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MBA Information Systems 1st Year - Assignment Annamalai University

1.1: Principles of Management

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Question #1: Discuss the importance and application of principles of management in the present day context.

Answer:-

Management

Management is a very popular and widely used term. It is a global phenomenon. All organisations irrespective of their objectives - business, political, cultural or social are involved in management because it is management which helps and directs the various efforts towards a definite purpose.By nature management is dynamic and versatile. Defining management in a comprehensive way by considering all its characteristics is a difficult task. However some renowned authors have defined management as follows

To manage is to forecast, to plan, to organize, to command to co-ordinate and control. Henry Fayol

The art of getting things done through people Mary Parker Follet

Management is the process of planning, organising, leading and controlling the efforts of organisation members and of using all other organisational resources to achieve stated organisational goals James A.F. Stones

Management is an art of getting things done through and with the people in formally organized groups. It is an art of creating an environment in which people can perform and individuals and can co-operate towards attainment of group goals Harold Koontz.

Management is the process of working with and through others to effectively achieve the goals of the organization, by efficiently using limited resources in the changing world. Management involves creating an internal environment; it is the responsibility of management to create such conditions which are conducive to maximum efforts so that people are able to perform their task efficiently and effectively. It includes ensuring availability of raw materials, determination of wages and salaries, formulation of rules & regulations etc. Good management includes both being effective & efficient.

Management can be in following categories:Management as ProcessManagement as Activity Management as Discipline Management as ScienceManagement as ArtManagement as ProfessionPrinciples of ManagementHenry Fayol is widely acclaimed as founder of the classical management school. He was the first to systematize what management is all about. In an attempt to develop a science of management he divided business operations into six activities: 1. Technical2. Commercial3. Financial4. Security 5. Accounting6. Managerial

Fayol held that managerial ability should be acquired first in school and later in the workshop. In order to acquire managerial knowledge he developed 14 principles of management to be taught in academic institutions, they are as follows

1. Division of Labour: The objective of this principle is to achieve maximum efficiency from workers through specialization not only in technical aspect but in all other aspects of the organization. For example: A modern company like TVS motor company employs specialized workers like marketers, advertisers, skilled technologists, specialist managers, accountants, QC controllers, Production Line maintenance specialists, etc.

2. Authority and Responsibility: Responsibility is the essential counterpart of authority and they are correlated. An ideal manger is expected to have official authority arising from official positions as well as his inherent personal authority. Such person authority is compounded of intelligence experience, moral worth, ability to lead, past services, etc.

3. Discipline: All personnel serving in the organization should be disciplined. That is to respect the rules and agreements that govern the organization. According to Fayol, discipline will result from good leadership at all levels of the organization, fair agreements and judiciously enforced penalties upon breaching.

4. Unity of Command: Which means a person should get orders and instructions from only one superior. Fayol believed that, conflicts in instructions and confusion in authority will result when a person reports to more than one superior.

5. Unity of Direction: According to this principle each group of activities with the same objective should have one head and one plan. Unity of direction provides better coordination among various activities to be undertaken by an organization. For example: the personnel department in a company should not have two directors, each with a different hiring plan.

6. Subordination of individual interest to the common good: Common interest is above the individual interest. In any undertaking the interest of an employee should not take precedence over the interest of the organization as a whole.

7. Remuneration: Remuneration of employees should be fair and provide maximum possible satisfaction for both employee and employer. Fayol advocated profit sharing plan for managers but not for workers.

8. Centralization: Everything which goes to increase the importance of subordinates is decentralization; everything which goes to reduce it is centralization. Fayol believed that managers should retain final responsibility but also need to give their subordinates enough authority to do their jobs properly.

9. Scalar Chain and gang plankThe Hierarchy: Organizations today define this using organizational chart. There should be a scalar chain of authority and of communication ranging from the highest to the lowest. It suggests that each communication going from highest to lowest level or vice versa must flow through each position in the line of authority. Fayol has suggested gang plank which is used to prevent the scalar chain from bogging down action. His scalar chain and gang plank is as shown below:

According to the figure, A is top man having immediate subordinates B an L. In turn B and L are having immediate subordinates C and M. This continues to level G and Q.Ordinarily communication flow from top to down should be A B C D E F G, from down to top should be G F E D C B A. That means communication between F to P will be F E D C B A L M N O P, which consumes time. To speed up this Fayol suggested Gang Plank without weakening the chain of command. In order to achieve this superiors of F and P should authorize them to communicate directly provided each informs his superior of any action taken. According to Fayol this system allows F and P to deal in few hours with some questions or other which via scalar chain would have taken long time passing through twenty transmissions.

10. Order: This is a principle relating to the arrangement of people and material. People and material should be in right place at the right time. In material order, there should be a place for everything and everything should be in right place. Similarly, in social order, people in particular should be in jobs or positions most suited to them.

11. Equity: Equity is combination of both justice and kindness. Equity in treatment and behavior is liked by everyone; in turn it brings loyalty in the organization. Which means managers should be friendly and fair to their subordinates.

12. Stability of Staff: There should be reasonable security of jobs. No employee should be removed within short time. A high employee turnover rate is not good for the efficient functioning of the organization, which is both cause and effect of bad management.

13. Initiative: Within the limits of authority and discipline managers should encourage and give freedom to employees for taking initiative, even though this may result in some mistakes.

14. Espirit de Corps: This is an extension to unity of command based on the principle of Union is strength. Promoting team spirit will give the organization a sense of unity. To Foyal, even a small factor could help to develop this spirit. He suggested. For example the use of verbal communication instead of formal, written communication, whenever possible.

Application of Principles of management

Management process suggests that all the managers in the organization perform certain functions to get things done by others. Principles of management individually contribute to the overall effectiveness of the organization and also they are interrelated. Management principles are applicable in any type of organization irrespective of its nature and size to serve the following purposes

1. Planning: Planning means to outline future course of action to achieve the desired results. This includes what one wants to achieve, when to achieve and how to achieve. Planning involves determination of objectives, setting rules and procedures, setting policies, budgeting etc.

2. Organizing: Organizing is the process of dividing work into convenient tasks and grouping of such tasks in the form of positions, grouping various positions into departments and sections, assigning tasks to individual positions, and delegating authority to each position so that the work is carried out as planned. Structure of an organization varies based on its size and the nature of activities involved.

3. Motivation: Motivation creates a desire in people to act. In the case of organizational management, motivation is specifically directed towards getting people to act pursuant to the structure defined by the organizing step. Motivation can be in the form of rewards, such as compensation, or in the form of punishments, such as loss of compensation/employment.

4. Controlling: Controlling is the process of directing the use of resources and verifying that the plan is being accomplished through the procedures identified in the organizing step. Controlling also includes taking corrective action in event that the plan is not being accomplished because procedures are not being followed. Identifying whether the problems exist in terms of motivating, organizing, planning, or forecasting is essential to exerting control that will lead the organization to the desired outcome.

5. Coordinating: Coordinating consists of getting disparate resources to work together. Not only must an organization be coordinated within itself, but an organization must be coordinated with its suppliers and customers if it is to be successful. Within the organization, coordination plays the important role of ensuring that forecasting, planning, organizing, motivating, and controlling are internally consistent and moving in all aspects of the organization towards achieving its goals. Coordinating outside of the organization helps to refine the forecast, planning, and organizing processes by gathering inputs from customers and suppliers regarding their needs and capabilities.

6. Communicating: Communicating pulls all of the other principles of management together. Each phase requires communication so that everyone involved can provide input and know the result. Furthermore, information has to be communicated between each of the processes so that they remain consistent with the organization's overall objectives. Communication with customers and suppliers is also critical so that as much information as possible is available at each step. Communication is important in the event of a problem identified at a particular step that affects other principles, such as identified problems with the forecasting or organizing steps, so that it can be addressed.Importance of Management PrinciplesThe principles of management have tremendous impact upon the practice of management in increasing the efficiency of the organization. Need and importance of principles of management can be visualized as follows.

1. Improves Understanding: From the knowledge of principles managers get indication on how to manage an organization. The principles enable managers to decide what should be done to accomplish given tasks and to handle situations which may arise in management. These principles make managers more efficient.

2. Direction for Training of Managers: Principles of management provide understanding of management process what managers would do to accomplish what. Thus, these are helpful in identifying the areas of management in which existing & future managers should be trained.

3. Role of Management: Management principles make the role of a manager concrete. Therefore these principles act as ready reference to the managers to check whether their decisions are appropriate. Besides these principles define managerial activities in practical terms. They tell what a manager is expected to do in specific situation.

4. Guide to Research in Management: The body of management principles indicates lines along which research should be undertaken to make management practical and more effective. The principles guide managers in decision making and action. The researchers can examine whether the guidelines are useful or not. Anything which makes management research more exact and pointed will help improve management practice.

5. Establishes Sound Organization: To establish sound organizational structure is one of the objectives of management which is in tune with objective of organization and for fulfilment of this, it establishes effective authority & responsibility relationship. Management fills up various positions with right persons, having right skills, training and qualification. It enables the organization to survive in changing environment. With the change is external environment, the initial co-ordination of organization must be changed. It is responsible for growth and survival of organization.

6. Essentials for Prosperity of Society - Efficient management leads to better economical production which helps in turn to increase the welfare of people. Good management makes a difficult task easier by avoiding wastage of scarce resource. It improves standard of living. It increases the profit which is beneficial to business and society will get maximum output at minimum cost by creating employment opportunities which generate income in hands. Organization comes with new products and researches beneficial for society.

Principle of Management in Day to Day Context1. Principles of Management are Universal Management principles are applicable to all kinds of organizations - business & non business. They are applicable to all levels of management. Every organization must make best possible use by the use of management principles. Therefore, they are universal or all pervasive.

2. Principles of Management are Flexible Management principles are dynamic guidelines and not static rules. There is sufficient room for managerial discretion i.e. they can be modified as per the requirements of the situation. Modification & improvement is a continuous phenomenon in case of principles of management.

3. Principles of Management have a Cause & Effect Relationship Principles of management indicate cause and effect relationship between related variables. They indicate what will be the consequence or result of certain actions. Therefore, if one is known, the other can be traced.

4. Principles of Management - Aims at Influencing Human Behavior Human behavior is complex and unpredictable. Management principles are directed towards regulating human behavior so that people can give their best to the organization. Management is concerned with integrating efforts and harmonizing them towards a goal. But in certain situations even these principles fail to understand human behavior.

5. Principles of Management are of Equal Importance All management principles are equally important. No particular principle has greater importance than the other. They are all required together for the achievement of organizational goals.

Question #2: Co-ordination is the orderly arrangement of group effort to provide unity of action in pursuit of common purpose Elucidate this statement.

Answer:-Co-ordinationThe synchronization and integration of activities, responsibilities, and command and control structures to ensure, that the resources of an organization are used most efficiently in pursuit of the specified objectives. Some renowned authors have defined management as followsCo-ordination is balancing and keeping together the team by ensuring suitable allocation of task to the various members and seeing, that tasks are performed with due harmony among the members themselves E. F. L. BrechCo-ordination is the process whereby an executive develops an orderly patter of group efforts and secures unity of action in the pursuit of common purpose Mc FarlandCo-ordination is orderly arrangement of group efforts to provide unity of action in the pursuit of common goals Mooney and Reelay

Co-ordination is regarded as the essence of the management rather than one of its functions. It is a force which binds all other functions of management together. Management seeks to accomplish co-ordination through its basic functions of preparation, organizing, staffing, directing and controlling. Thats the reason why, co-ordination is not a separate function of management. Achieving harmony between individual efforts towards achievement of group goals is a key to accomplishment of management. Co-ordination is the core of management and is inherent in all functions of management. Co-ordination can be achieved through the following ways

1. Co-ordination through Planning: Planning facilitates co-ordination by integrating the various plans through joint discussion, exchange of ideas. Example: co-ordination between finance budget and purchases budget.

2. Co-ordination through Organizing: Mooney considers co-ordination as the fundamental nature of organizing. In fact when a manager groups and assigns various actions to subordinates, and when he creates departments co-ordination topmost in his mind.

3. Co-ordination through Staffing: A manager should bear in mind that the right no. of recruits in various positions with right type of education and skills are taken which will make certain right men on the right job.

4. Co-ordination through Directing: The purpose of giving orders, instructions & guidance to the subordinates is served only when there is a harmony between superiors & subordinates. 5. Co-ordination through Controlling: Manager ensures that there should be co-ordination between actual performance & benchmark performance to achieve organizational goals.

Types of Co-ordination

Co-ordination can be broadly classified as follows

Based on Coverage:

Internal: Co-ordination between units of same organisation is termed as internal co-ordination. Internal co-ordination summarizes the activities of different units so as to make the organization effective.

External: This means co-ordination between an organisation and its external environment comprising government, community, customers, investors, suppliers, competitors, research institutions, etc. It requires proper match between policies and activities of the enterprise and the outside world.

Based on Flow:

Vertical: Co-ordination between different levels of the hierarchy down the line in an organisation is known as vertical co-ordination. It ensures that all the levels in the organisation act in harmony and in accordance with the goals and policies of the organisation. Vertical co-ordination is assured by top management through delegation of authority.

Horizontal or Lateral: refers to co-ordination between different departments and other units at the same level of the management hierarchy. For instance, co-ordination between production department and marketing department is horizontal or lateral co-ordination.

Need for Co-ordination

Performance of various managerial functions in an integrated way ensures fair degree of co-ordination among individuals and departments. In large organization due to its size special efforts are needed for co-ordination due to the complexities mentioned below

1. Large Number of Personnel: The increasing number of persons involved in the large organisations complicates the problems of co-ordination. Individuals join organization to fulfil their needs. Many times these needs may be different than group needs and goals. Each individual is unique by nature; higher the number, higher will be the degree of incompatibility. In order to achieve efficiency it is imperative that both organizational and individual goals are brought to a level of conformity, and management tries to integrate both goals through co-ordination.

2. Specialisation: There is high degree of specialisation in modern organisations. Specialisation arises out of complexities of modern technology as well as from diversity of tasks and persons needed to them. It will be very expensive if specialists are allowed to work without co-ordination. Therefore, some mechanism is required to co-ordinate the efforts of various specialists in the organization.

3. Functional Differentiation: Functions of an organization are normally divided into departments, divisions, sections and the like. Co-ordination is therefore necessary to link the functions together and assure their contribution to the total result.

4. Interdependence: The need for co-ordination arises because of interdependence of organizational units and subunits and people working within these. Because of this interdependency, performance of one unit is affected by others. Therefore, in order to optimise effective use of the organizational resources, the efforts of all the units have to be integrated through high degree of co-ordination. There are three type of interdependence: pooled, sequential and reciprocal.

5. Individual Vs Organizational interests: Individuals join organization to fulfil their desires and expectations. In turn, organization expects certain things from the individual. Incompatibility between these two expectations leads to clash of interests. In such a case individual efforts may not contribute to the achievement of organizational objectives. Therefore there is a need for co-ordination and integration of both interests.

Principles of Co-ordination

In order to achieve effective co-ordination Marry Parker Follet has laid down the following principles of co-ordination.

1. Early Start: Co-ordination must start at the early stage in the management process that is planning stage. The task of co-ordination becomes easier subsequently in a management process if it starts at the planning stage. Mutual exchange of ideas helps in clearing doubts and misunderstanding. If not started in the early stage securing co-ordination becomes impossible at later stages.

2. Direct Personal Contact: It emphasises on the importance of direct contact between managers and their subordinates. It helps in achieving effective co-ordination and eliminates conflicts and misunderstandings. It facilitates managers to co-ordinate different activities of their subordinates effectively and efficiently.

3. Continuity: Co-ordination is a continuous process. In order to maintain perfect balance between various units and people, management should strive hard to continuously maintain co-ordination. Co-ordination should be maintained during all stages of management Planning, organizing, directing and controlling.

4. Integration: This principle calls for Integration of efforts to achieve a common purpose. Reciprocal relationship among departments and employees concerned is very important to achieve effective co-ordination and thereby successfully attaining a common purpose. Every decision taken by a department or a person in an organization affects all other departments or persons, because they are related to each other. Hence prior to taking any decision all managers should discuss its effect on other persons and departments.

Techniques for effective Co-ordination

The basic objective of all managerial functions is to get things done by co-ordination efforts. Different organizations adopt different mechanisms to achieve effective co-ordination. Since there is no universally accepted method of performing co-ordinated managerial functions, managers have to achieve co-ordination by making some special efforts. Some of them are as follows

1. Chain of command: This technique is very important particularly in vertical co-ordination. Vertical co-ordination is required to harmonise the work allocated to several levels in the organisation. It ensures that various levels do not act out of accord with each other or with policies and organisational objectives. The concept of unity of efforts, timing and orderly efforts apply to all levels and all units of the organisation. Managers can use their authority to issue orders and instructions to their subordinates, this process can go down the organisation.

2. Leadership: If co-ordination cannot be achieved by mere exercise of authority, managers can use their leadership to bring co-ordination among their subordinates. Leadership is the process of inducing subordinates to co-operate willingly. Leadership brings individual motivation and persuade the group to have identity of interests and outlook in group efforts. Thus many conflicting situations can be overcome by including people to work in harmony by exercising leadership.

3. Committees: Committee is a body of persons entrusted with discharge of some functions collectively as a group. The role of committee is significant in achieving horizontal coordination. Coordinating horizontally is a matter of relating the efforts of functional, divisional or territorial units to each other. Committee ensures that problems which arise out of relationships among various units can be solved by group decisions. The core of group decision making, so far as coordination is concerned, lies in the opportunities for free and open discussion and interchange of ideas, problems, proposals and solutions. Improved understanding of organisation wide matters leads to better coordination.

4. Meetings: Periodic meetings can be highly effective in promoting coordination through better communication. Usually, it is desirable for a regular time to be set aside for meetings. These meetings generally contribute in the following ways to achieve coordination To give everyone present a sense of the unity and interconnectedness of the work of the organisation as a whole; To learn from the superior managers about new problems and developments which affect their work; To solicit and enlist the thought and co-operation of staff members in the solution of problems; To provide an opportunity for subordinates to bring up questions which the superior manager should know about and which may affect the operations of parallel divisions of the organisation; To provide a forum in which fraction points or areas of inadequate coordination are brought into open.

5. Special coordinators: Generally, in big organisations special coordinators are appointed. They normally work in staff capacity to facilitate the working of main managers. A coordination cell may also be created. The basic responsibility of the cell is to collect the relevant information and send this to various heads of sections or departments so that interdepartmental work and relationship is coordinated. In some cases, a particular person is appointed to coordinate the work of a particular nature. For example, in a particular project, along with various functionaries, a project coordinator can also be appointed. His basic function is to coordinate various activities of the project and keep information about the development of the project.

6. Self-coordination: The basic principle of self-coordination is modification of functioning of department in such a way that each department coordinates with other department. Each department or section or individual affects others and also gets affected by others. Therefore, if those departments, sections, or individuals apply a method of working which facilitates others, then self coordination can be achieved. However, mere communication does work unless there is a proper organisational climate in which each one sees the integration of his goals with organisational goals and also the benefits of his departments with others.

Conclusion

In an organization every individual is related with others and his function affects others. Since all individuals, ultimately contribute to the same end result, their contribution will be maximum when there is positive effect of ones efforts over others. Without co-ordination the efforts of some will be counter-productive for others. Hence co-ordination is relevant for group efforts and not individual efforts. It involves the orderly pattern of group efforts because an individual who is working in isolation does not affect functioning of others and no need for co-ordination arises. Co-ordination emphasises unity of efforts which is the heart of co-ordination.

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