VEL TECH DR.RR & DR.

SR TECHNICAL UNIVERSITY DEPARTMENT OF MBA

P1BAB01 ESSENTIALS OF MANAGEMENT

(COURSE MATERIAL)

UNIT I Introduction
Management Definition of management Its nature and purpose It is the process of designing and maintaining an environment in which individuals working together in groups efficiently accomplish selected aims. 1. As managers, people carry out the managerial functions of planning, organizing, staffing, leading and controlling. 2. Management applies to any kind of organization. 3. It applies to managers to all organizational levels. 4. The aim of all managers is the same to create a surplus. 5. Managing is concerned with productivity, this implies effectiveness and efficiency. Managerial Performance The measure of how efficient and effective a manager is how well he or she determines and achieves appropriate objectives. Organizational Performance The measure of how efficient and effective an organization is how well it achieves appropriate objectives. Efficiency The ability to minimize the use of resources in achieving organizational objectives Doing things right Effectiveness The ability to determine appropriate objectives - Doing the right thing Organization Two or more people who work together is a structured way to achieve a specific good or set of goals. Goal The purpose that an organization strives to achieve; organizations often have more than one goal, goals are fundamental elements of organization. Managerial Roles

VEL TECH DR.RR & DR.SR TECHNICAL UNIVERSITY DEPARTMENT OF MBA

Henry Mintzberg has identified 10 roles common to the work of all managers. 10 roles are divided into 3 groups 1. Interpersonal 2. Informational 3. Decisional

Figure head

Interpersonal

Leader Provide Information

Liasion

Mointor Process Information

Feedback

Informational

Dissiminator

Spokesperson

Entrepreneur Disturbance handler Decisional Resource allocation Negotiator Use information

Management Levels 1. Top level 2. Middle Level 3. Lower level or supervisory management Managerial Skills 1. Technical Skills 2. Human relation Skills 3. Conceptual Skills

Conceptual skills

Human relation skills

Tech.skills

VEL TECH DR.RR & DR.SR TECHNICAL UNIVERSITY DEPARTMENT OF MBA

Managerial Functions 1. 2. 3. 4. 5. Planning Organising Staffing Directing Controlling

Henri Fayols 14 principles of management 1. Division of work 2. Authority 3. Discipline 4. Unity of command 5. Uinty of Direction 6. Subordination of individual interest to group interest 7. Remuneration 8. Centralisation 9. Scalar chain 10. Order 11. Equity 12. Stability of tenure of personnel 13. Initiative 14. Espirit de Corps

UNIT II Planning
Planning involves selecting missions and objectives and the actions to achieve them; it requires decision making, that is, choosing from among alternative future courses of action. Plans thus provide a rational approach to achieve pre selected objectives. Planning also strongly implies managerial innovation. It bridges the gap from where we are to where we want to go. Types of Plans 1. Purposes or missions 2. Objectives or goals 3. Strategies 4. Policies

VEL TECH DR.RR & DR.SR TECHNICAL UNIVERSITY DEPARTMENT OF MBA

5. 6. 7. 8. Procedures Rules Programs Budgets

Steps in planning 1. Being aware of opportunities 2. Establishing objectives 3. Developing premises 4. Determining alternative courses 5. Evaluating alternative courses 6. Selecting a course 7. Formulating derivative plans 8. Numberising plans by budgeting Decision making The process of identifying and selecting a course of action to solve a specific problem Types of managerial decisions 1. Organizational and personal decisions 2. Routine and strategic decisions 3. Programmed and non programmed decisions 4. Policy and operating decisions 5. Individual and group decisions Decision making process 1. 2. 3. 4. 5. 6. Defining the problem Analyzing the problem Developing alternative solutions Evalutating the alternatives Selecting the best alternative Implementing the decisions

Factors 1. Tangible 2. Intangible Problems 1. Indecisiveness

VEL TECH DR.RR & DR.SR TECHNICAL UNIVERSITY DEPARTMENT OF MBA

2. 3. 4. 5. 6. Time pressure Lack of information Confusing symptoms with causes Failure to evaluate correctly Lack of follow through

Key to success in decision making 1. Be problem oriented not just solution oriented 2. Set decision making goals 3. Check the accuracy of the information 4. Dont be afraid to develop innovative alternatives 5. Be flexible 6. Gain commitment for decision at a early stage 7. Evaluate and follow up the decision. MBO Management By Objectives MBO Process

Organisational Objectives reviewed

MBO for nest operating period begins

Employee objectives

Achievers rewarded

Progress monitored

Performance evaluated

VEL TECH DR.RR & DR.SR TECHNICAL UNIVERSITY DEPARTMENT OF MBA

Important features of MBO 1. Clarity of goals 2. Motivation 3. Better communication and coordination Advantages 1. 2. 3. 4. 5. 6. Helps and increases employees motivation Like to compete Reduce conflict and ambiguity Leads to good planning Identify problems Develop leadership qualities

Disadvantages 1. 2. 3. 4. Failure to give guidelines to goals Danger of inflexibility Failure to teach philosophy of MBO Managers completion may leas to tug of war

UNIT III Organizing

Organizing focuses attention on the structure and process of allocating jobs so that common objectives can be achieved. Organizing is the process of defining and grouping the activities of the enterprise and establishing the authority of relationships among them. In performing the organizing function, the manager differentiates and integrates the activities of his organization. Differentiation is the process of departmentalization or semnetation of activities on the basis of some homogeneity. Integration is the process of achieving unity of effort among the various departments. Organizational Structure Is the way in which an organizations activities are divided, organized and coordinated. Four building blocks Managers take four fundamental steps when they begin to make decisions about organizing.

VEL TECH DR.RR & DR.SR TECHNICAL UNIVERSITY DEPARTMENT OF MBA

1. 2. 3. 4. Division of work Departmentalization - grouping of employees and tasks Hierarchy specify who reports to whom Coordination integrating departmental activities

Types of organizational structure 1. Function 2. Product / market 3. Matrix form Functional organization A form of departmentalization in which individuals engaged in one functional activity such as marketing or finance are grouped into one unit.

President
VP Production VP Marketing VP Finance VP - HR

Product / market Product The organization of a company into divisions that bring together those involved with a certain type of product. Market The organizing of a company into divisions that bring together those involved with a certain type of work.

VEL TECH DR.RR & DR.SR TECHNICAL UNIVERSITY DEPARTMENT OF MBA

President

VP Marketing

VP Finance

GM Pharmaceutical Division

GM - Personal care Products

GM - Auto

Division by geography

President Marketing Finance

VP - North Zone

VP - South Zone

VP - East Zone

VP - West Zone

VEL TECH DR.RR & DR.SR TECHNICAL UNIVERSITY DEPARTMENT OF MBA

Division by customer

President

VP Consumer Products

VP Industrial Products

VP Military Products

Division Large organizations department that resembles a separate business Matrix An organizational structure in which each employee reports to both a functional or division manager and to a project or group manager. Informal Organizational Structure The undocumented and officially unrecognized rules between members of an orgnaisation that inevitably emerge out of the personal and group needs of employers. Span of management Span of management means the number of people managed efficiently by a single officer in an organization. It is accepted that a large number of subordinates cannot be supervised and their efforts coordinated effectively be anigle exzecutive. If the number of members is too large, it will be difficult to manage the persons and perform the work effectively. A sound organization depends upon the effective performance of work by the executive. So the executive should neither be overloaded nor be idle.

VEL TECH DR.RR & DR.SR TECHNICAL UNIVERSITY DEPARTMENT OF MBA

Factors affecting span of management 1. 2. 3. 4. 5. 6. 7. 8. 9. 10. Character of the supervision work Leadership qualities Qualities of the subordinate Time available to supervisor Nature of work Level of supervision Delegation of authority Fixation of responsibility Using of standards Methods of communication

Theory of span of management 1. Direct single relationship 2. Direct group relations 3. Cross relations

Authority and Responsibility Authority The rights inherent in a managerial position to give orders and expect them to be obeyed Responsibility The obligation to perform assigned activities Line authority The authority that entitles a manager to direct the work of a subordinate Staff authority Authority given to individuals who support, assist and advise others who have line authority. Chain of command The flow of authority from the top to the bottom of an organization. Acceptance theory of authority The theory that authority comes from the willingness of subordinates to accept it. Power

VEL TECH DR.RR & DR.SR TECHNICAL UNIVERSITY DEPARTMENT OF MBA

An individuals capacity to influence decisions. Delegation Delegation is a process which enables a person to assign a work to others and delegate them with adequate authority to do it. Importance 1. Is the most important method of managing subordinates and building morale. 2. Helps the manager to concentrate on the important work of planning, organizing and controlling 3. Wherever human beings work in groups, one or the other form of delegation is practiced by them Elements 1. Assignment of duties or responsibilities 2. Delegation of authority 3. Accountability Characteristics of authority 1. 2. 3. 4. Basis of getting things done Legitimacy Decision making Implementation

Sources of authority 1. The formal authority theory 2. Acceptance of authority theory 3. Competence theory

Delegation Types 1. 2. 3. 4. 5. 6. 7. General Specific Written Unwritten Formal Informal Downward

VEL TECH DR.RR & DR.SR TECHNICAL UNIVERSITY DEPARTMENT OF MBA

8. Accrued 9. Sideward Advantages 1. 2. 3. 4. 5. 6. 7. 8. 9. 10. Basis of effective functioning Saving of time Reduction of work Opportunity for development Benefit of specialized service Delegation of authority enables effective management supervision Efficient running of branches Interest and initiative Satisfaction to subordinates Expansion and diversification of business activity

Decentralization Decentralization means that each section has its own workers to perform activities within the department. There will be no general office to provide these services. Advantages 1. 2. 3. 4. Saves time Greater efficiency and output Maintenance of secrecy Departmental loyalty

Disadvantages 1. 2. 3. 4. No proper division of work Duplication of work No standardization Heavy expenditure

Elements of responsibility 1. 2. 3. 4. 5. Arises from superior subordinate relationship Results from contractual agreement Responsibility cannot be transferred to anybody Created by acceptance of authority Continuing process by nature.

VEL TECH DR.RR & DR.SR TECHNICAL UNIVERSITY DEPARTMENT OF MBA

UNIT IV Staffing
Recruitment Recruitment is the process of finding the right candidate and including them to apply for a job in the organization. The recruitment should be a sound one, if it is not so the morale of the staff will be very low and the image of the company will be tarnished Meaning Discovery of the staff members for the present and future jobs in an organization Definition The term recruitment applies to the process of attracting potential employees to the organization Merits 1. Choice 2. New outlook 3. Wide experience Demerits 1. 2. 3. 4. 5. Gurigng of old employment Lack of cooperation Expensive Trade union Danger of non adjustment

Selection Is the process adopted by the organization to select the number of persons who are fit for the job. Stages 1. 2. 3. 4. 5. 6. Receiving and screening of applications Initial interview Blank application Test Checking references Interview

VEL TECH DR.RR & DR.SR TECHNICAL UNIVERSITY DEPARTMENT OF MBA

Kinds of interview 1. 2. 3. 4. 5. 6. 7. Direct interview Indirect interview Patterned interview Stress interview Systematic in-depth interview Board or panel interview Group interview

Training and Development Training refers to a programme that facilitates an employer to perform the job effectively through acquiring increased knowledge and skills Importance 1. Non availability of trained personnel 2. Suitability for the job 3. Getting knowledge by latest methods Types 1. On the job training a. On specific job b. Rotation of position c. Special projects d. Apprenticeship 2. Off the job training a. Special course and lectures b. Conference c. Case study d. Role playing e. Management games f. Brain storming g. Transactional analysis Characteristics 1. 2. 3. 4. 5. Individual differences Relating to job requirements Determination of trading needs Result oriented training Incentives

VEL TECH DR.RR & DR.SR TECHNICAL UNIVERSITY DEPARTMENT OF MBA

6. Support of management

UNIT V Directing and Controlling

Directing consists of the process and techniques utilized issuing instructions and making certain that operations are carried on as originally planned. Principles 1. 2. 3. 4. 5. 6. 7. 8. 9. 10. 11. Harmony of objectives Maximum individual contribution Unit of direction or command Efficiency Direct supervision Feedbvack information Effective communication Appropriateness of direction techniques Efficient control Comprehension Follow through.

Techniques 1. Consultative direction 2. Free-rein direction 3. Autocratic direction Importance 1. 2. 3. 4. 5. 6. Initiates action Coordinates the group efforts Ensures maximum individual contribution Reduces the reluctance to put up with changes in the organization Provides stability and balance in the organization Helps to achieve the objectives of an organization.

Leadership It is generally defined as influence. The art of influencing people so that they will strive willingly towards the achievement of group goals. Leader is one who guides and directs other people. He must give effective direction and purpose.

VEL TECH DR.RR & DR.SR TECHNICAL UNIVERSITY DEPARTMENT OF MBA

Need or importance of leadership 1. 2. 3. 4. 5. 6. 7. 8. 9. 10. Perfect organizational structure Directing group activities Technological, economic and social changes Better utilization of manpower Avoiding imbalances Sources of motivation Reconciliation of goals Developing good human relations Promoting the spirit of coordination Fulfilling social responsibilities

Leadership theories 1. 2. 3. 4. 5. Traits theory Behavioral theory Situational theory Follower or acceptance theory System or path-goal theory

Functions of a leader 1. 2. 3. 4. 5. 6. 7. 8. 9. 10. Taking initiative Representation Guide Encouraging others Arbitrator and mediator Planner Rewards and punishments Integration Communication Production