Hands Out Priciples of Management Tribhuvan University BBS 1ST Year Nepal
Hands Out Priciples of Management Tribhuvan University BBS 1ST Year Nepal
Hands Out Priciples of Management Tribhuvan University BBS 1ST Year Nepal
Concept of organization: The term organization is derived from the word organism which refers to the composition of organs. Organization is the planned unit deliberately structured for the attainment of specific goal of the organization. It is the composition of two or more persons. According to John D. money organization is the form of every human association for the attainment of specific objective In conclusion, organization is the system composed of people, structure and technology for the achievement of common objective in a dynamic enviroment. Characteristics of organization: The characteristics of organization are explained below: 1. Common objective: People work in the organization together for the achievement of common objective. Such objectives are expressed in terms of goals or set of goals. It may be short-term as well as long-term. 2. Enviromental Influence: Since the organization operates in the enviroment. Its affairs are directly or indirectly influenced by the enviromental forces. Organizations goal, structure, policy, culture etc are the internal enviroment. Political-legal, economic, socio-cultural and technological is the external enviroment which are not under the control of organization. 3. Collection of people: Organization is the collection of people being recruited for achieving common objective of the organization. Human resource is regarded as the prominent resource of the organization which mobilizes the all resources of organization. 4. Co-ordination: The functions of the organization are performed in the co-ordinated manner. The goal of the organization is achieved through the coordinated effort of the human workforce. 5. Division of labor: Every task of the organization is break-down into small units. Each unit is carried out by the specialization. 6. Hierarchy of authority: The authority of the people involved in the organization is channeled as per the hierarchical order. Authority is delegated from higher level to lower level.
Concept of organization goal: Every organization is goal-oriented. Goals provide direction about what is to be done. They guide the actions of the organization. They are the focal-point for using resources. They are the endresult to be achieved by the organization .They serve as the standard for measuring the performance of the organization. According to Amitai Etzioni Goal may be defined as the desired state of affairs organization attempt to realize In conclusion, every organization has certain goals, such goals are known as organizational goal. It directs the organizational activities. They are the end-result to be achieved by the organization. It helps to evaluate the performance of the organization in order to correct the deviations. Process of Goal Formation: Goals are the end-result to be achieved. It directs the activities of the organization. It should be formulated carefully. It should be specific(S), measurable (M), acceptable (A), realistic (R) and time bound. The goal formation process comprises of three steps which are explained below: ENVIROMENTAL SCANNING FORMATION OF OVERALL GOAL FORMATION OF SPECIFIC GOAL Fig: Goal Formation Process 1. Enviromental Scanning: It is the act of acquiring information to, monitor change and development in the enviroment. The following information is gathered. A. Trend in the external enviromental forces: The impact of enviromental trend on the organization is analyzed. Generally five year time horizon is taken for trend analysis. They are PEST: political-legal : government policy, laws regulation economical : economic model, inflation, monetary policy, fiscal policy socio-cultural : change in social and cultural value technological : level of technology and pace of technological development
B. SWOT Analysis: Strength, weakness, opportunities and threats analysis is conducted to scan and respond to data. Strength and weakness exists within the organizations which are under the control of organization.
Opportunities and threats exist in the external enviroment which is not under the control of organization. FORMATION OF OVERALL GOALS: The second step of goal formation process is formation of overall goals. The high level executives set the organizations goal, policy, mission, vision and strategy. FORMATION OF SPECIFIC GOALS: The final step of goal formation is formation of specific goals. These goals are formed in the basis of corporate goals. These goals are related to the production, marketing and finance etc. such goals are formed by the concerned levels or department. Problems of goal formation: Problem serves as the barrier to goal formation. The following are the common types of problem encountered in the goal formation. 1. Inappropriate goals: Inappropriate goals are the unattainable goals. Too much emphasis on the qualitative and quantitative measures makes the goal inappropriate. Conflicting goals are also inappropriate goals. 2. Improper reward system Improper reward system for the achievement of organizational goal can be the problem to goal formation. Too much emphasis on short-term performance at the cost of long-term problem serves as the problem to goal formation. 3.Enviromental dynamism Rapidly changing enviroment can be the problem to goal formation. Technological innovation and intense competition to goal formation.. Enviromental dynamism requires goal revision. 4. reluctant to establish goal: Lack of confidence, fear of failure and avoidance of accountability makes the managers reluctant to establish goals. This serves as problem to goal formation 5. Resistance to change: Change makes thing different. People resist change. The reasons can be fear of unknown, poor communication, loss of job security and vested interest. This serve as problem to goal formation. 6. Resource constraints Lack of resource can be the problem to goal formation. Legal restrictions, increasing competition and time constraints posed problem to goal formation.
Goal Succession: Every organization has certain goals such goals need to be reviewed time to time, for achieving current goals new goals are to be developed to meet the need of changing enviroment or situation after the current goals. So the act of developing new goals to achieve primary goals or after the current goals is known as goal succession. Management must have study of internal and external enviroment as well as analysis of sufficient, reliable information and data for the succession of organizational goal. The main reason for the goal succession is: Achievement of primary goals Enviromental changes ambitious to achieve
Goal Displacement: Sometimes organizational goals need to be completely altered because of government policies, increasing competition and internal and external enviroment. So the act of developing completely new goals is known as goal displacement. Management must have study of internal and external enviroment as well as analysis of sufficient, reliable information and data for the displacement of organizational goal. The main reason for the goal displacement is: Goals conflicting with individual goal. Means become Ends. Goal substitution. Attitude of the employee Unclear and abstract goals.
Functions of management: The functions of management are explained as below: 1. Planning: Planning is the deciding in advance about what is to be done. It is the predetermination of future course of action. It involves the selection of goals and future course of action to achieve them. It discovers alternatives .It chooses future course of action among alternatives. It requires decision making by every level of manager. According to Ricky Griffin planning is the setting organization's goals and deciding how best to achieve them. In conclusion, Planning is the process of establishing goals and choosing future course of action to achieve them. 2. Organizing: Organizing is the process of bringing together physical ,financial, human resource and developing productive relationship amongst them. It provides integrated apparatus for the achievement of organizational goal. 3. Staffing: Staffing function of management is concerned with the people. People are regarded as prominent resource of the organization which mobilizes all the factors of organization. Organizational performance depends upon quality manpower. Staffing is the process of matching position with person. It focuses on development and utilization of human potentiality. 4. Leading: Leading may be defined as the process by which manager guides and influence the works of the sub-ordinates in desired direction. It relates to direction, promoting staffs and exchanging information. 5. Controlling: It implies the measurement of accomplishment against standard and correction of deviation if any to ensure the achievement of the organizational goal. The purpose of controlling is to ensure everything occurs in conformities with standard. An efficient control system helps to predict deviation before they are actually occur
Managerial Skills:
Conceptual Skill
Human Skill
Technocal Skill
Top-level Manager
Middle-level Manager
Lower-level Manager
Managerial levels are broadly classified as top level, middle level and lower level. Top level manager are the chief executives, middle level manager are the department head and lower level managers are the supervisors. Managers need to have certain skills and abilities to perform various functions which are dealt as below: 1. Technical Skill They are the abilities to perform specific jobs such computer skill ,accounting skill, quality control skill. Such skills are needed for the supervision of subordinates. They provide functional expertise and technical competence. Lower level manager needs high degree of technical skill. 2. Human skill: They are the interpersonal skill. They are the abilities to get along with people, get job done through people and motivating people. Such Skills are: communication bargaining leading motivating negotiation conflict management Human skills are equally needed by all levels of manager. 3. Conceptual Skills: They are the mental abilities to cope with complex problem and coordinate the interest and objectives of the organization. They are the abilities inherent in top level manager to think strategically. Top level manager needs high degree of conceptual skill.
Components of Economic Enviroment: Economic enviroment refers to the economic forces that influences to the business enviroment. The components of economic enviroment are dealt as below: 1. Economic System Economic system determines the scope of private sector participation and market force. The models of the economic system are dealt as below. A. Free Economy This system assumes private entrepreneurship as the backbone of the economy. Profit serves as driver of economic engine. Competitive market mechanism guides business decision. B. Centrally planned economy This system is centrally planned, controlled and regulated by the state. Consumers sovereignty is neglected. Public enterprises play dominant role. C. Mixed Economy This system is the composition of free economy and centrally planned economy. Both private and public sector co-exists . It is merely regulated by the state. 2. Economic Policy A. Monetary policy It is concerned with the supply of money, interest rate and availability of credit. It influenced the level of spending through interest rate. Cheap money reduces the cost. Dear money increases the cost. B. Fiscal policy It is concerned with the public financing i.e. governments income and expenditure. Taxation on income, expenditure, capital , subsidy and other transfer influenced the management decision. C. Industrial Policy It is concerned with the industrial licensing, location, incentive , foreign direct investment (FDI) ,bilateral investment, joint-venture, technology transfer and nationalization .It influenced the investment atmosphere. 3. Economic Condition A. Income The level and distribution of income affects to the expenditure, saving and investment which altogether influence to the economic condition of the organization.
B. Inflation It is the general rise in price level. C. Business Cycle It consists of various phases of business such as recession, recovery and prosperity. D. Stages of economic development Economic development can be categorized as least developed , developing and developed. 4. Globalization Globalization is the process by which undertaking becomes become worldwide in scope. Free movement, portfolio investment, foreign direct investment, bilateral investment, joint-venture ,technology transfer are the basic dimensions of globalization.
Components of Socio-cultural enviroment: Socio-cultural enviroment refers to socio-cultural forces that influenced the business enviroment. The component of socio-cultural enviroment is dealt as below. 1. Demography Demography is concerned with the human population and distribution. Demographic forces are: Size and the growth of the population. Age mix of the population Migration of the population Urbanization of the population. Geographical shift of the population 2. Social Institution A. Family Two or more person related by blood, marriage or adoptation reside together constitute family. B. Reference Group They are the group which impact on the attitude and behavior of the consumer. They can be sports, music and cinema personalities. C. Social Class: It is the rank within society. It can be upper-class , middle-class and lower-class.
Components of technological enviroment Technological enviroment refers to the technological forces that influence the business enviroment. The components of the technological enviroment are dealt as below 1. Level of Technology Level of technology can be appropriate or sophisticated. Level of technology can be broadly classified as: Labor based technology Mainly labor is used. Capital based technology Mainly capital is used. It is represented by automation, computerization, digitalization and robertization 2. Pace of technological development Rapidly changing technology can pose problem to a management. Human skill should be upgraded as the technological needs. 3. Technology Transfer It refers to the stratigical collaboration with technological advanced company. It can be through amalgamation, acquisition and merger. Research and Development R & D is the essence of effective technological innovations.
People Sub-System
Technology sub-System
Goal
Structure Sub-System
Enviroment
Managerial Sub-System
A. People Sub-System They are the human work force working in the organization. B. Structure sub-system It defines the job and relationship. C. Managerial Sub-System It co-ordinates the resource of organization. It links organization to its enviroment. D. Technology sub-System They are the tools. Techniques, equipments, procedures and skills.
In conclusion, system theory views organization as input-output system. It is regarded as one of the most recent development in the management theories. It takes the integrated view of the management. Management is regarded as important force. It co-ordinates the activities of sub-systems.
Major contributions of System Theory 1. This theory takes the integrated view of the management. Holistic view is taken from problem solving. 2. It recognizes the interaction and interrelation among sub-system for synergistical effect. 3. It provides better understanding about enviroment and enviromental changes. 4. It is useful for studying complex organization. 5. Feedback facilitates change in system.
Limitations of System Theory 1. Doesnt focus on the specific task function. 2. Doesnt directly explore the impact of interpersonal relationship and loyalty on productivity. 3. Enviromental changes directly affect to the structure and the function of the organization. Contingency Theory of Management: Contingency theory recognizes the situational nature of the management. It is regarded as one of the most recent development in the management theories. It takes the integrated view of the management. It doesnt believe on the universality of the management. This theory states that management practice depends on situation. Every situation are unique and demands unique managerial action. Result differs because situation differs. There is no one best way in the world of management. Managers should be developed situation-sensitive in their behavior. Effective managerial behavior in one situation cannot be generalized to other situation. Different situation calls for different managerial approaches and practice. Effects of causes is situation.
Causes
Effects
Prevailing contingency variable determines the managerial approaches and practices. They are 1. Size of the organization No. of people in the organization. B. Technology They are the tools. Techniques, equipments, procedures and skills. C. Individual difference Among Employee. D. Uncertainty Caused by enviromental forces. E. Type of work being done. In conclusion, Contingency theory states leadership styles, organizational structure, job analysis, motivational approaches, control system and management of change and conflict should be situation specific. Major contributions of contingency theory are: 1. This theory takes integrated view of management. It has practical application. 2. Situation is very important for management .it determines the managerial response. 3. This theory is widely used in practices of management. Limitations of Contingency theory 1. This theory is complex. It is very difficult to identify relevant contingency variable and determine their interrelations.
CHAPTER-5 PLANNING
Meaning of Planning: Planning is the deciding in advance about what is to be done. It is the predetermination of future course of action. It involves the selection of goals and future course of action to achieve them. It discovers alternatives .It chooses future course of action among alternatives. It requires decision making by every level of manager. According to Ricky Griffin planning is the setting organization's goals and deciding how best to achieve them. In conclusion, Planning is the process of establishing goals and choosing future course of action to achieve them. IMPORTANCE OF PLANNING: Planning is a foremost function of management. Today it assumed to be immense in all types of organization no matter whether it is big or small. The following points underline the importance of planning: 1. Focuses on objectives Every organization has objectives .organizational planning puts focus on objective. Objective provides direction and all planning decisions are directed towards achievement of these objectives. 2. Facilitates control Planning is necessary to facilitate control. It provides standard to compare with actual performance. So, control without planning is impossible. 3. Better co-ordination Planning helps to bring better co-ordination among activities, persons, departments and organizational level is for the attainment of objectives. 4. Minimizes cost Planning involves a lot of money, but once it is formulated and implemented in right earnest in every sphere and every stage cost of performance is reduced. It needs effective plan and correct implementation. 5. Provides framework for decision making Planning provides a framework for decision making. Understanding objectives and the method to achieve these objectives eliminates ambiguity in the decision making process. 6. Reduces uncertainty Future is always uncertain. But by determining proper course of action plan. We may reduce future uncertainties .so planning is important.
PROCESS OF PLANNING: Planning as process consists of a series of steps which are explained as below: 1. Enviromental context (PEST) Understanding the forces in the enviroment is the first step in planning. The forces consist of:
A. Political They consist of political system, institutions and philosophy. Political forces pose political risk in the planning process. Legal forces limit the planning process. B. Economic Economic forces consist of economic system, economic policy, economic conditions and globalization. Economic forces pose economic risk in the planning process. C. Socio-cultural Socio-cultural forces consist of demograhy, social institution, social change, pressure groups and cultural forces. They pose socio-cultural risk to the planning. D.Technological Technological forces consist of level of technology, pace of technological change, technology transfer and research and development. Rapidly changing technology pose problem to planning. 2. Vision and mission formulation: Planning process is based on vision and mission formulation of the organization. Vision states where the org wants to be in long term perspective. Mission states the reason of organizations existance. It also outlines the premises, values and directions of the org. 3. Strategic goals and strategic plans: Flowing from missions and visions are strategic goals and strategic plans. Strategic goals are set by top management. They determine strategic plans. Strategic plans are org wide plan to match opportunities with organizations resources from a long term perspective 4. Tactical goals and tactical plans: Strategic goals and Strategic plans serve as inputs for developing tactical goals and tactical plans. They are set by middle management. Tactical goals are targets for departments. Tactical plans identify priorities for departmental activities. 5. Operational goals and operational plan: Tactical goals and Tactical plans serve as input for the operational goal and operational plan. They are set by lower level management. Operational goals are targets for units in the departments. Operational plans identify specific actions for the units in the units. Budgets are operational plan Enviroment : political
Mission
Vision
Staratigic Goal
Stratigic Plan
STEPS IN PLANNING: Planning is a process. It is a systematic way of doing things. The steps involved in planning process are: 1. SWOT Analysis Strength, weakness, opportunities and threats analysis is conducted to scan and respond to data. Strength and weakness exists within the organizations which are under the control of organization. Opportunities and threats exist in the external enviroment which is not under the control of organization. 2. Set goals Goals provide direction about what is to be done. They are the end-result to be achieved by the organization. 3. Develop Premises Premises are key assumptions about the future enviroment in which the plan is to be carried out. Forecasting is important for premises. Premises can be about sales, product, price,cost, technology,tax rates etc. 4. Determine and evaluate alternatives Alternatives course of action are determined for achieving goals efficiently. Alternatives are evaluated in terms of contributions to goals achievement. Their feasibility is assessed. 5. Select course of action: The best course of action is selected. Costs, profits and judgment are important for selection of course of action. The limiting factors such as time, cost, quality determines selection. 6. Formulate actions plan: Action plan for each activity is prepared. Such plans set time bound targets. It will respond to following question: What activities will be done? How activities will be done? When activities will be done? Who will do the activities? 7. Prepare budget: A budget is financial plan. Actions plans are converted in to budgets. Budgets are prepared for each activity to find how much will it cost. They serve as standard for control. They project cost of plans.
CHAPTER-6 MOTIVATION
Concept of Motivation: The term motivation is derived from Latin word movere which means to move. Motivation means to create interest of people to perform the job. It is the result of internal wants .due to these wants people will be motivated to do work. According to Sundhram and Black Motivation is the set of forces that causes people to behave in certain ways. In conclusion, motivation is the important function of management which induces people for higher productivity. Employee accidents, turnover, and absenteeism are reduced. Herzbergs theory of motivation: Herzbergs theory of motivation is propounded by Fedrick Herzberg. This theory states not all job factors motivates people. An individual attitude toward job determines the satisfaction. Satisfaction has two different dimensions which are dealt as below: A. Hygiene Factors Hygiene factors do not motivate people but they try to reduce dissatisfaction or check up the dissatisfaction. Such factor bring employee in to zero level of motivation. Herzberg and his sub-ordinates listed following points as hygiene factor. Companys policy and administration Technical supervision interpersonal relationship personal life job security salary work condition status B. Motivational factor Motivational factor positively affect to the staffs morale, satisfaction, efficiency, productivity. Such factor satisfies and motivates people to do work. Herzberg and his subordinates listed following points as motivational factor. advancement achievement recognition responsibility work itself growth
Major contributions of Herzbergs Theory of motivation 1. This theory is popular and well-known. 2. It increased the awareness about the importance of motivation in work place. Job content is emphasized for motivation. 3. It evolved the job enrichment as a technique to motivation. 4. It stimulates research on motivation. Limitations of Herzbergs Theory of Motivation 1. The research methodology of this theory has been subject of criticism. Subsequent research has not validated this theory. 2. The finding of this theory has been subject to different explanation. 3. Hygiene factor and motivational factors are not wholly undirectional. Both are important. 4. Motivational factor varies from person to person. 5. This theory is one sided in a sense that it only explains about job satisfaction.
CHAPTER-7 GLOBALIZATION
Concept of Globalization: There are five approaches of globalization they are business globalization, economic globalization, structure globalization, competition globalization and company globalization. Globalization is emerging concept in the field of management which expands borderlessly through global production and global marketing network. Globalization has nourished the world economy through technological advancement, removal of trade barriers, liberalization and privatization. According to Sundrahm & Black Globalization is the process by which activity or undertaking becomes worldwide in scope. In conclusion, globalization is the process by which undertaking becomes worldwide in scope. Free movement, portfolio investment, foreign direct investment, bilateral investment, joint venture, technology transfer are the basic dimensions of globalization. Various international agencies, regional grouping and economic grouping such as WTO, IMF, WORLD BANK, SAFTA, SAARC, EU etc have facilitated to boost-up globalization. Effects of Globalization: Globalization has both positive as well as negative impact which is dealt as below: A. Positive Effects 1. Growth of Export Export is the popular method of globalization. Labor intensive products are exported from developing countries and capital intensive products are exported form developed countries. 2. Transfer of factors of production Free mobility is the essential feature of the globalization which results to transfer of factors of production (men, material, labor, capital) from one country to another easily. 3. Increase in Productivity Globalization has increased the productivity in production and contributes to the national income. 4. Increase in Employment Globalization has increased the employment through worldwide scope of labor market. B.Negative Effect 1. Erosion of National Sovereignty National Sovereignty is diluted by big multinational companies. 2. Unequal partnership Developing countries should collaborate with developed countries. In fact, it is not equal partnership. Developing countries do not have competitive power. 3. Threat to social and cultural values Globalization has increased the terrorism, crime, prostitution, child-sex abuse, drug trafficking and changes in the civilization and culture. 4. Threat to Domestic Market Globalization captures the domestic market which leads to discouragement and pessimism in domestic market.
CHAPTER-8 COMMUICATION
Concept of communication: The term communication' is derived from the Latin word 'communis' which means transferring and understanding the information. Exchanging news, views, ideas and experience between two parties is communication. According to Ricky Griffin Communication is the process of transmitting information from one person to another. In conclusion , communication is the important function of management which exchanges news, views, ideas and experience between two parties. Effective communication is the essence of effective management. At Least two parties are needed for effective communication. Communication may be formal as well as informal. Barrier in the effective communication: 1.Physical Barrier The barrier in the effective due to physical reasons such as physical distance, noise, physical arrangement etc is known as physical barrier. 2. Psychological Barrier The barrier in the effective due to Psychological reasons such as selfishness, dignity more than necessity, ego, jealousy, fear etc is known as psychological barrier. 3. Semantic barrier: The barrier in the effective due to satirical language, ambiguity (dual meaning ), poor communication skill etc is known as semantic barrier. 4. Organizational barrier The barrier in the effective due to poor planning, information overload, distance, timing, technology, structural complexity etc is known as organizational barrier. Techniques to remove barrier in the effective communication: 1.Reducing Physical barrier The effective communication can be enhanced by reducing physical barrier such as physical distance, noise, physical arrangement etc. He/she may use informal communication, communication by moving around to reduce physical barrier. 2. Promoting interpersonal Relationship Employee is the main cause of barrier in the effective communication because they have different values, norms, culture, language, religion, attitudes, belief, adaptional power. Hence, The effective communication can be enhanced by promoting interpersonal relationship. 3.Simplifying the language The effective communication can be enhanced by omitting satirical language, ambiguity ( dual meaning) etc.
4. using communication technology Today is the era of information and technology. The effective communication can be enhanced by using modern information and technology. 5. Improving communication process The effective communication can be enhanced by adopting appropriate communication channel and effective feedback mechanism.