management principles & practices

8/8/2019 Management Principles & Practices

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By Dileep Tanksali


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Defi itio :

Pl i g is the rocess of

setti g go ls d choosi g

the means to achieve thesegoals


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Concept:

Primar management concept

Involves goals & plans

Goals are desired outcomefor individuals orgroups or entire organisations

Goals are objectives

Plans document how goals are going to be met hey describe resourceallocations schedules and

other necessaryactions

Managers develop both goals & plans Inplanning there is hierarchy Mission

statement, vision statement, strategic plans,operational plans

Planning involves decision making


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Importance: Primaryfunction - establishes the basis for all other

functions and sets the directionfor the organisation Without plans - Managers will not know how to

organise, lead or control- How to organise people & resources

effectively will not beknown- Goals cannot beachieved- Managers cannot lead with

confidence

- Important decisions cannot be taken- Control is not possible- Organisations effectivefunctioning &

future will beaffected


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Types ofplans:Strategic plans

- Mission, Vision, Objectives or Goals

- Strategies positioning the organisationin terms of its environment

- Apply to entire organisation, establishthe overall goals and position the

organisationOperational plans

- Plans that specify how overall goals areto beachieved


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Long term plans- Timeframe beyond 3 years

Short term plans- Covering 1 year or less

Specific plans

- Clearly defined leaveno room for interpretation includes budgets ( Increasing output by 10 %)

Directional plans- Flexibleand set out general guidelines ( improving profitsby 5 to 10 %)

Single useplans

- One timeplan specifically designed to meet needs ofaunique situation includes programmes

Standing plans- Ongoing plans providing guidancefor activities performedrepeatedly includepolicies, rules & procedures


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Essential features ofplanning:

1) Precedes all other managerial functions

2) Gives shape to ideas

3) Covers the whole organisation

4) Is hierarchical

5) Is based onfacts, figures, trends,

surveys, studies, research etc.6) Takes contingencies into account

7) Involves resources & their distribution


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8) Consists of schedules and actions

9) Involves decision making

10) Concentrates on outcomes

11) Makes goals measurable & quantifiable12) Reduces uncertainty

13) Sets standards

14) Reduces overlapping

15) Provides the basefor controlling


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Principles ofplanning

Involves threeareas ofplanning purpose &nature ofplanning, the structure & nature ofplans, Theprocess ofplanning

A) Thepurpose & nature ofplanning

- Contribution to accomplishment of objectives

- Objectives should be clear

- Planning should precedeall managerial

functions

- Plans should beefficient cost should be offset

by contribution


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B) The structure ofplans

Planning premises should be consistent

Strategies & policies should be understood andimplemented

C) Theprocess ofplanning Limiting & critical factors should be taken care

of

Commitments involved in decisions should befollowed byactions

Flexibility should be built into plans to deal withunexpected events

Navigational change ( redrawing plans) to movetowards the desired goals


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Steps inplanning process:A) Being aware of opportunities

- Within the organisation & outside

- Possiblefuture opportunities SWOTanalysis

B) Establishing objectives

- For entire organisation & thenfor each

subordinate unit- For long term as well as short term

- deciding on outcomes

C) Developing Premises

- Utilising consistent planning premises


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E) Determining alternate courses

- Examining alternate courses

- Analysing promising alternatives

F) Evaluating alternate courses- Weighing premises in light of goals &

premises

- Variables & limitations to be considered

G) Selecting a course

- Adopting aplan

- Sometimes following several courses


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H)Formulating derivativeplans

- Derivativeplans to support basic plans

I) Numberising plans by budgeting

- Plans to be converted into budgets- Departmentwise budgets

J) Coordination of short term & long term

plans - Short rangeplans should match

with long rangeplans

- Correcting inconsistencies


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Planning premises:

Anticipated environment in which plans are

expected to operate. They include

assumptions or forecasts of thefutureandknown conditions that will affect the

operation of theplans.

Difference betweenforecasts that areplanning premises and forecasts that are

translated into futureexpectancies usually in

financial terms


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Environmental forecasting

Values and areas offorecasting:

- Compel thinking ahead

- Discloses areas lacking control

- Helps to unify & coordinateplans

Environmental forecasting areas

- Economic- Social

- Political legal

- Technological


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Barriers inplanning:

Lack of - vision

- Clarityabout objectives and

goals

- Consistent planning premises- Perfect information

Narrow approach of departments

Dynamic environment plans focus on todays competition

Rigidity

Uncertainty & risk

Variation in standards

Reliance onpast data & success

Suppression of intuition & creativity


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Definition: Organising is theprocess of

creating an organisational structure.

Organisational Structure: Theformal

arrangement of jobs withinan organisation.Organisational Design: Developing or

changing an organisations structure.

Organisational design involves decisions

about sixkeyelements : Work specialisation,Departmentalisation, Chain of command,

Span of control, Centralisation &

Decentralisationand Formalisation.


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Organising Involves:

Identification & Classification of required

activities.

The grouping ofactivities necessary to attainobjectives.

Theassignment ofeach grooping to a manager

with authoritynecessary.

Theprovisionfor coordination horizontally &vertically.

An organisation structure clarifies who is to do

what job and who is responsiblefor what results.

Organisation implies aformalised intentional

structure of roles ofpositions.


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Principles of organisation:

Thereare 13 principles

Purpose of organising-(Points 1 & 2), The cause

of organising(Point 3), The structure oforganisationAuthority(Points 4 to 9), The

structure of organisationDepartmentised

Activity(Point 10), Theprocess of organising

(Points 11 to 13)

1)Unity of objectives :

- Structure which enables individuals to

contribute to enterprise objectives.


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2)Organisational Efficiency :

- A structure which facilitates achievement

of objectives with minimum costs &

unsought consequences.

3) Span of management :

- Each managerial position having under it a

manageablenumber ofemployees.

4) Scalar Principle :

- Clear line ofauthorityfrom top

management to lowest level employee

with clear responsibilities.


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5) Delegation :

- Authority delegated to managers should be

adequate to ensure their ability to accomplish

expected results.

6) Absoluteness of Responsibility :

- The responsibility of subordinates to superiors

for performance should beabsolute.

7) Parity of Authority & Responsibility :

- The responsibility should be commensurate

with authority.

8) Unity ofCommand :

- An individual reporting to a single Superior


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9) Authority level decisions :

- Decisions within theauthority ofa manager

should not be referred upward.

10) Functional definition :

- Clarityabout results expected, activities to be

undertaken, theauthorityan informal

relationship with other position.

11) Balance :

- Balancing broad spans of management against

inefficiencies of communication.

- Balancing lobs from multiple command against

gains from expertness & uniformity in

delegation.


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- Balancing offunctional specialisationagainst

advantages ofestablished semi-independent

units.

12) Flexibility- Devices & techniques ofanticipating and

reacting to charge.

- Inflexibility leads to resistance to charge,

complicated procedures, or meeting

environmental charges.

13) Leadership Facilitation :

- Designing & maintaining anenvironment for

performance.

- Organisation should promote leadership.


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Formal & Informal Organisation

Formal Organisation

The intentional structure of roles inaformally

organised enterprise. Formal does not meaninflexibility. Individual effort ina group

situation must be channelled toward group &

organisational goals.

Refers to formal structure ofan organisation.


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Informal Organisation

A network ofpersonal and social relations

not established or required by theformal

organisation but spontaneous as peopleassociate with oneanother.

It includes such informal groups within

the organisation such as bowling team,

cheers group or morning coffee

regulators.

These groups areformed onaccount of

common inter.


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Departmentation:

Organisational Structure

Departmentation means grouping activities &

people info departments based on certain basicpatterns.

Thepatterns ofDepartmentationareas follows :

Functional Departmentation :

Grouping ofactivities inaccordance withfunctions over an organisation.

Grouping could be like Marketing, Engineering,

Production, financeetc


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The terms used to describe thefunctional

grouping can be different for different

types of organisationfor Ex. For rail-road

operations, traffic, financeFunctional Departmentation most widely

employed basis.

Co-ordination ofactivities through rules &

procedure.


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Territorial Departmentation :

Useful for large scalefirms whoseactivities arephysically

or geographically dispersed.

This method used when similar operations undertakes in

different geographic areas.

It is also most often used in sales & production but not in

finance, which is concentrated at Headquarters.

Product or Product lives Departmentation

Used in multiline, large scaleenterprises.

Divisionexecutive has extensiveauthority over the

manufacturing, sales and engineering functions relating to

aproduct or product line.

Divisionexecutives responsiblefor profits.


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Customer Departmentation :

Customers key to the way theactivities are grouped.

Activities arranged to cater to clearly define customer

group.

For example ina bank grouping ofactivities like corporate

banking, Institutional banking, agricultural banking, retail

banking etc

Matrix or Grid Organisation :

Project or product management

Combining offunctional or project or product patterns

Used inEngineering, R&B, Construction, aerospaceetc


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Matrix management can be madeeffective

byfollowing certain guidelines:

Defining objectives ofproject or task

Clarifying roles, authority & responsibilitiesof manager & team members.

Balancing power offunctional & project

management

Selecting experienced manager to provideleaders.

Installing appropriate cost, time & qualify

that report deviationfrom standards


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Strategic Business Units :

Distinct little businesses set upan units ina

larger companyfor handling aproduct or

product line This ensures that each product or product line

offered by the company receives the same

attentionas it would if it were developed,

produced & market byan independent company

To be called SBU a business unit must meet

following criteria

Have definable groups of competitors

Prepare its own integrativeplans


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Manage its resources inkeyareas

Must haveproper sizeneither too large

nor too small

SBU manager responsiblefor all activities

of theproduct

Technique ofpreserving entrepreneurial

attention


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Line & Stall Structure:

Concept:

Widely held view that livefunctions are those that have

direct impact onaccomplishment of the objectives of the

organisation

Stafffunctions are those that help the livepersons work

most effectively inaccomplishing objectives

Traditionallyproduction & slides considered livefunctions

and purchasing, accounting, personnel, plant maintenance

and quality control as Stafffnctions

But actuallyeven the so called Stafffunctions are

important inaccomplishment of objectives


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Nature of line & Staff Relationship

Line & staffarea matter of relationship

Lineauthority gives a superior alive ofauthority over asubordinate

Liveauthority is an uninterpted scale or series of steps which iscalled the scalar principle

Nature of staff relationship is advisory investigating research &

giving advice to live managers

Some managers regard line & staffas type of departments

But line & staff is distinguished byauthority relationshipand notby what people do

Public relations department may be thought as stall departmentsbut within that department thereare line relationships

Though some departments may be considered as live or stafftheir activities do not characterise the department. Line & staff

are characterised by relationships.

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