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Why Management?

Unit 1

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Each one of us is a manager of sorts. Managment skills help effective attainments of ones personal goals. Even professionals, like teachers, scientists, doctors etc., at a later stage of their career, earn their living as managers. Our society has become society of institutions. Till even 1900 family served most social tasks. Now we have an employee society. We need strong, performing autonomous institutions. Management makes institutions (both business and non business) perform. Thus, management makes people productive working individually or in groups, organisations Why Business Management?

Business enterprise were the first modern institutions to emerge - railroads. Now onwards Profitability as measure of performance was not available with other institutions
work on management was generic and continuous.

What Management does?


Management contributes in the form of value addition. Input Transforsmation Output

Inputs are men, money, machine and material. Outputs are in the form of goods or services Tranformation involves planning, organising, actuating and controlling.
Management achieves more and better from existing inputs. Management Defined Managment is the process of planning, organising, leading and controlling of the resources of the organsation in the efficient and effective pursuit of specified organisational goals. Thus, Managerial and organisational performance should be judged through the criterion of Efficiency vs. Effectiveness (Doings things right vs. doing right things). Efficiency - the ability to do things right - is an input -output concept. Minimise the cost of resources to achieve goals. Effectivenes involves choosing right goals. First, find out the right things to do because no amount of efficiency can make up for the lack of effectiveness.

What a Manager Does


A Manager plans, organises, leads and controls human, financial, physical and informational resources of the organsation in the efficient and effective pursuit of specified organisational goals

Management Process

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Planning; What is to done (organizational goals) and how it is to be done (courses of action) and when it is to be accomplished (Time frame). Matching resources and strengths with market opportunities. Organizing; arranging human and physical resources, identifying jobs to be done, hiring people to do them, establishing departments, delegating or pushing authority to the subordinates, establishing chain of command Leading; influencing people to get the job done, maitaining morale, moulding company culture and managing conflicts and communication Controlling; setting standards, comparing actual performance with these standards and then taking corrective action For the sake of clarity we present them in a simplified step by step sequence. In practice, they are intermingled and interrelated. At a particular point of time, the typical manager is engaged in a number different activity. Moreover, while in operation the changes may have to bring in various elements of management process. Which function is more important? That depends on the context like size of organization, the nature of task being performed etc. However, leading, the management function that focuses on the behavioral or people aspects of what managers do is not just another step in the management process but an integral part of everything a manager does. Management Function Planning Organising Controlling Behavioral (Leadership) side of Management Function Getting Departments heads to work together, encouraging groups to think of creatively, resolving conflicts when Departmental plans are in disagreement Resolving questions of power and company politics, encouraging communication across depts., understanding personality profiles in order to make suitable placement correcting out of control behavior, monitoring tendencies of subverting control systems, encouraging interpersonal communication to change the way employees do things

Managerial Skills
Managers need wide array of skills and abilities. Katz (1974) classified them in three categories. Technical Skills; ability to perfrom a specific task or function. ability to use procedures, techniques and knowledge of a specialised field. Human Skills; to get along with people, to get work done through them and to motivate other people as individuals and groups Conceptual Skills; ability to organise information and to jugde the relationship within a complex whole. Ability to see the big picture. Relative importance of these skills depends on the managers rank in the organsiation

Managerial Roles, Mintzbergs conceptualization The nature of managerial work

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There was no break in the pace of activity during office hrs. The mail, telephone calls and meeting accounted for the almost every minute from the moment these executives entered the office in the morning until they departed in the evenings. A true break seldom occurred. Coffee was taken during meetings and lunch was almost invariably work related. When free time appeared ever present subordinates usurped it. If the managers wished to have a chance of peace, they had two means at their disposal. - the observational tours and meetings with light schedule. But there was no regularly scheduled break. Thus managing is a perpetual preoccupation. The manager can never be free to forget the job and never has the pleasure of knowing even temporarily that there was nothing to do. No matter what kind of managerial job, managers always carry the nagging suspicion that they can contribute just a little more. Hence they assume an unrelenting pace in their work Managerial work can be, thus, characterised as calculated chaos or controlled disorder Myths and Facts About Managers Job Myths 1; manager is a systematic and reflective planner Fact 1; managers work at an unrelenting pace, their activities are characterised by brevity, variety and discontinuity. They are strongly oriented towards action rather than reflection. They plan implicitly in the context of their day to day activities not in the form of some abstract process. Plan exists in their heads flexible but often specific intentions Myth 2; An effective manager have no regular duties to perform, carefully orchestrate everything in advance, then sits back and enjoys the fruit of his labour, responding occasionally to unforeseen situations Fact 2; In addition to handling exceptions, managerial work involves performing a number of regular duties, including rituals and ceremonies, negotiating, processing soft information that links the environment with organisation. Myth 3 senior managers need aggregated info. That formal MIS best provides Fact 3 managers strongly favour oral media; telephone & meetings. Oral information is stored in their brains; strategic data bank of the organization is not in the memory of the computers so much so as in the minds of its managers. That explains dilemma of step also, i.e. to do himself or delegate with inadequate briefing. Manager is overburdened with obligations, yet he cant easily delegate. Thus he overworks Thus, brevity, fragmentation and oral communication characterize the work of managers. 10mbaib11 Mintzberg thus proposed the framework of Managerial roles to conceptualise Managers job 3

Role Interpersonal Figure head Leader Liason

Description

Identifiable Activities

Symbolic head; obliged to Ceremonies, Status perform a no. of duties of legal requests, solicitations or social nature Responsible for the motivation Virtually all activities involving subordinates Maintains self developed Acknowledging mail; network of outside contacts to external board work, get favors and info. activities involving outsiders Seeks and receives info., emerges as the nerve centre of internal and external info. Transmits info.; some factual, some involving interpretation and integration Handling mail, observational tours, periodical news Forwarding mail , verbal contacts in the from of review sessions, instant communication flows Transmits info. to outsiders on Board meetings, handling the organsiations plans, mail and contacts involving policies, actions, results etc. transmission of info. to outsiders searches for opportunites, strategy and review sessions initiates improvements for initiating & designing improvement projects Responsible for corrective strategy and review sessions action for imp. and unexpected involving disturbances and disturbaces crises Allocation of resources of all Scheduling; requests for kinds - in effect making authorisation; any activity approval of all siginificant involving budgeting orgainational decisions Responsible for representing Negotiation meetings orgn. at major negotiations

Informational Monitor Disseminator

Spokes person

Decisional Entrepreneur Diturbance handler Resource allocator

Negotiator

However, these roles are not mutually exclusive. They reinforce each other. Thus, all managers perform all these roles simultaneously. Although varying jobs may require greater emphasis on one set of roles than others. Like marketing managers may pay more attention to interpersoanal role, MIS managers on informational roles while production managers on decisional roles.

Evolution of Management Thought


Management is old profession but a new discipline

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Management in Antiquity Egyptian Civilization: Pyramids - not only the size but more importantly the managerial feat of putting it together. 23,00,000 separate stones, each weighing an average of 2,5 tons. spread across 13 acres. 1,00,000 workers worked for 20 yrs. Managerial feat of bringing stones from quarries to the work site. The Hebrews as Managers: Moses and Ten Commandments - guidelines for individual and organizational conduct. Ancient Chinese Managers: Use of Staff advisors Contribution of Greeks: Philosophy and political Science. Platos Republic. The concept of Division of Labour Ancient Indian Civilization: Indus Valley Civilization, their town planning, elaborate drainage system, organization of city as one unit. The Genesis of Modern Management The Age of Feudalism Preindustrial Commerce Industrialsation- Major Contributiuon to Modern Management Modern management theories evolved as a result of industrialization and emergence of large organisations. Essentially three approaches have emerged namely the Classical approach, the Behavioural approach and Management Science approach Each new approach has added to the knowledge of the previous one. Each approach has continued to develop on its own. Later theorist attempted to integrate the accumulated knowledge leading to emergence of Systems and Contingency approach. We study management theory because it provides a stable focus for our understanding of what we experience. We are able to see things in continuity. It also helps us keep learning about our world.

The Classical Approach:


Period: later part of 19th c. and beginning of 20th Century. It has two streams of thinkers: those concerned with increasing productivity of individuals performing work - the Scientific Management School those concerned with increasing productivity of organizations within which the work is performed - The Classical Organization School

Taylor' Scientific management

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Core of SM is the organized study of work, the analysis of work into simplest elements and the systematic improvement of the workers performance in each of these areas. Its insight is that work can be studied systematically, can be analyzed, can be improved by working on its elementary parts. Taylor Principle Develop a science for each job with standardized work implements and efficient methods for all to follow Scientifically select workers with skills and abilities that match each job and train them in the most efficient ways to accomplish tasks Ensure cooperation through incentives and provide the work environment that reinforces optimal work results in a scientific manner Divide responsibility for managing and working while supporting individuals in the work groups for what they do best. Some people are more capable of managing while others are better at performing tasks laid out for them Related Management Activity Undertake time and motion studies to determine the best way to do each task Use job descriptions to select employees, set up formal training systems and establish optimal work standards to follow Develop incentive pay, such as a piece rate system to reward productivity and encourage safe conditions by using proper implements. promote leaders who guide not do the work create responsibility for group results by planning tasks and helping workers top achieve those results

SM rose together with new discipline of engineering. Period from 1890 to 1920 produced brilliant thinkers - Taylor, Gantt, Gilbreths etc. Critique SM was the essence of America's industrial achievement. However, all its conclusions did not prove right. Despite its worldly success it has not succeeded in solving the problem of management of worker and work. Its insight is half insight. What it sees is important. What it does not see is equally important. We must analyze work into its constituent motions. But should we organize it also as a series of individual motions each to be carried out by individual worker. There is a need to integrate. Otherwise we confuse a principle of analysis with the principle of action. To take apart and to put together are two different things. The belief that work is best performed as it is analyzed is wretched engineering. Human being does individual motions poorly. Man's specific contribution is always to integrate, to balance, to measure, to judge. Man performs only when a job is formed out of the individual motions, a job that puts to work man's specific qualities. Another blind spot of SM - divorce of planning from doing. Taylor's valuable insight is that work will become easier more effective, more productive the more we plan before we do. Planning as a separate part of the job. But should planner and doer be two different people. They are separate part of the same jobs they are not separate jobs. One can not plan exclusively all the time. Otherwise one dreams rather than performs.

The Classical Organization School

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Henry Fayol's Principles are a part of larger work, General and industrial Management. Uniqueness of these principles lies in a combination of practical wisdom and pithy, compressed style. He was not seeking fixed rules of conduct. Rather, he was seeking guidelines for action. He used same analytical approach as Taylor, but he developed it independently and applied it in a new area - top management and administration. Soundness and good working of the body corporate depends on certain principles, laws and rules. However principles are flexible and capable of adaptation. 1. Division of Labor: Natural order an example of division of labour. More they specialize more efficient they become. 2. Authority: Authority is the right to give orders and power to exact obedience. Formal authority gives them the right to command. Personal authority gives them power to seek obedience. 3. Discipline: respect for rules and agreements. How to enforce - good leadership at all levels, fair agreements, judiciously imposed penalties for infraction 4. Unity of command: Each employee must receive instruction from one superior or else there is conflict in instruction and confusion of authority. 5. Unity of direction: Activities that have the same purpose should be grouped together and operate under the same plan 6. Subordination of individual interest to organizational interest: The interest of the organisation take precedence over individual interest. 7. Remuneration; To maintain loyalty and support of workers, they must receive a fair wage for the services rendered 8. Centralization Authority should be delegated in proportion to responsibility. Find the proportion that gives the best overall yield. 9. The Hierarchy An unbroken chain of command should exist through which all directives and communications should flow 10. Order A place for everything and everything in its place (for material order). For human order " A place for everyone and everyone in his place" Appearance of order may cover over real disorder. Appearance of disorder may actually be the true order. Social order requires good organization and good selection. 11. Equity and not justice? Equity results from a combination of kindliness and justice. Established rules and agreements should be enforced fairly 12. Stability of Personnel: Why? time is needed to get to know men and things in a large concern in order to be in a position to decide one plan of action, to gain confidence in oneself, and to inspire others. A mediocre manger is preferable. Instability is both a cause as well as effect of bad management. 13. Initiative: Power to think and executing, freedom to propose and execute. but within limits imposed by respect for authority and for discipline. Manger should sacrifice personal vanity. 14. espirit de corps: observe one principle unity of command, the dangers to be avoided are (a) a misguided interpretation of the motto "divide and rule" (b) the abuse of written communication. Priciples are flexible not rigid. Same principle is hardly applied twice in the same way. We make an allowance for different and changing circumstances as also for human beings who are equally different and changeable. Principles can be adapted to meet every need; it is a question of knowing how to use them and in which proportion. Managers responsibility is to find out the appropriate balance.

The Behavioural School

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The classical school viewed organisation from a mechanistic point of view. There was a need to understand the human behaviour in organisations. Three triggers to realisation of this need were - The Great Depression, the organised labour movement and Hawthorne studies. Hawthorne studies, conducted by Elton Mayo and his associates, were originally planned like any other Scientific management study. The first study involved manipulation of illumination for one group of workers and comparing their output with that of another group whose illumination was held constant. Although illumination was increased for the test group, production went up in both groups. Further, productivity continued increasing even when the illumination was decreased for the test group. Researchers concluded that a new social setting created for the tests had accounted for the increase in productivity. This they called Hawthorne effect or the tendency of people, who are singled out for attention, to improve their performance. In subsequent tests, Mayo found that the same work factors ( such as working conditions, pay, rest periods etc.) can be source satisfaction for some workers and dissatisfaction for other workers. workers sacrificed their incentive pay and restricted their output in order to avoid displeasure of the group. Thus emerged the concept of Social Man From HR to Behavioural Science Approach Later researchers more rigorously trained in Social Sciences brought two new dimensions to the study of management and organisations. first, they advanced an even more sophisticated view of human beings and their drives than Mayo and his contemporaries. Maslow, Mcgregor etc. proposed concept of self actualising man. They wanted more than instantaneous rewards. Thus organisations need to support this complexity. Second, behavioural Scientists applied methods of scientific investigation to study pattern of behaviour. Their influence on management theory is significant and continuing. Critique The behaviourist focussed attention on the human side of enterprise, providing new insights into the motivation and interpersonal relationships. It opened the door for the new field of Organisational Behaviour. But; early behavioural theories tended ot be overly simplistic. They did not really capture the great complexity of human behaviour and organisational dynamics. These theories were not sujected to rigours of research and application in real work enviornment. Later researches found inconclusive evidence of the relationship between motivation, performance and job satisfaction

The Management Science School

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WW II witnessed new and complex problems of warfare. British formed OR teams that achieved tactical and technological breakthroughs. Americans used early computers to perform calculations involved in mathematical modeling. The central theme of this school is to provide managers with quantitative bases for decisions. After war, Applicability of OR to industry. Development of Computers and communications facilitated this trend. The aim of MS to provide managers with an objective bases for decisions. Mixed team of specialist from relevant disciplines constructs mathematical models considering all relevant factors bearing on the problem and their relationship. The key characteristics of MS tools and techniques are: A primary focus on decision making: Decision making is the central activity esp. for production and operation managers today. Reliance on econmic effectiveness criteria: variables considered are costs, revenues and ROIs Reliance on formal mathemtical models: a simplified representation of the relevant aspects of an actual system or process. It facilitates replication, later. Dependence on computers: Its use is necessitated because of complexity of mathemetical models. Makes number crunching easier. Robert Mcnamara a key exponent and pratitioner of MS School. Despite meticulous planning and advanced techniques USA faired badly in Vietnam war. Critique A system works as whole. If we strengthen only one part, the system may even become weak. What matters in system is performance as whole which is the result of growth and adjustment and integration and not just technical efficiency. Efficiency of parts may even damage performance. Emphasis on techniques rather than on principles, on mechanics rather than on decisions, on tools rather than on decisions. Where I can use my beautiful gimmick. The emphasis has been on hammer rather than on driving in the nail let alone build the house. It became synonymous with quantification Why manager do not accept MS. The cleavage between tool maker and tool user. Ideally tool user does not and may be need to know anything about the tool. But that left the mgt. scientist unmanaged . The Management Scientist, thus, came up with a box of tricks- a management gadget bag of answers to non existing questions.

Integration Schools ( Contemporary approaches)

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The traditional approaches had two basic limitations. Stressed on one aspect of the organisation at the expense of other parts. Ignored the relationship of the organisation and its external enviornment. Therefore, proved inadequate in the changed context. Contemporary approaches are based on the assumption that there is no best way to manage and all theories have application to the practice of management. The Systems Approach Argues viewing organisation as a system - an entity that has interdependent parts and a purpose. All systems have four characteristics - they operate within an environment and are separated by it by a boundary (that may be rigid or porous), they are composed of building blocks i.e. subsystems, have a central purpose against which the organisations efforts and subsystems can be evaluated, there exist interrelatedness among subsystems (and between subsystems and its environment). Thus the approach emphasizes dynamic and interrelated nature of organizations and management task. Managers should plan actions and anticipate both immediate and far reaching consequences, as also unanticipated consequences as they develop. This way managers can maintain balance between various parts and the goals of the organisation The Contingency Approach There is no best way to plan, organise and control. The real engrossing answer for all mgt. problems is - It depends. Thus the proponents advise study of all schools and develop, through personal experience, techniques for use in different solutions. There are no universal solutions because every problem situation is unique. The approach suited for the occassion shall be guided by the law of the situation. Managers must find different ways to fit different situations. Given certain characteristic of the job and certain characteristic og people doing the job, specific managment practices tend to work better than others. For example, if productivity is to be increased, the manager should not automatically assume that a new work method is needed (a classical solution) or that a new motivational method is to be tried (a behavioual solution). The manager should study the charactristic of the workers, the nature of job and his own leadership approach before deciding on a solution. Contingency view has become more relevant and prominent because of the following factors: 1. Increased globalisation, pressures of operating in cross cultural settings. 2. Changing demographics and skill requirements of the workforce. 3. New organisational structures that emphsise speedin reacting to enviormental changes. 4. Changing needs of persoanl fulfillment Integrative approaches are useful in thinking about management in todays fast paced world, where change is a constant and relatioships numerous & complex. Concluding comment: Each school was the product of its times. When the context changed, one approach became inadequate, a new approach developed to meet the new demands. However, no approach became altogether irrelevant at any point of time. Infact each continued to develop on its own, eg., HR approach witnessed major growth in 1960s, its ambit got broadened and it became to be known as Behavioural school. 10

HR Approach Stimulated by Hawthorne studies

Behavioural Science Approach

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ABC Steel Corporation

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Like most steel companies, ABC Steel suffered hard times in the the decade of 1980s. At an 1986 executive retreat, a number of frustrated middle managers argued that repeated pay reductions had undermined their morale. President Donald replied that he did not care and it was their problem not his. As result the executives left the meeting in disgust. Donald had been a financial specialist. The board of directors assigned him the top job because they thought that his financial expertise could turn the firm around. At first the move seemed a good one. Donald used his financial expertise to arrange creative financing of companies debt but that didnt solve deeper problems. Donald was basically a numbers men with few people skills. He proved a poor planner. His efforts to diversity came too late. Attempts at reorganization met resistance from corporations entrenched centralized structure. Always uncomfortable with face to face communication, he issued memos exhorting employees to increase productivity. Internal strife increased. Both blue-collar and white-collar employees blamed him for increasing losses. Middle management was alienated and the top management team became ineffective

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The nature of managerial work

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There was no break in the pace of activity during office hrs. The mail, telephone calls and meeting accounted for the almost every minute from the moment these executives entered the office in the morning until they departed in the evenings. A true break seldom occurred. Coffee was taken during meetings and lunch was almost invariably work related. When free time appeared ever present subordinates usurped it. It the managers wished to have a chance of peace, they had two means at their disposal. - the observational tours and meetings with light schedule. But there was no regularly scheduled break and they were seldom totally unrelated to the work at hand Thus managing is a perpetual preoccupation. The manager can never be free to forget the job and never has the pleasure of knowing even temporarily that there was nothing to do. No matter what king managerial job, managers always carry the nagging suspicion that they can contribute just a little more. Hence they assume an unrelenting pace in their work managerial work; calculated chaos or controlled disorder

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