Principles of Management
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Transcript of Principles of Management
Text Book
Management:A global and entrepreneurial perspective
Heinz Weihrich Mark V Cannice Harold Koontz
12th edition, McGraw Hill
Slide Prepared By: Abdullah Al Yousuf Khan, Faculty, IUBAT—International University of
Business Agriculture and Technology, Dhaka, Bangladesh
1
After studying this chapter, you’ll be able to:
1. Explain the nature and purpose of management 2. Understand that management applies to all kind of
organisations3. Recognise that the aim of all managers is to create a surplus
(profit)4. Identify latest information technology and globalisation5. Explain the concepts of productivity, effectiveness, and
efficiency6. Describe the evolution of management and some recent
contribution to management thought7. Describe various approaches to management, their
contributions as well as limitations8. Show how the management process, operational process,
approaches to management theory and science has a basic core of its own
9. Realise that managing requires a system approach and that practice must always take into account SITUATIONS and CONTINGENCIES
10. Define the mangerial functions of planning, organising, leading and controlling
2Slide Prepared By: Abdullah Al Yousuf Khan, Faculty, IUBAT—International University
of Business Agriculture and Technology, Dhaka, Bangladesh
Definition of Management: Its nature and purpose
Management is a process of designing and maintaining an environment in which individuals, working together in groups, efficiently accomplish selected goals.
Expended Definition: As managers, people carry out the managerial
functions of planning, organising, leading and controlling.
Management applies to any organisations. It applies to managers at all kind of organisational
levels. The aim of all mangers is the same to create a surplus. Managing is concerned with productivity, which implies
effectiveness and efficiency.
3Slide Prepared By: Abdullah Al Yousuf Khan, Faculty, IUBAT—International University of Business Agriculture and
Technology, Dhaka, Bangladesh
Definition of Management
All do manage organisations. Organisation can be defined as a
group of People working together to create a surplus. In business organisations, this surplus is profit. Universities does
create profit but generate and disseminate knowledge as well as provide service
to the society.
4Slide Prepared By: Abdullah Al Yousuf Khan, Faculty, IUBAT—International University
of Business Agriculture and Technology, Dhaka, Bangladesh
The Functions of Management:
Planning Organising
Staffing Leading
Controlling
5Slide Prepared By: Abdullah Al Yousuf Khan, Faculty, IUBAT—International University
of Business Agriculture and Technology, Dhaka, Bangladesh
PLANNING
Planning involves selecting goals andobjectives and actions to achieve
them, i.e.selecting future courses of actions
fromalternatives. To make any decision asystematic study, an analysis, or a
proposalis needed, and that is planning.
6Slide Prepared By: Abdullah Al Yousuf Khan, Faculty, IUBAT—International University
of Business Agriculture and Technology, Dhaka, Bangladesh
ORGANISING
Organising is that part of management which involvesestablishing an intentional structure of roles for people toFill in an organisation. It is intentional in the sense ofMaking sure that all the tasks necessary to accomplishgoals are assigned and, it is hoped, assigned to people whocan do them best.
The purpose of organisation structure is to help create anenvironment for human performance. It is a managementtool but may not be a easy task.
7Slide Prepared By: Abdullah Al Yousuf Khan, Faculty, IUBAT—International University
of Business Agriculture and Technology, Dhaka, Bangladesh
STAFFING
Staffing involves filling the positions in theorganisation structure. This is done by
identifyingwork-force requirements: inventorying the
peopleavailable: and recruiting, selecting, placing,promoting, appraising, planning the careers of,compensating, and training/developing currentemployees so that tasks are accomplishedeffectively and efficiently.
8Slide Prepared By: Abdullah Al Yousuf Khan, Faculty, IUBAT—International University
of Business Agriculture and Technology, Dhaka, Bangladesh
LEADING
Leading is influencing people so that they will contribute toorganisational and group goals: it has to do predominantlywith the interpersonal aspect of managing. All managerswould agree that they face most problems with peopletheir desires and attitudes as well as their behaviour asindividuals and in groups. And then effective managers
alsoneed to be effective leaders. Since leadership impliesfollower ship and people tend to follow those who offermeans of satisfying their own needs, wishes, and desires, itis understandable that leading involves innovations,leadership styles and approaches, and communication.
9Slide Prepared By: Abdullah Al Yousuf Khan, Faculty, IUBAT—International University
of Business Agriculture and Technology, Dhaka, Bangladesh
CONTROLLING
Controlling is measuring and correcting individual andorganisational performance to ensure that events conformto plans. It involves measuring performance against goalsand plans, showing when deviations from standards exist,and helping to correct deviations from standards. In short,controlling facilitates the accomplishments of plans. Controlactivities generally relate to the measurement ofachievement. Some means of controlling, like the budgetfor expenses, inspection records, and the record of labourhours lost, are generally familiar.
10Slide Prepared By: Abdullah Al Yousuf Khan, Faculty, IUBAT—International University
of Business Agriculture and Technology, Dhaka, Bangladesh
Management as an essential for any organisation
Managers are held responsible for taking actions that will enable individuals to make their best contributions group objectives. Management thus applies to small and large organisations, to profit and non-profit enterprise. To manufacturing as well as service industries. The term enterprise refers to a business, government agency, hospital, university and any other type of organisation-business or non business organisations. Effective management is the concern of the corporation president, the hospital administrator, the university president.
11Slide Prepared By: Abdullah Al Yousuf Khan, Faculty, IUBAT—International University
of Business Agriculture and Technology, Dhaka, Bangladesh
Managerial functions at different organisation levels Managers, administrators, executives and
supervisors are same in terms of taking responsibility.
But situation can be different in various types of organisation.
All managers carry out managerial functions. But time spent for each function may differ.
Top level managers spend more time on planning and organising than do lower-level managers.
Leading, on the other hand, takes a great deal of time for first-line supervisors.
12Slide Prepared By: Abdullah Al Yousuf Khan, Faculty, IUBAT—International University
of Business Agriculture and Technology, Dhaka, Bangladesh
Managerial skills and the organisational hierarchy Skills may differ at various levels in the organisational
hierarchy Technical skills are of the greatest importance at the
supervisory level and human skills are helpful in the frequent interactions with the subordinates.
Conceptual and design skills on the other hand, are not critical for lower-level supervisors.
At the middle management level, the need for technical skills decreases, human skills are still essential, while conceptual skills gain in importance.
At the top management level, conceptual and design abilities and human skills are especially valuable, but there is relatively little need for technical abilities.
In large organisations, CEOs can utilise the technical abilities of their subordinates.
In smaller firms, technical experience may still be quite important.
13Slide Prepared By: Abdullah Al Yousuf Khan, Faculty, IUBAT—International University
of Business Agriculture and Technology, Dhaka, Bangladesh
TopLevel
Managers
Middle-levelmanagers
First-level supervisors
LEADING
ORGANISING
14Slide Prepared By: Abdullah Al Yousuf Khan, Faculty, IUBAT—International University
of Business Agriculture and Technology, Dhaka, Bangladesh
The goals of all managers and organisations The aim of the managers is simply to
make profit In many businesses- to increase
shareholders value in the long term is more important
The aim of all managers should be to create a surplus, by establishing an environment in which people can accomplish group goals with the least amount of time, money, materials, and personal dissatisfaction.
15Slide Prepared By: Abdullah Al Yousuf Khan, Faculty, IUBAT—International University
of Business Agriculture and Technology, Dhaka, Bangladesh
Characteristics of excellent and most admired companies In the US, profitability is an important
measure of company excellence. However, other criteria are also used that
frequently coincide with financial performance
Thomas Peters and Robert Waterman in their book, In Search of Excellence, identified 43 companies that they regarded as excellent.
In choosing firms, they considered factors such as growth of assets and equity, average return on total capital, and similar measures.
16Slide Prepared By: Abdullah Al Yousuf Khan, Faculty, IUBAT—International University
of Business Agriculture and Technology, Dhaka, Bangladesh
The authors identified eight characteristics of excellent enterprises.These firms Were oriented toward action Learned about the needs of their customers Promoted managerial autonomy and entrepreneurship Achieved productivity by paying close attention to the
needs of their people Were driven by a company philosophy often based on
the values of their leaders Focused on the business they knew Had a simple organisational structure with a lean stuff Were centralised as well as decentralised, depending
on appropriateness
17Slide Prepared By: Abdullah Al Yousuf Khan, Faculty, IUBAT—International University
of Business Agriculture and Technology, Dhaka, Bangladesh
Criticism
Two years after In Search of Excellence published, Business Week took a second look at the companies that the writers had considered excellent.
Business Week survey revealed that at least 14 of the 43 companies did not measure up very well to several of the eight characteristics of excellence.
9 companies showed a great decline in earnings.
The performance review of the firms indicated that success may be only transitory and that it demands continuing hard work to adopt to the changes in the environment
18
Slide Prepared By: Abdullah Al Yousuf Khan, Faculty, IUBAT—International University of Business Agriculture and Technology, Dhaka, Bangladesh
Advances in technologies, trends in globalisation, and a focus entrepreneurship for adapting to change in the 21st centuryTo be successful in business,
companies must take advantage of the new information technology –especially the internet-globalisation-and entrepreneurship
19Slide Prepared By: Abdullah Al Yousuf Khan, Faculty, IUBAT—International University
of Business Agriculture and Technology, Dhaka, Bangladesh
Technology
Technology, and specially information technology (IT) pervasive (allocable) impact on both organisations and individuals.
The World Wide Web and the Internet connect people and organisations through a global network.
Electronic commerce (e-commerce) is increasingly used for transactions between individuals and companies (B2C) as well as between business (B2B)
Another trend is the use of m-commerce, that is, use of mobile or wireless commerce for buying and selling goods using for example mobile phones or personal digital assistance (PDA)
20Slide Prepared By: Abdullah Al Yousuf Khan, Faculty, IUBAT—International University
of Business Agriculture and Technology, Dhaka, Bangladesh
For example, in Japan, NTT DoCoMo has developed an internet service called i-mode, which has already many million subscribers. This services will increase as soon as third-generation wireless technology making the speedy transmission of data possible (including video).
21Slide Prepared By: Abdullah Al Yousuf Khan, Faculty, IUBAT—International University
of Business Agriculture and Technology, Dhaka, Bangladesh
Globalisation
The second major trend is globalisation Most major corporations has international
presence The WTO, an umbrella organisation, was
established in 1955 to govern international trade.
Gains from globalisation not only benefit Western corporations but also result in higher incomes for people in other countries, such as China.
Clearly, managers must develop an international perspective.
22Slide Prepared By: Abdullah Al Yousuf Khan, Faculty, IUBAT—International University
of Business Agriculture and Technology, Dhaka, Bangladesh
Entrepreneurship
Entrepreneurship is seen by government as a means to increase employment and prosperity among their population, while organisation-large or small find that entrepreneurial innovation and expansion into new markets are essential to their success and survival in increasingly competitive markets that linked globally through sophisticated and ever present communication technologies.
23Slide Prepared By: Abdullah Al Yousuf Khan, Faculty, IUBAT—International University
of Business Agriculture and Technology, Dhaka, Bangladesh
Entrepreneurship
Entrepreneurship is a creative process that is centred in the notion of identifying market opportunities and unmet needs.
It is building solutions that meet these needs and bring value to customers.
Entrepreneurs build organisations that provide products that alleviate people’s pain (e.g. pharmaceutical companies) or provide the means for people to enhance their own lives through sophisticated telecommunications (e.g. information technology companies)
24Slide Prepared By: Abdullah Al Yousuf Khan, Faculty, IUBAT—International University
of Business Agriculture and Technology, Dhaka, Bangladesh
Productivity, effectiveness, and efficiency Definition of productivity; can be
defined as the output-input ratio within the time period with due consideration for quality
Output
Productivity = ------------- (time/quality)Inputs
More output with same input Same output less input
25Slide Prepared By: Abdullah Al Yousuf Khan, Faculty, IUBAT—International University
of Business Agriculture and Technology, Dhaka, Bangladesh
effectiveness, and efficiency
Effectiveness is the achievements of objectives
Efficiency is the achievement of the ends with the least amount of resources
26Slide Prepared By: Abdullah Al Yousuf Khan, Faculty, IUBAT—International University
of Business Agriculture and Technology, Dhaka, Bangladesh
Management: science or art: Managing is simply know-how. It is- doing things in light of the realities
of a situation Managers can work better by using
organised knowledge about management It is this knowledge that constitute a
science Thus, management as practice is an art; The organised knowledge underlying the
practice may be referred to as science
27Slide Prepared By: Abdullah Al Yousuf Khan, Faculty, IUBAT—International University
of Business Agriculture and Technology, Dhaka, Bangladesh
The evolution of management thought Scientific management Modern operational management
theory Behavioural sciences System theory Modern management thought
28Slide Prepared By: Abdullah Al Yousuf Khan, Faculty, IUBAT—International University
of Business Agriculture and Technology, Dhaka, Bangladesh
Scientific management;
Frederick W. Taylor; (1903) acknowledged as the father of scientific management. His primary concern was to raise productivity through greater efficiency in production and increased pay for workers, by applying the scientific method.
His principles emphasise using science, creating group harmony and cooperation, achieving maximum output, and developing workers.
29Slide Prepared By: Abdullah Al Yousuf Khan, Faculty, IUBAT—International University
of Business Agriculture and Technology, Dhaka, Bangladesh
Henry L. Gantt (1901)
Called for scientific selection of workers and “harmonious cooperation” between labour and management. Developed the Gantt chart stressed the need for training.
30Slide Prepared By: Abdullah Al Yousuf Khan, Faculty, IUBAT—International University
of Business Agriculture and Technology, Dhaka, Bangladesh
Frank and Lillian Gilberth (1900) Frank is known primarily time and
motion studies. Lillian, an industrial psychologist,
focused on the human aspects of work and the understanding of workers’ personalities and needs.
31Slide Prepared By: Abdullah Al Yousuf Khan, Faculty, IUBAT—International University
of Business Agriculture and Technology, Dhaka, Bangladesh
Modern operational management theory
Henri Fayol (1916) Referred to as the father of the modern
management theory. Divided industrial activities into six
groups: Technical Commercial Financial Security Accounting and managerial
32Slide Prepared By: Abdullah Al Yousuf Khan, Faculty, IUBAT—International University
of Business Agriculture and Technology, Dhaka, Bangladesh
Modern operational management theory
Recognised the need for teaching management.
Formulated 14 principles of management, such as; Authority and responsibility Unity of command Scalar chain Esprit de crops
33Slide Prepared By: Abdullah Al Yousuf Khan, Faculty, IUBAT—International University
of Business Agriculture and Technology, Dhaka, Bangladesh
Behavioural science
Hugo Munsterbergh (1912) Application of psychology in industry and
management. Walter Dill Scott (1910, 1911)
Application of psychology in advertising, marketing and personnel.
Max Webber (1946, 1947) Theory of bureaucracy.
34Slide Prepared By: Abdullah Al Yousuf Khan, Faculty, IUBAT—International University
of Business Agriculture and Technology, Dhaka, Bangladesh
Behavioural science
Vilfredo Pareto (1896-1917) Referred to as the father of the social
systems approach to organisation and management
Elton Mayo and F.J. Roethlisberger (1933) Famous studies at the Hawthorne plant of
the Western Electric Company on the influence of social attitudes and relationships of work groups on performance
35Slide Prepared By: Abdullah Al Yousuf Khan, Faculty, IUBAT—International University
of Business Agriculture and Technology, Dhaka, Bangladesh
Systems theory
Chester Barnard the functions of the managers (1938) The task of managers is to maintain a
system of cooperative effort in formal organisation. Suggested a comprehensive social systems approach to managing.
36Slide Prepared By: Abdullah Al Yousuf Khan, Faculty, IUBAT—International University
of Business Agriculture and Technology, Dhaka, Bangladesh
Modern management thought Peter F. Drucker (1974)
Very profile writer on many general management topics
W. Edwards Deming Introduced quality control in Japan
Laurence Peter (1969) Observed that eventually people get
promoted to a level where they are incompetent
37Slide Prepared By: Abdullah Al Yousuf Khan, Faculty, IUBAT—International University
of Business Agriculture and Technology, Dhaka, Bangladesh
William Ouchi (1981) Discussed selected Japanese managerial
practices adapted in the U.S. environment
Thomas Peters & Robert Waterman (1982) Identified characteristics of components
they considered excellent.
38Slide Prepared By: Abdullah Al Yousuf Khan, Faculty, IUBAT—International University
of Business Agriculture and Technology, Dhaka, Bangladesh
Patterns of management
The managerial roles approachHenry Mintzberg of McGill University
studied the activities of five CEOs.Executive do not perform the classical
management function Instead they do the following
Interpersonal roles1.The figurehead role (performing
ceremonial and social duties as the organisation’s representative
39Slide Prepared By: Abdullah Al Yousuf Khan, Faculty, IUBAT—International University
of Business Agriculture and Technology, Dhaka, Bangladesh
2. The leader role3. The liaison role
Informational roles4. The recipient role ( receiving information
about the operation of an enterprise)5. The disseminator role (passing
information to subordinates)6. The spokesperson role (transmitting
information to those outside the organisation)
40Slide Prepared By: Abdullah Al Yousuf Khan, Faculty, IUBAT—International University
of Business Agriculture and Technology, Dhaka, Bangladesh
Decision roles
7. The entrepreneurial role8. The disturbance-handler role9. The resource-allocator role10.The negotiator role
41Slide Prepared By: Abdullah Al Yousuf Khan, Faculty, IUBAT—International University
of Business Agriculture and Technology, Dhaka, Bangladesh
Other managerial approaches Empirical or case approach
Studies experience through cases, identifies success and failure
Limitations- situations are all different. No attempt to identify principles. Limited value for developing management theory
42Slide Prepared By: Abdullah Al Yousuf Khan, Faculty, IUBAT—International University
of Business Agriculture and Technology, Dhaka, Bangladesh