Nature of Management

1. Universality: Management is an universal phenomenon in the sense that it is common and

essential element in all enterprises. Managers perform more or less the same functions

irrespective of their position or nature of the organization. The basic principles of management

can be applied in all managerial situations regardless of the size, nature and location of the

organization. Universality of managerial tasks and principles also implies that managerial skills

are transferable and managers can be trained and developed.

2. Purposeful: Management is always aimed at achieving organizational goals and purposes.

The success of management is measured by the extent to which the desired objectives are

attained. In both economic and non-economic enterprises, the tasks of management are directed

towards effectiveness (i.e., attainment of organizational goals) and efficiency (i.e., goal

attainment with economy of resource use).

3. Social process: Management essentially involves managing people organized in work

groups. It includes retaining, Developing and motivating people at work, as well as taking care of

their satisfaction as social beings. All these interpersonal relations and interactions makes the

management as asocial process.

4. Coordinating force: Management coordinates the efforts of organization members through

orderly arrangement of inter-related activities so as to avoid duplication and overlapping.

Management reconciles the individual goals with the organizational goals and integrates human

and physical resources.

5. Intangible: Management is intangible. It is an unseen force. Its presence can be felt

everywhere by the results of its effort which comes in the form of orderliness, adequate work

output, satisfactory working climate, employees satisfaction etc.

6. Continuous process: Management is a dynamic and an on-going process. The cycle of

management continues to operate so long as there is organised action for the achievement of

group goals.

7. Composite process: Functions of management cannot be undertaken sequentially,

independent of each other. Management is a composite process made up of individual

ingredients. All the functions are performed by involving several ingredients. Therefore, the whole

process is integrative and performed in a network fashion.

8. Creative organ: Management creates energetics effect by producing results which are more

than the sum of individual efforts of the group members. It provides sequence to operations,

matches jobs to goals, connects work to physical and financial resources. It provides creative

ideas, new imaginations and visions to group efforts. It is not a passive force adopting to external

environment but a dynamic life giving element in every organization.

Management

We often come across the word management referring to people who run enterprises organized

as either sole-trading or partnership firms. These organizations are either owner-manager or

managed by professional managers. But in the current situation require professionally trained

people to manage the business. The extent of success these managers achieve depends on

their knowledge of management theory and its skillful application. In the transition from owner-

managed enterprises to professional-managed enterprises, profit is no longer the sole indicator

of success. The management is obliged to put up performance in areas which are concerns of

groups other than owners.

Concept of Management

Management is essential at all levels of an organization. But the word management has been

given different interpretations. It is used as a noun, a process, and a separate discipline.

Management as a noun

In general and popular usage, management refers to a distinct group of people who direct the

activities of other people and material resources toward the attainment of predetermined goals.

Giving a Broader meaning to it, one can look at management as a resource, a system of

authority, and a class of elite.

1. Management as an economic resource: The economist's view of management is that it is a

factor of production just like entrepreneurship, capital and loabour. The managerial resource, to a

large extent, determines organizational effectiveness and efficiency. Hence in a dynamic

environment managerial development is more important and its use must be more intensive.

2. Management as a system of authority: Management is a system of authority in the sense

that it consists of a team of managers who are responsible for making decisions and supervising

the work of others. Managers at different levels possess varying degree of authority. Higher level

managers manage managers at middle levels. Middle and lower level managers supervise and

control their subordinate managers and workers.

3. Management as a class of elite: Sociologists view management as a class and status

system. Increasing complexity of management in the modern complex organization has led to

managers being regarded as a distinct class in society, who possess knowledge and skill of

higher order. Access to managerial positions is based on achievement criteria, rather than on

ascriptive criteria (ie. on family and social origins). This development is viewed by some as

managerial revolution in which the managerial class threatens to become autonomous groups

with increasing amount of power. Others view this development not with alarm because increase

in power of managers attracts more of them, which prevents managerial autocracy.

Management as a process

Interpreted as a process, Management consists of a series of inter-related managerial activities

classified into various functions with a systematic approach, so as to integrate physical and

human resource into an effective operating unit. Management is thus, regarded as the process

by which a co-operative group directs action towards common goals.

Management as a discipline

Another connotation of management is that it is a separate discipline having a systematized body

of knowledge which managers use in performing their jobs. As a separate field of study,

management includes the principles and practice of general management as well as of the

various functions of management. It has developed its own techniques and approaches. The

theoretical foundations of management have evolved on the basis of experience, observation

and scientific investigations.

1. Principles of Management are Universal a. Management principles are applicable to all kinds of organizations - business

& non business. b. They are applicable to all levels of management. c. Every organization must make best possible use by the use of management

principles. d. Therefore, they are universal or all pervasive.

2. Principles of Management are Flexible a. Management principles are dynamic guidelines and not static rules. b. There is sufficient room for managerial discretion i.e. they can be modified as

per the requirements of the situation. c. Modification & improvement is a continuous phenomenon in case of

principles of management. 3. Principles of Management have a Cause & Effect Relationship

a. Principles of management indicate cause and effect relationship between related variables.

b. They indicate what will be the consequence or result of certain actions. Therefore, if one is known, the other can be traced.

4. Principles of Management - Aims at Influencing Human Behavior a. Human behavior is complex and unpredictable. b. Management principles are directed towards regulating human behavior so

that people can give their best to the organization. c. Management is concerned with integrating efforts and harmonizing them

towards a goal. d. But in certain situations even these principles fail to understand human

behavior. 5. Principles of Management are of Equal Importance

a. All management principles are equally important. b. No particular principle has greater importance than the other. c. They are all required together for the achievement of organizational goals.

Following are the main importance of the Principles of Management.

1. Improves Understanding. 2. Direction for Training of Managers. 3. Role of Management. 4. Guide to Research in Management.

1. Improves Understanding - From the knowledge of principles managers get indication on how to manage an organization. The principles enable managers to decide what should be done to accomplish given tasks and to handle situations which may arise in management. These principles make managers more efficient.

2. Direction for Training of Managers - Principles of management provide understanding of management process what managers would do to accomplish what. Thus, these are helpful in identifying the areas of management in which existing & future managers should be trained.

3. Role of Management - Management principles makes the role of managers concrete. Therefore these principles act as ready reference to the managers to check whether their decisions are appropriate. Besides these principles define managerial activities in practical terms. They tell what a manager is expected to do in specific situation.

4. Guide to Research in Management - The body of management principles indicate lines along which research should be undertaken to make management practical and more effective. The principles guide managers in decision making and action. The researchers can examine whether the guidelines are useful or not. Anything which makes management research more exact & pointed will help improve management practice.

Management as a Science

Science is a systematic body of knowledge pertaining to a specific field of study that contains general facts which explains a phenomenon. It establishes cause and effect relationship between two or more variables and underlines the principles governing their relationship. These principles are developed through scientific method of observation and verification through testing.

Science is characterized by following main features:

1. Universally acceptance principles - Scientific principles represents basic truth about a particular field of enquiry. These principles may be applied in all situations, at all time & at all places. E.g. - law of gravitation which can be applied in all countries irrespective of the time.

Management also contains some fundamental principles which can be applied universally like the Principle of Unity of Command i.e. one man, one boss. This principle is applicable to all type of organization - business or non business.

2. Experimentation & Observation - Scientific principles are derived through scientific investigation & researching i.e. they are based on logic. E.g. the principle that earth goes round the sun has been scientifically proved.

Management principles are also based on scientific enquiry & observation and not only on the opinion of Henry Fayol. They have been developed through experiments & practical experiences of large no. of managers. E.g. it is observed that fair remuneration to personal helps in creating a satisfied work force.

3. Cause & Effect Relationship - Principles of science lay down cause and effect relationship between various variables. E.g. when metals are heated, they are expanded. The cause is heating & result is expansion.

The same is true for management, therefore it also establishes cause and effect relationship. E.g. lack of parity (balance) between authority & responsibility will lead to ineffectiveness. If you know the cause i.e. lack of balance, the effect can be ascertained easily i.e. in effectiveness. Similarly if workers are given bonuses, fair wages they will work hard but when not treated in fair and just manner, reduces productivity of organization.

4. Test of Validity & Predictability - Validity of scientific principles can be tested at any time or any number of times i.e. they stand the test of time. Each time these tests will give same result. Moreover future events can be predicted with reasonable accuracy by using scientific principles. E.g. H2 & O2 will always give H2O.

Principles of management can also be tested for validity. E.g. principle of unity of command can be tested by comparing two persons - one having single boss and one having 2 bosses. The performance of 1st person will be better than 2nd.

It cannot be denied that management has a systematic body of knowledge but it is not as exact as that of other physical sciences like biology, physics, and chemistry etc. The main

reason for the inexactness of science of management is that it deals with human beings and it is very difficult to predict their behavior accurately. Since it is a social process, therefore it falls in the area of social sciences. It is a flexible science & that is why its theories and principles may produce different results at different times and therefore it is a behavior science. Ernest Dale has called it as a Soft Science.

Management as an Art

Art implies application of knowledge & skill to trying about desired results. An art may be defined as personalized application of general theoretical principles for achieving best possible results. Art has the following characters -

1. Practical Knowledge: Every art requires practical knowledge therefore learning of theory is not sufficient. It is very important to know practical application of theoretical principles. E.g. to become a good painter, the person may not only be knowing different colour and brushes but different designs, dimensions, situations etc to use them appropriately. A manager can never be successful just by obtaining degree or diploma in management; he must have also know how to apply various principles in real situations by functioning in capacity of manager.

2. Personal Skill: Although theoretical base may be same for every artist, but each one has his own style and approach towards his job. That is why the level of success and quality of performance differs from one person to another. E.g. there are several qualified painters but M.F. Hussain is recognized for his style. Similarly management as an art is also personalized. Every manager has his own way of managing things based on his knowledge, experience and personality, that is why some managers are known as good managers (like Aditya Birla, Rahul Bajaj) whereas others as bad.

3. Creativity: Every artist has an element of creativity in line. That is why he aims at producing something that has never existed before which requires combination of intelligence & imagination. Management is also creative in nature like any other art. It combines human and non-human resources in useful way so as to achieve desired results. It tries to produce sweet music by combining chords in an efficient manner.

4. Perfection through practice: Practice makes a man perfect. Every artist becomes more and more proficient through constant practice. Similarly managers learn through an art of trial and error initially but application of management principles over the years makes them perfect in the job of managing.

5. Goal-Oriented: Every art is result oriented as it seeks to achieve concrete results. In the same manner, management is also directed towards accomplishment of pre-determined goals. Managers use various resources like men, money, material, machinery & methods to promote growth of an organization.

Thus, we can say that management is an art therefore it requires application of certain principles rather it is an art of highest order because it deals with moulding the attitude and behavior of people at work towards desired goals.

Management as both Science and Art

Management is both an art and a science. The above mentioned points clearly reveals that management combines features of both science as well as art. It is considered as a science because it has an organized body of knowledge which contains certain universal truth. It is called an art because managing requires certain skills which are personal possessions of managers. Science provides the knowledge & art deals with the application of knowledge and skills.

A manager to be successful in his profession must acquire the knowledge of science & the art of applying it. Therefore management is a judicious blend of science as well as an art because it proves the principles and the way these principles are applied is a matter of art. Science teaches to ’know’ and art teaches to ’do’. E.g. a person cannot become a good singer unless he has knowledge about various ragas & he also applies his personal skill in the art of singing. Same way it is not sufficient for manager to first know the principles but he must also apply them in solving various managerial problems that is why, science and art are not mutually exclusive but they are complementary to each other (like tea and biscuit, bread and butter etc.).

The old saying that “Manager are Born” has been rejected in favor of “Managers are Made”. It has been aptly remarked that management is the oldest of art and youngest of science. To conclude, we can say that science is the root and art is the fruit.

Levels of Management

The term “Levels of Management’ refers to a line of demarcation between various managerial positions in an organization. The number of levels in management increases when the size of the business and work force increases and vice versa. The level of management determines a chain of command, the amount of authority & status enjoyed by any managerial position. The levels of management can be classified in three broad categories: -

1. Top level / Administrative level 2. Middle level / Executory 3. Low level / Supervisory / Operative / First-line managers

Managers at all these levels perform different functions. The role of managers at all the three levels is discussed below:

LEVELS OF MANAGEMENT

1. Top Level of Management

It consists of board of directors, chief executive or managing director. The top management is the ultimate source of authority and it manages goals and policies for an enterprise. It devotes more time on planning and coordinating functions.

The role of the top management can be summarized as follows -

a. Top management lays down the objectives and broad policies of the enterprise. b. It issues necessary instructions for preparation of department budgets, procedures,

schedules etc. c. It prepares strategic plans & policies for the enterprise. d. It appoints the executive for middle level i.e. departmental managers. e. It controls & coordinates the activities of all the departments. f. It is also responsible for maintaining a contact with the outside world. g. It provides guidance and direction. h. The top management is also responsible towards the shareholders for the

performance of the enterprise. 2. Middle Level of Management

The branch managers and departmental managers constitute middle level. They are responsible to the top management for the functioning of their department. They devote more time to organizational and directional functions. In small organization, there is only one layer of middle level of management but in big enterprises, there may be senior and junior middle level management. Their role can be emphasized as -

a. They execute the plans of the organization in accordance with the policies and directives of the top management.

b. They make plans for the sub-units of the organization. c. They participate in employment & training of lower level management. d. They interpret and explain policies from top level management to lower level. e. They are responsible for coordinating the activities within the division or

department. f. It also sends important reports and other important data to top level management.

g. They evaluate performance of junior managers. h. They are also responsible for inspiring lower level managers towards better

performance. 3. Lower Level of Management

Lower level is also known as supervisory / operative level of management. It consists of supervisors, foreman, section officers, superintendent etc. According to R.C. Davis, “Supervisory management refers to those executives whose work has to be largely with personal oversight and direction of operative employees”. In other words, they are concerned with direction and controlling function of management. Their activities include -

a. Assigning of jobs and tasks to various workers. b. They guide and instruct workers for day to day activities. c. They are responsible for the quality as well as quantity of production. d. They are also entrusted with the responsibility of maintaining good relation in the

organization. e. They communicate workers problems, suggestions, and recommendatory appeals

etc to the higher level and higher level goals and objectives to the workers. f. They help to solve the grievances of the workers. g. They supervise & guide the sub-ordinates. h. They are responsible for providing training to the workers. i. They arrange necessary materials, machines, tools etc for getting the things done. j. They prepare periodical reports about the performance of the workers. k. They ensure discipline in the enterprise. l. They motivate workers. m. They are the image builders of the enterprise because they are in direct contact with

the workers.

Management as a Discipline

Management as a discipline refers to that branch of knowledge which is connected to study of principles & practices of basic administration. It specifies certain code of conduct to be followed by the manager & also various methods for managing resources efficiently.

Management as a discipline specifies certain code of conduct for managers & indicates various methods of managing an enterprise. Management is a course of study which is now formally being taught in the institutes and universities after completing a prescribed course or by obtaining degree or diploma in management, a person can get employment as a manager.

Any branch of knowledge that fulfils following two requirements is known as discipline:

1. There must be scholars & thinkers who communicate relevant knowledge through research and publications.

2. The knowledge should be formally imparted by education and training programmes.

Since management satisfies both these problems, therefore it qualifies to be a discipline. Though it is comparatively a new discipline but it is growing at a faster pace.

Management as a Process

As a process, management refers to a series of inter - related functions. It is the process by which management creates, operates and directs purposive organization through systematic, coordinated and co-operated human efforts, according to George R. Terry, “Management is a distinct process consisting of planning, organizing, actuating and controlling, performed to determine and accomplish stated objective by the use of human beings and other resources”. As a process, management consists of three aspects:

1. Management is a social process - Since human factor is most important among the other factors, therefore management is concerned with developing relationship among people. It is the duty of management to make interaction between people - productive and useful for obtaining organizational goals.

2. Management is an integrating process - Management undertakes the job of bringing together human physical and financial resources so as to achieve organizational purpose. Therefore, is an important function to bring harmony between various factors.

3. Management is a continuous process - It is a never ending process. It is concerned with constantly identifying the problem and solving them by taking adequate steps. It is an on-going process.

"A system is a whole made up of parts. Each part can affect the way other parts work and the way all parts work together will determine how well the system works. This is a fundamental challenge to traditional management thinking. Traditionally we have learned to manage an organization by managing its separate pieces (sales, marketing, production, logistics, service, etc.). Managing in this way always causes sub-optimization; parts achieve their goals at the expense of the whole. Only changing the system solves the problem." 

In essence, the systems perspective emphasizes that everything is connected to everything else and that it's often worthwhile to model businesses and processes in

terms of flows and feedback loops. Systems thinking stresses linkages and relationships and flows. It emphasizes that any given employee or unit or activity is part of a larger

entity and that ultimately those entities, working together, are justified by the results they produce.

 To effectively, nimbly, and proactively adapt to the demands of a rapidly changing

environment, all system components – inputs, processes, outputs, and feedback – must be managed.

Key points:

Organizations are systems Organizations are processing systems Organizations are adaptive systems Organization goals must be aligned with the reality of the organization's super-

system Primary processes must be aligned to meet customer expectations and

organizational goals Support processes must be aligned with primary process goals Functions, jobs, or roles must be aligned to perform the required tasks of the

processes The human performance system (HPS) components must be aligned – individually,

vertically, and horizontally Management must do the aligning

 

 

Rummler-Brache Models 

 

Processing System Hierarchy 

 

 

  

  

Systems Thinking Organizations must be understood and managed (systems thinking) as systems in order to understand why an organization performs as it does, rather than as we intended:

How do the many system conditions interact to create patterns of behavior, of which events are merely instances of those patterns of behavior.

In order to understand events and their underlying patterns of behavior, we need to understand how the patterns of behavior result from system conditions, and this requires systems thinking.

Systems thinking emphasizes the interactions of system conditions to produce organizational behavior, as opposed to analysis, which means breaking things into their constituent parts.

For any improvement intervention to be successful it must take account of inter-dependency; a change to one system condition is bound to be influenced by, or have an influence upon, other system conditions.

Systems Laws

The First Law: Every system or process is perfectly designed to achieve exactly the results it gets. So even though we may not like the results, we knowingly or unknowingly designed the system or process to achieve those results.

The Second Law: If you put good people in a bad system or process, the system or process will win every time.

Nine Performance Variables System Model (Rummler-Brache) Whether an organization is concerned with customer satisfaction, quality, productivity, cycle time or cost, the underlying issue is performance. In order to improve performance, it is necessary to understand the variables that influence performance at the organization, process and individual job/performer levels. Rummler and Brache, in their book, Improving Performance: How to Manage the White Space on the Organization Chart, introduced a matrix that identifies nine different concerns that anyone trying to change processes in an organization must consider. “The Rummler-Brache methodology has helped everyone involved in business process change to understand the scope of the problem, and it provides the foundation on which all of today’s comprehensive process redesign methodologies are based.” (Business Process Change, Paul Harmon)  All organizations are systems and the Rummler-Brache model describes all of the things that a mature organization must master.

An organization’s strategic and operational effectiveness is the product of three levels of performance – the organizational level, the process level, and the job/performer level. As a result, every improvement effort must be seen through the lens of the three levels.

Three performance needs must be met at each level: goals, design, and management.

Failure to manage the nine performance variables is failure to manage the business holistically.

Cross-functional processes are particularly critical to the customer satisfaction, quality, productivity, cycle time and cost performance of any business.

Managing people should include addressing the needs of all components of the human performance system (performance specifications, task support, consequences, feedback, skills/knowledge, and individual capacity) in which they work.

At each of the three levels, there are tools that can help in documenting, analyzing, and improving performance.

Other Rummler-Brache or Performance Design Lab models:

coming soon

 Read Dr. Geary Rummler's interview with Gartner Reseach... 

Superior organizational performance? It's All About Alignment.®

Of Nine Performance Variables

Performance Needs ->

GOALS DESIGN MANAGEMENT

Organizational

 Level

Organization Goals-Is the strategy/direction articulated and communicated?-Does the strategy make sense, in terms of external threats and opportunities and internal strengths and weaknesses?-Have the required outputs and level of performance been set and communicated?

Organization Design-Are all relevant functions in places?-All necessary?-Is flow of inputs and outputs between functions appropriate?-Does formal organization structure support the strategy and enhance efficiency and effectiveness of the system?

Organization Management-Have appropriate functional goals been set?-Is relevant performance measured?-Are resources appropriately allocated?-Are interfaces between functions aligned and managed?

ProcessLevel

Process Goals-Are goals for key processes aligned with customer/organization requirements?

Process Design-Is it the most effective and efficient process for accomplishing the process goals?

Process Management-Have appropriate process sub-goals been set?-Is process performance managed?-Are sufficient resources allocated to each process?-Are the interfaces between process steps being managed?

Job/Performer

Level

Job Goals-Are job outputs aligned with process requirements, which are aligned with customer/organization requirements?

Job Design-Are process requirements reflected in the appropriate jobs?-Are the job steps in a logical sequence?-Have supportive policies and procedures been developed?-Is the job environment ergonomically sound?

Job Management-Performance Specifications?-Task Support?-Consequences?-Feedback?-Skills/Knowledge?-Individual Capacity?

Business Process Management (BPM) Program or strategy?

 

BPM refers to how a business organizes and controls processes.BPM is a mangement discipline focused on improving corporate performance by managing a company's business processses. BPM is a set of methods, tools, and technologies used to design, enact, analyze, and control operational business processes. BPM is a process centric approach for improving performance that combines information technologies with process and governance methodologies. BPM is collaboration between business people and information technologists to foster effective, agile, and transparent business processes. BPM spans people, systems, functions, businesses, customers, suppliers, and partners. BPMS refers to systems that help accomplish BPM.

 See the Four Waves of Process Management... See Process Maturity Assessment Tools... 

Business or Enterprise Process Architecture A business or enterprise process architecture is a written or diagrammatic high-level summary of the value chains and business processes in the organization. A good process architecture shows how value chains and business processes are related to each other and to the strategic goals of the organization. A process model or process diagram refers to a single process.

  

 

BPTrends Enterprise Architecture PyramidIn Business Process Change, A Guide for Business Managers and BPM and Six Sigma Profesionals (2007), Paul Harmon says: "Companies undrtake process change initiatives for a variety of reasons. Organizations that are new to process work usually start by deciding to improve a specific business process. More experienced companies usually have some kind of corporate business process architecture and a BPM group assigned to consider all possible process change initiatives, to prioritize interventions, to coordinate efforts, and to document results. Organizations that have more sophistication usually support a number of ongoing activities that are managed at the enterprise level. These initiatives include the maintenance of a corporate business process architecture, the ongoing measurement and analysis of process performance, and some kind of corporate process management. These activities are not, typically projects, but ongoing managerial processes performed to support executive decision-making efforts and to define specific process change opportunities. At the same time, these organizations normally undertake a variety of specific projects to create, redesign or improve specific business processes. These projects are usually managed by divisional or department managers. These are process level concerns.

Allied to the projects at the process level, but at a further remove, are more specific projects undertaken to acquire and install new software applications or to create new training courses that will actually implement changes defined at the process level.

One of the major insights we’ve drawn from studying a wide variety of business process efforts during the past three years is that it is very useful to distinguish between the various levels of concern. Projects or activities at different levels require different participants, different methodologies, and different types of support. We illustrate these three different levels of concern with the business process pyramid.” 

 (Source: Harmon, BPTrends)

  

What is the State of Business Process Managment?(Not much has changed in the latest 2009 survey.) In 2006 BPTrends undertook a survey of its reads to determine what companies were doing to support business process change. “The responses were consistent with lots of other data about why companies undertake business process projects. In bad times companies seek to make processes more efficient to save money. In expansive times, companies seek to redesign processes to make them more competitive, to offer new services, or to get into new lines of business. Or they acquire companies and have to integrate the processes used at the two different organizations. In addition, especially during expansive periods, companies look to see if they can gain a competitive advantage by incorporating a new technology.”

“The fourth major reason for undertaking business process change is perhaps the most interesting, and ultimately the most revolutionary. A growing number of leading companies have begun to believe that a corporate-wide focus provides a superior way of managing the company. These companies tend to be in industries that are undergoing rapid, extensive changes. Their senior executives have concluded that they need the insights and the agility provided by a process-oriented approach to management in order to respond quickly and effectively. These are the organizations that are making major commitments to develop enterprise-level business process tools and management systems to assure that they have aligned all their business resources and functions to their value chains and can manage those processes in something close to real time.” “In the nineties, most organizations were focused on business process redesign or reengineering projects. Leading companies focused on processes that cut across departmental or functional lines, but most companies concentrated on redesigning processes within specific departments or functional units. At the same time, Six Sigma was popular in manufacturing organizations for process improvement efforts. Toward the end of the nineties, standard or off-the-shelf software applications (ERP, CRM) became a popular way to standardize processes and reporting systems. In the past six years, all of these process change strategies have continued to be popular. Today, however, leading companies are putting more emphasis on developing enterprise-wide business process architectures and corporate performance management systems. They seek to standardize specific process throughout their divisions and subsidiary organizations to assure that the same ERP or CRM modules can be used throughout the corporation and they seek to understand their corporate value chains to assure regulatory compliance. At the same time, there is a major emphasis on installing new software automation technologies – usually termed Business Process Management Systems (BPMS) – to automate the day-to-day control of processes and to provide real-time performance data for senior management.”

Changes In Focus at Leading Companies(adapted from Business Process Change, A Guide for Business Managers and BPM and Six Sigma Profesionals

(2007))

(Source: Harmon, BPTrends)

 

 

 Some Key Ideas and Groups that are Part of the BPM Movement(adapted from Business Process Change, A Guide for Business Managers and BPM and Six Sigma Profesionals

(2007)) Most of the technologies listed continue to evolve. None of them are confined to a single tradition. For

example, Lean Six Sigma is focused on process improvement but also supports process managment and process redesign initiatives.

 

(Source: Harmon, BPTrends)

 

(Source: Harmon, BPTrends) Variety of SolutionsProcess improvement refers to relatively minor, specific changes that one makes in an existing business process. Every manager responsible for a process should always be considering process improvements. In addition, on occasion, special process improvement efforts are required to get everyone focused on improving a specific process. Six Sigma and Lean are popular approaches to process improvement.

Process design or redesign refers to a major effort that is undertaken to significantly improve an existing process or to create a new business process. Process redesign consider every aspect of a process and often results in changes in the sequence in which the process is done, in employee jobs, and in the introduction of automation. Business Process Reengineering, the BPTrends Process Redesign methodology, and the Supply Chain Council’s SCOT methodology are all good examples of popular approaches to process redesign.

Process automation refers to the use of computers and software applications to assist employees or to replace employees in the performance of a business process. The use of BPMS tools, workflow systems, or XML business process language are ways to automate the management of processes or activities. Adapted from BPTrends

  Process Migration Strategy

 

Adapted from Process Renewal Group

A system is commonly defined as a group of interacting units or elements

that have a common purpose. The units or elements of a system can be

cogs, wires, people, computers, and so on. Systems are generally

classified as open systems and closed systems and they can take the form

of mechanical, biological, or social systems. Open systems refer to

systems that interact with other systems or the outside environment,

whereas closed systems refer to systems having relatively little

interaction with other systems or the outside environment. For example,

living organisms are considered open systems because they take in

substances from their environment such as food and air and return other

substances to their environment. Humans, for example, inhale oxygen out

of the environment and exhale carbon dioxide into the environment.

Similarly, some organizations consume raw materials in the production of

products and emit finished goods and pollution as a result. In contrast, a

watch is an example of a closed system in that it is a relatively self-

contained, self-maintaining unit that has little interacts or exchange with

its environment.

All systems have boundaries, a fact that is immediately apparent in

mechanical systems such as the watch, but much less apparent in social

systems such as organizations. The boundaries of open systems, because

they interact with other systems or environments, are more flexible than

those of closed systems, which are rigid and largely impenetrable. A

closed-system perspective views organizations as relatively independent

of environmental influences. The closed-system approach conceives of

the organization as a system of management, technology, personnel,

equipment, and materials, but tends to exclude competitors, suppliers,

distributors, and governmental regulators. This approach allows

managers and organizational theorists to analyze problems by examining

the internal structure of a business with little consideration of the

external environment. The closed-system perspective basically views an

organization much as a thermostat; limited environmental input outside

of changes in temperature is required for effective operation. Once set,

thermostats require little maintenance in their ongoing, self-reinforcing

function. While the closed-system perspective was dominant through the

1960s, organization scholarship and research subsequently emphasized

the role of the environment. Up through the 1960s, it was not that

managers ignored the outside environment such as other organizations,

markets, government regulations and the like, but that their strategies

and other decision-making processes gave relatively little consideration

to the impact these external forces might have on the internal operations

of the organization.

Open-systems theory originated in the natural sciences and subsequently

spread to fields as diverse as computer science, ecology, engineering,

management, and psychotherapy. In contrast to closed-systems, the

open-system perspective views an organization as an entity that takes

inputs from the environment, transforms them, and releases them as

outputs in tandem with reciprocal effects on the organization itself along

with the environment in which the organization operates. That is, the

organization becomes part and parcel of the environment in which it is

situated. Returning for a moment to the example of biological systems as

open-systems, billions of individual cells in the human body, themselves

composed of thousands of individual parts and processes, are essential

for the viability of the larger body in which they are a part. In turn,

"macro-level" processes such as eating and breathing make the survival

of individual cells contingent on these larger processes. In much the

same way, open-systems of organizations accept that organizations are

contingent on their environments and these environments are also

contingent on organizations.

As an open-systems approach spread among organizational theorists,

managers began incorporating these views into practice. Two early

pioneers in this effort, Daniel Katz and Robert Kahn, began viewing

organizations as open social systems with specialized and interdependent

subsystems and processes of communication, feedback, and management

linking the subsystems. Katz and Kahn argued that the closed-system

approach fails to take into account how organizations are reciprocally

dependent on external environments. For example, environmental forces

such as customers and competitors exert considerable influence on

corporations, highlighting the essential relationship between an

organization and its environment as well as the importance of

maintaining external inputs to achieve a stable organization.

Furthermore, the open-system approach serves as a model of business

activity; that is, business as a process of transforming inputs to outputs

while realizing that inputs are taken from the external environment and

outputs are placed into this same environment. Companies use inputs

such as labor, funds, equipment, and materials to produce goods or to

provide services and they design their subsystems to attain these goals.

These subsystems are thus analogous to cells in the body, the

organization itself is analogous to the body, and external market and

regulatory conditions are analogous to environmental factors such as the

quality of housing, drinking water, air and availability of nourishment.

The production subsystem, for example, focuses on converting inputs into

marketable outputs and often constitutes a primary purpose of a

company. The boundary subsystem's goal is to obtain inputs or

resources, such as employees, materials, equipment, and so forth, from

the environment outside of the company, which are necessary for the

production subsystem. This subsystem also is responsible for providing

an organization with information about the environment. This adaptive

subsystem collects and processes information about a company's

operations with the goal of aiding the company's adaptation to external

conditions in its environment. Another subsystem, management,

supervises and coordinates the other subsystems to ensure that each

subsystem functions efficiently. The management subsystem must resolve

conflicts, solve problems, allocate resources, and so on.

To simplify the process of evaluating environmental influences, some

organizational theorists use the term "task environment" to refer to

aspects of the environment that are immediately relevant to management

decisions related to goal setting and goal realization. The task

environment includes customers, suppliers, competitors, employees, and

regulatory bodies. Furthermore, in contrast to closed-systems, the open-

system perspective does not assume that the environment is static.

Instead, change is the rule rather than the exception. Consequently,

investigation of environmental stability and propensity to change is a key

task of a company, making the activities of an organization contingent on

various environmental forces. As an open system, an organization

maintains its stability through feedback, which refers to information

about outputs that a system obtains as an input from its task

environment. The feedback can be positive or negative and can lead to

changes in the way an organization transforms inputs to outputs. Here,

the organization acts as a thermostat, identified previously as an example

of a relatively closed-system. The difference between closed-systems and

open-systems, then, is in the complexity of environmental interactions.

Closed-systems assume relatively little complexity; a thermostat is a

simple device dependent mainly on temperature fluctuations. Conversely,

open-system such as the human body and modern organizations are more

intricately dependent on their environments. The point is that closed-

systems versus open-systems do not represent a dichotomy, but rather a

continuum along which organizations are more open or less open to their

environments. The key defining variable governing this degree of

openness is the complexity of the environment in which the organization

is situated.

Managers must take into consideration their organization's position

along the open-closed continuum. The Linux computer operating system,

for instance, is "open-source" and Red Hat, Inc., the corporation selling

the bundled revisions-the multiple inputs from geographically dispersed

users-represents an organization that would cease to exist if it were not

for an open-systems perspective. Thus, stable environments with low

complexity are more consistent with a relatively closed-system or

mechanistic management style, while rapidly-changing environments are

more consistent with flexible, decentralized, or "organic" management

styles.

A system is defined as a collection of interrelated part forming a synergistic whole that jointly perform functions that each part by itself cannot perform. The parts of the systems, also called components or elements, can be thing, or people, or both. Actions of the system elements including interactions between them constitute the processes of the system. Systems can be very simple and constitute of only things. For example, a chair is a physical system that serves the purpose of providing the convenience for sitting. The various components of the chair like its legs, seat, arms, and the back rest are connected to each other to to provide necessary shape, strength, rigidity and other characteristics to the chair, which enable the chair as a whole to serve its purpose. Systems can also be very complex like human body, a manufacturing plant, or a business organization.

The system as a whole receives inputs from sources outside itself, processes these inputs within the system, and transfers the outputs or results of these processes to outside itself. Whatever exists outside the system is described as environment of the system.

System are have boundaries that separate systems from their environment. A system is influenced by its environment and in turn may be influenced by it, but a system does not have direct control over the process in the environment.

depending on its relationship with the environment, systems are divided in two broad categories - open systems and closed systems. An open system interacts with its environment while a closed system does not. In practical world there are no systems that are absolutely closed. Systems that have relatively limited interaction wit its environment are, therefore, considered closed systems while those with substantial interaction are considered open systems.

For example, the R&D department of a company may have much less interaction wit people outside the department as compared to marketing department. Therefore, we may consider the R&D department organization as a closed system, and Marketing department organisation as an open system.

Whether organisation is slectively open or perfectly open is defined by the permable boundaries.Broadly speaking organisations are divided into 3 levels opreating level, co-ordinative level and strategic level. Examples.- organisations say Airtel, Vodafone etc allow external forces to penetrate in to the core level(operating level) as we can talk to each working executive and customer executives this can be considered as an example of Open System (near perfect). Now taking example of say TATA Motors at the time of NANO project it hardly allowed its operating department to intereract and disclose the various technicalities related to the launch of this new car.Only the Strategic level RATAN TATA and other officials came to interact with the external environment about the features of NANO car this means that it only allowed external forces to penetrate uptill strategic level and this can be considered as an example for Slective open system.

Kindly let me know your thoughts on this one.