Upload
anilkety
View
225
Download
0
Embed Size (px)
Citation preview
8/4/2019 Principles of Mgt Jun10 Edn 2
http://slidepdf.com/reader/full/principles-of-mgt-jun10-edn-2 1/104
July 2010 _edn 1
Principles & Practice of Management
Reference Text: “Essentials of Management – aglobal perspective” Wiehrich & Koontz (7th Edn; Tata Mcgraw Hill)
Course Facilitator: Bijoy S Guha
8/4/2019 Principles of Mgt Jun10 Edn 2
http://slidepdf.com/reader/full/principles-of-mgt-jun10-edn-2 2/104
July 2010 _edn 1
About the facilitator… ► Joined Philips India as a Management Trainee (1969)
► After O-J-T of 18 months, became a Section In-charge in a factory► 18 months later, become Shop In-charge
► 24 months later, took over as I/C Engineering & Customer Support
► 18 months later, Project 2nd I/C for new Factory
► 18 months later, Manager Quality Control
► 42months later, Manager Innovation Group► 42 months later seconded to Philips Germany
► 24 months later returned as Factory Manager, Luminaire Centre/Calcutta
► 36 months later took over as Plant Manager, Kalwa Lamp Factories/ Thane the largest Philips Production complex – first Indian Manager
► 54 months later took over as SBU head- Professional Lighting/India► 36 months later took over as Head, Corporate Purchasing/India for 12
months;
► Started (1998) up a joint-
venture between Tata AutoComp & YazakiCorp/Japan for Auto EDCS (C.E.O, Tata-Yazaki ) and steered it for 60
months;► Retired from Tata-Yazaki to start a second career as a Teacher. (2003)
8/4/2019 Principles of Mgt Jun10 Edn 2
http://slidepdf.com/reader/full/principles-of-mgt-jun10-edn-2 3/104
July 2010 _edn 1
►Lectures duration is 60 minutes gross i.e. 50-55
minutes net: Please be on time to maximize utilization;
late coming disturbs the lecture flow – and is a serious
breach of management etiquette. Let us practice to be„Managers‟!
Only one person talks at a time – lecturer or questioner/commenter/answerer!
The last 5 minutes are for summarization/ discussion.Please participate to learn and share: no individual(including me) is expected to
know everything!
Questions show interest not ignorance!
Ground Rules
8/4/2019 Principles of Mgt Jun10 Edn 2
http://slidepdf.com/reader/full/principles-of-mgt-jun10-edn-2 4/104
July 2010 _edn 1
► At the end of section (4/5 lectures), discussion topics willbe given in advance as home assignment, to be prepared
for a class discussion: Individuals will be selected at random to answer/explain
questions - these being recorded for Internal Marks , so bekeen to participate!
You need to use all acquired knowledge to be a Manager. Don‟tforget what you have learnt in earlier years; build on it byenquiring – interact, question & challenge!
►Standard internal tests (MCQ & written) will also be held,
with little notice – be prepared! Don‟t worry about a missedtest, if your absence is authorized.
Have fun, enjoy
your learning experience – only then will marks follow in abundance!
8/4/2019 Principles of Mgt Jun10 Edn 2
http://slidepdf.com/reader/full/principles-of-mgt-jun10-edn-2 5/104
July 2010 _edn 1
PPM 1Management: Definitions, Roles &
Skills
8/4/2019 Principles of Mgt Jun10 Edn 2
http://slidepdf.com/reader/full/principles-of-mgt-jun10-edn-2 6/104
July 2010 _edn 1
Management: definitions by the Class
► Get jobs done by others:
Motivate/Lead/Direct/Coach/Guide etc. Sharing in a group to achieve objective
Empower
► Structured approach to get goal: 5 W‟s & 1H
Rules, regulations, processes etc.
► Making Profits & growing Meeting Budgets and Targets
Increasing firm‟s value
Resource & cost controls► Innovate & compete for Business
► Planning Organizing Staffing Directing: forachieving results
► …
8/4/2019 Principles of Mgt Jun10 Edn 2
http://slidepdf.com/reader/full/principles-of-mgt-jun10-edn-2 7/104
July 2010 _edn 1
Management: Definitions
► “Management is the process of designing and
maintaining an environment in which individuals,working together in groups, efficiently accomplish selected aim(s) viz. to create a surplus(s).” …. Weihrich & Koontz
► “Management is not an absolute; rather it is socially and culturally determined. Across all cultures and in all societies, people coming together to perform certain collective acts encounter common problems
having to do with establishing direction,coordination and motivation. Culture affects how these problems are perceived and resolved.” …The Art of Japanese Management by R. Pascale & A. Athos .
8/4/2019 Principles of Mgt Jun10 Edn 2
http://slidepdf.com/reader/full/principles-of-mgt-jun10-edn-2 8/104
July 2010 _edn 1
Management: Definition …ctd . Applies to and through any kind of organization:
collective, cohesive and consistent human effort towardsaccomplishing a common objective.
Applies to people at all levels
Concerned with “Doing the right things right at all times” :
1. Effectiveness: Achievement of objectives (Right Things );2. Efficiency: Achieving those objectives with least amount/
sacrifice of resources (Things Right );
3. Continuous Improvement: in creating increasing „surplus‟
(at all times ); – “Improve or die” = survival of the fittest
– “what gets measured , gets managed and improved” e.g.
Productivity= Output / Input ratio
8/4/2019 Principles of Mgt Jun10 Edn 2
http://slidepdf.com/reader/full/principles-of-mgt-jun10-edn-2 9/104
July 2010 _edn 1
Management: Definition …ctd.
ORGANIZATION
Economic
Political
Regulatory
Societal
Technological
Globalization
Doing „right things right‟ is affected by forces
of environment:
For creating a „surplus‟
8/4/2019 Principles of Mgt Jun10 Edn 2
http://slidepdf.com/reader/full/principles-of-mgt-jun10-edn-2 10/104
July 2010 _edn 1
Management: The Art & Science
►Evolution of “Management”- Two dominant trends: from
►Agriculture Manufacturing Services
►Local National Multi-National Global
Industrial Revolution & Factory System
Information Technology & societal maturity
Breaking-down of barriers: “Global Village”
From “inside-out” to “outside-in”
Impact of speed: “24x7” mindset
8/4/2019 Principles of Mgt Jun10 Edn 2
http://slidepdf.com/reader/full/principles-of-mgt-jun10-edn-2 11/104
July 2010 _edn 1
Management: The Art & Science
►Contribution of Dominant Personalities (20th
Century): F.W.Taylor & the “scientists” (20‟s)
Fayol/Peter Drucker & the rationalists (40‟s)
Maslow/Herzberg & the Humanists (50‟s)
Demming & the Quality crusaders (60‟s)
Hofsteed & the Culture club (70‟s)
Tom Peters & the „excellence‟ brigade (80‟s)
Michael Porter & the „value‟ drivers (80‟s) Prahalad/Reis & the „focus‟ specialists (90‟s)
Hammer & the „change and reengineer‟dynamos (00‟s)
8/4/2019 Principles of Mgt Jun10 Edn 2
http://slidepdf.com/reader/full/principles-of-mgt-jun10-edn-2 12/104
July 2010 _edn 1
►Management – Approach, Roles & Skills:
Fredrick Taylor‟s path-breaking “scientific approach ”
Henri Fayol‟s classical definition of „functions‟ ,
and process:►Plan Organize Lead Control
Mintzberg‟s map of managerial „roles‟ :
►Interpersonal + Informational + Decisional Katz‟s interpretation of „skills‟ :
►Technical / Human / Conceptual
Management: The Art & Science …c‟td
8/4/2019 Principles of Mgt Jun10 Edn 2
http://slidepdf.com/reader/full/principles-of-mgt-jun10-edn-2 13/104
July 2010 _edn 1
►Management – Approach, Roles & Skills:
Human – „get things done through others‟:
►Leadership: “The ability to influence a group towards
achievement of goals” (works of Fielder, Blanchard et al)
►Motivation: “The willingness to exert high level of
effort towards goals” (works of Maslow, Herzberg, Mayo
etc.)
►Communication:”The transference and
understanding of meaning”
Will be done in detail in Organizational Behaviour
Management: The Art & Science …c‟td
8/4/2019 Principles of Mgt Jun10 Edn 2
http://slidepdf.com/reader/full/principles-of-mgt-jun10-edn-2 14/104
July 2010 _edn 1
Managerial Roles - 10 (Mintzberg)
Role Description ExamplesInterpersonal •Figurehead symbolic head; required to show Ceremonial,
„face‟ in social & legal conditions. Civic etc.•Leader Motivating & directing subordinates project plan
•Liaison Networking outside for information Industry -& favours group meetsInformational •Monitor nerve centre and interpretator Reports•Disseminator networking within the organization Meetings etc.•Spokesperson Transmit intent to outsiders; expert Board Meets
Decisional •Entrepreneur Opportunity finding& reacting Strategy Plan•Trouble shooter Handling unexpected disturbance Contingency•Resource allocator Initiating/approving changes Budgeting
•Negotiator Getting best deal for Organization Contracts
Management: The Art & Science …ctd
8/4/2019 Principles of Mgt Jun10 Edn 2
http://slidepdf.com/reader/full/principles-of-mgt-jun10-edn-2 15/104
July 2010 _edn 1
Managerial Skills(Katz & others)
► Technical Skills:
Application of specializedknowledge or expertiseacquired though formal
training & its use.
► Human Skills:
Ability to work with people,understand and motivate
groups & individuals.► Conceptual Skills:
Mental ability to recognize,analyze, diagnose and thinkthrough complex situations.
Skills Needed
Board
Exec.
Mgr.
Supr.
Management: The Art & Science …ctd
8/4/2019 Principles of Mgt Jun10 Edn 2
http://slidepdf.com/reader/full/principles-of-mgt-jun10-edn-2 16/104
July 2010 _edn 1
Management: The Art & Science …ctd
SYSTEMS
MAN
MONEY
“HARD” “SOFT”
H R ToolsMarketing Tools
LawsMethod Study
Etc.
RelationshipMotivation
Goal CongruenceBrandEtc.
AccountingOprn. Research
Portfolio ManagementFin. Management
Etc.
Investment Decisions
Stakeholder RelationsInternational Business
Etc.
Analytical Judgmental
8/4/2019 Principles of Mgt Jun10 Edn 2
http://slidepdf.com/reader/full/principles-of-mgt-jun10-edn-2 17/104
July 2010 _edn 1
Management: The Art & Science …ctd
“Different Doors” to Management
Cooperative Social Systems
Group/InterpersonalBehaviour
7-S Framework
Total Quality Management
Applied SystemsTheory
Socio-technicalTheory
Reengineering
Contingency/Situational Theory
Rational choice/Decision Theory
Mathematical Modeling
SYSTEM
Approach
8/4/2019 Principles of Mgt Jun10 Edn 2
http://slidepdf.com/reader/full/principles-of-mgt-jun10-edn-2 18/104
July 2010 _edn 1
Class Discussion 1
► Contributions to Management thought:
F.W.Taylor – father of Scientific Management
Henri Fayol – father of Systems Management
Deming – Quality Management
Maslow – Humanistic Approach
Drucker – the all time great
8/4/2019 Principles of Mgt Jun10 Edn 2
http://slidepdf.com/reader/full/principles-of-mgt-jun10-edn-2 19/104
July 2010 _edn 1
Principles of
Management 2Management: A Systems
Approach
8/4/2019 Principles of Mgt Jun10 Edn 2
http://slidepdf.com/reader/full/principles-of-mgt-jun10-edn-2 20/104
July 2010 _edn 1
Systems approach to Management
Organization as a System receives Input, Transforms itthrough a Process for Output and operates in anEnvironment (economic, regulatory and other forces)
Transformationprocess
input output
Feedback (Re-energizing/setting the system)
ENVIRONMENT
System Boundary
8/4/2019 Principles of Mgt Jun10 Edn 2
http://slidepdf.com/reader/full/principles-of-mgt-jun10-edn-2 21/104
July 2010 _edn 1
Systems approach to Management …ctd.
Systems Concepts
System Boundaries and SubsystemsSystems often consist of numerous
subsystems.
Subsystems perform specialized tasks forthe overall system.
A subsystem has own activities, objectives
& interacts with other subsystems.
Sub-System 2e.g. Production
Sub-System 3e.g. Sales
Sub-System 1e.g. Purchasing
8/4/2019 Principles of Mgt Jun10 Edn 2
http://slidepdf.com/reader/full/principles-of-mgt-jun10-edn-2 22/104
July 2010 _edn 1
Systems approach to Management …ctd.
“Stake”: Something wagered or risked; an interest in an
enterprise with contingent gain or loss …Webster „s dictionary
“Holders” who have stake in Business:
Shareholders: are the owners. They have put in their money inthe enterprise, expecting better returns from it than from other
ventures; Society: includes the State, provincial and local governmentsfor the improvement of „quality of life‟ of its citizens;
Suppliers: continuity of their enterprise depends on thesuccess of the customer enterprise;
Customers: require the goods and services provided by theenterprise, better than those from its competitors. Theenterprise is, in turn, a supplier to its customers;
Employees: livelihood depends on the health, progress andsuccess of the employing enterprise;
Output for “Stake-holders” in Business:
8/4/2019 Principles of Mgt Jun10 Edn 2
http://slidepdf.com/reader/full/principles-of-mgt-jun10-edn-2 23/104
July 2010 _edn 1
Systems approach to Management …ctd. Outputs and Inputs
Systems produce Outputs from Inputs – i.e. theInputs are converted to Outputs.
Outputs of one subsystem become inputs to anothersubsystem.
Outputs must adhere to standards to be useful oracceptable to the next subsystem.
System Environment Environment consists of people, organizations and
other entities that supply data to or that receive datafrom the system
An “open” system interacts with the environment; a
“closed” system does not.
8/4/2019 Principles of Mgt Jun10 Edn 2
http://slidepdf.com/reader/full/principles-of-mgt-jun10-edn-2 24/104
July 2010 _edn 1
Systems approach to Management …ctd. “Inputs”: 5 Ms of Management
Inputs or the resources managers deal with are:Man : human resources, both inside and outside, connected
with an organization;
Materials: goods (hard & software, processed or semi-
finished) and services required to create the sellable endproduct;
Machines: technology and expertise deployed towards thetransformation process;
Methods: systems, procedures and processes seamlesslyput together for the transformation;
Measurement: score-keeping and in-process monitoringcontinuously with due feedback to keep on-course on time.
8/4/2019 Principles of Mgt Jun10 Edn 2
http://slidepdf.com/reader/full/principles-of-mgt-jun10-edn-2 25/104
July 2010 _edn 1
Systems approach to Management …ctd.
“Inputs”: 5 Ms of Management
“Money” is required for generating alltheses Ms – managers need to acquire,deploy, generate and distribute money as
a primary need for business!Money is the common measure or
language of Business: resources – converted to “costs”.
earnings – converted to “revenue”.
investments – converted to “assets”
surplus – expressed as “profit” & “cash flow”
8/4/2019 Principles of Mgt Jun10 Edn 2
http://slidepdf.com/reader/full/principles-of-mgt-jun10-edn-2 26/104
July 2010 _edn 1
Systems approach to Management …ctd.
► There is a “freedom of choice” (for association)between each of these stake-holders and theenterprise in the longer term: But they sink or swim together in the shorter term
Length of term definition varies with individuals!
► They have varied interests in terms of specificoutcomes, e.g. Society in Ethics & Environment, andoften prioritize differently – even divergently, e.g.
Shareholder on higher Profit & Employees on higher Wages.► Managers need to balance different interests, fine-
tuning the Business Processes towards stakeholdersatisfaction.
Output for “Stake-holders” in Business …ctd.
8/4/2019 Principles of Mgt Jun10 Edn 2
http://slidepdf.com/reader/full/principles-of-mgt-jun10-edn-2 27/104
July 2010 _edn 1
Systems approach to Management …ctd.
Business processA business process or business method is
a collection of related, structured and
sequenced activities or tasks thatproduce a specific service or product(serve a particular goal) for a particular
stakeholder. It often can be visualizedwith a flowchart (of activities) repeatedover time for same outcome.
8/4/2019 Principles of Mgt Jun10 Edn 2
http://slidepdf.com/reader/full/principles-of-mgt-jun10-edn-2 28/104
July 2010 _edn 1
Systems approach to Management …ctd.
There are three types of business processes:
>Management processes, that govern the operationof a system. Typical management processes are
"Corporate Governance" & "Strategic Management".
> Operational processes: constitute the corebusiness and create the primary value stream.Typical operational processes are Purchasing,Manufacturing, Marketing & Sales.
> Supporting processes, which support the coreprocesses. E.g. Accounting, Recruitment, Technicalsupport.
8/4/2019 Principles of Mgt Jun10 Edn 2
http://slidepdf.com/reader/full/principles-of-mgt-jun10-edn-2 29/104
July 2010 _edn 1
Planning (What, where & when to do?)
+ Organizing (How to do?)
+ Staffing (who to do?)
+ Leading (same direction?)
+ Controlling (OK?)
to accomplish certain pre-determined, (as derived from stakeholder needs) goals orobjectives i.e. outcomes
Systems approach to Management …ctd.
Management as a system transforms inputs as a
whole & in each type of Business Process by:
Systems approach to Management ctd
8/4/2019 Principles of Mgt Jun10 Edn 2
http://slidepdf.com/reader/full/principles-of-mgt-jun10-edn-2 30/104
July 2010 _edn 1
Inputs(Goal
Oriented)
Outputs(External
ToOrgnzn.)
P l a nni n g
O r g a ni z i n g
S t a f f i n g
L e a d i n g
C o n t r o l l i n g
Product/Services,Profits, Customer &Societal satisfaction,
Other Long-term Goals
Man, MachineMaterial,Methods,
Measurement
Stake holder Feedback (reenergizing the system)
EXTERNAL ENVIRONMENT(Opportunities, Constraints)
Stakeholders
Shareholders;Society; Customers;Employees; Suppliers
Systems approach to Management …ctd. A Flowchart
Mgt
Core
Sup
8/4/2019 Principles of Mgt Jun10 Edn 2
http://slidepdf.com/reader/full/principles-of-mgt-jun10-edn-2 31/104
July 2010 _edn 1
Principles of
Management 3Management Process
First Step: Planning
8/4/2019 Principles of Mgt Jun10 Edn 2
http://slidepdf.com/reader/full/principles-of-mgt-jun10-edn-2 32/104
July 2010 _edn 1
Planning
►Planning involves selecting objectives orgoals and defining the course of actions toachieve them:
Provides the road-map to take us fromwhere we are to where we want to go;
Is a rational approach to achieving pre-selected objectives - based on innovation,
knowledge and purpose; Decision making in choosing the best from
alternative courses of action is integral toplanning;
8/4/2019 Principles of Mgt Jun10 Edn 2
http://slidepdf.com/reader/full/principles-of-mgt-jun10-edn-2 33/104
July 2010 _edn 1
Plans as foundation of Management
Planningrequires asking& answering:
Where to?
Seeing & living the future – but
not fortune telling! • “Dreams” backed by clear actions to
achieve them (Ws & Hs)• People must know what they are expected to accomplish, to make the
group effort effective.• without a plan any road leads you to nowhere! • Finally, the „plan‟ serves as the basis
for control.
What kind of resources needed?
?
What kind of people
& org. structure to have?
?
How & Who to lead them to reach planned goals?
?
How & when to control in case of Deviation from plan?
?
8/4/2019 Principles of Mgt Jun10 Edn 2
http://slidepdf.com/reader/full/principles-of-mgt-jun10-edn-2 34/104
July 2010 _edn 1
Types of Plans
►Mission / Purpose The basic function or „reason for existence‟ of
an enterprise/ organization, e.g.
Wal-Mart : "To give ordinary folk the chance to buy
the same thing as rich people."
Mary Kay Cosmetics : "To give unlimited
opportunity to women."
Merck : "To preserve and improve human life."
Walt Disney : "To make people happy."
8/4/2019 Principles of Mgt Jun10 Edn 2
http://slidepdf.com/reader/full/principles-of-mgt-jun10-edn-2 35/104
July 2010 _edn 1
Type of Plans (Cont‟d)
►Objectives/ Goals The end towards which activity of anorganization is aimed, e.g.
►For a Business enterprise – profit, surplus creation;
►For a Management Institute: The number of employable/useful trainees;
►Strategies Determination of the long term objectives and
adoption of a course of action Gives a frame work for linked action-plans,
communicated systematically to guidethinking and actions.
Objectives: more precise;
Goals: open ended e.g.
Pepsi‟s “Beat Coke”
T f Pl ( t‟d)
8/4/2019 Principles of Mgt Jun10 Edn 2
http://slidepdf.com/reader/full/principles-of-mgt-jun10-edn-2 36/104
July 2010 _edn 1
Types of Plans (cont‟d)
►
Business Policies “Plans” that are general directional statements(or understandings) that guide/help in decisionmaking:
►Repeat decisions taken „reflexively‟; ►Delegation of tasks without loss of control.
Some discretion is permissible depending oncircumstances thus encouraging initiative withinlimits and situational adjustments;
► Difficulty: Subject to (personal) interpretations
T f Pl ( t‟d)
8/4/2019 Principles of Mgt Jun10 Edn 2
http://slidepdf.com/reader/full/principles-of-mgt-jun10-edn-2 37/104
July 2010 _edn 1
Types of Plans (cont‟d)
►Procedures
Plans that are chronological sequences of required actions: task-oriented in nature;
Cuts across department boundaries (sub-
systems) in an organization. Procedures and policies are inter related: e.g.
authorization for paid leave►Policy governs quota, responsible authority etc.
►Procedure governs application, grant and record-keeping.
►Rules: Specific actions or non-actions allowing no discretion
►Caution: rules and procedures limit initiative!
8/4/2019 Principles of Mgt Jun10 Edn 2
http://slidepdf.com/reader/full/principles-of-mgt-jun10-edn-2 38/104
July 2010 _edn 1
Types of Plans (cont‟d) ►Programs
Action plans (mainly non-routine or for changedactivities) including, task assignments, steps tobe taken, resources to be deployed etc. toachieve a (new/renewed) goal;
►Primary program may require supporting programs,spreading across the enterprise;
►Perfect coordination between supporting & primaryprograms essential to avoid delays, unnecessary costs
and expected roll-out. Programs can be a complex of (sub)goals,
policies, rules and other elements necessary forthe course of action e.g. obtaining ISO
certification.
8/4/2019 Principles of Mgt Jun10 Edn 2
http://slidepdf.com/reader/full/principles-of-mgt-jun10-edn-2 39/104
July 2010 _edn 1
Types of Plans (cont‟d)
►Budgets
A statement of expected results expressed in “Numerical terms” e.g. financial operatingbudget = “profit plan”;
Budgets enforce precision in thinking:►Making a budget is „planning‟ by itself;
►Encourages innovation – a “different” way to work
Budgets serve for „Control‟:
►Enforces discipline in execution of plans;
►Instills cost consciousness;
►Makes people (constantly) plan!
8/4/2019 Principles of Mgt Jun10 Edn 2
http://slidepdf.com/reader/full/principles-of-mgt-jun10-edn-2 40/104
July 2010 _edn 1
► By Planning Period:
Short range plans e.g. material procurementplan in a factory
Long range plans e.g. product development
plan, plant/production facility installation;► “Urgent” drives out the “Important” – mismatch
between short & long term plans!
Planning horizon must allow for actions to runtheir course – requiring „commitments‟:
►Thus “decisions today” are key to good plans;
►Long-term plans reap benefits of good short-term
plans.
Types of Plans (cont‟d)
8/4/2019 Principles of Mgt Jun10 Edn 2
http://slidepdf.com/reader/full/principles-of-mgt-jun10-edn-2 41/104
July 2010 _edn 1
Top levelManagers
Middle levelManagers
Supervisors
P l anni n g
Or g ani z
i n g
L e a d i n
g
C on t r ol l i n g
Time spent in Managerial functions
at different levels of organization
Directional;Strategic
Operational;
Tactical
Short-term;
Routine
Plans as foundation of Management …ctd
8/4/2019 Principles of Mgt Jun10 Edn 2
http://slidepdf.com/reader/full/principles-of-mgt-jun10-edn-2 42/104
July 2010 _edn 1
Hierarchy of Objectives & Org. Levels
Mission
OverallObjectives & Key result areas.
Divisional objectives
Departmental objectives
Individual objectives
Board of Directors
CEO
DivisionHead
Product X
DivisionHead
Product Y
Sales & MktgDept
Production Dept
Sales Manager A Sales Manager B
Objectives set end results – they need to be supported by a hierarchy ofsub-objectives, duly networked through the organization to avoid discord andwasted effort.
Management must ensure that the components of the network fit each
other. This is the “Cascade Principle”.
K R l A (KRA)
8/4/2019 Principles of Mgt Jun10 Edn 2
http://slidepdf.com/reader/full/principles-of-mgt-jun10-edn-2 43/104
July 2010 _edn 1
Key Result Areas (KRA)
► Are areas in which performance is essential for the
success of an enterprise
► Examples of „generic KRA‟s:
Market share
Return on Investment (ROI) Service level
Customer satisfaction
► Peter Drucker recommends: Market standing,
innovation, productivity, physical & financialresource, profitability, managerial performance & development, worker performance & attitude andpublic responsibility.
St i (B i ) Pl i
8/4/2019 Principles of Mgt Jun10 Edn 2
http://slidepdf.com/reader/full/principles-of-mgt-jun10-edn-2 44/104
July 2010 _edn 1
Evaluationand Control
and ControlStrategyFormulation
StrategyImplementation
Mission
Objectives
Strategies
Policies
Feedback/Learning
Environmental
Scanning
Societal
Environment
General Forces
TaskEnvironment
Industry Analysis
Structure
Chain of Command
Resources
Assets, Skills
Competencies,
Knowledge
Culture
Beliefs, Expectations,
Values
Reason for
existence
What
results toget & when
Plan toachieve the
mission &
objectives
Programs
Activities
needed to
accomplish
a plan
Budgets
Cost of theprograms Procedures
Sequence
of stepsneeded todo the job
Process to checkperformance &take appropriateaction: corrective
& preventive.
Performance
External
Internal
Evaluationand Control
Broad guideto decisionmaking
A Contemporary Model:
Steps in (Business) Planning
Environment Scan
8/4/2019 Principles of Mgt Jun10 Edn 2
http://slidepdf.com/reader/full/principles-of-mgt-jun10-edn-2 45/104
July 2010 _edn 1
Environment Scan
Environmental Scanning: External
8/4/2019 Principles of Mgt Jun10 Edn 2
http://slidepdf.com/reader/full/principles-of-mgt-jun10-edn-2 46/104
July 2010 _edn 1
External Environment
Environmental Scanning: External P.E.S.T
Analysis
Porter‟s 5-
Force model
for Task
environ.
T k E i t I d t A l i
8/4/2019 Principles of Mgt Jun10 Edn 2
http://slidepdf.com/reader/full/principles-of-mgt-jun10-edn-2 47/104
July 2010 _edn 1
Task Environment: Industry Analysis
Porter‟s Five Forces : anModel for analysis of the
External environment.
The forecast of external factors
8/4/2019 Principles of Mgt Jun10 Edn 2
http://slidepdf.com/reader/full/principles-of-mgt-jun10-edn-2 48/104
July 2010 _edn 1
The forecast of external factorsForecasting Techniques:
►
Extrapolation Time-series statistically project demand analyzing
historical data;
Causal method seek co-relation on cause and effect
basis between two (or more) variables to quantify
demand;
► Statistical modeling
► Brainstorming
► Expert opinion
► Scenario writing:
Coping with uncertainties
► Sensitivity analysis & “What if” scenarios (trust instinct!);
► Planning for contingencies – with defined cut-in milestones.
• Un-quantifiable factors e.g. national pride• Quality of assumptions
•Excessive data required (often unobtainable) to
make accurate forecasts
• Environmental changes: Technology, Gov. Policy,
Global alignments, New materials/sources etc.
8/4/2019 Principles of Mgt Jun10 Edn 2
http://slidepdf.com/reader/full/principles-of-mgt-jun10-edn-2 49/104
July 2010 _edn 1
► Corporate Governance: relationship betweenvarious stakeholders influencing goals/mission;
► Responsibilities of Business: Model (Carroll) of Corporate Performance.
Internal Analysis
8/4/2019 Principles of Mgt Jun10 Edn 2
http://slidepdf.com/reader/full/principles-of-mgt-jun10-edn-2 50/104
July 2010 _edn 1
Internal Analysis …ctd
Internal Strategic Factors:Critical Strengths and Weaknesses that are likely todetermine if the firm will be able to takeadvantage of opportunities while avoiding threats.
Resources: A resource is an asset, competency, process, skill or
knowledge controlled by the corporation. A resource is:
a strength if it provides a firm with competitiveadvantage;
a weakness if it is something the company is notsufficiently endowed with respect to the competitors
Th SWOT l i & St t f l ti
8/4/2019 Principles of Mgt Jun10 Edn 2
http://slidepdf.com/reader/full/principles-of-mgt-jun10-edn-2 51/104
July 2010 _edn 1
The SWOT analysis & Strategy formulation
W/T Strategy(mini-mini)
take cover for both
weaknesses & threats
S/T Strategy(maxi-mini)
using strengths to avoid
or overcome threats
Threatse.g. competition, new
entrants, reduction of
protection etc.
W/O Strategy(mini-maxi)
overcoming weakness
to leverage opportunity
S/O Strategy(maxi-maxi)
using strengths to
leverage opportunities
Opportunitiese.g. economic
upturns, political/
social changes etc.
Weaknesses
e.g. areas not
showing up in
„strengths‟ box
Strengths
e.g. strengths in
R&D, knowledge,
finance etc.
Internal Factors
External Factors
Generic Strategy
8/4/2019 Principles of Mgt Jun10 Edn 2
http://slidepdf.com/reader/full/principles-of-mgt-jun10-edn-2 52/104
July 2010 _edn 1
Generic Strategy
Relationship
B‟marking Partnering
Company
Customer
Competitor Supplier
Ultimate competitive position:- position w.r.t major Customers
- K.S.Fs of Competitors
- leveraging of suppliers
Competitive Advantage
1. Cost Leadership: To continually work reducing
the cost prices of products.Supplier Q-C-D has very highpriority.
2. Differentiation: To constantly offer innovativeand unique solutions. Suppliertechnology & quality has focus.
3. Customization: To offer required services in therequired manner is the focus.
Speed and flexibility important.
Strategy Formulation: Choice & Fit
8/4/2019 Principles of Mgt Jun10 Edn 2
http://slidepdf.com/reader/full/principles-of-mgt-jun10-edn-2 53/104
July 2010 _edn 1
Strategy Formulation: Choice & Fit
Decision Making = is the core of the planning process; a plan
does not come into being unless a „decision‟ i.e. certain commitments of resources, managerial time and moneyare made and risks are taken.
Caution: A “Plan” is not intentions and should not suffer from
“Analysis Paralysis”.
Comparing & choosing analternative
Decisionmaking
Budgeting( Numberizing Plans)
Say, Sales budgetOperational Expense budget,
Capital expenditure budget
FormulatingSupporting
plans
Say, plan to buyEquipment, recruit & train
Employees, develop product etc
Deployment (MBO etc.)
Strategy Implementation: Deployment
8/4/2019 Principles of Mgt Jun10 Edn 2
http://slidepdf.com/reader/full/principles-of-mgt-jun10-edn-2 54/104
July 2010 _edn 1
Mission
OverallObjectives & Key result areas.
Divisional objectives
Departmental objectives
Individual objectives
Board of Directors
CEO
DivisionHead
Product X
DivisionHead
Product Y
Sales & MktgDept
Production Dept
Sales Manager A Sales Manager B
This is the “Cascade Principle”, discussed earlier.
While setting Objectives, ideally, Top Management should getinformation / „buy-in‟ from lower levels to set tough but
achievable goals for a good result.
Bottom-up
ResponseTop-downApproach
Strategy Implementation: Deployment
Management By Objectives (MBO)
8/4/2019 Principles of Mgt Jun10 Edn 2
http://slidepdf.com/reader/full/principles-of-mgt-jun10-edn-2 55/104
July 2010 _edn 1
Management By Objectives (MBO)► A comprehensive managerial system that integrates
many key managerial activities in a systematicmanner and that is consciously directed towards the
effective and efficient achievement of organizations‟
and individual objectives:
Set-out by Peter Drucker in 1954; integrated to personal
performance appraisal by Douglas McGregor in 1957;
Has formed the basis for many theories on motivation;
Has been criticized for introducing a short-term focus andundesirable (individualistic) behaviour;
Currently viewed as a „way of managing‟ (deployment
cascade) – not a specific tool.
D i i M ki
8/4/2019 Principles of Mgt Jun10 Edn 2
http://slidepdf.com/reader/full/principles-of-mgt-jun10-edn-2 56/104
July 2010 _edn 1
► Decision making is a „rational choice‟ process,
bounded by: Limitations: time, information and „logic‟;
Behaviour: Risk averseness and biases.
► A key step in the process is to identify those limiting
factors, „road-blocks‟ to each effective („right thing‟)alternative – then finding a „solution‟ with leastsacrifice of resources („thing right‟):
Factors: quantitative, qualitative/intangible;
Nature: structured/unstructured
Finding solutions:►marginal analyses – benefits with incremental inputs;
►cost-effectiveness – assessment of benefits over costs;
► Intuitive/judgmental – making „connections‟ that are not
obvious
Decision Making
Decision Making ctd
8/4/2019 Principles of Mgt Jun10 Edn 2
http://slidepdf.com/reader/full/principles-of-mgt-jun10-edn-2 57/104
July 2010 _edn 1
Top level
Managers
Middle levelManagers
Supervisors
Non- programmed
Decisions
Programmed Decisions
Decision Making…ctd. Nature of decision making in Organizations
Non Programmed decisions: used for unstructured, novel and ill-
defined situations of non-recurring natureProgrammed decision: is applied to structured or routine problems; veryoften recurring maybe under varying circumstances
Decision Making ctd
8/4/2019 Principles of Mgt Jun10 Edn 2
http://slidepdf.com/reader/full/principles-of-mgt-jun10-edn-2 58/104
July 2010 _edn 1
Decision Making…ctd.
How to select Amongst the
Alternatives ?
“Experience”: good teacher and useful when
routine/repeat situations arise under similarcircumstances. Without due analysis of theconditions, mistakes tend to repeat or a poorfit results.
“Research & analysis”: the approach is in at first
understanding the problem („half the solution‟!), then finding relations between various factorswhich hinder or foster goal attainment. This is astructured, analytical approach quantitative orotherwise.
“Experimentation”: arguably, the best techniqueto use, particularly when either experience orrationale is lacking/limited. However is expensiveand „success/failures‟ are magnified, results are subject to interpretational errors.
Decision Making ctd
8/4/2019 Principles of Mgt Jun10 Edn 2
http://slidepdf.com/reader/full/principles-of-mgt-jun10-edn-2 59/104
July 2010 _edn 1
Decision Making…ctd.
► Decision making takes place under varying degreesof uncertain conditions and risks. Techniques usedto aid the process are:
Risk analysis: every decision is based on interactionsamongst different factors/variables – each of which havetheir own probabilities (towards „success‟). Analysis of these probabilities yield a risk profile for each alternativepath. In the absence of defined probabilities, estimatescan be used.
Decision trees: the outcome (measure pre-decided e.g.
cost or time) of every step in the decision is charted anda course selected on the most favourable outcome. Verymuch like making a trip, navigating by using a road-map(refer example in W & K, “Management – a global perspective/10 th edn. Pg. 209)
Decision Making ctd
8/4/2019 Principles of Mgt Jun10 Edn 2
http://slidepdf.com/reader/full/principles-of-mgt-jun10-edn-2 60/104
July 2010 _edn 1
Decision Making…ctd.
Flow Charts: as a process-guide to taking a decision and
helps as a check-list of key variables, the sequence inwhich they fall and the interrelations. Key to making achoice or re-examining the path taken are also indicatedas risk-reduction devices.
(refer example in W & K, “Management – a global perspective/10 th
edn. Figure 8-5)
Decision Support Systems: a wide variety of (proprietary)computer based programs are available for managers touse their time more effectively for decision making of
semi-structured tasks – by providing alternativeevaluations. They focus on the process of decisionmaking, taking data provide by the managementinformation systems in enterprises.
8/4/2019 Principles of Mgt Jun10 Edn 2
http://slidepdf.com/reader/full/principles-of-mgt-jun10-edn-2 61/104
July 2010 _edn 1
Principles of
Management 4Management Process:
Organizing for results
Nature of Organizing
8/4/2019 Principles of Mgt Jun10 Edn 2
http://slidepdf.com/reader/full/principles-of-mgt-jun10-edn-2 62/104
July 2010 _edn 1
Nature of Organizing► Organizing may be broadly defined as:
1. The identification and classification of requiredactivities;
2. The grouping of those activities towards attainingtheir set objectives;
3. The assignment of those groupings to a responsible
manager, duly empowered;4. The provision for coordination among, within and
across the groups in the organization.
► Organization structures are designed to:
Clarify tasks & responsibilities, Remove obstacles,
Furnish decision making & communication network
Support attainment of enterprise objectives
Nature of Organizing …ctd.
8/4/2019 Principles of Mgt Jun10 Edn 2
http://slidepdf.com/reader/full/principles-of-mgt-jun10-edn-2 63/104
July 2010 _edn 1
g g
The Business Organization Model: “Value Chain” (Porter,1985)
Firm Infrastructure
Human Resource Management
Technology Development
Procurement
Inbound
LogisticsOperations
Outbound
Logistics
Marketing
& SalesService
Primary Activities
The margin reflects the reward for the risks run by the company.
All activities together need to generate ‘value’ greater than the sum of its costs.
Nature of Organizing …ctd.
8/4/2019 Principles of Mgt Jun10 Edn 2
http://slidepdf.com/reader/full/principles-of-mgt-jun10-edn-2 64/104
July 2010 _edn 1
g g
Inbound Logistics: relate to receiving, storing and disseminatinginputs;
Operations: associated with transformation of inputs into finalproduct form;
Outbound Logistics: relate to collecting, storing and physicallydistributing the products to buyers;
Marketing & Sales: relate to advertising, Promotion, sales,distribution-channel selection & management and Pricing;
Service: associated with enhancement or maintenance of
product value over life;
The Value Chain: “Primary Activities”
Nature of Organizing …ctd.
8/4/2019 Principles of Mgt Jun10 Edn 2
http://slidepdf.com/reader/full/principles-of-mgt-jun10-edn-2 65/104
July 2010 _edn 1
g g
Procurement: relates to the function of purchasing inputs usedacross the firm‟s primary and support activities;
Technology Development: relates to know-how, processes &
procedures, „technology‟ embodied in the product design anddelivery. Most activities have their own sub-set of technology;
Human Resource Management: directed at recruiting, training,
developing and compensating all personnel;
Firm Infrastructure: associated with serving and supporting thefirm as a whole, with the company as its customer eg. Finance &
accounting, Quality;
The Value Chain: “Support Activities”
Nature of Organizing ctd
8/4/2019 Principles of Mgt Jun10 Edn 2
http://slidepdf.com/reader/full/principles-of-mgt-jun10-edn-2 66/104
July 2010 _edn 1
► Most practicing mangers would translate this “value
chain” to imply an organization as:
“ a formalized, intentional structure of roles and positions”
Thus „formal organization‟ implies the intentionalstructure of roles in an enterprise.
► However, in an enterprise „informal organization‟
will form, not necessarily bad and is:“ a network of personal and social relations not established
or required by formal organizations but arising spontaneously as people associate with each other”.
Nature of Organizing …ctd.
e.g. a Footballteam
e.g. “Senior” Players
Nature of Organizing ctd
8/4/2019 Principles of Mgt Jun10 Edn 2
http://slidepdf.com/reader/full/principles-of-mgt-jun10-edn-2 67/104
July 2010 _edn 1
Nature of Organizing …ctd.
*
*
Hierarchical levels(6)
#
*
*
Span of Management(8)
Informal OrganizationOffice Golf team
Car Pool to/from work
*C
C C C
The building block of an organization
is the Department: a group charged
with independent task & responsibility.
Sales Gr1
NCR
G‟oan
Car Prod
Assembly
Test
Manuf.
G Fy
Nature of Organizing …ctd.
8/4/2019 Principles of Mgt Jun10 Edn 2
http://slidepdf.com/reader/full/principles-of-mgt-jun10-edn-2 68/104
July 2010 _edn 1
► Grouping activities & people into departments makes
it conceptually possible to expand organizations toan infinite degree.
► Different patterns have been successfully used to
group activities: By simple nos. is a simple method – works well for the
lowest levels where work is routine, uniform and non-specialized; time-grouping is an extension of this methodwhere shift-working is required;
By enterprise functions – embodies what enterprisestypically do e.g. Production, Engineering, Sales etc. Thismethod, defined by F.W.Taylor, is arguably the mostprevalent method still used.
g g “Departmentation”
“Departmentation” …ctd.
8/4/2019 Principles of Mgt Jun10 Edn 2
http://slidepdf.com/reader/full/principles-of-mgt-jun10-edn-2 69/104
July 2010 _edn 1
By territory or geography – is very common when thegeographical spread is wide. It was a device introduced to
speed up management in similar units for easy and swiftcommunication e.g. Sales: N/E/W/S; Fire Brigade: Camp,Hinjewadi, Aundh etc.
By Customer/Account orientation – reflecting the primary
interest in nature of markets/business/customer e.g.Banks: Institutional banking, Small Savings etc.
By Process groups – encountered primarily in specialized/manufacturing operations where processes are vital e.g. Advertising: Copy-writing, Creative etc.; Manufacturing:Steel Melting, Wire-drawing etc.
By Product Lines – has evolved with enterprises becoming “multi-line” with „function‟ needing adaptation/integrationto suit specific products e.g. Tata Motors: Passenger
Vehicles / Commercial vehicles
Departmentation …ctd.
“Departmentation” …ctd.
8/4/2019 Principles of Mgt Jun10 Edn 2
http://slidepdf.com/reader/full/principles-of-mgt-jun10-edn-2 70/104
July 2010 _edn 1
Departmentation …ctd.
Most commonly encountered Organization structures in largeorganizations are:
Functional: Developed as a consequence of Taylor‟s concept of division of labour on specialization , leading to efficiencies. Atthe working end, departamentation is mainly functional. At higherlevels, this is challenged since:
Outputs are not discreetly attributable to functions, Speed of decision-making and need for a „wholistic view‟,
Rapid shifts in relative needs of specialization, Creation of „barriers to communication‟ (Silos).
Business Units: Developed to negate the ills and focuses on“lines of Business” comprehensively i.e. “Coy within a Coy”, with
some limitations to autonomy, leading to “closeness to Market”. Generally, speed and effectiveness outweigh the cons of some
redundancies and lower functional excellence.
“Departmentation” …ctd.
8/4/2019 Principles of Mgt Jun10 Edn 2
http://slidepdf.com/reader/full/principles-of-mgt-jun10-edn-2 71/104
July 2010 _edn 1
Departmentation …ctd.
Allow for maximum flexibility and freedom of operations,
especially when the products/businesses are unconnected e.g.General Electric. Generally, SBU‟s have:
- Their own Missions, Goals and Strategies;
- Distinct and definable set of competitors;- Deploy and manage resources in key areas;
- A reasonable „size‟.
Matrix: Currently in vouge for larger organizations to capture theadvantages of both systems i.e. Functional excellence and theEffectiveness BU‟s. Thus, organizations can:
Avail of relevant (skill & experience) functional staff Drive for higher levels of functional excellence (Value Chain) Meet rapid shifts in relative needs of specialization,
Without sacrificing the nimbleness of BU operations.
“Departmentation” …ctd.
8/4/2019 Principles of Mgt Jun10 Edn 2
http://slidepdf.com/reader/full/principles-of-mgt-jun10-edn-2 72/104
July 2010 _edn 1
C.E.O
Finance Qual. HRM BU 1 BU 2
I.R.M
Recr.
T&D
G/H.R
Plant 1
G/H.R
Ind.
Sin.
I.S.O
Departmentation …ctd. Example of “Grid Control” & S.B.U‟s
“Departmentation” …ctd.
8/4/2019 Principles of Mgt Jun10 Edn 2
http://slidepdf.com/reader/full/principles-of-mgt-jun10-edn-2 73/104
July 2010 _edn 1
Organizing for Projects
Pure Project e.g.Construction
C.E.O
Housing PortsRoads
PM 1
PM 2
PM 1
PM 2
PM 1
Contractor Pool
Project Team e.g. Automobile
Director
Design Markt.Manf.
Mgr 1
Mgr 2
Mgr 1
Mgr 2
Mgr 1
Mgr 2
PM
„Rafting‟ or Matrix Structure
Departmentation …ctd.
Nature of Organizing …ctd.
8/4/2019 Principles of Mgt Jun10 Edn 2
http://slidepdf.com/reader/full/principles-of-mgt-jun10-edn-2 74/104
July 2010 _edn 1
The purpose of organizing is to make human cooperationeffective and is limited by:
the number of persons a manager can „supervise‟ effectively andefficiently;
while the total number is dictated by the quantum of work/
nature of task/spread etc. Thus the two dimensions, “Level” (depth) and “Span of control” (width) are interrelated .
The reason for creating Levels of organization is the limitation inthe span of control. “Effective span” is influenced by:
Training/skill of subordinates and personal contact required;
Clarity of delegation of authority;
Clarity of plans, use of objective standards and communicationtechniques;
Rate of change;
Maturity and experience of the manager and organization.
Span-of-Management
Span-of-Management …ctd.
8/4/2019 Principles of Mgt Jun10 Edn 2
http://slidepdf.com/reader/full/principles-of-mgt-jun10-edn-2 75/104
July 2010 _edn 1
Levels, per se, are not desireable:
They are expensive – as they increase, both infrastructure costsand staffing tends to increase;
Real work is accomplished at the „gemba‟ (Japanese: workplace )where the actual value-addition/transformation takes place. Thecontribution of levels on top are not directly co- relatable, thus
best avoided;
Communication become complicated – omissions, filterationsand misinterpretations lead to wasted and misdirected effort;
Planning and control become tortuous, requiring complicated
coordination and alignment between levels. Studies reveal that between 8 to 10 people at „higher‟ levels
and upto 15 at lower levels is a good “span”. Increasingly,enterprises are attempting to cut back levels to 5 or less.
Span of Management …ctd.
8/4/2019 Principles of Mgt Jun10 Edn 2
http://slidepdf.com/reader/full/principles-of-mgt-jun10-edn-2 76/104
July 2010 _edn 1
Principles of
Management 5Management Process:
Staffing
Staffing: Human Resources
8/4/2019 Principles of Mgt Jun10 Edn 2
http://slidepdf.com/reader/full/principles-of-mgt-jun10-edn-2 77/104
July 2010 _edn 1
Staffing: Human Resources
►Staffing seeks to: Put “the Right people in the Right Job at the
Right time ”
Further, the process needs to ensure that these
right people are retained and enabled to perform
And prepared for the right job since thesechange with the operating environment.
►i.e. management of Human Resources.
8/4/2019 Principles of Mgt Jun10 Edn 2
http://slidepdf.com/reader/full/principles-of-mgt-jun10-edn-2 78/104
July 2010 _edn 1
Staffing: Human Resources (cont‟d)
What is H.R.M?►The Michigan State Univ. Model:
Looks at employees as a means to achieving the
organization‟s Strategy:
►as a „resource‟ that is used in a calculative and mainly
rational manner,
►as a means towards competitive success;
8/4/2019 Principles of Mgt Jun10 Edn 2
http://slidepdf.com/reader/full/principles-of-mgt-jun10-edn-2 79/104
July 2010 _edn 1
What is HRM? (cont‟d)
This „hard‟ model thus proposes that increasingproductivity and competitiveness is the principal
reason for H.R.M:
►Therefore, a framework in which the needs of the
organization are paramount;
► And Organizations exist to accomplish a mission or
achieve an objective, leading to 3 inter-connected
issues:
8/4/2019 Principles of Mgt Jun10 Edn 2
http://slidepdf.com/reader/full/principles-of-mgt-jun10-edn-2 80/104
July 2010 _edn 1
The Michigan Model (cont‟d)
Mission & Strategy
Orgn. Structure HR Management
PoliticalForces
EconomicForces
CulturalForces
8/4/2019 Principles of Mgt Jun10 Edn 2
http://slidepdf.com/reader/full/principles-of-mgt-jun10-edn-2 81/104
July 2010 _edn 1
The Michigan Model: Human Resource Cycle
Rewards
Development
Selection Performance Appraisal
HRM th O ti i t
8/4/2019 Principles of Mgt Jun10 Edn 2
http://slidepdf.com/reader/full/principles-of-mgt-jun10-edn-2 82/104
July 2010 _edn 1
HRM – the Operating environment
HR Strategy• Recruitment• Training• Pay
• Empl. Relations• Flexibility etc.
HR Management
National Culture
Orgn: Size & Culture
Sector
CorporateStrategy
Behaviour
Performance
8/4/2019 Principles of Mgt Jun10 Edn 2
http://slidepdf.com/reader/full/principles-of-mgt-jun10-edn-2 83/104
July 2010 _edn 1
A HRM Process Model
Input Transformation Output
Feedback
• Challenges • Resources
• Education
• skills
• Management • Recruiting • Selection • Training & Dev.
• Contributions • Capable staff • Motivated employees
8/4/2019 Principles of Mgt Jun10 Edn 2
http://slidepdf.com/reader/full/principles-of-mgt-jun10-edn-2 84/104
July 2010 _edn 1
HRM Systems: Preparation & Selection
Job-analysis & DesignBased on HR information systemwhich collates needs and „fits‟.
Human Resource Planning Matching organization‟s future objectives dynamically with needs.
RecruitmentBalancing organization‟s policies &
plans with capability/costs/supply.
SelectionSeries of steps leading to a “hire”; Testing,interviewing & validation.
HRM Systems: Selection
8/4/2019 Principles of Mgt Jun10 Edn 2
http://slidepdf.com/reader/full/principles-of-mgt-jun10-edn-2 85/104
July 2010 _edn 1
► The process of choosing the „right ones‟ involves a series of
steps with multiple evaluation points which adds time andcomplexity to the hiring process:
Frustration among candidates/applicants,and
Among managers who need the job openings filled!
But hiring is a long-term decision for the firm, whereas it is at best
a mid-term engagement for the applicant and the hiring Manager.► The step-wise progression in the selection process is :
HRM Systems: Selection
# 6: Supervisory Interview
# 7: Realistic job preview
# 8:Hiring Decision
# 1: Reception of applications
# 2: Employment tests
# 3: Selection Interviews
# 4: references & background checks
# 5: Medical Evaluation
8/4/2019 Principles of Mgt Jun10 Edn 2
http://slidepdf.com/reader/full/principles-of-mgt-jun10-edn-2 86/104
July 2010 _edn 1
HRM Systems: Development & Evaluation
When a new employee is hired or present employee isreassigned, orientation / placement should follow;new job-holders need to be trained to do their present
jobs & developed to handle future tasks/responsibilities.
The success of the individual and of the HR process/dept.depends on the feedback about performance; through aperformance appraisal, the employee evaluates the degreeof success.
Employers offer career planning to further encourage thedevelopment of employees.
8/4/2019 Principles of Mgt Jun10 Edn 2
http://slidepdf.com/reader/full/principles-of-mgt-jun10-edn-2 87/104
July 2010 _edn 1
Development & Evaluation: T & D …cont‟d.
A usual step-by-step approach to preparing T&D is:
Needs
assessment
T & D
Objectives
Program
content
Learning
principles
Actual
Program
Skills,Knowledge &
ability
Evaluation
Evaluationcriteria
Development & Evaluation: Performance
8/4/2019 Principles of Mgt Jun10 Edn 2
http://slidepdf.com/reader/full/principles-of-mgt-jun10-edn-2 88/104
July 2010 _edn 1
p Appraisal
► The basis for Appraisal must be job related standards of performance; if performance standards are not jobrelated, evaluation can be biased.
► The approach must: Identify performance related standards;
Measure those criteria; Give feedback to the employee
Keep HR Dept. informed for follow-up.
Performance Appraisal Feedback
MeasuresStandardsRecords
Interventions
8/4/2019 Principles of Mgt Jun10 Edn 2
http://slidepdf.com/reader/full/principles-of-mgt-jun10-edn-2 89/104
July 2010 _edn 1
Employees must be compensated for their efforts;
But this more than salaries : it may include
incentives, benefits and services as a totalpackage for financial and other security;
This forms the key concern of HR department‟s
efforts to obtain, maintain and retain an effective
work force; the role this plays in employee (future
& current) well-being .
HRM Systems: Compensation & Protection
Compensation & Protection:…cont‟d.
8/4/2019 Principles of Mgt Jun10 Edn 2
http://slidepdf.com/reader/full/principles-of-mgt-jun10-edn-2 90/104
July 2010 _edn 1
► The major phases of compensation management are: Job-analysis comprising Position description, Job description &
job standards i.e. Identify and study jobs
Job-evaluation comprising Job ranking/job grading through
Factor comparisons or Point systems i.e. Define internal equity
Wages & salaries surveys Labour directorate, Employerassociations, Professional associations & (self) commissioned
surveys i.e. Establish external equity Pricing Jobs Match job evaluation worth with employment
market worth; i.e Match external and internal worth
► Challenges affecting compensation are:
Market forces forcing pay to be more than the relative worth;
Union interventions/interference;
Government constraints & legislation;
International wage/compensation rates: offshore challenge;
Productivity & cost constraints;
Social constraints.
p
8/4/2019 Principles of Mgt Jun10 Edn 2
http://slidepdf.com/reader/full/principles-of-mgt-jun10-edn-2 91/104
July 2010 _edn 1
Principles of
Management 6Management Process:
Controlling & Leading
Controlling
8/4/2019 Principles of Mgt Jun10 Edn 2
http://slidepdf.com/reader/full/principles-of-mgt-jun10-edn-2 92/104
July 2010 _edn 1
g
Control Device
Controlled Entity
Detector: Information ofWhat is happening.
Effector: BehaviourAlteration, if needed.
Assessor: Comparison(With standard)
Detector: or a sensor that measures what is actually happening in theProcess being controlled.
Assessor: a device that determines the significance of what is actualsituation in comparison with some standard or expectation.
Effector: a device (often called „feedback‟) that alters behaviour if the Assesor indicates the need to do so.
+ a communication network that transmits information
Elements of Control
Controlling … cntd.
8/4/2019 Principles of Mgt Jun10 Edn 2
http://slidepdf.com/reader/full/principles-of-mgt-jun10-edn-2 93/104
July 2010 _edn 1
Management Control Focuses primarily on Strategy Implementation.Three distinct systems/activities that require planning and control can be
defined:
StrategyFormulation
Goals, Strategies, Policies
ManagementControl Implementation of Strategies
Task
Control Performance of specific Tasks
Planning
Coordinating
Communicating
Evaluating
Deciding
Influencing
• Management control does not necessarily require that all actions are perthe previously determined Plan;
• It, however, requires inducing people to act in pursuit of own goals in ways
that organization‟s goal are also met: Goal Congruence.
Controlling … cntd.
8/4/2019 Principles of Mgt Jun10 Edn 2
http://slidepdf.com/reader/full/principles-of-mgt-jun10-edn-2 94/104
July 2010 _edn 1
Management control hinges on the ability to influence
human behaviour towards achievement of the StrategicObjective, i.e.
What actions do control initiatives motivate people to take in
their own self interest?
Are these actions in the best interest of the Organization? Goal Congruence: implies that actions people are led to take
in their perceived self-interest are also in the interest of the
firm:
Both Formal and Informal processes influence human behaviour
in organizations;
Informal processes need to be recognized since they are ill-
defined and are both intrinsic and extrinsic to an Organization.
Controlling … cntd.
8/4/2019 Principles of Mgt Jun10 Edn 2
http://slidepdf.com/reader/full/principles-of-mgt-jun10-edn-2 95/104
July 2010 _edn 1
Organization
Structure
(Management)Controls
Culture
H. R.
Management S t r a
t e g y
P er f o
r m an c e
Implementation Mechanism
• Org. Structure specifies roles, reporting relationships, responsibilities that shape
decision making;
• Culture refers to the set of common beliefs, attitudes that guide management actions
• HR Management is related to activities which enable people to execute strategy;
Controlling … cntd. F l S t
8/4/2019 Principles of Mgt Jun10 Edn 2
http://slidepdf.com/reader/full/principles-of-mgt-jun10-edn-2 96/104
July 2010 _edn 1
► Policies & Rules:
Organograms, protocols and defined communication structure;
Written instructions/Code of Conduct/Manuals etc.;
ISO and allied systems – down to task control level;
Physical controls e.g. Access cards, locked stores etc.
► The Process:
Formal System
Analysis/ Actions
OK?
NRevision
Y
“Reward”
Strategic
Planning
Goals &
Strategies
Other
Info.
BudgetingDepartment
Performance
“Rules” •Task Control
•Safeguards
Reports:
“A vs P”
Measurement
Controlling … cntd.
8/4/2019 Principles of Mgt Jun10 Edn 2
http://slidepdf.com/reader/full/principles-of-mgt-jun10-edn-2 97/104
July 2010 _edn 1
Management control process is the process by
which managers at all levels ensure that people they supervise implement their intended strategies:
Unlike the simpler systems, thestandard is not pre-set;
Control is not automatic;Requires coordination amongst
individuals;The link between „need for action‟ and
determining the action is not alwaysclear;
Much of control is self control.
Leading: Nature
8/4/2019 Principles of Mgt Jun10 Edn 2
http://slidepdf.com/reader/full/principles-of-mgt-jun10-edn-2 98/104
July 2010 _edn 1
Leading: Nature
Leadership: The ability to influence a group towards the
achievement of goal, objective or target. Not all Leaders
are Managers and not all Managers are Leaders !!
Kotter: Management is about coping with complexity,
Leadership is about coping with change;
Zalenznik: Managers adopt impersonal and passive
attitude to goals, Leaders take an active, personal
attitude towards goals.
► Trait theories seek to explain „leadership‟ in terms of personality, social, physical and/or intellectual traits todifferentiate between leaders & others.
► Behavioral theories propose that specific behaviorsdifferentiate leaders from non-leaders.
Leading: Nature cntd
8/4/2019 Principles of Mgt Jun10 Edn 2
http://slidepdf.com/reader/full/principles-of-mgt-jun10-edn-2 99/104
July 2010 _edn 1
Leading: Nature …cntd.
Contingency Model (Fiedler) effective group performance
depends on the proper match between leader‟s style of interaction with subordinates & the degree to which thesituation control and influence to the leader: concept of Task& Relationship (“position/power”) orientation.
Task Behavior: The extent to which leaders are likely to
organize and define the role of group members, to explain
5W+1H of assigned tasks – characterized by well defined
structures, channels and way of working;
Relationship Behavior: The extent to which leaders are likely
to maintain personal relationships with group members,opening up channels of communication, providing
“psychological strokes” and facilitating behaviors.
Hersey & Blanchard‟s Situational Theory a contingency
theory, focusing on the followers‟ readiness.
Hersey & Blanchard‟s Situational Theory
8/4/2019 Principles of Mgt Jun10 Edn 2
http://slidepdf.com/reader/full/principles-of-mgt-jun10-edn-2 100/104
July 2010 _edn 1
L
Delegating “Able& willing”
Participating “Able & unwilling”
R e l a t i o n
s h i p
B e h a v i o r
Task Behavior
H
HL
Selling “Unable & willing”
Telling “Unable & unwilling”
Follower Readiness
Mature Immature
Leading: Nature …cntd.
8/4/2019 Principles of Mgt Jun10 Edn 2
http://slidepdf.com/reader/full/principles-of-mgt-jun10-edn-2 101/104
July 2010 _edn 1
Path – Goal Theory a leader‟s behavior is acceptable tosubordinates in so far as they view it as a source of either
immediate or future satisfaction. The underlying premise isthat effective leaders clarify the path to help their followersachieve of work goals, making the journey easier by reducingroad-blocks & pitfalls: directing / supporting / participating ororienting.
Performance&
Satisfaction
Environment•Task structure •Formal Orgn.
•Work group
Subordinates•Locus of control •Experience •Perceived ability
Directive more satisfying when tasks are
ambiguous/stressful;
Supportive leads to higher satisfaction &
performance with structured tasks;
Achievement orientation increases
effort for performance in ambiguity;
Participative gives satisfaction to
members with “internal” Locus of control.
Perceived as controlled by
Leading: Power & Politics
8/4/2019 Principles of Mgt Jun10 Edn 2
http://slidepdf.com/reader/full/principles-of-mgt-jun10-edn-2 102/104
July 2010 _edn 1
► Power: capacity of an individual (or group) to influence thebehavior of other(s), implying: a potential that need not becashed-in for effecting change & dependence as a basis of relationship. In organizations, there are 5 sources of power:
►Coercive Power that is based on fear;►Reward compliance based on ability to distribute largess;►Legitimate derived from (formal) hierarchical position;
►Expert influence based on special skills or knowledge;►Referent influenced by possession of desirable objects;
► Where does Power lie: Organo-grams do not always give theimplicit picture; „where‟ can be assessed as an answer to:
►How many people at the top have come from a dept./divn. etc?
►How well is the dept./divn represented in Key teams/committees?►Salary/other quality level of Senior Mangers in the dept/divn?►Location, facilities and „perquisites‟ extended; ►Staffing strength/resource allocation, promotions extended;►Symbolic perquisites to individuals: „first among equals‟.
Leading: Power & Politics …cntd.
8/4/2019 Principles of Mgt Jun10 Edn 2
http://slidepdf.com/reader/full/principles-of-mgt-jun10-edn-2 103/104
July 2010 _edn 1
► Power Tactics: is the way in which individuals translatepower bases into specific actions:
Reason use of data to make logical/rational presentation;
Friendliness Use of emotions (flattery, humility etc.) in
preparation;
Coalition getting or inducing group support to the issue;
Bargaining negotiating exchange of benefits and/orfavors;
Assertiveness forcing (demands, reminders, orders etc.) often
using rules and formal structures; Higher authority gaining support before acting;
Sanctions use of organizationally derived reward/punishment.
Leading: Power & Politics …cntd.
8/4/2019 Principles of Mgt Jun10 Edn 2
http://slidepdf.com/reader/full/principles-of-mgt-jun10-edn-2 104/104
Leading: Power & Politics …cntd.
► Politics = Power in action: Political behavior comprisethose activities that are not required as a part of one‟s
formal role , but influence the distribution of
advantages/disadvantages within organizations:
“legitimate” political behavior normal everyday influencingtactics acceptable as routine to get work done;
“illegitimate” political behavior in violation of the “rules of the
game”: e.g. „whistle-blowing‟, sabotage, mass leaves etc.
Politics is a fact of life in any organizations. There will continueto be „forces‟ for grabbing a share of the (limited) resource pie.