identifying KRAs by the top management consists of the following broad steps :-(i) SWOT Analysis : Analysis of Strengths, Weaknesses,

Opportunities and Threats.

(ii) Brainstorming exercise to identify all possible KRAs.

(iii) Discussion, analysis & classification to arrive at an agreed list of KRAs.

(iv) Establishment of specific objectives in each KRA.

(v) Preparation of Action Plans, including assignment of

responsibilities for results to be achieved.

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Setting up Objectives• The next step is to set up objectives within these

KRAs, which have to be measurable and quantifiable• An objective is a statement of expected results, which

provides guidelines for decisions and actions at lower level & provides standards against which performance is assessed.

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• Any objective thus, should have the following four elements, which are also determinants of improved performance, viz., – Quantity, – Quality,– Cost – Time.

• Objectives are successful as guidelines only if they are quantifiable & measurable. If you can not count, can not describe, can not measure what you want, you probably do not know what you want, and hence can not use it as an objective in your plan of action.

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Action Planning• Action plans are the means to convert objectives into

reality.• Objectives describe what is to be achieved, whereas

action plans describe how these objectives are to be achieved.

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• The four broad steps essential in all action plans are:

(i) Choice of strategies which are essential for achieving

objectives.

(ii) Fixing the responsibility for achieving each objective.

(iii) Resource allocation for achieving the objectives.

(iv) Scheduling specific activities in specific sequence for

maximum utilization of resources

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Performance Review• The main purpose of performance review in MBO

process is to provide corrective feedback to the concerned person

• focuses on performance appraisal, improvement, future corrective action, frequency of reviews & self appraisal.

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Performance review under MBO

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Total Quality Management (TQM)

• Quality can be defined as “the totality of features and characteristics of a product / service which have the ability to satisfy the clients felt / implied needs”.

• Total Quality Management (TQM) as a management tool, focuses on continuous improvement of procedures and processes involved in any activity or any services

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• The basic principles of TQM:(a) Satisfy the consumer:TQM involves satisfying the felt

or perceived needs of the customer, which tend to change with time and circumstances

(b) Management based on facts: Every manager needs to have access to correct facts about the product or services being offered by the organisation.

(c) People-centric management:

(d) Ongoing improvement: It is an ongoing process which aims to improve the every day routine procedures & processes involved in product /service.

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Some important TQM methods

• Acceptable Quality Level (AQL)provides a set of predetermined rules and standards for

acceptance or rejection of a product, so that each item inspected for its ‘quality’ is classified as acceptable or unacceptable.

• Affinity diagrams provide some type of relationship to groups within an

organisation. Such methods are useful when a team attempts to translate the customer requirements into an organisational structure

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• Arrow diagram is used to depict the time required to solve aproblem in the

organisation.

• Benchmarking provides comparison with pre-determined standard of quality

of product/service, thereby focusing on overall mission of the organisation and is a process which compares the performance (quality) with that of others, thereby ensuring better performance through comparison.

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• Consensus reaching is a way of examining alternatives so that an organisation

can collectively reach a conclusion which is acceptable to all members of the organisation.

• Contingency planningis the process of planning for unforeseen circumstances to ensure

least wastage of resources and to avoid ‘fire-fighting’ at the last moment.

• Cost benefit analysisinvolves the analysis of real cost and benefit involved in the

project. It is used to assess if the solution is practical and achievable in terms of the cost incurred by the organisation.

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• Criteria testing is the process of listing the various criteria and evaluating an

alternative course of action against these pre-determined & pre-decided criteria

• Deming Wheel (PDCA)is a graphical representation of essential requirements to

satisfy a customer’s equirements, namely, plan (P), do (D), check (C) & action (A). Such a managerial tool is used extensively to develop new products & services based on the felt needs of the clients.

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• Error proofing (pokayoke)is the managerial process of designing and conducting an operation

in such a manner so as to eliminate specific errors which cause major disruption of process / services, thereby causing dissatisfaction to customers

• Gannt Charts are graphical representation of the essential steps for completing a

project. Thus the entire project is broken down into smaller component steps and a graph is created to depict the time scheduling of each step. Gannt charts make it easier to identify the various steps involved and also easily indicate (visually) when the deadline for particular step in the project has been missed.

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Summary

• With larger and complicated organisations with their own unique organisational and structural issues a need has been felt for better, more effective and innovative managerial methods, some of which are Network Analysis, Management By Objectives (MBO) and Total Quality Management (TQM).

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• Network analysis is a means of planning and controlling processes. In this, a project is broken up into small operations which are arranged into logical sequence.

• Time management of a project, an important managerial control technique, can be done through Critical Path Method (CPM) and Project Evaluation & Review Technique (PERT).

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• Management By Objectives (MBO) is a modern managerial tool by which managers can improve their performance and their overall effectiveness– It can be defined as a managerial approach which uses

objectives as a focal point to improve managerial performance & effectiveness at individual and organisational levels.

• Total Quality Management (TQM) focuses on continuous improvement of procedures and processes involved in any activity or any services

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Conclusion

• There is need and scope for adoption of such techniques to health sector management to ensure efficiency.

• Methods used may be less exact as the sophisticated quantitative techniques in common usage may not be immediately applicable in the health field.

• Several of these techniques have shown their use fullness in healthcare establishment.

• Though many of these modern techniques require the services of a specialist, it is advantageous if health officers have some knowledge and appreciation of the purpose, methodology use fullness of common techniques

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Thank you

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Referrences

• Text book of public health and community medicine. 1st ed. Pune (India). Dept. of Community Medicine AFMC; 2009

• P V Sathe. Epidemiology And Management For Health Care For All. 3rd ed. Mumbai(India): Vora Medical Publications;2011

• http://books.google.co.in/books?id=-jZGVIcCaDMC&printsec=frontcover&source=gbs_ge_summary_r&cad=0#v=onepage&q&f=false:

8-01-2014 ; 18.30hrs