Professional Documents
Culture Documents
OBJECTIVE
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The students will be able to understand and apply the following concepts:
INTRODUCTION
OBJECTIVE [CONTD.]
Forms of Organization
Individual ownership Partnership Joint Stock Companies Co-operative Enterprises Public Sector Undertakings g
MANAGEMENT
Share Holders Board of Directors Committees Chief Executive Line and Functional Managers
Unit - 01 :: Pg.1
Trade Union
Economic Objectives:
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Satisfying ROI. Growth of Business: Diversification, Merger, or Acquisitions. Continuous Product Innovation Profit: strong market position. Proper layout & location
Proactive, responsive, & adaptive management Effective organizational structure Effective personnel policy Customer centered system
Management is the process of planning, organizing, coordinating , leading, motivating, and controlling the process (human resources) ) of an organization g in an & resources ( efficient & effective pursuit of specified organizational goals. Functions of management process are:
Staffing: Job Analyzing, recruitment, and hiring individuals for appropriate jobs. Leading/Directing: Determining what needs to be done in a situation and getting people to do it. Controlling/Monitoring: Checking progress against plans. Motivation: Motivation is also a kind of basic function of management, because without motivation, employees cannot work effectively.
Planning: Deciding what needs to happen in the future (today (today, next week, next month, next year, over the next 5 years, etc.) and generating plans for action. Organizing: (Implementation) making optimum use of the resources required to enable the successful carrying out of plans.
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DEFINING ADMINISTRATION
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Administration is the function concerned with determination of corporate policy Management is the function concerned with execution of the corporate policy
Management is the total process execution Administration is p part of management g which installs & follows the procedure for regulation for process.
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CONTRIBUTORS
CONTRIBUTERS
Charles Babbage
Proponent of specialization of labour. Advocated that managers should conduct time studies to determine how long should it take for each specialized task.
Charles Babbage (1792 1871) Fredrick Winslow Taylor (1856 1915) Frank & Lillian Gilbreth (1878 1972) Henry Gantt (1861 1919) Henri Fayol (1841 1925) Chester Barnard (1861 1961) Herbert Simon (1916 2001)
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Robert Owen (1771 1858) Hugo Munsterberg (1863 1916) Elton Mayo (1880 1949) Mary Parker Follet (1868 1933) Abram Maslow (1908 1970) Douglas McGregor (1906 1964) Peter Drucker (1909 2005)
Develop a science for each job with standardized work implements and efficient methods for all to follow. Select the workers scientifically with skills and abilities that match each job, and train them in the most efficient ways so that they may accomplish tasks. Ensures cooperation through incentives and provide the work environment that reinforce optimal work results in a scientific manner Divide responsibility for managing and for working
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Unit - 01 :: Pg.3
Henri Fayol
He was the first to envisage the function process approach to the practice of management. p g Managerial task classified to
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Developed time and motion study Their classification covers motions such as grasping, moving and holding First to introduce rest pause in an 8 hour work.
Technical Commercial Financial Security Accounting Administrative
Henry Gantt
Developed Gantt chart (Precursor of CPM and PERT) that provide a graphical representation of flow of work that is required to complete a given task task. Developed work quota system complete with bonus for workers who met or exceed quotas. Developed 14 principle of management
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Chester Barnard
Hugo Munsterberg
Studied the application of psychology to the organizational settings. g Considered to be the father of industrial psychology.
Believed that organizational success required individuals willing to accept p authority y of others. Developed working principles by which organizations communication system maintains final authority.
Elton Mayo
Herbert Simon
Believed manager is an administrative man and not an economic man Manager makes decision amid bounded rationality and selects not the maximizing alternative but selects the first alternative that meets some minimum level of achievement.
Conducted the famous Hawthorne studies studies. He found out the tendency of people who are singled out of special attention to improve their performance Found that the same work factors can be source of satisfaction for some workers and dissatisfaction for other workers
R b tO Robert Owen
Unit - 01 :: Pg.4
First to speak out on behalf of organizations human resource. Criticized industrialist who spent more money on production machine but did little to improve the lot of the people.
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Douglas McGregor
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Believed that groups where the mechanisms through which people p p could combine their differing g talent for the g greater g good of the organization. Follett behavioral model of control depicts control being sponsored p by y and oriented towards the group, g p while self control exercised by both individuals and the group ultimately result in both sharing the power.
He argued that management should shift their traditional view (Theory ( y X) ) to a new humane (Theory ( y Y) ) view concerning g employee-work relationship. According to him, views of Theory X, that man is lazy and wants to avoid work are both p pessimistic and counterproductive p while the views of Theory Y that man wants to work and was good is positive, and should become the standard for humanizing the work place. Contributions include specifying the functions of management in more objective j terms, , popularizing p p g MBO and emphasizing p g time management.
He proposed that man need could be placed in Hierarchy of needs ranging from physiological needs, safety needs, social needs, , esteem needs, , and selfactualization needs.
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MANAGEMENT THOUGHT
Early Egyptian papyri (1300 BC) indicate the recognition of the importance p of organisation g and administration in bureaucratic states of antiquity. Similar records (Confucius parables) are found in china also.
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Ancient management Roman Catholic Church Military Organization Cameralists Industrial Revolution
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MILITARY ORGANISATION S:
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The most effective formal organisation in the history of western civilisation has been the Roman Catholic Church. The development of the hierarchy of authority, with its scalar and territorial organisation, the specialisation of activities along functional lines, and the early, y intelligent g use of the staff device are examples of these techniques.
Some of the most important principles and practices of the modern business management g may y be traced to military y organisations. However, they failed to put much theory to use before the past two centuries.
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CAMERALISTS:
The cameralists were a group of German and Austrian public administrators and intellectuals. They believed that to enhance the position of state, it was necessary to maximise the material wealth.
Earlier to the industrial revolution, commerce was conducted on a limited scale and organisation g were relatively y small. With the development of the economic discipline and technologies of manufacturing, both commerce and organisation grew rapidly. g p y
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CASE SITUATION
Specialization & division of labor Positions arranged in hierarchy A system of abstract rules Impersonal relationship
FAILURE
SUCCESS
Dysfunctional
1. Situations are all different different. 2. No attempt to identify principles. 3. Limited value for developing management theories.
WHY ?
Unit - 01 :: Pg.7
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Characteristics/ Contributions
Limitations
1. Original study consisted of observations of five chief executives. 2 On 2. O th the b basis i of f this study, ten managerial roles were identified and grouped into 1.Interpersonal 2.Informational 3.Decision roles
1. Original sample was very small. 2. Some activities are not managerial. 3. Activities are evidence of f planning, l i organizing, i i staffing, leading and controlling 4. But some important managerial activities are left out (Eg. Appraising managers)
Managerial practice depends p on circumstances. Contingency theory recognizes the influence of given solutions on organizational behavior patterns. Managers have long realized that there is no one best way to do things. Difficulty in determining all relevant contingency factors and showing their relationship can be very complex.
Contingency
Situation
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LIMITATIONS
There is more to managing g g than making g decisions The focus is at the same time too narrow and too wide wide.
Managing is seen as mathematical process, concepts, symbols, and models. Looks at management as a purely logical process, expressed in mathematical symbols and relationship.
yes no
Preoccupation with mathematical models. Many aspects in managing cannot be modeled. Mathematics is a useful tool, but hardly a school or an approach to management.
Focus on the making g of decisions, , persons or group making decisions, and the decisionmaking process process. Some theorist use decision-making as a spring board to study all enterprise activities. The boundaries of study are no longer clearly defined.
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Unit - 01 :: Pg.8
Group decision making
REENGINEERING APPROACH
ILLUSTRATION CHARACTERIST ICS/ CONTRIBUTIO NS LIMITATIONS ILLUSTRATION
SYSTEMS APPROACH
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LIMITATIONS
Can hardly be considered new approach to management, as claimed by some proponents to this approach.
Neglect of external environment, ,p possibly y ignoring customers needs. Neglect of human needs ignores total management system as in the management process or operational approach.
Transformation Output
Input
Systems concept has broad applicability. System have boundaries but they also interact with the external environment. Recognize the i importance of f studying interrelatedness of planning, p g, organizing g g and controlling in an organization
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Technical system
Emphasis only on blue collar and low level office work. Ignores much of other managerial knowledge.
Technical system has great effect on social system. Focus on production, office operation, and other areas with close relationships between the technical h i l system and d people.
Social system
Unit - 01 :: Pg.9
Group behavior Personal attitude
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LIMITATIONS
Study of a group
Concerned with both interpersonal and group behavior aspects leading to a system of cooperation. Expanded concept includes any cooperative group with i h a clear l purpose.
Common goal l
Too broad a field of management. At the same time, it overlooks many managerial concepts, principles, and techniques.
Emphasis on behavior of people in groups. Based on sociology and social psychology. Primarily study of group behavior patterns. The Th study d of fl large groups is often called organizational g behavior.
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Often not integrated with management concepts, principles, theory, and techniques. Need for closer integration with organization structure design, ffi planning, l i and d staffing, controlling.
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MCKINSEYS FRAMEWORK
CHARACTERIST ICS/ CONTRIBUTIO NS LIMITATIONS ILLUSTRATION
LIMITATIONS
The terms used are not precise and topics are not discussed in depth.
structure
systems style
Focus on interpersonal behavior, human relations, leadership, and motivation. Based on individual psychology
Focus of study
Ignores planning, organizing, and controlling. Psychological training is not enough to become an effective manager.
The seven Ss are 1)strategy 2)structure 3)systems 4)style 5)staff 6)shared values 7)skills
strategy
staff
Unit - 01 :: Pg.10
skills
shared values
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A.Sriraman
LIMITATIONS
Does not as some authors do, , identify y representing or coordination as a separate function.
Dependable satisfying y g products p and services Product or service that is fit for use Conformance to quality requirement Continuous improvement Attention to details Teamwork Quality education
Team
Operational approach
Draws together concepts, p ,p principles, p , techniques, and knowledge from other fields and managerial approaches. The attempt is to develop science and theory with practical application. Distinguish b/w managerial and non managerial approach
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CONSTRAINTS
Economic Environment
Capital Labor Price levels Govt. fiscal & tax policies C t Customer Technology
Change in public needs leads to change in expectations Better social environment Reduced Govt. interventions Great power = great responsibility I t d Interdependent d t modern d society i t Inherent to stockholders Problem = opportunity for profit Positive publicity Problem solvers Resources Prevention is better than cure.
Unit - 01 :: Pg.11
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FORMS OF ORGANIZATIONS
Profit Social involvement = higher prices Weak international balance of payment situation Social involvement = More power = corruption L k of Lack f skills kill in i solving l i all ll social i l problem bl Lack of accountability Not necessary complete support. Unit 1.2
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INDIVIDUAL OWNERSHIP
To control the use of property. Right to benefit form the property. Right to transfer or sell the property. Right to exclude other from the property.
Intangible property:
Intellectual property ownership rights.
Id l Ideology
Unit - 01 :: Pg.12
Support to the idea of capitalism. Private property is different from personal ownership Former relates to relationships and the later relates to the personal things.
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PARTNERSHIPS
TYPES OF PARTNERSHIP
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Partnership is to nominate contract between individuals who, in a spirit of cooperation, agree to carry on an enterprise; y combining g property, p p y knowledge g or contribute to it by activities; and share its profit Types of Partners:
General Partners: General partner takes part in the management of the business, and also takes responsibility for the liabilities of the business. If one partner is sued, sued all partners are held liable. liable General partnerships are the least desirable for this reason.
Limited partners: A limited partner does not participate in the day-to-day management of the partnership and his/her liability is limited. In many cases, the limited partners are merely investors who do not wish to participate in the partnership other than to provide an investment and to receive a share of the profit. Limited Liability Partnership (LLP): In this, all partners have limited liability. An LLP combines characteristics of partnerships and corporations. As in a corporation, all partners in an LLP have limited liability, from errors, omissions, negligence, incompetence, or malpractice committed by other partners or by employees.
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Of course, any partners involved in wrongful or negligent acts are still personally liable, but other partners are protected from liability for those acts. In recent years, the limited liability company has supplemented the general partnership and the limited partnership, because of the limits of liability.
Unit - 01 :: Pg.13
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Types:
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Persons united voluntarily to meet their common economic, social, and cultural needs and aspirations through jointly y controlled enterprises p owned and democratically Ideology :
Merits:
Demerits:
Welfare state Mutual benefits for the society Economic democracy- socialism. Regulated competitive environment.
Share holders are to also bear the liabilities in the shares There is no assured profits.
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Retailer cooperative
Workers cooperative
Volunteer cooperative
A pubic sector enterprise may be defined as any commercial or industrial undertaking owned and managed by the government with a view to maximize social welfare and g uphold the public interest. Any business units owned, managed and controlled by the central state or local government are termed as public sector central, enterprises or public enterprises. These are also known as public sector undertakings.
Social cooperative
Consumer cooperative
Unit - 01 :: Pg.14
Consumer oriented.
Public enterprises consist of nationalized private sector enterprises, such as, banks, Life Insurance Corporation of India and the new enterprises set up by the government such as Hindustan Machine Tools (HMT), (HMT) Gas Authority of India (GAIL), (GAIL) State Trading Corporation (STC) etc.
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Characteristics: Government Ownership and Management Financed from Government Funds Public Welfare Public Utility y Services Public Accountability Excessive Formalities
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CORPORATE FRAMEWORK
It is the set of processes, customs, policies, laws, and institutions affecting the way a corporation is directed, administered or controlled. Corporate framework also includes the relationships among the many stakeholders involved and the goals for which the corporation is governed governed. Principles:
Unit 1.3
Rights and equitable treatment of shareholders Interests of other stakeholders Role and responsibilities of the board Integrity g y and ethical behavior Disclosure and transparency
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Unit - 01 :: Pg.15
SHARE HOLDERS
Controlling Factors:
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Monitoring by the board of directors Internal control procedures and internal auditors Balance of power Performance-based remuneration
A shareholder or stockholder is an individual or institution (including a corporation) that legally owns one or more shares public or p private corporation. p of stock in a p Shareholders own the stock, but not the corporation itself. Stockholders are granted special privileges depending on the class of stock. stock
Competition Debt covenants Financial statements Government regulations Managerial labour market Media pressure Takeovers
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BOARD OF DIRECTORS
A corporation, whether for-profit or nonprofit, is required to have a governing Board of Directors. Each corporation has a Board of Directors that represents the stockholders or the public. Members of a governing Board have certain legally required (fiduciary) duties, duties including duties of care care, loyalty and obedience (some states and countries use different terms -for example, in Canada, the duties of care and loyalty are often ft stressed). t d) For-profit Boards often are referred to as "corporate" Boards, which really is a misnomer because both nonprofit and forprofit corporations are required to have Boards -- not just forprofit corporations.
These rights may include: The right to sell their shares The right to vote on the directors nominated by the board The right to nominate directors (although this is very difficult in practice because of minority protections) and propose shareholder h h ld resolutions l The right to dividends if they are declared The right to purchase new shares issued by the company The right to what assets remain after a liquidation.
Unit - 01 :: Pg.16
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COMMITTEES
COMMITTEES [CONTD.]
They do not supplant responsibility of each board member; they operate at the board level and not the staff level. Committees may meet monthly (this is typical to new organizations, with working boards), every two months, or every three months; if meetings are not held monthly, attempt to have committees meet during the months between full board meetings. Minutes should be recorded for all board meetings and for E Executive ti C Committee itt meetings ti if th the B ByLaws L i indicate di t th the Executive Committee can make decisions in place of the board when needed.
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Establish committees when it's apparent that issues are too complex and/or numerous to be handled by the entire board. For ongoing, major activities establish standing committees; for short-term activities, establish ad hoc committees that cease when the activities are completed. Standing committees should be included in the by-laws by laws. Committees recommend policy for approval by the entire board. Committees make full use of board members' expertise, time and commitment, and ensure diversity of opinions on the board.
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CHIEF EXECUTIVE
The definition of "chief executive officer" (almost always) depends on whether a business is a corporation or not, that (usually) y) has a board of directors or not. is, whether it ( In an organization that has a board of directors, the "chief executive officer" is (usually) the singular organizational position that is primarily responsible to carry out the strategic plans and policies as established by the board of directors. In this case, the chief executive reports to the board of di directors. t In I a form f of f business b i that th t is i usually ll without ith t a board b d of directors (sole proprietorship, partnership, etc.),
Board Administration and Support Program, Product and Service Delivery Financial, Tax, Risk and Facilities Management Human Resource Management Community and Public Relations Fundraising g (nonprofit-specific). ( p p )
Unit - 01 :: Pg.17
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A.Sriraman
Line managers have the formal power to direct and control immediate subordinates. The superior issues orders and is responsible for the result result the subordinate obeys and is responsible only for executing the order according to instructions.
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Top management
TRADE UNIONS
Unit 1.4
Percent of job
Unit - 01 :: Pg.18
Supervisors
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INTRODUCTION
Definition:
A trade union or labor union is an organization of workers that have banded together g to achieve common g goals.
A.Sriraman
Social Welfare Period (1875-1918 Early Trade Union Period (1918-1924) Left-Wing Left Wing Unionism Period (1924 (1924-1934) 1934) Trade Unions Unity Period (1935-1938) Second World War Period (1939-1945) ( ) The Post-Independence Period (From 1947 to-date) Objectives:
Representation Negotiation Voice in decisions affecting workers Member Services:
Education and training Legal assistance Financial discounts.
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FUNCTIONS
Militant:
To achieve higher wages and better working conditions To raise the status of workers as a part of industry. To protect labors against victimization and injustice.
Fraternal:
Greater bargaining power Minimize discrimination Sense of security Sense of participation Sense of belongingness g g Platform for self expression Betterment of relationships
Unit - 01 :: Pg.19
To take up welfare measures for improving the morale of workers To generate self confidence among workers To encourage sincerity and discipline among workers To provide opportunities for promotion and growth To protect women workers against discrimination.
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UNION PROBLEMS
Trade union leadership Multiple unions Union rivalry Finance Other problems: p
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Indian Trade Union Act 1926 is a principal act that provides adequate safeguards to the rights of labor masses. The Trade Unions Act, 1926 has defined the role of trade unions and also set certain controlling mechanisms. The main aims and objectives of this Act emphasizes on the reciprocal relationship between the employers and employees employees.
Illiteracy Uneven growth Low membership
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REFERENCES
Herald Koontz and Heinz Weihrich, Essentials of Management, McGraw Hill Publishing Company, Singapore International Edition, 1980. M. Govindarajan and S. Natarajan, Principles of Management, Prentice Hall of India Pvt. Ltd., New Delhi, 2007.
Unit - 01 :: Pg.20
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