Unit I : Basics of Management 6L

• Introduction, Definition of management,

characteristics of management, functions of
management - Planning, Organizing, Staffing,
Directing, Co-ordination, Controlling, Motivating,
Communication, Decision Making,
• Principles of management – F.W.Taylor, Henry
Fayol, Elton Mayo,
• Administration and management, Nature of
management, levels of management, scientific
management, managerial roles,
• Forms of Organization- Line , Line – staff,
committee etc, Distinction between Traditional
organization and Modern organization, concept
of Globalization
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 Management
"Management is the art of getting things done through
people". Mary Parker Follet, further elaborate the definition
as
• One category of people
(managers) should achieve their
organizational objectives by
arranging others (subordinates)
to carry out the necessary tasks
instead of performing those tasks
themselves.

Therefore, "The prime purpose of management is to create

a suitable environment in which people can perform
productively and coordinate individual efforts toward
achieving
Sep 30, 2020 organizational goals.” 2
• In other words, Management is the act of getting
people together to accomplish desired goals and
objectives using available resources efficiently and
effectively.
PREPARATION
• So, Management comprises
of the following activities as M START-UP P
A R
1. Planning, N FEASIBILITY O
A J
2. Organizing, G DEFIN. & PLANNING E
E C
3. Staffing, M IMPLEMENTATION T
E
4. Leading /directing, and, N CLOSE-DOWN
T
5. Controlling
for the purpose of accomplishing a goal.
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 Characteristics of Management
• Mgt is a group of
managers
• Mgt is Universal •Mgt is a Multi-faceted
• Mgt is dynamic discipline
• Mgt is Purposeful •Mgt is a continuous
• Mgt is goal oriented process
•Mgt is a system of
• Mgt is a Social process
authority
• Mgt is a resource •Mgt is integrative
• Mgt is intangible Function (multidisciplinary
(incapable of being perceived holistic approach)
by senses or realized / •Mgt is profession as art &
defined)
Sep 30, 2020 science 4
• Planning simply means “deciding in advance,
what, how, when to do and by whom”, “bridging
the gap between present position/status and
destination”, and, “thinking before doing”.
Planning can be divided Type /scope of plans include :
into kinds as: 1.purpose/mission
1.Short & Long term planning 2.Objective
2.Financial & Non-financial 3.Strategy
planning
4.Policy
3.Formal & Informal planning
4.Specific or Routine planning 5.Procedures
5.Corporate & Strategic 6.Rules
planning 7.Programs
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8.Budgets 5
•Planning means appropriate actions to achieve the said
objectives that enables management to pursue its goals in a
systematic manner instead of relying on chance.
CURRENT PROJECTS MARKETING
Investments Customers/Markets RESEARCH &
Financing Products/ Services DEVELOPMENT
Milestones Distribution Innovation

MANAGEMENT
PRODUCTION SUMMARY
Suppliers BUSINESS PLAN Strengths/
Procurement Weaknesses/
Production resources Opportunities/ Risks

COMPETITION/ MARKET COMPANY

With-in the canton Purpose/Mission statement
(subdivision of an area) Entrepreneurial team/Organization
National/International Legal form
market description Curriculum vitae
Liquidity is degree to which an asset can be Projected profit & loss statement
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bought/sold without affecting the asset's price. Liquidity plan
Organizing
Organizing the company's human and material
resources into a workable structure to ensure
cost-effective organizational performance.
MANAGER

Marketing Procure Production Engineering Administrative Finance

dept. dept. dept. dept. dept. dept.

Finished Accountant
Assembly Engineer Technician
product
Cashier

Abroad Domestic Warehouse Production Quality Personal

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line control
 Principles of Organizing
the 14 - dimensions
1. Objectives 8. Responsibility
4.The higher level
have limited
2. Specialization 9. Authority time, only
exceptionally
3. Span of Control 10. Efficiency complex
problem should
4. Exception 11. Simplicity be referred to
them and
5. Scalar Principle / 12. Flexibility routine matters
Chain of command be dealt by the
subordinates at
the lower levels
6. Unity of 13. Unity of
5.Line of authority
Command Direction
7. Delegation 14. Personal ability
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Organizing
entails
•Operating
coordinating model
all working •Structure roles
•Competencies •How leadership
activities •Confirming the •Governance works together
vision, values and
into an •Decision making •Identifying
behaviors
•Individual values leadership actions
integrate & capacity to •Individual
leadership actions
operational change
•Strategic message
framework, •Ensuring we have
the right skills
creating •Balanced score
•Learning plans
card
functional •Performance •New capabilities
•Migration plans •Career plans
management
positions, •Reward alignment
•Redeployment
•Communication legislative
and staffing compliance
•Redundancy &
them with Support
suitable •Moral maintenance
•Communication
employees.
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Leading
Leading the company's employees toward accomplishment of
organizational objectives. Six R’s are important!

The path to strategic advantage. Identify gaps, priorities to tackle, and, strengths we can leverage.

Leaders walk the talk. A

consistent message from
management and to align
entire organization around
Get the right people on company’s goals & sales
the bus. Manage talent strategy.
better. Improve overall
performance.

Integrate the management

process that drive optimal sales.
Establish synchronized roadmap
Boosts the team’s ability to that aligns selling with the way
sell. Understand customers on customers buy. Give sales
a deeper level, create business leaders consistent cadence
results, communicate values, ( Balanced /rhythmic flow) for
manage accounts strategically managing.
and coach for maximum
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impact. Integrating sales enablement tools to build success
 • Proper Leading entails directing and influencing
subordinates in performing their designated
duties in the most cost-efficient manner.

Six areas of work of a

committed LEADER
Process management
Measurements & metrics
Rewards & cognition (mental
action / process of acquiring knowledge
/understanding through thought,
experience, and, senses)
Strategy integration
Training & staffing
Governance
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& communication 11
 TWO TYPES OF LEADERSHIP STYLES:
• Task-Oriented Leadership Style
• Employee-Oriented Leadership Style
FACTORS WHICH INFLUENCE LEADERSHIP STYLES:
1. Management,
2. Subordinates,
3. Organizational situation
FOUR EVOLUTION OF LEADERSHIP STYLES:
1. “Telling” leadership style.
2. “Selling” leadership style.
3. “Participating” leadership style.
4. “Delegating” leadership style.
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 Controlling
Controlling the performance of the company's
employees is ensuring that the organization is
progressing toward achieving its goals.
This entails establishing standards of
performance, measuring actual performance,
comparing it against established standards,
Developing and
Monitoring
taking action to correct any significant
deviations.
So, while talking about Controlling process;
performance management system activity
becomes very important.
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 THE CONTROLLING PROCESS
Essentials of Controlling process for various
operational activities within the organization
are……
Set specific Locate
performance responsibility
standards

PLANNING Action to
Action to alter communicate Evaluate
Objective performance
performance
Strategies against
standard
Tactics standards
Take
corrective
Action to alter plans action
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The implementation of the Controlling Process,
therefore, represents the ultimate step in
converting the company’s plan of management into
reality.

The controlling
process is
required to be
implemented in
a professional
manner.

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 Motivating
• Employee involvement is needed to meet the
organization’s goals for quality & productivity
and that requires motivation for them to
perform accordingly.
Concepts to achieve a motivated work-force
1.Know 2.Know 3.Establish 4.Share the
thyself your positive goals
employees attitude
5.Monitor 6.Develop 7.Communicate 8.Celebrate
progress interesting effectively success
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work 16
 Communication
• Communication is derived from the Latin word
“Communis” which implies common. So,
Communication is the interchange of thoughts &
information.
METHODS OF COMMUNICATION
1.Oral Communication
2.Written Communication
3.Gestural Communication
ELEMENTS of communication
1.Sender 2. Message 3.Encoding
4.Channel 5.Receiver 6.Decoding
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• Sound Communication provides the advantage of
Improving Managerial Performance, Facilitates
Leadership, Increases job Satisfaction, Reduces time &
efforts, Enhances coordination, and, Help public
relations.
• Channels of Communication are
1.Formal Communication that is classified as
– Downward Communication – flow of communication from
superior to subordinate
– Upward Communication - flow of communication from
subordinate to superior
– Horizontal Communication – transmission of information
among the positions at the same level of Organization.
2.Informal Communication or Grapevine which is among
people
Sep 30, 2020 through informal contacts or relations. 18
 Decision Making
• It is the process of choosing a course of action from
available alternatives.
• According to Haynes & Massie “ Decision making is a
process of selection from a set of alternative courses
of action which is thought to fulfills the objective of
the decision – problem more satisfactorily than
others.”
• Types of Managerial Decisions are Organizational &
Personal Decisions, Routine & Strategic Decisions,
Programmed & Non programmed Decision, Policy &
Operating Decision, and, Individual & Group
decision.
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• Decision making Process are Defining &
Analyzing the problem, Developing alternative
solutions, Evaluating the Alternatives, Selecting
the best alternatives, and, Implementing the
decision.
• Factors involved in Decision Making are
1. Tangible Factors - the factors those can be
measured eg Fixed cost, operating cost, profits,
machine, etc,
2. Intangible factors – Un-measurable elements. e.g.
 (a) Employee morale, quality of labor relations,
Consumer behavior, etc.
 (b) Personal values & Organizational Culture, Group
decision making etc.
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• Problems of Decision Making are Indecisiveness,
Time pressure, Lack of Information, confusing
symptoms with causes, Failure to evaluate
correctly, and, Lack of follow through.
• Key to success in Decision Making are Be
problem oriented not just solution oriented, Set
decision making goals, Always check the
accuracy of the information, Don’t be afraid to
develop innovative alternatives, Be flexible, Gain
commitment for decision at an early stage, and,
Evaluate and follow up the decision.

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 CLASSIFICATION OF MANAGERS/Level of Mgmt

1. Top level
Managers LEADERSHIP TEAM
Steering Group,
Project Director,
Sponsors

2. Middle INTERNAL LIAISON

level Line Departments, Project EXTERNAL LIAISON
other projects, Trading Parameters,
Managers Information
Manager
Suppliers, Contractors
Technology
PROJECT TEAM
3. Low level Participants,
Deliverables,
Managers Tasks

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 MANAGEMENT STRUCTURE
• Effective Management Structure is of paramount
importance to any successful business
organization. This applies to small, medium-sized,
and large companies alike.
• The development of an effective management
structure represents, a critical management
responsibility of every business owner.
The development of a
management structure is
usually based on the
company’s operational
activities & organizational
goals.
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 Structuring a job in organizations
• There are numerous ways to structure jobs within an
organization, but two of the most basic forms include
1. Simple line structures, and,
2. Line-and-staff structures.
• In a line organization, top management has complete
control, and the chain of command is clear & simple.
• Examples of line organizations are small businesses in
which the top manager (often the owner) is
positioned at the top of the organizational structure
and has clear "lines" of distinction between him and
his subordinates.
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• The line-and-staff organization combines the line
organization with staff departments that support and
advise line departments.
• Most medium and large-sized firms exhibit line-and-
staff organizational structures.
• The distinguishing characteristic between simple line
organizations and line-and-staff organizations is the
multiple layers of management within line-and-staff
organizations.
• An advantage of a line-and-staff organization is the
availability of technical specialists.
• Staff experts in specific areas are incorporated into
the formal chain of command.
• A disadvantage of a line-and-staff organization is
conflict between line and staff personnel.
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 Line-and-Staff Organization
Staff authority
President
Line authority

Legal Advisor

Vice President Vice President Vice President

Sales Production Finance

Production Department
Supervisor Head
Production Department
Supervisor Head
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 Principles of Management
• No Universally Accepted Theory of
Management
• There are several approaches to the
theory and practice of management.
– The universal process approach
– The operational approach
– The behavioral approach
– The systems approach
– The contingency approach
– The attributes of excellence approach
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 The Universal Process Approach
• Universal Process Approach
– Assumes all organizations require the same
rational management process.
• Core management process remains the
same regardless of the purpose of the
organization.
• The management process can be reduce
to a set of separate functions and related
principles.
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Henri Fayol’s Universal Management Process
A form of work that involves coordinating an
organization’s resources toward accomplishing
organizational objectives
• Fayol published a document of Administration in 1916,
In which, he has
1. Divided the manager’s job into five functions as
Planning, organizing, command, coordination, and
control, and,
2. Developed universal principles of management eg.
DIVISION OF LABOR (specialization), UNITY OF
COMMAND (only one boss), SCALAR CHAIN OF
COMMAND (hierarchy of authority), SPAN OF CONTROL
(number of subordinates supervised).
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 Lessons from the Universal Process
Approach
– The management process can be separated
into interdependent functions.
– Management is a continuous process.
– Management is a largely, though not an
entirely, rational process.
– The functional approach is useful because it
specifies what managers should do.

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 The Operational Approach
• Operational Approach
– Describes the production-oriented area of
management dedicated to improving efficiency,
cutting waste, and improving quality.
– Covers the technical and quantitative
approaches to management :
• Management science
• Operations research
• Production management
• Operations management
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Frederick W. Taylor’s Scientific Management

– Developing performance standards on the

basis of systematic observations and
experimentation.
• Standardization of work practices and methods
reduce waste and increase productivity
• Time and task study of workers’ efforts to
maximize productivity and output.
• Systematic selection and training of workers to
increase efficiency and productivity.
• Differential pay incentives based on established
work standards.
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 So, F. Taylor has concentrated on the study
of parameters as
• Time Study
• Standards for Work
• Job Specialization
• Managerial Planning & Control of Work
• Worker Selection & Training
• Incentives

ASSUMPTIONS: Productivity is a workplace

problem, Managers should plan & direct the work
to others, Individuals are economically motivated.
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 The Behavioral Approach
• The Human Relations Movement
– An effort to make managers more sensitive to
their employees’ needs.
– Arose out the influences of
• the threat of unionization.
• the Hawthorne studies.
• the philosophy of industrial humanism.
• Elton Mayo
– Believed emotional factors were more
important determinants of productive
efficiency than physical and logical factors.
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 Outcomes of Elton Mayo’s Study
• Workers working in a group develop bond of
relationships
• Behavior at workplace depends on their mental
state, emotions and prejudices
• Emotional factors are very important.
• Human and liberal attitude of supervisor helps in
improving performance
• Managerial skills and technical skills are not
necessary to be a successful leader.

Sep 30, 2020 35

1. Threat of unionization: Business managers adopt
‘morale-boosting human relations techniques’ as a
union-avoidance tactic.
2. Philosophy of industrial humanism: Emotional
factors are more important determinant of
productive efficiency than physical & logical factors.
Motivating performance is better than demanding it.
Cooperation, a spirit of unity, and self-control are the
keys to productivity. Employee are energetic creative
individuals achieving great things if given right
opportunity.
3. Hawthorne studies: The productivity is less affected
by changes in work conditions than by the attitudes
of the workers themselves. The relationships
between members of a work group and between
workers & their supervisors is more significant.
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 Globalization
Globalization refers to the shift towards a more
integrated and interdependent world economy that
means covering/ affecting the whole world. It also
means integration of the domestic economy of a
country with the international economy.
• The term globalization has four parameters viz.
1.Reduction of trade barriers, so as to permit free flow
of goods across national frontiers.
2.Free flow of capital among nations.
3.Free flow of technology among nations.
4.Free movement of labor among different countries of
the world.  
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 Two main key facets of globalization are
1.Globalization of markets, 2. Globalization of
production.
Globalization of markets -The merging of historically
distinct and separate national markets into one huge
global marketplace. (Coca Cola, McDonald’s hamburgers
etc. are the examples of result of this class.)
Globalization of production-The sourcing of goods &
services from locations around the globe to take
advantage of national differences in the cost and quality
of factors of production e.g. labor energy, land, and
capital. (Boeing, Lenevo etc. are the examples of result of
this class.)
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 The Emergence of Global Institutions
Global institutions:
• Manage, regulate, and police the global market place.
• Promote the establishment of multinational treaties to
govern the global business system.
• World Trade Organization (WTO) that polices world
trading system and ensures nations adhere to the rules
established in WTO treaties
– In 2010, its 154 members accounted for 97% of world
trade
• International Monetary Fund (IMF) that maintains order in
the international monetary system.
• World Bank that promotes economic development.
• United Nations (UN) that maintains international peace
and security, develops friendly relations among nations,
cooperates in solving international problems and
promotes respect for human rights, and is a center for
harmonizing
Sep 30, 2020
the actions of nations. 39
 Benefits & Drawbacks of Globalization
• Improves efficiency, Improves factor Income (income
derived from selling the services of factors of production i.e.
inputs to the production process), Improves finance,
Gains from Migrations.
• Globalization increases the problems of
unemployment
• Domestic Industries finds difficulty in survival.
• Only group of people who participate in the process
of Globalization will be benefited, this creates
income inequality within the country
• Control on domestic economy becomes more
difficult
• Developing country suffers from the problem of
brain-drain.
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