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Management Theory Practice
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PRINCPLES & PRACTICES OFMANAGEMENT
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Definitions
Management is the process of designing and maintaining an environment in whichindividuals working together in groups efficiently accomplish selected aims.
- Weihrich and Kuontz
The use of people and other resources to accomplish objectives.
- oone and Kurtz
The process by which managers create! direct ! maintain and operate purposiveorganizations through systematic! coordinated! cooperative human effort.
- Mc. "arland
Management is a multi-purpose organ that manages a business! manages amanager and manages workers and work.
- #eter $rucker
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Management- Science & Art
Science
Adances !"#no$%edge
Proes
Predicts
Defines
Measres Im'resses
Art
Adances !"'ractice
Fee%s
Gesses
Descri!es
O'ines E('resses
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)*" Std" Management
+ti%i,ation of resorces est 'erformance is a gien sitation To ac*iee 're-determined o!.ecties Interna% and E(terna% Enironmenta% factors affecting
!siness For form%ating cor'orate strateg" To face com'etitie c*a%%enges For R &D
To nderstand t*e im'act of c*ange To nderstand t*e im'ortance of /a%it" To nderstand *o$ it can !e a''%ied to so%e an"
!siness 'ro!%em
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0PROFESSIONAL MANAGEMENT1
Professional Management
Se'aration of o$ners*i' from management
2no$%edge !ased decision ma#ing
Professiona% managers are 'erformanceoriented
T*e" fo%%o$ management 'ractices !ased
on information o!tained3e('erience A''%ication of management t*eories to
so%e emerging organi,ationa% 'ro!%ems
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Eo%tion of Management t*og*t
%lassical approach
Fredrick Taylor (1856-1915)
&. 'cience! not rule of the thumb
(. )armony! not discord
*. %ooperation! not individualism+. Ma,imum output
. $evelopment to greatest efficiency and prosperity
. )igh wages! low cost
Charles Babbage
&. 'pecialization
(. Work measurement/ methods*. 0tilization of machines and tools
+. $ivision of labour
. 'cience and mathematics
. %ost reduction
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Cont455
Frank and Lillian Gilberth (1868-19! " 18#8-19#)
&. Time and motion study
(. Worker welfare
*. #otential of workers
$enry Gantt (1861-1919)
&. 1antt %hart(. onuses for Workers and 'upervisors
*. 1ood understanding of 23
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Cont4
$enry Fayol ( 18!1-195)
&. $ivision of labour
(. $iscipline
*. 0nity of command
+. 'ubordination of individual interest to common good
. 3emuneration
. %entralization
4. )ierarchy
5. 6rder
7. 89uity&:. 'tability of 'taff
&&. 2nitiative
&(. 8sprit $e %orps
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Cont45 Ma( )e!er 6789:-7;<=>
reacrac" Criticisms
E%ton Ma"o- T*e ?a$t*orn E('eriments 67;<@-<> 6788=-7;:;>
Mar" Par#er Fo%%ett 67898-7;>
C*ester arnard 67889-7;97
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Cont45 Behavioral Science
Mas%o$ Mc5 Gregor A%derfer ?er,!erg
Management Science
Mat*ematica% Mode%%ingB or for so%tions of management 'ro!%ems
Recent Developments
S"stems A''roac* Contingenc" A''roac* D"namic Engagement A''roac* Et*ics and socia% Res'onsi!i%it" C%tres and M%tic%trism TM
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Re%ation of Motion & Time Std" to)or# Design
O!.ectieIm'roe O's !"Effectie ti%i,ationOf a%% resorces
O!.ectieIm'roe Contro% !"More accrate '%ng3estimating3 ea%ating'erformance
s
)or#Design
Method Study/ OR
Motion
Study
Time Study
Standard S"m!o%so O'eration TN3 Moement Ins'ection D De%a"3 Tem' Storage Storage
+sed to Ea%ate
A%ternate designs3met*ods Dee%o'ed !" Ta"%orDee%o'ed!"
Gi%!ert*
+sed to find t*e fastest
Motion se/ences
)or# Measrement
Com!ined Actiit"
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Manageria% ro%es identified !"Mint,!erg
Inter'ersona% Figre*ead Leader Liaison
Informationa% Monitor Disseminator S'o#es'erson
Decisiona% T*e Entre'reneria% ro%e T*e distr!ance *and%er ro%e T*e resorce a%%ocator ro%e T*e negotiator ro%e
“ Aim all communication at identifying and solvingprolems! not laming"#
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Manageria% Attri!tes
Professiona% Com'etence
Et*ics3 a%e Drien
Candor and *onest" Emotiona% Inte%%igence
Commitment
?man a%es Leaders*i' a%ities
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$ey Aspect of the Management Process
Organi%ational Resources &unctions of Management
;<abour
;%apital
;Materials
;Machinery
;2nformation
;#lanning
;6rganizing
;'taffing
;<eading
;%ontrolling
;%oordinating
=ttainment
6f
6rganizationa
l
1oal
Ty%es o& 'anagers
Type &- 8,pectations >alues Targets
Type (- 8,pectations >alues Targets
Type *- 8,pectations >alues Targets
Type +- 8,pectations >alues Targets
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Socia% & Et*ica% Res'onsi!i%it" ofManagement
0CSR refers to t*e !sinessmans decisions and actions ta#en forreasons 'artia%%" !e"ond t*e firms direct economic or tec*nica%interest51
- 2eit* Dais
0CSR contends t*at management is res'onsi!%e to t*e organi,ationitse%f and to a%% t*e interest gro's $it* $*ic* it interacts5 Ot*erinterest gro's sc* as $or#ersB cstomersB creditorsB s''%iersBgot5 and societ" in genera% are '%aced essentia%%" e/a% $it*s*are*o%ders
- O'erationa% Definition Et*ics
?o$ or decisions affect ot*er 'eo'%e Std" of 'eo'%es rig*ts & dties Mora% r%es 'eo'%e a''%" $*i%e ma#ing decisions Natre of re%ations*i's among 'eo'%e
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Arguments for Social 'nvolvement
Im'roements !enefit !ot* societ" and !siness Greater Freedom and f%e(i!i%it" from got5 Po$er $it* res'onsi!i%it"
Pro!%ems can !ecome 'rofits Faora!%e '!%ic image etter to 'reent t*an cre
Arguments Against
Primar" O!.ecties Costs Associated Enog* Po$er No Acconta!i%it"
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P%anning
#lanning is a continuous process of making present entrepreneurialdecisions systematically and with best possible knowledge of theirfuturity! organizing systemically the efforts needed to carry out thesedecisions and measuring the results against e,pectations throughfeedback system.
- #eter $rucker
#lanning is the selection and relating the facts and making use of
assumptions regarding the future in the visualization and formalizationof proposed activities believed necessary to achieve the desired result.
- Terry
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Natre of P%anning
P%anning is goa% oriented
P%anning is an inte%%ecta% or rationa%'rocess
P%anning is a 'rimar" fnction
P%anning is a%% 'erasie
P%anning is for$ard %oo#ing
P%anning is a 'er'eta% 'rocess P%anning is an integrated 'rocess
P%anning ino%es c*oice
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Significance of P%anning
Focses attention on o!.ecties Offsets ncertaint" and ris# Proides sense of direction
Proides gide%ines for decision ma#ing Increases organi,ationa% effectieness Proides efficienc" in o'erations Ensres !etter coordination
Faci%itates contro%s Encorages innoation and creatiit" Faci%itates de%egation
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T"'es of P%ans
Top (evel Middle (evel (o)er (evel
Time <ong 2ntermediate 'hort 3ange
3ange 3ange
'cope 'trategic Tactical 6perational
ight a*or areas o& +trategic Goals
; Market 'tanding and %ustomer loyalty
; 2nnovation; )uman 3esources Management
; "inancial 3esources; #hysical 3esources! $eployment and 0se; #roductivity! effectiveness ! efficiency; 'ocial 3esponsibility;#rofit 3e9uirements
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+nderstanding organi,ation
)*at is Organi,ation
i%ding %oc#s
Diision of $or# De'artmenta%i,ation ?ierarc*" Coordination
Mec*anistic 3s Organic S"stems
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Cont4
C%assification of Organi,ations Predominant%" coercieB non-%egitimate at*orit" Predominant%" ti%itarianB rationa% %ega% at*orit"B se of
economic re$ards Predominant%" normatieB se of mem!ers*i' stats and
intrinsic a%e re$ards at*orit" on c*arisma3 e('ertise Mi(ed strctres
Strctres
" Fnction " Prodct Matri(3Mi(ed
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Organi,ing
,e&inition
2dentification and classification of re9uired objectives 1rouping of activities necessary to attain objectives =ssignment of each grouping to the manager with authority to supervise it
#rovision of coordination horizontally and vertically
"ormalized intentional structure of roles or positions.
$etermining what tasks are to be done! who is to do them! how the tasks are to begrouped! who reports to whom and where decisions are to be made
- 3obbins ? %oulter
6rganizing is a management function involving assigning duties! grouping tasks!delegating authority and responsibility and allocating resources to carry out aspecific plan in an efficient manner
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Common Organi,ationa% Designs
Sim'%e Strctre reacrac"
Matri( Strctre Team Strctre irta% Organi,ation ondar" %ess Organi,ation Diisiona% Strctre Fnctiona% Strctre
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)*" Do Strctres Differ
Mec*anistic s Organic Mode%s
Strateg"
Organi,ationa% Si,e Tec*no%og"
Enironment
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Line and Staff At*orit" (ine Authority
Direct%" res'onsi!%e for organi,ationa% goa%s Standard c*ain of command ased on %egitimate 'o$er
Staff Authority
Proides serices and at*orit" to %ine managers E('ert *e%' and adice ased on e('ert 'o$er Researc*B ana%"sis and o'tion dee%o'ment Po%ic" im'%ementationB monitoring and contro%
&unctional Authority
Rig*t to Contro% actiities of ot*er de'artments ased on %egitimate 'o$er3 e('ert 'o$er Practiced in most organi,ations
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Contd4
De%egation
Forma% at*orit" and acconta!i%it" tocarr" ot s'ecific tas#s
Necessar" for efficient fnctioning ofan" organi,ation
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S'an of Contro%
De'artment )ide S'an Narro$ S'an Factors determining effectie s'an
&actors determining effective Span of *ontrol
Trained s!ordinated C%arit" of de%egation of at*orit" C%arit" of '%ans +se of o!.ectie standards
Rate of c*ange Commnication tec*ni/es Amont of 'ersona% contact needed +se of Staff Assistants Com'etence of Manager
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Re%ations*i's 6 ie$s on Conf%icts>
Im'ortance of Conf%ict Management
Re$ards
Leaders*i'
C*ange 6Nad%er and Ts*man>
Incrementa% Strategic
Antici'ator" Tning Re-orientation
Reactie Ada'tation Re-creation
(earning Organi%ationsTo%erance for am!igit"
Managing diersit"O'en CommnicationsCPSConf%ict Reso%tionTeam OrientationInnoatie Efforts
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Conf%ict ?and%ing Modes *ompetitive *ollaorating 6o$n concerns at ot*ers 6$or#ing $it* ot*er
E('ense> 'art" to find so%tions>
*ompromising
6Mta%%" acce'ta!%e so%tion>
Avoidance Accommodating 6Not addressing conf%ict> 6Satisf"ing>
6?ig*>
Assertiveness
6Lo$>
6Lo$> Coo'eratieness 6?ig*>
Mode Assertieness Coo'eratieness
Com'eting ?ig* Lo$Co%%a!oraing ?ig* Lo$Aoiding Lo$ Lo$Accomodating Lo$ ?ig*Com'romising Moderate Moderate
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C%tre T*e com'%e( mi(tre of assm'tionsB !e*aiorsB storiesB m"t*sB meta'*ors and
ot*er ideas t*at fit toget*er to define $*at it means to !e a mem!er of a'artic%ar societ"
Body Shop)or#B LieB Loe and Learn- rat*er t*an$or#B $or#B $or#
See meaning and mone"- rat*er t*an mone"a%onei%d net$or# of re%ations*i's- rat*er t*an*ierarc*ies of 'o$erSstain resorces rat*er t*an 0+se it andLose it1 Gro$ Natra%%"- rat*er t*an gro$ fastEm!race $or# and fami%"- rat*er t*an $or#or fami%"
Artifacts- Es'osed a%es- asic Assm'tions
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Cont45
C%tra% Practices Materia% s Non Materia% c%tres Eco%og" and C%tre C%tra% C*aracteristics
O!sered e*aior Norms a%esB Attitdes and !e%iefs
P*i%oso'*" R%es Organi,ationa% C%imate
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Decision Ma#ing Process of identif"ing and se%ecting a corse of action to so%e a s'ecific 'ro!%em
'mportant aspects Past E('erience H !ot* 'ositie and negatie ?man Re%ations*i's Pro!%ems and o''ortnit" finding Deciding to decide
Prolem finding process Deiation from 'ast e('erience Deiation from set '%ans From ot*er 'eo'%e Performance of com'etitors
Opportunity finding process Somet*ing t*at offers a c*ance to e(ceed o!.ecties Dia%ectica% in/ir" met*od 6Dei%s Adocate met*od> Im'ortance of information gat*ering
Recogni%ing the Prolem Prioriti,e Is t*e 'ro!%em eas" to dea% $it* Mig*t t*e 'ro!%em so%e itse%f Is t*is m" decision to ma#e
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Cont4
Decision Ma#ing
S'ecific Re/irements
75 E('ected Res%ts
<5 Resorce Constraints
Prioriti,e Needs
O'tiona% Corses of Action
C*oose est O'tion Identif" Potentia% nfaora!%e
conse/ences
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Cont45 Natre of Decision Ma#ing
Programmed
Non Programmed
Certaint"
O!.ecties
AccrateB measra!%e and re%ia!%e information Ris#
Otcome cannot !e 'redicted
Pro!a!i%it" factor
+ncertaint"
Litt%e #no$n a!ot a%ternatie and otcome
Im'ortance of e(terna% factors and information
Programmed Non'rogrammed*ertainty Ris+ ,ncertainty
Manageria% contro%?ig* Lo$
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Factors affecting t*e decisionma#ing 'rocess
Information Time factor Enironmenta% factors
Interna% Factors Persona%it" of t*e decision ma#er Partici'ationB acce'tance & im'%ementation Precedent Esca%ation of commitment Pro!%em 'erce'tion
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Rationa% Decision Ma#ing Process
'nvestigate SitDefine 'ro!%emDiagnose casesIdentif" decisiono!.ecties
DevelopalternativesSee# creatiea%ternatiesDo not ea%ate"et
'mplementand monitorP%an Im'%ementation
MonitorMa#e ad.stment
Ea%ateA%ternaties &Se%ect !estaai%a!%e
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Cont4
'nvestigation Define t*e 'ro!%em Diagnose t*e cases Identif" decision o!.ecties Development
Eas" for 'rogrammed Diffic%t for non-'rogrammed -valuation Is t*e a%ternatie feasi!%e Is t*e a%ternatie a satisfactor" so%tion )*at are t*e conse/ences for t*e rest of t*e organi,ation
'mplementation A''ro'riate instrctions Ac/isition3 A%%ocation of resorces Assigning res'onsi!i%itiesB !dgeting Progress re'orts and corrections
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Information S"stems for Manageria% Contro% andDecision Ma#ing
Cor'orateData!ases
Information for decisionMa#ing
Information for contro%
MIS
DSS
EIS
Feed!ac#Contro% S"stems
Mgt Contro% S"stems
a%anced Scorecard
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Management Contro% S"stems
Acta%Performance
MeasrePerformance Com'arison
Desired'erformance
Deiations
ReasonForDeiation
CorrectieActions
&eedac+ (oop
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O!.ecties of MCS
Re%ations*i' $it* organi,ationa% goa%s
Identification of critica% 'rocesses t*ataffect goa%s
Identif" #e" sccess factors Identif" res'onsi!i%ities
Acconta!i%it"
Financia% s non financia% 'erformance Im'roement of co%%ectie decision ma#ing
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)*" Management Contro% s"stemfai%
Most contro% s"stems are 'ast actionoriented
Precision Leae %itt%e margin for error
Contro%s do not c*ange $it* missionsBstrategiesB o!.ecties and '%an
e*aiora% and *man side if t*e contro%s"stem oer%oo#ed
Standards are not modified as 'er t*esitation at *and
Im'ortance of s'eed" and re%ia!%e feed!ac#
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ERP
ERP- Integration of !siness 'rocesses across de'artments into anenter'rise $ide information s"stem
Integration of
Prodct P%anning Parts 'rc*asing Inentor" Contro% Prodct Distri!tion and f%fi%%ment Order trac#ing
ERP +sers T*ose $*o e(ecte strategic '%anning T*ose $*o 'erform manageria% contro% T*ose $*o do o'erationa% contro%
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Cont45
Sa%es Order '%acement Order sc*ed%ing
S*i''ing and inoicing
Finance Financia% data
Financia% re'orts Tria% a%anceB a%ance S*eet arter%" financia% data
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Management Contro%
Management contro% is a s"stematic effort to set 'erformancestandards $it* '%anning o!.ecties to design informationfeed!ac# $it* t*ese 're determined standards and to measret*eir significance and to ta#e an" action re/ired to assre t*ata%% cor'orate resorces are !eing sed in t*e most effectie
and efficient $a" 'ossi!%e in ac*ieing cor'orate o!.ecties - Moc#%er
P%anning
Im'%ementation of strategies Contro% !" com'aring
Acta% res%ts $it* '%anned res%ts
Strategies to ac*iee o!.ecties
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Feed!ac# Loo' of ManagementContro%
DesiredPerformance Acta%
Performance
MeasrementPerformance
Ana%"sisDeiations
IdentificationOf deiations
Com'arisonAgainstStandards
CorrectieAction Im'%ementation
Of correction
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Cont455
Management Contro% *e%'s in
75 Co'ing $it* ncertaint"
<5 Detecting irreg%arities5 Identif"ing o''ortnities
:5 ?and%ing com'%e( sitations
J5 Minimi,ing costs
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