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ORGANIZATION
Technological Regulatory
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
Managerial Skills(Katz & others)
Con
► Human Skills:
cept
Ability to work with people,
Exec.
HUM
understand and motivate
ual
groups & individuals.
AN
► Conceptual Skills: Mgr.
Tec
Mental ability to recognize,
hnic
analyze, diagnose and think
Supr.
al
through complex situations.
Management: The Art & Science …ctd
“Different Doors” to Management
Socio-technical Cooperative Social Systems
Theory
7-S Framework
Reengineering
Transformation
input output
process
System Boundary
Systems Concepts
♦ System Boundaries and Subsystems
> Systems often consist of numerous
subsystems.
> Each subsystem has elements, interactions
with other subsystems, and objectives.
> Subsystems perform specialized tasks for
the overall system.
Mgt
Controlling
Organizing
Planning
Staffing
Leading
Outputs
Inputs
(External
Core (Goal
To
Oriented)
Orgnzn.)
Sup
EXTERNAL ENVIRONMENT(Opportunities,
Constraints)
Management Process
First Step: Planning
► Planninginvolves selecting
objectives or goals and defining the
course of actions to achieve them:
Provides the road-map to take us from
where 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 to planning;
Planning What kind of
requires asking Quo Vadis? ? resources
& answering: needed?
Planning
Controlling
Organizing
Leading
Middle level
Managers
Supervisors
Formulating
Budgeting Supporting
(Numberizing Plans) plans
e.g., Sales budget, Operational e.g., plan to buy material,
Expense budget, Capital expenditure recruit & train employees,
Mission Board of
Directors
Overall
Objectives & CEO
Key result areas.
Division Division
Head Head
Divisional objectives Product X Product Y
Comparing &
Setting Goals/ Identifying
choosing an
Objectives alternatives
alternative
What to accomplish Decision
& when making
Strategic
choice
The Strategic Planning/formulating Process
Planning Premises & Strategies
…ctd.
Porter’s Five Forces : an
Model for analysis of the
External environment.
Forecasting 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 • Un-quantifiable
Brainstorming factors e.g. national
pride
Expert opinion • Quality of
Scenario writing: assumptions
• Coping with uncertainties • Excessive data
required (often
Sensitivity analysis & “What if” scenarios (trust
instinct!); unobtainable) to make
Planning for contingencies – with accurate forecasts
defined cut-in
milestones. • Environmental
changes: Technology,
Customer Competitive
Advantage
Relationship
1. Cost Leadership:
To continually work reducing
the cost prices of products.
Company Supplier Q-C-D has very high
priority.
Top level
Managers Non-
programmed
Middle level Decisions
Managers
Programmed
Decisions
Supervisors
“Experience”: good teacher and useful when
routine/repeat situations arise under similar
circumstances. Without due analysis of the
conditions, mistakes tend to repeat or a poor
fit results.
How to select
Amongst the “Research & analysis”: the approach is in at firs
Alternatives ? understanding the problem (‘half the solution’!)
then finding relations between various factors
which hinder or foster goal attainment. This is a
structured, analytical approach quantitative or
otherwise.
“Experimentation”: arguably, the best technique
to use, particularly when either experience or
rationale is lacking/limited. However is expensiv
and ‘success/failures’ are magnified, results are
subject to interpretational errors.
Decision making takes place under varying
degrees of uncertain conditions and risks.
Techniques used to aid the process are:
• Risk analysis: every decision is based on
interactions amongst different factors/variables –
each of which have their own probabilities (towards
‘success’). Analysis of these probabilities yield a risk
profile for each alternative path. In the absence of
defined probabilities, estimates can be used.
• Decision trees: the outcome (measure pre-decided
e.g. cost or time) of every step in the decision is
charted and a course selected on the most
favourable outcome. Very much like making a trip,
navigating by using a road-map (refer example in W &
K, “Management – a global perspective/10th edn. Pg. 209)
• Flow Charts: as a process-guide to taking a decision and
helps as a check-list of key variables, the sequence in
which they fall and the interrelations. Key to making a
choice or re-examining the path taken are also indicated
as risk-reduction devices.
(refer example in W & K, “Management – a global perspective/10th
edn. Figure 8-5)
• Decision Support Systems: a wide variety of
(proprietary) computer based programs are available for
managers to use their time more effectively for decision
making of semi-structured tasks – by providing
alternative evaluations. They focus on the process of
decision making, taking data provide by the
management information systems in enterprises.
Principles of
Management 4
Management Process:
Organizing for results
Organizing may be broadly defined as:
1. The identification and classification of
required activities;
2. The grouping of those activities towards
attaining their 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
The Business Organization Model: “Value
Chain” (Porter,1985)
Support Activities
Firm Infrastructure
M
ar
gi
Technology Development
n
Procurement
Inbound OutboundMarketing
n
Operations Service
gi
Logistics Logistics & Sales
ar
M
Primary Activities
margin reflects the reward for the risks run by the company.
All activities together need to generate ‘value’ greater
The Value Chain: “Primary Activities”
Inbound Logistics: relate to receiving, storing
and disseminating inputs;
G Fy *
Car ProdC C
Sales Gr1
C
Assembly *
NCR
#
Test *
G’oan
Informal Organization
Span of Management
*
Office Golf team
(8)
C
Car Pool to/from work
Grouping activities & people into departments
makes it conceptually possible to expand
organizations to an 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 method where shift-working is required;
• By enterprise functions – embodies what enterprises
typically do e.g. Production, Engineering, Sales etc.
This method, defined by F.W.Taylor, is arguably the
most prevalent method still used.
• By territory or geography – is very common when the
geographical spread is wide. It was a device introduced to
speed up management in similar units for easy and swift
communication 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/integration to
suit specific products e.g. Tata Motors: Passenger Vehicles /
Commercial vehicles
• By ‘grid’ control – in essence combining the
‘functional’ and the ‘product-line’ patterns to best
effect. Functional excellence is not subjugated to
Operational ease. In ‘projects’,
this serves to bring together the diversity of skills
required into one team.
• The Strategic Business Unit: companies today are
organizing themselves as ‘companies within a
company’ to 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’.
“Departmentation” …ctd.
Example of “Grid Control” & S.B.U’s
C.E.O
Sin.
T&D
Nature of Organizing …ctd.
Span-of-Management
The purpose of organizing is to make human
cooperation effective and is limited by:
the number of persons a manager can ‘supervise’
effectively and efficiently;
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 in the 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
communication techniques;
Span-of-Management …ctd.
Levels, per se, are not desireable:
They are expensive – as they increase, both
infrastructure costs and staffing tends to increase;
Real work is accomplished at the ‘gemba’ (Japanese:
workplace) where the actual value-
addition/transformation takes place. The contribution of
levels on top are not directly co- relatable, thus best
avoided;
Communication become complicated – omissions,
filterations and 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”.
Principles of
Management 5
Management Process:
Staffing
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 these change
with the operating environment.
i.e. management of Human Resources.
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;
What is HRM? (cont’d)
• This ‘hard’ model thus proposes that increasing
productivity 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:
The Michigan Model (cont’d)
Political Economic
Forces Forces
Mission & Strategy
Cultural
Forces
The Michigan Model: Human Resource
Cycle
Rewards
Development
HRM – the Operating
environment
National Culture
Sector
HR Strategy
• Recruitment
Corporate • Training
Strategy • Pay HR Management
• Empl. Relations
• Flexibility etc.
Performance
A HRM Process Model
Feedback
Program
content
Skills,
Needs T&D Actual Knowledge &
assessment Objectives Program ability
Learning
Evaluation principles
criteria
Evaluation
Development & Evaluation: Performance
Appraisal
► The basis for Appraisal must be job related
standards of performance; if performance
standards are not job related, 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.
Records
Standards Measures
Interventions
HRM Systems: Compensation &
Protection
Controlled Entity
Communicating
Management
Implementation of Strategies Evaluating
Control
Deciding
Task Influencing
Control Performance of specific Tasks
• Management control does not necessarily require that all actions are per
the 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.
Management control hinges on the ability to influence
human behaviour towards achievement of the Strategic
Objective, 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.
Implementation Mechanism
(Management)
Performance
Controls
Strategy
Organization H. R.
Structure Management
Culture
Revision Measurement N
Controlling … cntd.
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, the
standard is not pre-set;
Control is not automatic;
Requires coordination amongst
individuals;
The link between ‘need for action’ and
determining the action is not always
clear;
Much of control is self control.
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 to
differentiate between leaders & others.
Behavioral theories propose that specific behaviors
differentiate leaders from non-leaders.
Contingency Model (Fiedler) effective group performance
depends on the proper match between leader’s style of
interaction with subordinates & the degree to which the
situation 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
L Task Behavior H
H
Participating Selling
“Able & unwilling” Relationship “Unable & willing”
Behavior
Delegating Telling
“Able& willing” “Unable & unwilling”
Mature Immature
Follower Readiness
Leading: Nature …cntd.
Path – Goal Theory a leader’s behavior is acceptable to
subordinates in so far as they view it as a source of either
immediate or future satisfaction. The underlying premise is that
effective leaders clarify the path to help their followers achieve of
work goals, making the journey easier by reducing road-blocks &
pitfalls: directing / supporting / participating or orienting.