Chapter 1 - Nature And Concept Of Management 331i3i

Nature and Concept of Management

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That’s not my Job This is a story about four people named Everybody, Somebody, Anybody and Nobody. There was an important job to be done and Everybody was sure that Somebody would do it. Anybody could have done it, but Nobody did it. Somebody got angry about that, because it was Everybody’s job. Everybody thought Anybody could do it, but Nobody realized that Everybody wouldn’t do it. It ended up that Everybody blamed Somebody when Nobody did what Anybody could have.

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What is Management? “The force that runs an enterprise and is responsible for its success and failure.” “Management is the performance of conceiving and achieving desired results by means of group effort consisting of utilizing human talents and resources” “Getting things done through people.” “Planning and Implementing.” “Satisfying the economic and social needs by being productive for the human being, for the economy, and for society.” 3

What is Management? Management is a distinct process of planning, organizing, staffing, directing, and controlling (POSDICON), performed to determine and accomplish stated objectives by the use of human being and other business resources. Basic Resources 6 M’s Men Money Materials Machines Methods Market

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Fundamental Functions The Process of Management Planning

Organizing

Stated Objectives End-Results

Staffing Social Responsibility Profit

Directing

Controlling

CONCEPT OF MANAGEMENT A. TRADITIONAL CONCEPT  Management is the art of getting things done through others.

(Mary

Parker Follett)

 Management consists of getting things done through others. A

manager is one who accomplishes organizational objectives by directing the efforts of others. (C.S. George)

B. MODERN CONCEPT  Management is establishing an effective environment for people operating in formal organizational group. (koontz and op’donnel)  Management is the co-ordination of all resources through the process of Planning, Organizing, Directing and Controlling in order to attain stated objectives. (F.W.Taylor 5

Definition of Management  According to Harold Koontz,

"Management is the art of getting things done through and with people in formally organized groups."Harold Koontz gave this definition of management in his book "The Management Theory Jungle".

 According to Henri Fayol,

"To manage is to forecast and to plan, to organize, to command, to co-ordinate and to control.“ Henri Fayol gave this definition of management in his book "Industrial

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and General istration".

Definition of Management According to F.W.Taylor " Management is an art of knowing what to do, when to do and see that it is done in the best and cheapest way."

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Management can be defined in the following categories : 1.

2. 3. 4.

5. 6. 7.

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Management as a Process Management as an Activity Management as a Discipline Management as a Group Management as a Science Management as an Art Management as a Profession

Importance of Management 1.

2. 3. 4.

5. 6. 7.

8.

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Management is goal oriented Management is associated with group efforts Management is intangible Management is an activity and not a person or group of persons Management is situational Management is universal Management is concern with people Management is the combination of art, science and profession

Universally Accepted Functions of Management Planning

• Formulation of objectives, programs, policies, procedures, rules and regulations, in order to achieve the goals of the business. • Related to decision-making • Involves selecting the best course of action that a business or other enterprises and every department will follow. • Ranging from the company purpose and objective to the most detailed individual action plan. • Involves forecasting, that is, making decisions in advance. • Used to further accomplish the objectives today and it relationship in the future. 10 • Thinking before doing.

Universally Accepted Functions of Management (con’t) Organizing • The grouping together of people, establishing relationship among them, and defining the authority and responsibility that the personnel have in the use of the company’s material resources to attain predetermined goals and objectives. • Involves establishing an intentional structure of roles for men to fill in an enterprise. Intentional that it makes sure that all the tasks necessary to accomplish goals are assigned to men who can do them best. 11

Universally Accepted Functions of Management (con’t) Staffing •Involves filling and keeping filled the positions provided in the organization structure. •Includes recruiting and selecting candidates for position, compensation, and training. Directing • Involves motivation, leadership styles, and approaches, and communication. • Leadership implies followership, and people tend to follow the man on who they see a means of satisfying their own needs, wishes, and desires. 12

Universally Accepted Functions of Management (con’t) Controlling • The process of measuring and correcting the activities of subordinates and the company itself to assure conformity to plans. • It measures performance against goals, and plans where negative deviations exist, and, by actions to correct deviations and help assure the success of plans. 13

Universally Accepted Functions of Management (con’t) Communication It provides the vital link in any organization. Every successful manager has to develop an effective system of communication

Communication means exchange of facts, ideas, and information between two or more person. It helps in building up high moral.

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Management as a Science and as an Art Art • It results to the accomplishment of objectives through the use of human efforts. • Requires skill and careful study in the management of any endeavor. Science • It is a systematic body of knowledge. • gathers and analyzes facts and formulates general laws or principles from these facts.

*** Management seeks to integrate into a unified, coordinated whole the essential factors that makes up an organization – personnel, finance, production, sales or marketing, purchasing, and procurement, istration, and advertising. 15

Evolution of Management Theories The Classical or Traditional School • Concept of management is not new, it has been practiced for thousand of years. •The classical theory of management is built on principles. 14 Principles of Management by Henri Fayol 1. Division of Work – assignment of specialized jobs to various departments and/or positions. When work is specialized, people learn the task more easily and perform them more effectively. 2. Authority and Responsibility – both to be related and inseparable. Authority as the power or the right entrusted to make the work possible and responsibility as the duty or work assigned to a particular position. 3. Unity of Command – employees should receive orders from one superior/manager only. 4. Subordination of Individual Interest to General Interest – interest of one employee or group of employees should not prevail over the interest of the business. 5. Remuneration – remuneration and method of payment should be fair and afford the maximum possible satisfaction to employees and employer. Sometimes called Compensation. “equal pay for equal work”. 6. Centralization – extent to which authority is concentrated. Major policies are made only by 16 the top management.

Evolution of Management Theories (con’t) 14 Principles of Management by Henri Fayol (con’t)

7. Scalar Chain – “chain of superiors” from the highest to the lowest ranks. 8. Stability of Tenure – unnecessary labor turnover could be the cause and the effect of bad management. Employees should be given enough time and period to prove his worth to the company. “probationary appointment” 9. “Esprit de Corps” – “in union there is strength”. Need for teamwork and the importance of communication in obtaining it. 10. Span of Control – refers to the specific and limited number of subordinates that a manager can effectively handle and control. Effective supervision. 11. Simplicity – unnecessary elements should be eliminated from all activities 12. Unity of Direction – one boss and one plan for a group of activities having the same objective. 13. Order – ensures a place for everything. 14. Equity – results from kindness and justice.

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Evolution of Management Theories (con’t) 4 Principles of Scientific Management by Frederick Taylor 1. Develop a science for each element of a man’s work, to replace the old rule-of-thumb method. 2. Scientifically select and then train the worker 3. Heartily cooperate with the men to ensure that all the work done is in accordance with the principles of the science develop for the work. 4. Divide the work and the responsibility equally between the management and the workers. Management should take over from the workmen all work for which it is better fitted. Taylor’s scientific management stresses the following: • The need for developing the best way of performing each job, • Training and preparing workers to perform that job, and • Establishing harmonious cooperation between management and workers. 18**Piece-Rate

Incentive System andTime-And-Motion Study

Evolution of Management Theories (con’t) Frank and Lillian Gilbreth and Motion Study • Emphasized the ideal motions required to perform a job in an optional fashion • Developed the concept of the “therblig”, an elemental hand or arm motion • 17 “therbligs suitable for a particular job. •MOTION STUDY detailed analysis of motions in an Goal: To eliminate ineffective motions, to produce faster or more effective motions

operation

A. Effective therbligs - directly advance progress of work, may be shortened but difficult to eliminate completely 1) Reach (RE) - movement of empty hand to or from object 2) Move (M) - movement of loaded hand 3) Grasp (G) - closing fingers around an object, depends on type of grasp 4) Release (RL) - relinquish control of object 5) Pre-Position (PP) - positioning object in predetermined location for later use 6) Use (U) - manipulating tool for intended use 7) Assemble (A) - two mating parts brought together 8) Disassemble (DA) - opposite of assemble, mating parts separated

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Evolution of Management Theories (con’t) Frank and Lillian Gilbreth and Motion Study • Emphasized the ideal motions required to perform a job in an optional fashion • Developed the concept of the “therblig”, an elemental hand or arm motion • 17 “therbligs suitable for a particular job. •MOTION STUDY detailed analysis of motions in an Goal: To eliminate ineffective motions, to produce faster or more effective motions B. Ineffective therbligs - do not advance progress of work, should be eliminated 9) Search (S) - eyes or hands groping for object 10) Select (SE) - choosing one item from several 11) Position (P) - orienting object during work 12) Inspect (I) - compare object with standard 13) Plan (PL) - pause to determine next action 14) Unavoidable delay (UD) - beyond operator's control 15) Avoidable delay (D) - operator responsible for idle time 16) Rest to overcome fatigue (R) - appears periodically, not every cycle 17) Hold (H) - one hand object while other does useful work

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operation

Levels of Management The level of management determines a chain of command, the amount of authority & status enjoyed by any managerial position. The levels of management can be classified in three broad categories:

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Levels of Management Middle Level of Management The branch managers and departmental managers constitute middle level. •They are responsible to the top management for the functioning of their department. They devote more time to organizational and directional functions. They execute the plans of the organization in accordance with the policies and directives of the top management. • They interpret and explain policies from top level management to lower level. • It also sends important reports and other important data to top level management. • They evaluate performance of junior managers. • They are also responsible for inspiring lower level managers towards better performance.

Levels of Management Middle Level of Management The branch managers and departmental managers constitute middle level. •They are responsible to the top management for the functioning of their department. They devote more time to organizational and directional functions. They execute the plans of the organization in accordance with the policies and directives of the top management. • They interpret and explain policies from top level management to lower level. • It also sends important reports and other important data to top level management. • They evaluate performance of junior managers. • They are also responsible for inspiring lower level managers towards better performance.

Levels of Management Lower Level of Management is also known as supervisory / operative level of

management. It consists of supervisors, foreman, section officers, superintendent etc. According to R.C. Davis, “Supervisory management refers to those executives whose work has to be largely with personal oversight and direction of operative employees”. In other words, they are concerned with direction and controlling function of management. •Asg of jobs and tasks to various workers. •They guide and instruct workers for day to day activities. •They are responsible for the quality as well as quantity of production. •They are also entrusted with the responsibility of maintaining good relation in the organization. •They communicate workers problems, suggestions, and recommendatory appeals to the higher level and higher level goals and objectives to the workers.

Levels of Management Lower Level of Management •They help to solve the grievances of the workers. •They arrange necessary materials, machines, tools etc for getting the things done. •They prepare periodical reports about the performance of the workers. •They ensure discipline in the enterprise. •They motivate workers. •They are the image builders of the enterprise because they are in direct with the workers.

Who are Managers? Someone who works with and through other people by coordinating their work activities in order to accomplish organizational goals. A manager is responsible for planning and directing the work of group of individuals, monitoring their performance and taking corrective action when necessary for the accomplishment of organizational goals and objectives.

Managerial Skills Conceptual Skills - The abilities to think about the creative understand and visualize the future, to organize and translate observation into ideas and concepts.

Analytical Skills (Decision Making) - The ability to work out a complex problem or situation into component. Analytical skills are required for solving problems and decision.

Managerial Skills Human Relation Skills - The ability to understand the behavior of people, their problems, their needs, working conditions and motivation to people.

istrative Skills - It involves the implementation of plan and use of available resources to get the desired output that is profit and to regularize a performance in orderly manner.

Managerial Skills Technical Skills - These skills are essential for the first line managers. He requires knowledge of a job, ability to apply the methods and techniques of job.

Computer Skills - Computer knowledge is essential for today’s manager i.e knowledge of hardware and software. Hardware is technical term and software is ability to adopt the system in an organization to attempt goals.

Managerial Skills Communication Skills - It is a systematic process of telling, listing and understanding. This skills requires the ability of listening and speaking in an effective manner.

Distinguish between Management and Organization Points

Management

Organization

Meaning

It is an executive function which is primarily concerned with getting the things done by others

It is an organic function of putting together the different parts of an enterprise into working order

Types

Planning, organizing, staffing, motivation, direction, coordination and control are the functions of management

Organization is one of the important functions of management

Nature

It is like the entire body of human being

It is like a nervous system of human body

Levels

There are different levels in management i.e Top, Middle, Lower Level

There are no such levels in organization

Scope

Management uses the organization

Organization is the machine organization

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Evaluation: Explain the different Functions of Management. 30 pts Assignment: 1. Define Management. 2. Explain Management as an Art and as a Science.

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