8Ps of Integrated Service Management

Product. Managers must select the features of both the core product and the bundle of
supplementary service elements surrounding it, with reference to the benefits desired by
customers and how well competing products perform. In short, they must be attentive to all
aspects of the service performance that have the potential to create value for customers.

Place. Delivering product elements to customers involves decisions on the place and time of
delivery as well as on the methods and channels employed. Delivery may involve physical or
electronic distribution channels, depending on the nature of the service being provided. Use
of messaging services and the Internet allows information-based services to be delivered in
cyberspace for retrieval by telephone or computer wherever and whenever it suits the
customer. Firms may deliver service directly to customers or through intermediary
organizations, such as retail outlets that receive a fee or percentage of the selling price to
perform certain tasks associated with sales, service, and customer contact, speed and
convenience of place and time for the customer are becoming important determinants in
service delivery strategy.

Process. Creating and delivering product elements to customers requires the design and
implementation of effective processes that describe the method and sequence of actions in
which service operating systems work. Badly designed processes are likely to annoy
customers when the latter experience slow bureaucratic, and ineffective service delivery.
Similarly, poor processes make it difficult for frontline staff to do their jobs well, result in
low productivity, and increase the likelihood of service failures.

Productivity and Quality. These elements, often treated separately, should be treated
strategically as interrelated. No service firm can afford to address either element in isolation.
Productivity relates to how inputs are transformed into outputs that are valued by customers,
whereas quality refers to the degree to which a service satisfies customers by meeting their
needs, wants, and expectations. Improving productivity is essential to keep costs under
control, but managers must beware of making inappropriate cuts in service levels that are
resented by customers (and perhaps by employees, too).Service quality, as defined by
customers, is essential for product differentiation and building customer loyalty. However,
investing in quality improvement without understanding the tradeoff between incremental
costs and incremental revenues may hurt profitability.

People. Many services depend on direct, personal interaction between customers and a firm’s
employees (such as getting a haircut or eating at a restaurant ). The nature of these
interactions strongly influences the customer’s perceptions of service quality. Customers will
often judge the quality of the service they receive based on their assessment of the people
providing that service. They may also make judgments about other customers they encounter.
Successful service firms devote significant effort to recruiting, training, and motivating their
personnel. Firms often seek to manage customer behavior, too.

Promotion and Education. No marketing program can succeed without effective

communications. This component plays three vital roles: providing needed information and
advice, persuading target customers of the merits of a specific product, and encouraging them
to take action at specific times. In services marketing, much communication is educational in
nature, especially for new customers. Companies may need to teach these customers about
the benefits of the service, as well as where and when to obtain it, and provide instructions on
how to participate in service processes. Communications can be delivered by individuals,
such as salespeople and trainers, or through such media as TV, radio, newspapers, magazines,
posters, brochures, and Web sites. Promotional activities may serve to marshal arguments in
favor of selecting a particular brand or use incentives to catch customers’ attention and
motivate them to act.

Physical Evidence. The appearance of buildings, landscaping, vehicles, interior furnishing,

equipment, staff members, signs, printed materials, and other visible cues all provide tangible
evidence of a firm’s service quality. Service firms need to manage physical evidence
carefully, because it can have a profound impact on customers’ impressions. In services with
few tangible elements, such as insurance, advertising is often employed to create meaningful
symbols. For instance, an umbrella may symbolize protection, and a fortress, security.

Price and Other User Costs. This component addresses management of the expenditures
and other outlays incurred by customers in obtaining benefits from the service product.
Responsibilities are not limited to the traditional pricing tasks of establishing the selling price
to customers, setting trade margins, and establishing credit terms. Service managers also
recognize and, where practical, seek to minimize other burdens that customers may bear in
purchasing and using a service, including time, mental and physical effort, and unpleasant
sensory experiences, such as noises and smells.

Historical Development of Management

Taylor’s Major Concern

An American engineer who worked his way through evening studies for his qualifications.
From being an engineer in a steel company he became one of the first of a new breed of very
influential management writers and theorists. He is known for defining the techniques of
scientific management which is the study of relationships between people and tasks for the
purpose of redesigning the work process to increase efficiency.

He was writing at a time when factories were creating big problems for management who
needed new methods for dealing with the management challenges.
Taylor was one of the first to attempt to systematically analyze behaviour at work. His model
was the machine therefore his ideas are often characterised as the machine model of
organisations. Each task was broken down to its smallest unit to identify the best way to do
each job. Then the supervisor, would teach it to the worker and make sure the worker did
only those actions essential to the task..

Taylor’s major concern throughout most of his life was to increase efficiency in production,
not only to lower cost and raise profits but also to make possible increased pay for workers
through their higher productivity. As a young man working in machine shops, he was
impressed with the degree of soldiering on the job, of making work, and of producing less
rather than more, due primarily to the workers ear that they might work themselves out of a
job if they produced more. He saw soldiering as a system. Form his own experience, he knew
that much higher productivity was possible without unreasonable effort by the workers.

Taylor decided that the problem of productivity was a matter of ignorance on the part of both
management and labor. Part of this ignorance arose from the fact that neither managers nor
workers know what constituted a fair day’s work were concerned too much with how they
should divide the surplus that arose from productivity-the split in thinking between pay and
profits-and not enough with increasing the surplus so that both owners and laborers could get
more compensation. In brief, Taylor was productivity as the answer to both higher wages and
higher profits. He believed that the application of scientific methods, instead of custom and
rule of thumb, could yield productivity without the expenditure of more human energy or
effort.

Major Contribution to Management

Scientific management

Frederick W. Taylor, Shop Management 1903, Principles of Scientific Management

1911, Testimony before the special House Committee 1912.

Acknowledged as the father of scientific management. His primary concern was to increase
productivity through greater efficiency in production and increased pay for workers, through
the application of the scientific method. His principles emphasized using science, creating
group harmony and cooperation, achieving maximum output, and developing works.
Henry L. Gantt 1990

Called for scientific selection of workers and harmonious cooperation between labor and
management. Developed the gantt. Stressed the need for training.

Frank and Lillian Gilbreth 1900.

Frank is known primarily for his time and motion studies. Lillian, and industrial psychologist,
focused on the human aspects of work and the understanding of workers personalities and
needs.

Modern Operational Management Theory

Herri Fayol, Administration Industrielle et Generale 1916

Referred to as the father of modern management theory Divided industrial activities into six
groups : technical, commercial, financial, security, accounting and managerial. Recognized
the need for teaching management. Formulated fourteen principles of management, such as
authority and responsibility, unity of command, scalar chain, and esprit de corps.

Behavioral Sciences

Hugo Munsterberg 1912

Application of psychology to industry and management.

Walter Dill Scott 1911

Application of psychology to advertising, marketing, and personnel.

Max Weber (Translations 1946, 1947)

Theory of bureaucracy.
Vilfredo Pareto (books 1896-1917)

Referred to as the father of the social systems approach to organization and management.

Elton Mayo and F.J. Roethlisberger 1933

Famous studies at the Hawthorne plant of the western electric company. Influence of social
attitudes and relationships of work groups on performance.

Taylor’s Principles

The fundamental principles that Taylor saw underlying the scientific approach to
management are summarized in the Perspective below. You will notice that these basic
precepts of Taylor’s are not far from the fundamental beliefs of the modern manager. It is
true that some of the techniques Taylor and his colleagues and followers developed in order
to put his philosophy and principles into practice had certain mechanistic aspects. To
determine what a fair day’s work was and to help in finding the one best way of doing any
given job, the careful study of time and motion was widely applied. Likewise, various pay
plans based on.

Replacing rules of thumb with science (organized knowledge.

Obtaining harmony in group action, rather than discord.

Achieving cooperation of human beings, rather than chaotic individualism.

Working for maximum output, rather than restricted output.

Developing all workers to the fullest extent possible for their own and their company’s
highest prosperity.

Output were used in an attempt to increase the surplus to make sure that workers who
produced were paid according to their productivity, and to give workers an incentive for
performance.

As they often were by many factory owners throughout the world, to increase labor
productivity without providing ample reward, adequate training, or managerial help. But this
was certainly not what Frederick Taylor had in mind.
Taylor emphasized the importance of careful advance planning by managers and the
responsibility of manager to design work systems so that workers would be helped to do their
best. But as he spoke of management, he never overlooked the fact that the relations between
employers and men form without question the most important part of this art.

Henri Fayol

The Father Of Modern Operational Management Theory

Henri Fayol (1841-1925) a French engineer. His key work was Administration Industrielle
et Generale, 1916 He belongs to the Classical School of management theory and was writing
and exploring administration and work about same time as F W Taylor in USA.

The real father of modern management theory is the French industrialist Henri Fayol.
Although there is little evidence that management scholars, either in England or in the United
States, paid much heed to Fayol’s work or knew much about it unit the 1920s or even year
later, his acute observations on the principles of general management first appeared in 1916
in French. Although the work of Fayol was brought to the attention of American management
scholars in 1923 by Sarah Greer’s translation of one of Fayol’s paper.

Industrial Activates.

Fayol found that activates of an industrial undertaking could be divided into six groups,
Technical (production), Commercial (Buying, selling, and exchanging), Financial (Search for
and optimum use of capital), Security (Protection of property and persons), Accounting
(including Statistics)and Managerial (Planning, Organization, Command, Coordination and
control).

Noting that principles of management are flexible, not absolute, and must be usable
regardless of changing and special conditions, Fayol listed fourteen, based on his experience.
They are summarized in the perspective.
General Principles Of Management

1. Division of work. This is the specialization that economists consider necessary for
efficiency in the use of labor. Fayol applies the principle to all kinds of work,
managerial as well as technical.

2. Authority & responsibility. Here Fayol finds authority and responsibility to be

related, with the latter arising from the former. He sees authority as a combination of
official factors, deriving from the manager’ position and personal factors.

3. Discipline. Seeing discipline as “respect for agreements which are directed at

achieving obedience, application, energy, and the outward marks of respect. Fayol
declares that discipline requires good superiors at all levels.

4. Unity of command. This means that employees should receive orders from one
superior only.

5. Unity of direction. According to this principle, each group of actives with the same
objective must have one head and one plan.
6. Subordination of individual to general interest. This is self explanatory when the
two are found to differ, management must reconcile them.

7. Remuneration. Remuneration and methods of payment should be fair and afford

the maximum possible satisfaction to employees and employer.

8. Centralization. Without using the term “Centralization of authority.” Fayol refers to

the extent to which authority is concentrated or dispersed. Individual circumstances
will determine the degree that will give the best overall yield.

9. Scalar chain. Fayol thinks of this as a chain of superiors from the highest to the
lowest ranks, which, while not to be departed from needlessly, should be short
circuited when to follow it scrupulously would be detrimental.
 10. Order. Breaking this into material and social order, Fayol follows the simple adage of
a place for everything and everything in its place.

11. Equity. Loyalty and devotion should be elicited from personnel by a combination of
kindliness and justice on the part of managers when dealing with subordinators.

12. Stability of tenure. Finding unnecessary turnover to be both the cause and the effect
of bad management, Fayol points out its dangers and costs.

13. Initiative. Initiative is conceived of as the thinking out and execution of a plan. Since
it is one of the keenest satisfactions for an intelligent man to experience.

14. Esprit de corps. This is principle that “in union there is strength” as well as an
extension of the principle of unity of command, emphasizing the need for teamwork
and the importance of communication in obtaining it.

Function of Management

Management is the process of achieving organizational goals by engaging in the four major
functions of planning, organizing, leading, and controlling. This definition recognizes that
management is an ongoing activity, entails reaching important goals, and involves knowing
how to perform the major functions of management. Since these functions are crucial to
effective management. We use them as the basic framework for this book. Accordingly, parts
tow through five of the test are devoted, respectively, to planning, organizing, leading, and
controlling.

Planning

Planning is the management function that involves setting goals and deciding how best to
achieve them.

Organizing
Organizing is the management function that focuses on allocating and arranging human and
nonhuman resources so that plans can be carried out successfully. Through the organizing
function manager determine which tasks are to be done.

Leading

Leading is the management function that involves influencing others to engage in the work
behaviors necessary to reach organizational goals. Leading includes communicating with
others, helping to outline a vision of what can be accomplished, providing, direction, and
motivating organization members to put forth the substantial effort required. This function
also includes encouraging the necessary levels of change and innovation.

Controlling

Controlling is the management function aimed at regulating organizational activities so that

actual performance conforms to expected organizational standards and goals. To do the
necessary regulating, managers need to monitor ongoing activities.

Keymanagement Skills
In addition to having a knowledge base, managers need certain skills to carry out the various
functions of management. A skill is the ability to engage in a set of behaviors that are
functionally related to one another and that lead to a desired performance level in a given are.
For managers, three types of skills are necessary :

Technical Skills

Technical skills that reflect both an understanding of and a proficiency in a specialized field.
For example, a manager may have technical skills in accounting, finance, engineering,
manufacturing, or computer science.

Human Skills

Human skills are skills associated with manager’s ability to work well with others, both as a
member of a group and as a leader who gets things done through other.
Conceptual Skills

Conceptual skills related to the ability to visualize the organization as a whole, discern
interrelationships among organizational parts, and understand how the organization fits into
the wider context of the industry, community, and world. Conceptual skills, coupled with
technical skills, human skills and knowledge base, are important ingredients in organizational
performance.

JobTypes Of Managerial

Although we hae been discussing the nature of managerial work in general, managerial jobs
vary somewhat on the basis of two important dimensions. One is a vertical dimension,
focusing on different hierarchical levels in the organization. The other is a horizontal
dimension, addressing variations in managers responsibility areas. We explore these
dimensions and their implications in this section. Because of its importance in fostering
innovation, we give special attention to the entrepreneurial role at various hierarchical levels.

Vertical Dimension : Hierarchical Levels

Along the vertical dimension, managerial jobs in organizations fall into three categories :
first-line, middle, and top management. These categories represent vertical differentiation
among managers because they involve three different levels of the organization.

First-Line Managers

First-line managers (or first-line supervisors) are managers at the lowest level of the
hierarchical who are directly responsible for the work of operating (no managerial)
employees. They often have titles that include the work supervisor. First-line managers are
extremely important to the success of an organization because they have the responsibility of
seeing that day-to-day operations run smoothly in pursuit of organizational goals. Because
they operate at the interface between management and the rest of the work force.

Middle Managers

Middle managers located beneath the top levels of the hierarchy who are directly responsible
for the work of managers other middle managers or first-line managers. Sometimes middle
managers also supervise operating personnel, such as administrative assistants and specialists.
Many different titles are used for middle managers, including “manager”, director of chief,
department head, and division head.

Top Managers

Top managers are managers at the very top levels of the hierarchy who are ultimately
responsible for the entire organization. They are few in number, and their typical titles
include “chief executive office” president, “executive vice president” “executive director,
senior vice president, and sometimes, vice president. Top level managers are often referred to
as executives, although the term executive is also sometimes used to include the upper layers
of middle managers as well. They typically oversee the overall planning for the organization,
work to some degree with middle managers in implementing that planning, and maintain
overall control over the progress of the organization.

In public. Corporations, whose stock is sold to the public, top management ultimately reports
to the board of directors, the board is composed of a group of individuals elected by the
shareholders for the purpose of guiding corporate affairs and selecting officers. A board
typically has from 15 to 25 members, depending on company size. In some companies,
boards may essentially rubber-stamp management initiatives, particularly when the majority
of the board is made up of top managers and outside individuals with close ties to
management. In others, boards include more outsiders, operate more independently and are
more proactive factors that often lead to better corporate performance. Typically, the board
appoints the CEO, who then selects other top managers, including most vice presidents,
subject to board approval. Often the CEO also serves as chair person of the board. A recent
study, however, suggests that companies perform better when the CEO does not also hold the
position of board chairperson as this arrangement allows the board to more adequately
monitor the performance of top management.

Differences among Hierarchical Levels

Although the same basic managerial process applies to all three hierarchical levels of
management, there are some differences in emphasis. Major difference stem mainly from the
importance of the four functions of management, the skills necessary to perform effectively,
the emphasis on managerial roles at each level, and the use of the entrepreneurial role.
Function of Management

The relative importance of planning, organizing, leading and controlling varies somewhat
depending on managerial level. Planning tends to be more important for top managers than
for middle or first-line managers. This is primarily because top managers are responsible for
determining the overall direction of the organization, a charge that requires extensive
planning.

At the same time, organizing is somewhat more important for both top and middle managers
than for first-line managers. This stems from the fact that it is the top and middle levels of
management that are mainly responsible for allocating and arranging resources, even though
this function is also performed to some extent by first-line supervisors.

In contrast, leading substantially more important for first-line supervisors than for managers
at higher levels. Since first-line supervisors are charged with the ongoing production of goods
or services, they must engage in substantially higher amounts of communicating, motivating,
directing, and supporting. All of which are associated with leading.

Finally, the management function that is most similar at all three hierarchical levels is
controlling. This similarity reflects a common degree of emphasis at all levels on monitoring
activities and taking corrective action as needed.

Management Skills

The three levels of management also differ in the importance attached to the key skills
discussed earlier: technical, human, and conceptual. Generally, conceptual skills are most
important at the top management level. Top managers have the greatest need to see the
organization as a whole, understand how its various parts relate to one another and associate
the organization with the world outside. Whirlpool’s David Whitwam points out that looking
at an organization as a whole can be difficult, particularly when a company is doing well and
there is not imminent crisis on the horizon. He said that Whirlpool was doing well
domestically, but nevertheless, top management faced up to the challenge of looking at the
big picture because they could envision their future growing more difficult and complicated.
When they took a more holistic view, they realized that they had to globalize to survive and
prosper.

In contrast, first-line managers have the greatest need for technical skills, since they directly
supervise most of the technical and professional employees who are not manager. Yet middle
managers, too often need sufficient technical skills so that they can communicate with
subordinates and recognize major problems. Even top managers must have some technical
skills, particularly when technology is an important part of the products or services their
organizations produce.

Not surprisingly, all threelevels of management

requirestronghumanskills becausethey all must get
things donethroughpeople. Ironically, promotions to
first-level management areoftenbasedonindividuals
goodtechnical skills, withlittleconsiderationgivento
theadequacyof their humanskills. Managers who
lacksufficient humanskills usually runintoserious
difficulties whentheyattempt todeal withindividuals
insideandoutsidetheir workunits.

Management Skills

The three levels of management also differ in the importance attached to the key skills
discussed earlier: technical, human, and conceptual. Generally, conceptual skills are most
important at the top management level. Top managers have the greatest need to see the
organization as a whole, understand how its various parts relate to one another and associate
the organization with the world outside. Whirlpool’s David Whitwam points out that looking
at an organization as a whole can be difficult, particularly when a company is doing well and
there is not imminent crisis on the horizon. He said that Whirlpool was doing well
domestically, but nevertheless, top management faced up to the challenge of looking at the
big picture because they could envision their future growing more difficult and complicated.
When they took a more holistic view, they realized that they had to globalize to survive and
prosper.

In contrast, first-line managers have the greatest need for technical skills, since they directly
supervise most of the technical and professional employees who are not manager. Yet middle
managers, too often need sufficient technical skills so that they can communicate with
subordinates and recognize major problems. Even top managers must have some technical
skills, particularly when technology is an important part of the products or services their
organizations produce.

Not surprisingly, all three levels of management require strong human skills because they all
must get things done through people. Ironically, promotions to first-level management are
often based on individuals good technical skills, with little consideration given to the
adequacy of their human skills. Managers who lack sufficient human skills usually run into
serious difficulties when they attempt to deal with individuals inside and outside their work
units.

Managerial Roles
Although Mintzberg argued that the 10 managerial roles he identified apply to all levels of
management he did note that there may be some differences in emphasis at various levels.
Subsequent research by others suggests that the figurehead role and several others such as
liaison and spokesperson may become more important ass a manager moves up the hierarchy.
On the other hand, the leader role appears to be more critical at the lower levels, a finding
that supports the idea that the leading function itself has greater importance for lower-level
managers than for those higher up.

In a study of the importance of the various roles, managers at all levels gave particularly high
ratings to the entrepreneurial role. Several experts on innovation, however, argue that the
entrepreneurial role varies in some important way depending on a manager’s level in the
hierarchy.

Promoting Innovation: The Entrepreneurial Role

An innovation is a new idea applied to imitating or improving a process, product, or service.

The process of innovation is closely allied with the entrepreneurial role in organizations,
particularly since that role relates to discovering and exploiting new opportunities. In fact,
innovative activities in organizations, especially major ones, have frequently been refereed to
as entrepreneurship within organization. More recently, individuals who engage in
entrepreneurial roles inside organization are often called entrepreneurs. The term is used to
differentiate innovators working inside existing organizations from individuals who innovate
by creating new organizations. Encouraging innovation in organizations takes special effort.
Furthermore, successful innovations are rarely the product of only one person work. Rather,
the innovative process usually involves individuals at various level who fulfill three different
types of entrepreneurial roles :

Idea Champion

An idea champion is an individual who generates a new idea or believes in the value of a new
idea and supports it in the face of numerous potential obstacles. We often thin of such
individuals as entrepreneurs, inventors, creative individuals, or risk takers. They are usually
individuals at lower levels in the organization who recognize a problem and help develop a
solution.

Sponsor

A sponsor is an individual, usually a middle manager, who recognizes the organizational

significance of an idea, helps obtain the necessary funding for development of the innovation,
and facilitates its actual implementation. Sponsors tend to be middle manager because their
higher-lever position in the organization makes it more feasible for them to provide the strong
backing necessary for the survival of innovations.
Orchestrate

An ORCHESTRATOR is a high-level manager who articulates the need for innovation,

provides funding for innovating activates, creates incentives for middle managers to sponsor
new ideas, and protects idea people. Because innovations often constitute a challenge to the
current ways of doing things, they are frequently resisted by those who are comfortable with
or have a particular stake in the status quo. An ORCHESTRATOR maintains the balance of
power so that new ideas have a chance to be tested in the face of possible negative reactions.
By filling the role of orchestrator, top managers encourage innovation.

Without all three roles, major innovations are much less likely to occur. The development of
the VHS videocassette recorder at JVC illustrates the importance of entrepreneurial, or
innovative, roles at the various levels of the organization.

Ultimately, the indirect intervention of Matsushita as an orchestrator became crucial. These

three types of entrepreneurial roles constitute another vertical difference among managers.

Horizontal Dimension : Responsibility Areas

In addition to their vertical differences, managerial jobs differ on a horizontal dimension that
relates to the nature of the responsibility area involved. In horizontal differentiation, there are
three major types of managerial jobs : Functional, General, and Project.

Functional Managers

General managers are managers who have responsibility for a whole organization or a
substantial subunit that includes most of the common specialized areas. In other words, a
general manager presides over a number of functional areas. General managers have a variety
of titles, such as division manager and president, depending on the circumstances. A small
company will usually have only one general manager, who is the head of the entire
organization. Depending on how it is organized, a large company may have several general
managers (in addition to the chief executive officer) each of whom usually presides over a
major division.

Project Managers
Project managers are managers who have responsibility for coordinating efforts involving
individuals in several different organizational units who are all working on a particular
project. Because the individuals report not only to the managers in their specific work units
but also to their project manager, project managers usually must have extremely strong
interpersonal skills to keep things moving smoothly. Project managers are frequently used in
aerospace and other high-technology firms to coordinate projects, such as airplane or
computer project development. They are also used in some consumer oriented companies to
launch or stay on top of market development for specific products. Such as cookies or
margarine.

Planning

Planing is thinking in advance or before doing something .All kinds of organizations do

planing. Planing helps us in looking into the future.Planing establishes goals or objectives
and identifies the ways to achieve them. A plan is a predetermined course of action to be
taken in future. Planning has been defined as follows:

Counts and O’Donnell

“Planing is an intellectual process, the conscious determination of courses of action,

the basing of decisions on purpose, facts and considered estimates.”

At another place they say

”Planning is deciding in advance what to do,how to do it,

when to do it and who is to do it.”

George Steiner
“Planing is a process that beings with objectives; defines strategies, polices,

and detailed. Plans to achieve them”.

Peter Drucker

“Planing is the continuous process of making present entrepreneurial (risk taking) decisions
systematically and with best possible knowledge of their futurity.
Nature or characteristics of planning

There is a number feature or characteristics of planing that indicate towards its nature. These
may be outlined as follows;

1. Goal-oriented.

Planing is goal-orient in the sense that plans are prepared and implemented to achieve
certain object.

2. Basic to all managerial functions.

Planing is a function that is foundation of management process. Planing logically

precedes all other functions of management, such as organization, staffing, etc. Because
without plan there is nothing to control. Every managerial action has to be properly
planned.

3. Pervasive.

Planing is a function of all managers, although the nature and extent of planing will vary
with their authority and level in the organization hierarchy. Managers at higher levels
spend more time and effort on planing than do lower manager.

4. Interdependent process.

Planing affects and is affected by the programs of different department in so programs

constitute an integrated effort.

5. Future-oriented.

Planing is forward looking and it prepares an enterprise for future.

6. Forecasting integral to planing.

The essence of planing is forecasting. Plans are synthesis of various forecast.Thus,

planing is inextricably(inseparably) bound up with planing.

7. Continuous process.

Planing is an ongoing process. Old plans have to be prepared in case the environment
undergoes a change. It shows the dynamic nature of planing.

8. Intellectual process.

Planing is a mental or conceptual exercis.it therefore involves rational decision making:

requires imagination, foresight, and sound judgement: and involves thinking before
doing_thinking on the basis of facts and information.

9. Integrating process.
 Planning is essential for the enterprise as a whole. Newman and others have drawn our
attention towards this feature of planning, “without planning, an enterprise will soon
disintegrate: the pattern of its action would be as random as that made by leaves
scampering (running quickly in short steps )before an autumn wind, and its employees
would be as confused as ants in an upturned anthill.” If there are no plans, action will be
a random activity in the organization, instead there will be chaos.

10. Planning and control are inseparable.

Unplanned action cannot be controlled without control, planned actions cannot be

executed plans furnish standards of control In fact ,planning is meaningful without
control and control is planning aimless without planning . is measuring rod of efficiency.

11. Choice Among Alternative Courses Of Action.

The need for planning arises due to several ways available for an action If there is only
one way out left there is no need for planning

12. Flexible process .

the principle of navigational change (i.e, change according to change in environment)

applies to planning In other words effective planning requires continual checking on
events and forecasts ,and the redrawing of plans to maintain a course towards desired
goals .thus plans have to be adaptable to changing circumstances

Planning process :Steps in planning

The process of planning involves the following steps

• Analysing environment. At the outset the internal and external environment is

analyzed in order to identify company ;s strengths and weaknesses (in internal
environment)and opportunities and threats (existing in the external environment) this
is also known as SWOT (Strengths Weaknesses Opportunities and Threats ) analysis .

• Establishing objectives or goals in the light of the environmental scanning

(study)clear or probable opportunities that can be availed are identified in order to
avail them objectives or goals are clearly defined in specific terms along with
priorities in all the key areas of operations major problems associated with such
objectives are also identified and defined ,so that there may be special emphasis on
their planned solutions.

• Seeking necessary Information :

 All relevant data and facts are collected from internal and external sources such as
Availability of supplies, physical and human recourses of the company , finance of
disposal, relevant government policy etc then such collected information and factors
are analyzed. These information can be used in two ways

1. To make necessary modifications in objective and goals

2. To take help them in premising assumption.

Establishing the planing premises

In order to develop consistent and coordinate plans ,it is necessary that planing is
based upon carefully considered assumption and predictions

Identifying the alternative course of action.

After established the goals or objective and taking other related steps , feasible
alternative programs or course of action are searched out . Impossible or highly
difficult propositions are left out .

Evaluating the alternatives.

Problems consequences of each alternative course of action in terms of its pros and cons
(eg Cost, benefits, risks etc) are assessed and then relative importance of each of them is
found out by looking at their overall individual strengths and limitations especially in the
light of present objective and the environment of the company.

Selecting the alternative or Course of action.

The alternative which appears to be most feasible and conducive to the accomplishment
of company’s objective, is selecting the final plan of action as strategy.

Preparing the Derivative plans

Derivative plans involve short rang operating plans that are useful in day-to-day operations
these plans are developed through the

1 Schedules

2 Budgets
3 Programmes

4 Procedures

5 Methods

6 Rules & Polices etc.

These plans are prepared in different departments ,and their timings and sequence are also
specified .

Advantages benefits of Planning

1. Provide a sense of direction.

Without planning manager would fail to make proper decisions , and hance there
would be chaos ,not activity in the organisation. Planing desired decision making and
efforts on guided path leading to the desired destination.

2. Offsets (balance ) future uncertainty and change.

Uncertainty and risk are inevitably associated with business and its operations.
Through planing cannot eliminate these two element plans of nature and risk because
they provide a better understanding of likely future events.

3. Focuses attention on objective and results.

Organisation exists because people have common objective. Managers are charge of
organisation for the purpose of attaining results .if attention are not focused on
objective and results.

4. Causes efficient operations.

Planing make things occur ,improves the competitive strength of the organisation,
guides proper utilisation channels for resources and facilities integrates resources and
efforts, aligns internal and external environment

5. Provides the basis for decentralization

Decentralisation of authority signifies dispersal of decision making power to the

lowest level in the organisation .Well-designed plans serve as guides to subordinates
and reduce the risk involved in delegation of authority.

6. Guides Rational decision making

Decisions are primarily future oriented .plans cover to the future activities without plans there
is no sound basis for making future oriented decision

Stratigies and Policies

STRATEGY :

The determination of the purpose and the basic long term objectives of an enterprise, and
the adoption of course of action and allocation of resource necessary to achieve these
aims .

POLICIES :

General statements or understanding that guide thinking in decision making, the essence
of policies is the existence of discretion , with in certain limits, in guiding decision
making .

Both strategies and policies give direction to plans. They provide the framework for
plans and serve as a basis for the development of tactics and other managerial activities .

SWOT Analysis

SWOT analysis is a simple framework for generating strategic alternatives from a situation
analysis. It is applicable to either the corporate level or the business unit level and frequently
appears in marketing plans. SWOT (sometimes referred to as TOWS) stands for Strengths,
Weaknesses, Opportunities, and Threats. The SWOT framework was described in the late
1960's by Edmund P. Learned, C. Roland Christiansen, Kenneth Andrews, and William D.
Guth in Business Policy, Text and Cases (Homewood, IL: Irwin, 1969). The General Electric
Growth Council used this form of analysis in the 1980's. Because it concentrates on the issues
that potentially have the most impact, the SWOT analysis is useful when a very limited
amount of time is available to address a complex strategic situation.

The following diagram shows how a SWOT analysis fits into a strategic situation analysis.

Situation Analysis
 /\

Internal Analysis External Analysis

/\/\

Strengths Weaknesses Opportunities Threats

SWOT Profile

The internal and external situation analysis can produce a large amount of information, much
of which may not be highly relevant. The SWOT analysis can serve as an interpretative filter
to reduce the information to a manageable quantity of key issues. The SWOT analysis
classifies the internal aspects of the company as strengths or weaknesses and the external
situational factors as opportunities or threats. Strengths can serve as a foundation for building
a competitive advantage, and weaknesses may hinder it. By understanding these four aspects
of its situation, a firm can better leverage its strengths, correct its

weaknesses, capitalize on golden opportunities, and deter potentially devastating threats.

Internal Analysis

The internal analysis is a comprehensive evaluation of the internal environment's potential

strengths and weaknesses. Factors should be evaluated across the organization in areas such
as:

• Company culture
• Company image
• Organizational structure
• Key staff
• Access to natural resources
• Position on the experience curve
• Operational efficiency
• Operational capacity
• Brand awareness
• Market share
• Financial resources
• Exclusive contracts
• Patents and trade secrets
The SWOT analysis summarizes the internal factors of the firm as a list of strengths and
weaknesses.

External Analysis

An opportunity is the chance to introduce a new product or service that can generate superior
returns. Opportunities can arise when changes occur in the external environment. Many of
these changes can be perceived as threats to the market position of existing products and may
necessitate a change in product

specifications or the development of new products in order for the firm to remain
competitive. Changes in the external environment may be related to:

• Customers
• Competitors
• Market trends
• Suppliers
• Partners
• Social changes
• New technology
• Economic environment
• Political and regulatory environment

The last four items in the above list are macro-environmental variables, and are addressed in
a PEST analysis. The SWOT analysis summarizes the external environmental factors as a list
of

opportunities and threats.

SWOT Profile

When the analysis has been completed, a SWOT profile can be generated and used as the
basis of goal setting, strategy formulation, and implementation. The completed SWOT profile
sometimes is arranged as follows:

Strengths Weaknesses

1. 1.

2. 2.
 3. 3.

4. 4.

5. 5

. .

Opportunities Threats

1. 1.

2. 2.

3. 3.

4. 4.

5 5

. .

When formulating strategy, the interaction of the quadrants in the SWOT profile becomes
important. For example, the strengths can be leveraged to pursue opportunities and to avoid
threats, and managers can be alerted to weaknesses that might need to be overcome in order
to successfully pursue opportunities.

Multiple Perspectives Needed

The method used to acquire the inputs to the SWOT matrix will affect the quality of the
analysis. If the information is obtained hastily during a quick interview with the CEO, even
though this one person may have a broad view of the company and industry, the information
would represent a single viewpoint. The quality of the analysis will be improved greatly if
interviews are held with a spectrum of stakeholders such as employees, suppliers, customers,
strategic partners, etc.
SWOT Analysis Limitations

While useful for reducing a large quantity of situational factors into a more manageable
profile, the SWOT framework has a tendency to oversimplify the situation by classifying the
firm's environmental factors into categories in which they may not always fit. The
classification of some factors as strengths for weaknesses, or as opportunities or threats is
somewhat arbitrary. For example, a particular company culture can be either a strength or a
weakness. A technological change can be a either a threat or an opportunity. Perhaps what is
more important than the superficial classification of these factors is the firm's awareness of
them and its development of a strategic plan to use them to its advantage.

Kinds Of Strategies And Policies

Major kinds of strategies and policies need to developed in areas such as growth, finance,
organization, personnel, public relations, products or services and marketing .

Competitive Strategies By Porter :

Professor porter identified three generic competitive strategies related to :

• Overall cost leadership

• Differentiation strategy .
• Focused strategies .

Effectively Implement Strategies :

To implement strategies effectively, managers must communicate the strategies and planning
premises to all who should know them and must make sure that plans contribute to and reflect
the strategies and goals they serve . Managers must also review strategies requirely, develop
contingency strategies, and be sure that the organization structure of the enterprise fits its
panning programs managers need to make learning about planning and implementing strategy
an on going process .

[+/-
] Management by Objectives (MBO )
Meaning and definition of management by objectives

Management by objectives (MBO) has become a widely used slogan. It is a basic mentality
that a high-performance manager brings to the job of managing. The term management by
objectives was coined by Peter Drucker in 1954. he propounded management by Objectives
concept and emphasized it and then it developed as a management philosophy,. Some authors
has used the term management by results interchangeable with management by objectives.

Management by objectives is an overall philosophy of management that concentrates on

goals and end results. Management by objectives is based on the presumption that people
perform better when they know what is expected of them and can relate their personal goals
to organizational goals. It also assumes that people perform better when they know what is
expected of them and can relate their personal goals to organizational goals. It also assumes
that people are interested in the goal

setting process and in evaluating their performance against the target.

Some important definitions of MBO may be given as follows :

George S. Odiorne.

The system of management by objectives can be described as a process whereby the superior
and subordinate managers of an organization jointly identify its common goals, define each
individual major areas of responsibility in terms of the results expected of him, and use these
measures as guides for operating the unit and assessing the contribution of each of its
members.

Peter Drucker.

He says that management by objectives and self-control is a philosophy of management.

Resting on a concept of human action. Human behavior, and human motivation. MBO
applies to every manager at any level and to all business enterprises whether large or small.
He says the management by objectives ensures performance by converting objective needs
into personal goals.

Heinz Weihrich & Harold Knoontz.

MBO is a comprehensive managerial system that integrates many key managerial activities in
a systematic manner and that is consciously directed toward the effective and efficient
achievement of organizational and individual objectives.
Essential Characteristics or Features of Management By Objectives

A careful study of the above definitions bring out the following features of MBO.

1. Management by Objectives is a philosophy or a system, and not merely technique.

2. It emphasizes participative goal setting.
3. It clearly defines each individual responsibilities in terms of results.
4. If focuses attention on what must be accomplished (goals0 rather than on how it is to
be accomplished.
5. It converts objective needs into personal goals at every level in the organization.
6. It establishes standards or yardsticks (goals ) as operation guides and also as basis of
performance evaluation.
7. It is a system intentionally directed toward effective and efficient attainment of
organizational and personal goals.
8. MBO process (or management by Objective cycle or key elements of management by
Objectives or minimum requirements of management b y objectives.

There are four important and essential steps or elements in the management by Objectives
process as follows :

Setting Objectives.

Goal-setting or objective setting is a multistage process. It starts with the examining of the
current stat3e of affaires, level of efficiency, threats, and opportunities. Then the key result
areas are identified, such as product markets, improved services, lowered costs, work
simplification, employee motivation, profitability innovation and social responsibility. The
performance of these areas is critical for organization in the sense that failure in these areas
may result in failure of the organization. And this is why they are known as “key” result
areas. Peter says, objectives are important in every area where performance and results
directly affect the survival and prosperity of business.

Thereafter interacting or joint goal setting takes place. Subordinates are actively involved in
formulating goals at every level in the organization such goals are finished with reference to
the overall objectives of the organization. Care is taken to establish goals that are measurable
and contribute to the element also. Such goals may be long rang, medium rang, or short
range. Further, resources availability also becomes an important consideration in goal setting.
There is always need to decide priorities among the different objectives keeping in view the
environment within which business operates as well as possible further changes in it.

Developing Action Plans.

Set objectives must be translated into action plans. It requires assignment of specific
responsibilities to different departments, division, and individuals. It also requires allocation
of necessary resources needed to perform the assigned responsibilities. Time dimensions are
also to be decided in order that targets are reached without any unwarranted delays.

Periodic Review or Monitoring The Progress.

After setting objectives and developing action plans, it is necessary to establish a proper
monitoring system with a view to regularly keeping the activities. He progress is monitored
without day path leading to the ultimate objective. It is ensured that the deviations found, if
any, are thoroughly discussed and immediate corrective actions are taken to set them right on
the course. Such a regular monitoring and periodic review not only provide feedback which is
essential for completion of work in time. But also motivates the managers accountable for
performance. Periodic review and monitoring are done at departmental level generally.

Performance appraisal.

This is the last phase of MBO program that evaluates performance annually. The annual
review or appraisal is comprehensive and is done at the organization level. The actual annual
results are evaluated against the set objectives. Such assessment is also used for determining
targets for next year, for modification in standards (goals0 if needed, and for taking corrective
actions in order to avoid deviations form predetermined objectives.

Benefits Of Management By Objectives

Balance stress on objectives. MBO forces managers to set objectives with balanced stress on
key result areas. Thus, crisis conditions are avoided to take place in the organization.

Better managing. MBO forces managers to think about planning for results, rather than
merely planning activities or work. Managers are required to ensure that the targets are
realistic and needed resources are made available to subordinates to achieve the targets.
Clearly set objectives for the subordinates serve as evaluation standards as well as motivators
for them. Thus. MBO results in improvement in managing.

Better organizing. The positions in the enterprise can be built around the key result areas.
Managers are required to clarify organizational roles and structures. Hence better organizing.
Greater employee involvement & commitment. If MBO program is installed in an
organization, people are not just doing work, following instructions and waiting for guidance
and decisions form above and things are not dictated by the superiors. They are now
individuals with clearly defined goals which have been formalized through their own
participation in the process.

Orderly growth of organization. MOB provides for the maintenance and orderly growth of
organization by means of predetermined set of objectives for everyone involved. It also
provides for measurement of what is actually achieved. The progress and even the tenure of
management by objectives emphasizes the ability, skill and achievement of managers rather
than their personality. Thus, the orderly growth and development of the organization is
ensured.

Development of effective controls. MBO not only sharpens the planning, but also develops
effective controls. It specifically provides for periodic reviews and annual performance
appraisals serving as the needed feedback for further streamlining the objectives or targets. It
makes possible for a manager to control his own performance, high deg4ree of self control
resulting in stronger motivation.

Generating of an ideal atmosphere. Doughlas mcGregor says, the motivation, the potential
for development, the capacity for assuming responsibility, the readiness to Direct behavior
toward organization goals are all present in people. Management does not put them there. The
essential task of management is to arrange organizational conditions and methods of
operation .

Objective appraisal

Management byobjectives provides ascientific basis

for evaluatingasubordinate’s performancebecause
goals (standards) arejointly set bythesuperior and
thesubordinates.

Limitations /Weakness /Disadvantages of MBO

Unfavorable attitude of Managers.

Some manager have an attitude that the regular attenuation required of them By MBO
System, draws heavily on their busy time schedule and is not consistent with their roles.
Problems about Goals Setting.

MBO requires issuance of proper , exhaustive guidelines to goal setters The following are
difficulties in goals setting:

i. Positive and active participation from subordinates is not easily forth forthcoming.
ii. Truly verifiable goals are bot easy to formalise
iii. Emphasis is put in short-range goals, whereas long-range goals are avoided, tough
long-range goals are vital for growth and development of the organization
iv. Goals remain inflexible and rigid. For example, changes desirable in annual budgets
are not easily accepted in the middle of the year.
v. Over-use of quantitative goals jeopardizes the qualitative aspect which may more
important than quantification in some cases.
vi. Goals tend to take orecedebce or priority over the people who use them. Any action is
acceptable of it series in the attainment of Gilas, without caring for its impact on
people. Thus, all these difficulties come in the way of making management by
objectives operational in an organisation. Further, managing involves more than goal
setting.
vii. Time-consuming nature of management by objectives. Management by objectives
system is time-consuming especially in the early phases of its introduction when
employees are unfamiliar with its process.

[+/-
] Exchange Of Information In Selection Of Managers

It works in two ways in recruitment and selection. An enterprise provides applicants with an
objective description of the company and the position , while the applicant provides
information about their capabilities. Business and organizations convey information about

• Opportunities for growth

• Potential challenges
• Promotional possibilities
• Level of pay
• Fringe benefits
• Degree of job security
• Limitation or unfavorable aspects of the job

While an applicant must have

• Job knowledge
• Skills
• Abilities
• Aptitudes
• Motivation
• Past performances.

[+/- What is a Job?

]

If a function is performed a group of function is given to an individual .

In job designing there are some scope

• Appropriate job
• Full time position
• Challenge
• Skill ( required)

Job can be designed for individuals or for team works . It also includes the importance
of technical , conceptual , human and design skills.

Job design:

• Job enlargement
• Job enrichment ( to increase the responsibilities )

Job analysis:

You get the to get the information the job description , lob specification and try to finds
out whether the lob will be enlarged or enriched . For this purpose you have to make

• Questionnaires
• Interviews
• Observations

Job specifications:

Required skills for the job

• Qualification
• Experiences
• Age
• Skills
• Extra qualities

[+/-
] Selection, Placement and Promotion

Selecting a manager is to choose the best candidate among all applicants.

As selection is for specific job , there are two approaches

1. Selection approach :-

Is that , the candidate are made to fill a position with specific requirements

2. Placement approach :-

To find or design a suitable position by individual evaluation .

Promotion:

Promotion is to shift to a higher position required more advanced skills and greater
responsibilities . It involves higher status and an increase in salary.

The facts of selection and promotion are

• Outstanding performance
• Better utilization of an individual’s skills and abilities
• Past performance

Responsibilities For Selection:

• Selector be held accountable

• Performance of the chosen candidate

• Get opinions of others
• Selection must be on the basis of the qualification and potentials of the candidates
• It shouldn’t be on the basis of relations or friendships.

Interviews

To ask certain questions to candidates by one or more people is called interview . Nowadays
this process is distrusted by the people and it also have some weakness .

• Interpretation

In the obtained information

• Interviews sometimes influenced,ignorehis job

performance.
• Interviewers, don’t ask theright questions . To
improvetheinterviewingprocess several
techniques canbeused.
 • Interviewingshouldbetrained
• Interviewingshouldbepreparedtoask theright
question
• Conduct multipleinterviews utilizingdifferent
interviews ( they shouldprovideadditional
informationfor themanager for thefinal
decision)
• It is oneaspect of theselectionprocess soit
shouldbesupplementedby

•
o Data form
o Results of various tests
o Reference checks
o Letter of recommendation

There are three kinds of interviews

• Unstructured interviews
• Semi structured interview
• Structured interview

Unstructured Interviews : are informal interviews in which the interviews may say some
thing like “tell me about your last job”

Semi Structured Interviews : Interviewers may follows the interview guide but may also
ask other question.

Structured Interviews : In this kind of interview, interviewer asks a set of prepared

questions.

Factors Of Management

• Manager :

Very important factor , should be qualified , skilled and leader

• Organization

It is a systematic arrangement of people to accomplish some specific purpose

• Staffing :
 It is a labor through which production or output is obtained. Placing of right at
right place is called staffing

• Directives:

The order passed from authorities for implementations to run organization

effectively is called directives.

• Counter check:

This is factor of checking the desired result or output by some technical

methods as well as surprise check

• Rules:

These are hard and fast rules of organization which may be applied from the
very beginning . These are followed by all strictly.

[+/- What is Leadership?

]

Many people believe that leadership is simply being the first, biggest or most powerful.
Leadership in organizations has a different and more meaningful definition. Very simply put,
a leader is interpreted as someone who sets direction in an effort and influences people to
follow that direction. How they set that direction and influence people depends on a variety
of factors that we'll consider later on below. To really comprehend the "territory" of
leadership, you should briefly scan some of the major theories, notice various styles of
leadership and review some of the suggested traits and characteristics that leaders should
have. The rest of this library should help you in this regard.

[+/-
] Style of leadership

The Autocrat

The autocratic leader dominates team-members, using unilateralism to achieve a singular

objective. This approach to leadership generally results in passive resistance from team-
members and requires continual pressure and direction from the leader in order to get things
done. Generally, an authoritarian approach is not a good way to get the best performance
from a team.

There are, however, some instances where an autocratic style of leadership may not be
inappropriate. Some situations may call for urgent action, and in these cases an autocratic
style of leadership may be best. In addition, most people are familiar with autocratic
leadership and therefore have less trouble adopting that style. Furthermore, in some
situations, sub-ordinates may actually prefer an autocratic style

The Laissez-Faire Manager

The Laissez-Faire manager exercises little control over his group, leaving them to sort out
their roles and tackle their work, without participating in this process himself. In general, this
approach leaves the team floundering with little direction or motivation.

Again, there are situations where the Laissez-Faire approach can be effective. The Laissez-
Faire technique is usually only appropriate when leading a team of highly motivated and
skilled people, who have produced excellent work in the past. Once a leader has established
that his team is confident, capable and motivated, it is often best to step back and let them get
on with the task, since interfering can generate resentment and detract from their
effectiveness. By handing over ownership, a leader can empower his group to achieve their
goals.

The Democrat

The democratic leader makes decisions by consulting his team, whilst still maintaining
control of the group. The democratic leader allows his team to decide how the task will be
tackled and who will perform which task.

The democratic leader can be seen in two lights:

A good democratic leader encourages participation and delegates wisely, but never loses
sight of the fact that he bears the crucial responsibility of leadership.

He values group discussion and input from his team and can be seen as drawing from a pool
of his team members' strong points in order to obtain the best performance from his team.

He motivates his team by empowering them to direct themselves, and guides them with a
loose reign.
However, the democrat can also be seen as being so unsure of himself and his relationship
with his sub-ordinates that everything is a matter for group discussion and decision. Clearly,
this type of "leader" is not really leading at all.

[+/-
] Leadership is a facet of management

Leadership is just one of the many assets a successful manager must possess. Care must be
taken in distinguishing between the two concepts. The main aim of a manager is to maximize
the output of the organization through administrative implementation. To achieve this,
managers must undertake the following functions:

• organization
• planning
• staffing
• directing
• controlling

Leadership is just one important component of the directing function. A manager cannot just
be a leader, he also needs formal authority to be effective. "For any quality initiative to take
hold, senior management must be involved and act as a role model. This involvement cannot
be delegated." [1]

In some circumstances, leadership is not required. For example, self motivated groups may
not require a single leader and may find leaders dominating. The fact that a leader is not
always required proves that leadership is just an asset and is not essential.

1. Heinz & Horald Koontz ‘Management (A Global Perspective )10th Edition’

[+/-
] Manager

A manager is the one who motivates , takes decisions and risks and get the results.

Main Characteristics Of A Manager:

• Power delegation

o Tosharetheauthorityandresponsibility
amongtheteamaccordingtothecapability.

• Decision making

o Takingof decisionat anylevel of authority

• Problem solving approach

 o Shouldbeabletosolvetheproblemof the
team, regardingtheorganizationand
personnel

• Leadership

o Shouldshowleadershipskills

[+/-
] Human Factors And Motivation

Motivation :

Motivation pertains to various drives , desires , needs , wishes and other forces .

Motivators:

Forces that induce individuals to act or perform . Forces that influence human behavior.

Theories of Motivation

There are different theories of motivation.

Theory X Assumptions:

Assumptions about the nature of people as suggested by Douglas

McGregor:-

1. People dislike work and will avoid if they can ;

2. People must be coerced , controlled , directed and threatened with punishment to get
achievement of organizational objectives ;
3. Wish to avoid responsibility , have relatively little ambition and want security above
all .

Theory Y Assumptions:

Theory y suggests :-

1. The expenditure of physical and mental effort in

work is as natural as play or rest ;
2. External control and the threat of punishment are
not for producing efforts. People will exercise self-
directions and self-control ;
3. Proportionality in degree of commitment and in
size of the rewards ;
 4. To learn for seeking knowledge;
5. High degree of imagination;
6. Potentialities of the average person are only partially utilized.

Hierarchy Of Needs :

Maslow’s theory that basic human needs exist in our ascending order of importance and that
once a lower –level need is satisfied , actions appealing to it cease to motivate.

[+/-
] Herzberg’s theory

It is based on two factors:

1. Motivators:
o Challenging work
o Achievement
o Growth in the job
o Responsibility
o Advancement
o Recognition

These factors motivate the people of organization.

2. Hygiene factors:

o Aresalary,
o companypolicyandadministration,
o qualityof supervision,
o workingconditions ,
o interpersonal relations ,
o status and
o jobsecurity.

[+/-
] Equity theory
Refers to individuals subjective judgment about the equity or fairness of the reward
they receive in relation to their inputs ( which include factors such as effort , experience
and education ) in comparison with other’s rewards .

The aspects of the equity theory are :

Outcomes by a person = out comes by another person

Input by a person = input by another person

Reinforcement theory :

This theory was developed by skimmer, who suggested that people are motivated by praise of
desirable behavior, people should participate in setting their goals and should receive regular
feedback with recognition and praise .

Expectancy theory of motivation :

The theory that people will motivate by their expectancy that a particular action on their part
will lead to a desired outcome . It is stated:

Force = strength of a person’s motivate

Valence = Strength of an individual performance for an outcome

Expectancy = Probability that a particular action will lead to a desired outcome

[+/-
] Power And Authority

POWER : To make the people behave or want to make them behave .

Authority : Legitimate power, position power .

Types Of Power :

• Expert power
• Referent power
• Personality ethics
• Character ethics
• Reward / coercive power

Functions:
You make the people obey the functions

Functions

Responsibility

Responsibility:

Obligations to perform assigned functions / duties .It is flow from the function.

Principle of functional similarity

Authority –co equal Auth – Resp.

The official right to assign the people is responsibility.

Accountability.

Type s of functions:
 Line:

• Production
• Selling
• Financing

LineandStaff Authority:

There are various ways to conceptualize line and staff. Line and staff are characterized by
relationships and not by people or departments .Line authority is that relationship in which a
superior exercises direct supervisions over subordinates. The staff relationship consists of
giving advise and council.

Functional Authority:

Right to control processes , policies or other matters in departments ,other than a person’s
own . Functional authority is a small slice of a line manager’s authority and should be used
sparingly.

Delegation of Authority

Top Level management cant personally perform all the tasks needed to achieve their goals
,they must use the chain of command to distribute authority among other organizational
members to ensure that the work is completed.

Authority refers to the right to make decision , to perform or supervise activities , and to
allocate recourses in order to accomplish tasks that will achieve organizational goals.

Authority flows down the chain of command ,so high-level positions have a wide scope
and therefore more authority then low-level position .

However , as the classical management theorists first pointed out , Formal authority is
vested in the position not the person.

Employee play a key role in the manager’s exercise of authority. The acceptance theory of
authority argues that authority in meaningful only when employee accept a manager’s legal
right to direct their activities .But if employee believe their manager’s direction are outside
the boundary of official authority they may choose not to accept these direction , and the
manager’s authority is diminished.

Authority is the concept of responsibility the obligation to perform the assigned task or
activities . Every organizational position carries with it responsibility for achieving the
specific goals for achieving specific goals by perfuming specific duties.

The organizational members have accepted the authority and the responsibility of their job ,
the are subject to accountability ; they must achieve the expected results of justify their
deviation from the accepted result to managers higher in the chain of command .

The pattern of transferring authority from one level to the next lower level occurs throughout
every organization , enabling work to be accomplish and goals to be achieved at every level .
in this way the authority can be distribute to the lowest possible position in the organization
where employee and manager must make decision and exercise judgment about the day-to-
day operation that contribute the performance ,even when manager delegate work to their
employee , they are ultimately held accountable for the excepted result

Barriers toEffectiveDelegation

Although delegation enables manager to complete their work assignment and achieve results
without having to handle every task personally, managers sometimes face barriers to effective
delegation, Especially when the stakes are very high, some managers view delegation as too
risky. In such case managers may not trust their employees to complete delegated tasks
competently, so they resort to micro management, an excessive degree of personal
involvement in and control over the decisions and action of their employee.

[+/-
] Centralization and Decentralization

Although top managers distribute some authority for decision and actions through out the
vertical organization they also retain a certain amount of authority .

Centralization is the extent to which authority remains concentrated at top level management
level. The opposite of centralization is decentralization , delegation authority to lower
management level.

Centralization and decentralization are the two extremes of a continuum more authority
delegation down ward reflects a higher degree of decentralization, when more authority
detained by top managers reflect a higher degree of centralization.

What is Management?
Management is the process of designing and maintaining an Environment
in which individuals working together in groups efficiently accomplishes
selected aims.

Function of managements?

1. Management applies to any kind of organization.

2. It applies to managers at all organizational level.
3. Managers carry out the managerial function of planning,
organization, staffing, leading and controlling.
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 skill.

1. Technical Skills.
2. Human Skills.
3. Conceptual Skill.
4. Design Skill.

Technical Skills

Knowledge and proficiency in avidities involving method, process and

procedures for Example, mechanics work with tools and their supervisors
should have the ability to show them how to work these tools.

Human Skills

Ability to work with people it is the create of an environment in which

people create of an environment in which people feel secure and free to
express their opinion.

Conceptual Skills

Ability to see the “big picture” to recognize significant element in a

situation and to understand the relationship among the elements.
Design Skills

Ability to solve problem in ways that will benefit the enterprise managers
are not merely “problem watchers” they work out practical solution to
their problems.

Evolution of management thought.

Development of thought on management dates back to the days when

people attempted to accomplish goals by working group.

[+/-
] Frederick Taylor and Scientific Management

1. Was an Engineer?
2. Started out as an apprentice, common foreman, motor mechanic
and then chief engineer of a steel company, he invented high-speed
steel cutting tools. His patents made him rich and he stopped
working at the age of 45 and spent the remaining 14 years of his life
as an unpaid consultant and promoting his ideas on scientific
management.
3. Taylor’s major lancer was efficiency in production mode only to
lower costs and raise profits but also to increase pay for workers
through their higher productivity.

Taylor’s Principles.

A careful study of time and motion under lines his famous work. Principles
of scientific Management: various pay plans based on out put were used
to increase the surplus to make sure that workers who produced were
paid according to their productivity. Taylor emphasized the importance of
careful advance planning by managers and the responsibility of managers
to design work system so that workers would be helped to do their best.

Henry L.Gantt

1. Was a Mechanical Engineer?

2. Like Taylor he emphasized the need for developing mutuality of
interests between Management and labor and develop a
harmonious cooperation; he developed graphic method of
describing plant and improving managerial control the famous Gantt
chart.
 Frank and Lillian GillBreth.

1. Frank was a bricklayer became the chief superident of a building

contractor and the formed his own building contracting firm.
2. He reduced the number of bricklaying motions from 18 to 5 and
doubled a bricklayer’s productivity. He became a famous consultant
of improvement of human productivity.
3. Lillian was an industrial psychologist and great helped frank in his
consultancy. After her husband’s death, she carried on his
consultancy business till her own death at the age of 93.

Fayol: - Operational Management Theory

Fayol saw that activities of an industrial undertaking could be divided into

6 groups.

1. Technical (Production)
2. Commercial (Buying, Selling and exchanging)
3. Financial (Search for and optimum use of capital.)
4. Security (Production of property and persons.)
5. Accounting (Including Statistics.)
6. anagerial (Planning, Organization, command, coordination and
control)

Fayal focused his Analysis on the 6th groups and formulated 14th Principles.

1. Division of work.
2. Authority and responsibility.
3. Discipline.
4. Unity of command.
5. Unity of direction.
6. Subordination of undivided to general interest.
7. Remuneration.
8. Centralization.
9. Sector Chain.
10. Order-a place for everything and everything in its place.
11. Equity.
12. Stability of tenure.
13. Initiative.
14. Espirit do corps “In union there is strength”
[+/-
] The Emergence of Behavioral Science

1. Industrial Psychological and social science also influence

management thought industrial psychology: Hugo Munesterberg’s
objectives were to discover.
2. How to find people whose mental qualities best fit them for the work
they do.
3. Under what psychological condition the greatest and most satisfying
output can be obtained from the work of every person.
4. How a business can influence workers in such a way so as to obtain
the best possible result from then.
5. Sociological approach to management observing people as products
of group behavior.

Three Outstanding Scholars: -

1. Max Weber (German)

2. Emile Durkheim (French)
3. Vilfredo Pareto (French Italian)

[+/-
] Hawthorne Effect

Elton Mayo and his researchers saw that shortening workdays. Modifying
rest periods changing illuminations for the test group and varying
incentive pay system did not explain changes in productivity. They found
that improvement in productivity was due to such social factors as
morale’ satisfactory interrelationships between members of a work group
(A sense of belonging”) and effective management that understands
human behavior and uses interpersonal skills as motivating, counseling,
Leading and communicating. This phenomenon of “noticing” people is
called the hawthorn Effect. Recent contributors to management thought.

1. Peter F.Drucker.
2. W.Edwards Deming.
3. Lanrence Peter.
4. William Ouchi.
5. T.Peter’s & R. Waterman.
[+/-
] Approaches to Management Analysis

The managerial roles approach. Professor Mintzberg of McGill University

observed what managers actually do to determine what managerial
activities (or roles) are.

MCKINSEY’S 7-S Approach. The seven S’s are: Strategy, structure, system,
style, staff, shared value and skills (of the firm)

MOTIVATION:-

Motives are the factors that energize and guide the human beings to achieve the specific
goals.

There are five basic needs as shown below:-

1. Physiological needs.
2. Safety and security needs.
3. Love and belonging needs.
4. Self esteem needs.
5. Self actualization.

1.Physiological needs.

The first step is self-actualization is the satisfaction of the basic physiology needs of food, air,
shelter, and so on. If you were lost on a deserted island, you would be more concerned with
finding food shelter and cloth air etc. Maslow said the physical needs are first.

2.Safety and security needs.

In some societies, the human needs for safety and security is never satisfied. People may live
under continual treat by political, geographical, or weather factors. Generally people tried to
migration form one place to another place because there is some satisfaction. An other
example we take the earth quack in Pakistan lots of people live top of the mountain or
northern side etc. when the earth quack came after earth quack create lots of problem like
rain, snow falls etc also the shelter problems. The they have to decide to migrate to other
places.

3.Love and belonging needs.

Human are social animals, they want to be loved and needed by others.for the example we
take they are satisfied about their need like food, shelter, air , and clothe then to create the
love and belonging to other because with out belonging to others or love you are alone in the
society.
4.Self-esteem needs.

In our society there are many activities and products that promise to give self-esteem but are
unable to make good on the promise. We know that the right deodorant and the right car will
not make us right. We want to more and more satisfaction like advertiser to advertise in the
newspaper or in television the new product if we have buying power then we should be able
to satisfied.

5.Self-actualization.

We sometimes speak of some acquaintance as being a “fulfilled” Person----one who has a

specific goal and seems happily busy getting it. Achieving the top rung of mallow’s ladder is
a matter of developing the inner nature or the potential we each have within us. Those who
attention self actualization.

[+/-
] HERBEG'S TWO FACTORS THEORY

THERE ARE TWO TYPES OF FACTORS.

1- Hygiene Factors 2 – Motivators

The factors that prevent Motivators are satisfied the factors. For
from the dissatisfaction for the example bonus , salary satisfaction,
the example if a salary rework itself possibility of the growth,
person got the premise but responsibilities.
he dissatisfied the company
policy and working
environment.

PLANNING

Planning is a foundation for organization implement and controlling. For the example if we
want to made the any product in the organization being a manager we must be managed the
organization and control the all kinds of disadvantages the implement at the lact we made the
product successfully.

FLEXIBLE PLANNING.
Some times managers have only a general idea of where they want to go with no final goal in
mind. Such cases call for a certain amount of built-in flexibility. Michael Mc Caskey has
made a distinction between the planning with goals and planning with out goals he point out
the some efforts do not reveal their most valuable traits until we get into them.

MANAGEMENT BY OBJECTIVES.

One of important concepts that came out of druckers work with general electric was
management by objectives (MBO). This is a system of setting up organizational objectives
that then become the beginning middle and end operation. The objectives tell us every one
where she or he is going; departure from the optimums path.

[+/-
] WHAT IS MANAGEMENT

The process of activities, completed efficiently and effectively with and through people is
called management.

FACTORS OF MANAGEMENT

(1) MANGER (2) ORGANIZATION (3) STAFFING (4) COUNTER CHECK (V) RULES

1. MANAGER:- Very important factor should have qualified skilled leader.

2. ORGANIZATION:- It is systematic arrangement of people to accomplish some
specific purpose. It have four important parts.
3. STAFFING: (It is a labor through with production or output obtained. Placingof right
man at right place is staffing)
4. DIRECTIVES: (The orders passed from authorities for implementation to run
organization effectively is called DIRECTIVES. Followed strictly the directive issued
time to time according to the need.
5. COUNTER CHECK:- This is factor of checking the desired result or output by some
technical method as well as surprise check.
6. RULES:- These are hard and fast rules of organization, which may be applied from
very beginning. These are followed by all strictly.

MANAGER

Manager is first/ major part of organization who is responsible for activities. It may be first
line manager (supervisors), second line (Middle managers, deal between top management and
first line and top line managers who bring policies make lot of time in planning and takes
decision.
Simply a manager is one who innovate, take decision and risk and get.

MAIN CHARACTERISTICS OF MANAGER

1. Power delegation (To share authority and responsibility among the team according to
capability.
2. Decision making (Takes decision at any level of in authority and do the needful.
3. Problem solving Approach (Should be able to solve the problems of in teams
regarding the organization and personal.
4. leader ship (he should have the leadership skills.

MAIN CHARACTERISTICS OF ORGANIZATION:-

1) PRODUCTION 2) MARKETING 3) HUMAN RESOURCES 4) FINANCE

The organization are based on above four factors and arrange the people in order to achieve
the desire goals, when it innovate, invest and takes risk.

MAIN CHARACTERISTICS OF STAFFING

• The responsibilities of staff

• Shortage of managerial manpower
• Skilled about the modern machinery & its use
• Trade recognition of the problems
• Relation of organizational structure to staffing
• Keep in mind key factors of leadership
• Technical qualification & short courses of staff
• Personal interest of staff in filed of work
• Personal relation with staff and manager
• Limitation of work in staff
• Suitable timings of work
• Rewards and benefits of staff

LEVELS OF MANAGERS

1- First line managers (supervisors and manager)

2- Middle managers (Responsible for implementation …)

3- Top Managers….
[+/-
] PRINCIPLES OF BUSINESS MANAGEMENT

1. Division of work (the scope of work in managerial and staffing parts should be
divided clearly and standardized.
2. Authority and responsibility (The assignment of work should be equipped with certain
authority and responsibility so that one may able to use it with confidence and
becomes responsibility of work.
3. Discipline is use to control and correct the behaviors of all employees. Discipline
improve the efficiency and avoid the ignorance of duty and responsibility.

MAIN FEATURES OF MANAGEMENT / FUNCTIONS OF

AMANGEMENT

There are four main function s management.

1. PLANNING (To know about the purpose and destination. How to get the desire
purpose and why should be clear, which is called planning. It is done by the top
management but at each level of management some part of planning / involved.
2. ORGANIZATION (To adopt the process and structure about the planning in a better
way by people is called organizing. It is arrangement of peoples and resources to
achieve the desired goals.
3. Controlling (to ensure about all the above factors are going properly and the desired
goals are achieving if there is any error is found, the controlling is operated with some
extend.)
4. LEADER SHIP There is important quality of successful manager which is
combination of by birth and child hood. Education as well as technical skills The
managers should be leadership skilled which enhance in quality by various kinds as
Personality neat & clean career, good knowledge telling and writing power , decision
power , public dealing , problem solving approach, leading attitude in a mind, but
friendly and brother attitude in practice , use of resources effective, minimize the
waste and ___________ the .

1- SOCIAL MANAGEMENT

In any organization the main objection is to minimize the profit in spite of other values. But
the real organization need to concern with social value and social needs of society by
surrendering the some share of profit. It is because of social needs or values of society e.g If
in a society some items are not allowed so that it should be avoid to produce rather than
concept of organization _________. If in a society some item are needed once in year firm
should provide so that it shall be closer to society and goes to long run profit.
2- MANAGEMENT AS TECHNOLOGY

The method in which a firm use the special education training and skills about the
management and go through it is called management as technology. Because almost all the
internal problems of organization may be solved through techniques of management so we
can say the management as technology technological awareness to minimize the waste
statistical analysis and computer science are essential.

3-MANAGEMENT AS CULTURE

A the single person have its own personality through which he is appreciated or rejected or
known similarly the personality of organization is management culture. How the organization
behavior impression and imagine called the management culture e.g good / neat and clean
clean organization versus poor / dirty and lose organization.

4- INSTITUTIONAL LEVEL OF MANAGEMENT

In an organization when proper rules directives discipline, authorizes and responsibilities are
given then the management comes on institutional level where the management goes through
hard and fast rule and managed very perfect and result oriented.

5-COMMITTEE MANAGEMENT

The committee is ------ for some special task within specific time period and special powers.
The management of committee exercise such type of special powers authorities and hierarchy
is called committee management. This management has special and temporary title of name
power and facilities which automatically finished by the completion of task.

6-PRODUCTION MANAGEMENT

This type of management is involve in a production based organizations where \organization

object is maximize the output. This mean a certain technical skills of management are
required which use to maximize the production and minimize the waste , so the kind of
management do in this way called production management.

7- SALES MANAGEMENT
Sales Management is a part of broader filed of marketing or we can say that it is part of the
field of management which concerns its self with the managerial aspects of marketing. Major
parts of SALES MANAGEMENT.

1. Functions of Sales management

2. Planning and execution
3. Planning consists or research and evaluation of organization goals or targets.
4. Execution deals with assignment and __________ of work force and made good
communication classification of sales management.

Management sale and service personal.

8 -FINANCIAL MANAGEMENT

The role of finance is very important in an organization so to resolve the financial matters
effectively by the management. Important factors of financial management.

1. Interest Role
2. PlanningDifficulties
3. Demandof Capital
4. business andindividual inwith
5. AccountingProblem
6. Time&risk management
7. Cashflowv/s earning
8. Thecapital market
9. Primary&Secondary market

Financial management may help to serve and secure the interest of organization in field of
finance.

NEED THEORY OF MOTIVATION / MASLOWS THEORY OF NEEDS

MOTIVATION: Motivation as the processes that account for an individual’s intensity,

direction and persistence of effort toward attaining a goal. Finally motivation has a
persistence dimension. This is a measure of how long a person can maintain his or her effort.
Motivated individuals stay with a task long enough to achieve their goal.

HIERARCHYOFNEEDSTHEORY

It’s probably safe to say that the most well known theory of motivation is Abraham
Maslow’s hierarchy of needs. He hypothesized that within every human being there exists a
hierarchy of five needs. These needs are:
1- Physiological: Includes hunger, thirst, shelter, sex, and other bodily needs.

2- Safety: Includes security and protection from physical and emotional harm.

3- Social: Includes affection, belongingness, acceptance and friendship.

4-Esteem: Includes internal esteem factors such as self-respect, autonomy and achievement
and external esteem factors such as status recognition and attention.

5- Self-actualization: the drive to become what one is capable of becoming includes growth
achieving ones potential and self fulfillment.

As each of these needs becomes substantially satisfied the next need becomes dominant.

LOWER ORDER NEEDS: Needs that are satisfied externally physiological and safety
needs.

HIGHER ORDER NEEDS: needs that are satisfied internally social esteem and self
actualization needs.

EXPLANATIONORIMPORTANCEOF
MASLOW STHEORY

Maslows need theory has received wide recognition particularly among practicing mangers.
This can be attributed to the theory intuitive logic and ease of understanding. Unfortunately
however research does not generally validate the theory. Maslows provided no empirical
substantiation and several studies that sought to validate the theory found no support for it.

MBO (MANAGEMENT BY OBJECTIVE)

MBO

Management by objective is the approach by which both employees and superior jointly set
performance goals and duties. Having participated in the fixation of his own goals, the
employee becomes more involved dutiful and active in performance. MBO facilitates
employees to adjust their time schedules from time to time to attain the goals in planned time.
It helps employees understand objectives and duties clearly.

MBO HAS THREE ELEMENTS

1. Managers (Subordinate manger) should be measured what they accomplish rather than
how they spend their time.
2. Manager must be well informed of their objectives. Manager objectives are their duties that
they must perform.

3.Manager and their subordinates should jointly set performance objectives.

PROCESS OF MBO

The process starts at the top of an organization and has the active support of the chief
executive who give direction to the organization it is not essential that objective setting start t
the top however it can start at the division level at the marketing manager level or even lower
e.g in one company the system was first started in a division where it was carried down to the
lowest level of supervision with an interlocking networking network of goals. As in all other
kinds of planning one of the critical needs in MBO is the development and dissemination of
consistent planning premises no manager can be expected to set goals or establish budgets
without guidelines.

ADVANTAGES OF MBO

1.Organization is clearly defined in setting MBO organization roles and structure have to be
clearly defined. Clearly defined authority is delegated key clearly defined

2. Better management the quality of management is improved because mbo focuses its
attention in planning, Organization and controlling

3. Personnel Commitment the subordinate manager is committed dutiful and active in

performance . he has high morale

4. Effective control managers are self directed and controlled.

MANAGEMENT CONTROL & ITS VARIOUS STEPS OF CONTROL

PROCESS

MANAGEMENT CONTROL

Like other things are controlled management and managerial activities such as decision
making, plans and putting them into effect. This type of control ensures the quality of
management in terms of preparation of efficient and accomplishable plans, their execution
and maximum output with a minimum input.

Management control may be Direct control and Indirect control.

CONTROL PROCESS

The basis control process has three steps.

1. Establishing standards 2. Measuring performance 3. Correcting deviations

1. Establishing Standards

standards are yardsticks against which actual results are measured and efficiency is
determined. Standards are plans which tell us where we should be. Standards may be
physical, financial, qualitative or tangible. Standards are usually stated in specific terms but
they may also be intangible like the degree of morale goodwill market image and public
opinion and attitude.

2. Measuring Performance

Standards are established to measure actual performance. By measuring actual performance

against standards we come to know where we are as against we were supposed to be if the
standards are objective measurement is objective.

3.Correction of Deviation

the negative difference between where we should have been and where we actually are is
controlled. Deviation is corrected controls should facilitate corrective actions.

The manager may e compelled to correct actions by redrawing his plans or by modifying his
goals. if controls are forward looking they may indicate weak areas in time stopping further
damage.