Theory and Practice of Management

CHANGE Rapid changes more especially in the environmental and technological areas...

... impact organizational plans adversely. In the field of computers, the chip capacity of the hard disk increased in breathtaking speed. a 2 gig hard disk is considered obsolete-- as there are 1 TB hard disks available. again the increase in speed chips is breathtaking! Once radios used bulky, noisy, inelegant, vacuum tubes, which became obsolete after Bell labs designed transistors. In such rapidly changing, highly competitive environment, it is your won creativity and techniques bordering on innovation that are necessary to exist. Fast adaptability to change is the key.

TYPES OF PLANS Programs contain a simple, complicated or complex plan....

..... of activities developed primarily for carrying out stated policies. It simplifies the process of decision-making. A program generally consists of objectives, policies, procedures, rules, individual task allocations, what action or inaction to be taken or not taken by whom and when, and what resources are to be employed in order to successfully carry out a specified goal. Programs are also assisted by appropriate budgets in quantity or dollar terms.

ORGANIZING Informal Organization...

....according to Chester Barnard is any joint personal activity without conscious joint purpose, even though possibly contributing to joint results. The relationship in an informal organization never reflect in any organizational chart. There may be sub-assembly groups, stress groups or accounts groups, i.e groups of individuals. However, each group identifies itself as a contributing member and acts in unison where the group's ideal or any given member's identity or right is challenged.

CHANGE People feel comfortable and sage when they feel a sense of control and understand their role in the community and their environment....

...They attach their identity to their environment, so any changes, even those that are positive and will offer real benefits cause discomfort. Because of this discomfort, talking about future changes is not enough to move the average person from the frozen state and a lot of effort may be needed to unfreeze them and get them going. When people are unfrozen and ready to take the next step, they are referred to as change ready.

TYPES OF PLANS In order to handle future activities one needs...

...a plan that shows clearly what methods are to be used. And this plan that establishes such methods is known as procedure. Procedures are available at very level of an organization. It is more widely adhered to in the lower levels. Some organizations have even departmental procedures cogently spelled out for the people of the department to follow. Rules give us distinct action plans without permitting an sort of discretion whatsoever. THe action plan may spell out what action or non-action to be taken in clear terms. They are simple plans.

STEPS IN PLANNING The bounded rationality model is...

...another decision-making model. THis model is based on the theory that people will try to find the answer to their problem, but will settle for a less than perfect solution because it involves more work than they bargained for. The model was developed by Herbert Simon. He developed it in response to and as a criticism of the rationality model. Simon believed that there were 3 steps in problem solving. First the decision maker must decide if there is a legitimate problem. This is called the intelligence stage. It may involve talking with workers, going over budget and profit summaries, monitoring the workplace, or any other sort of action which helps them gather info about hte problem. Second, the decision maker develops a list of possible solutions. This is called the design stage. For example, if a company is not bringing in enough profit, the decision maker may consider raising product price, laying off a number of employees, or cutting production or distribution costs. In the final step the decision maker will "satisfice." Simon gave the step this unique name because it involves a combination of satisfying the problem, and sacrificing the best solution for one which is "good enough".

DECISION MAKING The central pith, the core of planning is...

...decision making. There are alternatives available. Choosing the best alternative from a plethora of available alternatives and sticking to it is the focus of decision making.

CHANGE At the personal level...

...knowledge changes are the easiest. Once you read this book you will have gained a little more knowledge than you had before starting it. Attitudinal change is not as difficult as individual behavior change, though time and conscious effort is needed. Group behavior change is little more difficult than individual behavior change. Group behavior change affects an organization.

CHANGE Lewin's model says...

...that change is a journey and not just a simple step. There may be multiple small changes that result in getting to where they (or the organization) want them to be. A failing for managers implementing these changes is the expectation to have everyone on the team get to the end result in just one change. Transition takes time and managers need to adjust their expectations to be in line. once the changes are made, a refreeze is in order, to establish the new reality and make it permanent. Refreezing may be slow as the transitions continue to be in a state of flux. Sometimes this results in a slushy environment, where the company is constantly changing, but slowly enough that it is at least a bit frozen.

STEPS IN PLANNING Risk Analysis

...which again is a method steeped in mathematical terms--it tells oyu what probabilities are there to arrive at decisional outcomes.

CHANGE If people as a group within an organization demand certain things...

..it impacts the organization and the Personnel Manager has to deal with such a situation. At organization level, environmental changes- Social, Economic, Political, Legal-- any change is any of the components, is going to affect the organization adversely. In the case of technological change, an organization has to face the music, if it does not adapt itself to the changes adeptly and with speed. A change is certainly a limiting factor in the planning process.

STEPS IN PLANNING Decision Trees

..which are statistical models which tell us which are the possible decision points, chance events which are likely to occur and what probabilities are there for each course of action. Then there is Preference Theory, which tells oyu a given manager's willingness to take or refrain from taking (unwillingness) risks.

ECONOMIC ISSUES 4 Factors of Production

1. labor--the human resource, brain and brawn. 2. land-- includes all natural resources 3. capital--funds provided by investors and profits created 4. entrepreneurship-- the process of bringing the other factors together to create a good or service and a profit

CHANGE Kurt Lewin identified 3 stages of change

1. unfreeze 2. transition 3. refreeze

Theory: Socio-technical Systems Approach

Arising out of the co-op social systems, another approach, mostly credited to E.L. Trist, seeks to emphasize the systems aspect of group behavior. It tries to relate group behavior with technical systems and its relationships. There should be a most harmonious relationship between groups of people (social systems) on the one hand and machines, systems, and methods (technical system, on the other. It seeks to establish that personal behavior and group behavior are necessarily influenced by the technical system in which they work.

Theory: The Co-operative Social Systems Approach

As a corollary of the group behavior approach, the Cooperative Social Systemcame into being. It deals with human relationship as a co-operative social system. PRopounded by Christian Barnard, the essesnce of the coop social system is the coop interaction of thoughts, ideas, wants and desires of 2 or more people. His theory focuses on both interpersonal and group behavioral approaches and concludes that their interaction leads to a system of co-operation.

Economic environment:

Deals with the availability of capital, rate of interest, labor availability and how well they are organized, general price levels, the degree of productivity, the willingness of entrepreneurs and availability of Managerial skills

ECONOMIC ISSUES

Economics is the study of how people choose to use limited resources to satisfy people's unlimited wants. Social responsibility is the idea that a business is part of something bigger than itself. It is part of a global community. With that knowledge comes the responsibility to do what is best for the company and for society as well. Some of the ways that companies can contribute to society are making environmentally friendly choices as well as contributing to charties.

Functional Management- Basics

Generally speaking, good managers need to posses 3 different qualities: technical skills, interpersonal skills, and conceptual skills. Technical skills: are field or task related. for example if the job requires use of a specific computer program or piece of machinery, the manager should know how to operate it. Interpersonal skills: relate to how well the manager works with other people. Good managers should be able to communicate with and inspire their employees. If they are uncommunicative or inefficient they will not be an effective manager. Conceptual Skills: relate to a manager's ability to identify important information, visualize and be innovative.

Management Roles

Henry Mintzberg classified 10 different management roles which can be grouped into 3 main areas. These are decisional roles, interpersonal roles, and informational roles. - Decisional roles: involve strategy and planning. The roles that fit into this category are entrepreneur roles, disturbance handler roles, resource allocator roles and negotiator roles. - Interpersonal Roles: involve interacting with employees and giving direction. roles which fit into this category include figureheads, leaders, and liaisons. - Information roles: involve organizing and interpreting information. Roles that fall into this category are monitors, spokespersons, and disseminators. Mintzberg also claimed that organizations could be classified as stable, dynamic, complex, or simple.

What is managing all about?

In a broader sense, Management may be defined as working with people and groups of people with the sole intention of achieving organizational goals. From this definition you can see that the word "manangement" is not tied down to managing business or industrial organizations. It has been given a broader perspective; business, industry, educational institutions, political establishments, hospitals and nursing homes, churches and even families--come under its purview. People who manage should have interpesonal skills. Messrs. Paul Hersey and Kenneth Blanchard believe that "...the achievement of organizational objectives through leadership is Management.."

Theory: The Group Behavior Approach

In an organization people work not in isolation but in groups. The study of group behavior patterns is to know how groups affect production possibilities positively or negatively. It relates to the study of behavioral composition of groups, which are large, and how this impacts their relationships.

Theory: The Contingency or Situational Approach Professor J. Lorsch of Harvard University was one of the founders of this theory

It tells us that any manager's peformance is directly related to a set of given cirucmstance or contingency. Some theorists aslo feel that it takes into account not only situations but also the behavior pattern of an organization. The spelled out drawback is that instead of promoting total organizational loyalty, it encourages departmental loyalty

Theory: The Inter-personal Behavior Approach

Its is all about understanding people and their relationships. It mainly deals with human aspects and stresses that if people understood other people perfectly, organizational goals could be achieved without much difficulty

Ethical Environment:

Longman Advanced American Dictionary describes: 1. "Ethics" "ethical" as the study of the moral rules and principles of behavior in society, and how they influence the choices people make..." 2. relating to principles of what is right ans hwat is wrong.." Ethical Environment therefore means holding on to moral principles, guided by value systems prevalent in society and generally behaving in a responsible way.

ORGANIZING

Organizing defines organizational roles to be played by individuals, their positions and the authority relationships. Every role should be clearly defined with distinct objectives in mind. The major duties to be performed by individuals, how responsibilities are to be delegated and with what authority are to be included in the organizing process. Should also indicate what resources are available, what info and tools are necessary to also carry out such roles effectively. This is organizing in a nutshell.

Theory: The Decision Theory Approach

THis approach emphasizes that a manager's most important function is decision making and therefore decision should be the central focus. A manager goes ahead on the basis of evaluating innumerable alternatives and arriving at a most suitable decision, depending upon the facts and figures, and importantly the extent to which he was delegated responsibility and authority. Since decision-making is the core, all the other functions of a manager are built around it, so say the decision theorists.

Theory: The empirical or case approach

The experience of past situations to guide in the present. Find out why a particular action succeeded or failed by going deeper to analyze the basic reason.

Theory: THe Mathematical or Management Science Approach

The mathematical models form part of this theory. Each situation is fraught in terms of available mathematical models and hten analyzes the situation threadbare arriving at a mathematically correct decision.

STEPS IN PLANNING 3. To Identify the Basics

The plan has to work in what sort of environment-- both external and internal. To take note of all factors that form part of the external environment

Theory: The Systems Approach

They view managment as a system, which envelopes within itself many subsystems, all operating within the total environment. A total unity which is a collection interdependent or interconnected subsystems working within a total environment. Concepts, ideas, thoughts, principles, theories, or techniques (sub-systems) in the area of managing (system)

Theory: The Operational Approach

This approach believes in imparting knowledge from every other field of knowledge such as sociology, mathematics, economics, psychology, ect. which fits simply into management.

Political and Legal Environment:

This consists mainly of laws, rules, regulations, governmental policies, ect.., that directly affect an organization. Managers are to act within the alwas of the land, follow the rules and regulations faithfully, and in case of a change in policy that has a direct bearing on the enterprise, to act accordingly.

STEPS IN PLANNING 2. Setting of Objectives

an unambiguous objective that spells out clearly where the organization is at the moment and why, where it should be heading, what should be the best direction to get there, what specific action should be taken by whom and when, and what measures should be watched to get info on whether the plan is going on the right track and at the right speed.

STEPS IN PLANNING Limiting Factor

ca be defined as something, which stands in the way of achieving a goal. The impediment. Identify the limiting factor or factors and solve them in order to arrive at the best possible decision. How to evaluate alternatives? There are Marginal Analysis Models and Cost Effective Analysis Models. The Marginal Analysis deals in analyzing the additional units of revenue one gets from incurring a certain unit of additional costs. The cost-effective analysis deals in cost-benefit analysis.. the ratio of benefits to costs. Your experience, ability to experiment and an analytical bent of mind helps you to arrive at a rational decision under specific given circumstances.

CHANGE

change is the essence of life. There are different levels of changes. Personal Level - group behavior - individual behavior - attitude change - knowledge change Organizational Level - technological change - environmental change

PLANNING What? How? When and Who? is....

decided in advance at the planning stage. What to do, How to do, When to do and Who exactly will do is the primary objective of good planning. It, therefore, precedes all other managerial functions. Since planning and controlling are related most intricately they become inseparable and therefore, a good plan always spells out yardsticks for accomplishing the planned objective. It is obvious control measures are also part and parcel of a well thought out plan.

The impact of External Environment

every organization has to operate under different external environments. It is within the environment and therefore has to be responsive ORGANIZATION <------ economic, technological, ethical, political, legal, social

Technological Environment

how good the available knowledge is used through technology is a factor to reckon with. How ot conceive ideas, how to design, how ot produce optimally, how to effect efficient distribuation and how well marketing is done, are all questions that are technologically-oriented.

additionally, the management of an international company has to spend a lot of time...

in determining the orientation of management best suited to the host country. A birds-eye view of management orientation is represented by: ETHNOCENTRIC: home country superiority foreign countries are different control home country POLYCENTRIC: host country is special foreign countries are different REGIOCENTRIC: regional differences and similarities even GEOCENTRIC: resemblance and variance seen in home and host countries decentralized control

STEPS IN PLANNING The SWOT analysis..

is a method that takes a view of both internal and external factors to analyze the success of a business. SWOT stands for Strengths (advantageous internal characteristics), Weakness (harmful internal characteristics), Opportunities (advantageous external factors) and Threats (harmful external factors). On the other hand, the Upstream Capital Cost Index (UCCI) tracks costs of equipment, facilities, materials, and personnel for a number of large companies. This offers a benchmark or comparison for other companies to look to and compare their own business to. Both methods can be helpful in considering and analyzing the resources needed for a company to be successful.

ECONOMIC ISSUES Socialism...

is an economic system. Unlike capitalism, the government does the economic planning, owns most of the basic industries, controls the large industries and has a heavy tax to finance the welfare programs of the nation. Typical industries owned by a socialist government include coal mining, banking, major transportation like air, rail, ect. some current democracies include: Great Britain, Italy, Sweden, France, and Austria. Under this system, the country supplies medical care, dental care, and college education.

Frederick Taylor...

is credited with the theory of scientific management. The practice of this theory came to be known as Taylorism. Taylor encouraged breaking jobs from complex processes into the step-by-step patterns of production. THis is essentially the idea of assembly line production. While Taylor designed his theory to increase efficiency, when it was originally suggested it was often used by managers to increase production without increasing their costs.

ORGANIZING Formal Organization

is what we see above

Social Environment

it is the value systems unique to particular group of people or society. The value system consists of attitudes, behavioral pattern, needs, wants, expectations, level of education, the degree of intelligence, general beliefs, customs and traditions followed by a particular group of people or society.

STEPS IN PLANNING Operations Research

lends a scientific aura to management decision-making. There are goals, models, variables, limitations--all such factors are built into quantifiable mathematical terms or formulae to decipher and arrive at the best decision possible under a given circumstance. Not all the managers are equipped mathematically to decide among alternative solutions. It is sometimes difficult to quantify a factor. In such cases operations research can do little about it.

Management theories

management theories abound. In some way each theory has contributed a mite to the knowldege of management.

Managing--Is it an art or science?

managing is something which managers practice. They interact with people in an organization with a view to achieve organizational objectives. A doctor practices medicine and an accountant practices accountancy. THey practice in their chosen fields because they have acquired skills. SO, if we view managing as a practice, then it can be consdiered as an art. A science, however, needs systematic knowledge, crystal clear concepts, rational theories supported by experimentation and analysis. So, if we view management as a body of systematic knowledge, it can be considered as a science.

PLANNING Planning comprises...

of setting objectives i.e goals for the organization as well as developing work-maps that identify the ways and means of achieving such objectives. It is the most basic function of managing and all other functions are built, brick by brick, over it. Broadly speaking it revolves around the selection of not only the total organizational objectives, but departmental, even sectional goals, and more importantly spelling out in clear terms the ways through which such objectives, goals are to be accomplished.

Social Responsibilities

organizations as well as managers should be socially responsive to the society as a shole and should be able to do their bit when a situation calls for it. They should be seen as contributing members of solutions fo the social problems.

TYPES OF PLANS A policy can be defined as...

predetermined action course that serves as a guide for the identified and accepted objectives and goals. A policy indicates the management strategy towards attainment of the overall objectives and goals and seeks to establish a platform of guiding principles which makes delegation of work to lower levels easy.

STEPS IN PLANNING 6. Quantify for Control

reduce your actions into numbers-- in other words work out budgets. Example: volume of business both in quantity and dollar terms for the targeted period, inventory, operating expenses, expenditure on capital goods, sales territory budgets, ect

TYPES OF PLANS Budges are...

statements of targeted results reduced to quantifiable terms. An operating budget is a "profit plan". A territory budget spells out what the target is for the territory in terms of dollars and what will be the total resources to be spent in order to achieve that quantified (in dollar terms) target. A budget is seen as a tool of control. If an organization has variable output levels, they normally have flexible/variable budgets.

STEPS IN PLANNING There as long term plans...

such as a 10 year or a 5 year plan which reflects the continuity of policy and short term plans like an annual plan that sets targets for the year to be achieved and which, for the sake of control, is further bifurcated into half yearly, quarterly and even monthly plans

The impact of External Environment cont 1

the operations of any organization whether domestic or international depend largely on these externals, which act as a constraining influence. In an international organization the impact of external influences is even more rigorous. A person deputed from a parent country has to be knowledgeable about the host country's economical, political, legal, educational, social and cultural environment

TYPES OF PLANS What is the main purpose of the company?

the purpose of a University is primarily teaching adn then doing research on studies. Every organization's principal planning document gives its mission statement explaining what the organization stands for and what its activities are going to be. Example: The mission statement of Du Pont has been spelled out as "...better living through chemistry.."

Theory: The Managerial Roles Approach

this is the latest approach propounded by Professor Henry Mintzberg, to observe what managers do and using such observations as a platform for analyzing and concluding on the basis of such analysis, what their roles (activities) are. THis approach has visibility. THe Professor studied the roels of many CEOs and concluded that they not only perform the classical function of a Manager (planning,organizing, coordinating, leading, and controlling) but also perform a variety of other functions as well.

STEPS IN PLANNING 1. Analysis of Opportunities

thorough knowledge of the plus points of your company and the products, market knowledge, knowledge of competition and knowledge as to what exactly the needs and aspirations of the customer are in so far as the products are concerned

STEPS IN PLANNING 5.

to design relevant plans that are supportive in nature such as purchasing capital goods, purchasing materials, sub-assemblies and components, recruit, train and place needed personnel.

STEPS IN PLANNING 4.

to identify, analyze, compare and choose the best of available alternatives

TYPES OF PLANS The statement "you can delegate authority but not responsibility" is...

very applicable to a management setting. Managers and supervisors have the right to delegate assignments and projects to other people. They give them authority to act to get things done. However, ultimate responsibility will always lie with them.

Henri Fayol....

was a french theorist who is considered the Father of management theory. He identified 6 levels of management functions. 1. forecasting 2. planning 3. organization 4. commanding, 5. coordinating 6. controlling He also created the 14 principles of management theory. These principles include 1. labor specialization 2.holding authority 3. strict discipline 4.defined command lines 5. centralization 6. consistency 7. initiative 8. cohesion 9. harmony

Edward Deming...

was a mathematical physicist who became a managerial consultant after WW2. He believed that most production problems originated due to poor management practices, and not employee error. His theroy was called TQM or Total Quality Management. There were 14 points which he included in this theory 1. have a constant purpose 2. accept that a higher standard is possible and necessary 3. eliminate the need for quality checks 4. consider quality of materials and not just price 5. institute modern methods fo training and supervision 6. eliminate fear 7. increase communication 8. eliminate work standards and quality advertisements directed at employees 9. foster a sense of pride in employees for creating quality products, 10. educate employees and managers and ensure that managers are dedicated to creating a quality product

Joseph M Juran...

was another management theorist who worked at the same time as Deming. Juran's focus was on improvement end project quality and educating managers to do this. His 3 step process (called Juran's trilogy) included: 1. planning quality 2. controlling quality 3. improving quality

TYPES OF PLANS What is an organization going to do in terms of business??

what business it is aiming at and how it is going about it? What time frame, what are the resources and where from they are coming, who all are boing to be responsible and who all are accountable for achieving the spelled out objectives? These points are to be clearly considered

TYPES OF PLANS Objectives are identified goals of an organization towards accomplishment of...

which all organizational activities are directed. It is an action program specifying what should be achieved over a specified time and what resources are to be employed in achieving such objectives.