principles of management 3

7/31/2019 Principles of Management 3

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Maslows - The Hierarchy of Needs Theory

IV. Direction


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The Hertzbergs Model

IV. Direction


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MaslowsTheory VsHerzbergs

Theory

IV. Direction


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Employee Moral and Satisfaction Morale is a feeling on the part of the employee , of being accepted &

belonging to a group of employees, through adherence to common goals& confidence in the desirability to those goals

IV. Direction


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V. Staffing


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V. Staffing

1.Staffing Definition of Staffing: Staffing is defined as filling positions

in the organization structure through identifying work-

force requirements, inventorying the people available,recruitment, selection, placement, promotion, appraisal,compensation, and training of needed people.


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Staffing

Job Analysis is the systematic study of jobrequirements and the factors that influencethe performance of those job requirements.This is the first step in the staffing processand is designed to identified who is to dowhat, where, when, and how.


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Staffing

According to McCormick(1976) job analysisusually concentrates on :

1.Work Activities2. Performance Standards3. Job-related Tangibles and Intangibles

4. Job Context5. Personal Requirements


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StaffingThe objective of Human Resource Management pro cess is to attract aneffective work force, which requires four basic activities:1. To identify human resource needs by monitoring growth, retirements,and terminations.2. Recruitment activities.3. Selection process.4. Orientation of new employees.


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Staffing

Forecasting HR Supply and DemandRecruitment and Selection

Orientation / InductionTraining and DevelopmentReplacement

Performance AppraisalCompensation and Benefits


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Staffing

Four Cs Model for Human ResourceManagement:

1. Competence2. Commitment3. Congruence

4. Cost-effectiveness


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VI. Controlling


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VI. Controlling

The Control functions essentially insures thatplanned performance is achieved with a

minimum of disorder and disruptions

Types of controlling Feed forward controls Concurrent (prevention) control Feedback controls


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Controlling

The Process of Controli. Establishing Standards: Physical, Technical, Monetary, Managerial,

time standards, Qualitative Standards

ii. Determining Performance standards

iii. Measuring performance: Ways of measuring performance,a. Observationb. Reports both oral and writtenc. Automatic Methodsd. Inspections, tester samples

iv. Comparing performance with standards and analyzing deviations:Comparison between what is and what should be

v. Taking corrective action, if needed


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Controlling

Controlling Key Function Areas Financial Control:

Return on Investment (ROI) ROI = Sales X Profit

Investments Sales Ratio Analysis (RA)

RA simply involves selecting two or more components of a firms financial statement and expressing theirrelationship as a percentage ratio

Profit and loss control Budgets


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Controlling

Controlling Key Function Areas Inventory Control:

Purposes Establish the maximum and minimum amounts of

inventory to have available Keep inventory levels and costs at desired minimum Provide feedback about the movement of inventory and

changes in inventory controls Signal management when items reach or fall below the

minimum (required) level


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Controlling

Controlling Key Function Areas Quality Control:

Activities Involved Setting Standards Inspection Statistical techniques Testing


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VII. Coordination


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VII. Coordination

Major task in the organizing process is that of coordination .

The activities of different departments/units are required to be linked

together to assure the achievement of overall organizational goals and the

attainment of synergy.

This is done through coordination , or the process of linking the activities of

the various departments in the organization.


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CoordinationThe departments in an organization are basically interdependent, as theydepend upon one another for the resources that are required to perform theirrespective tasks.

James Thompson(1967) identified three major forms of interdependence:

1. Pooled,

2. Sequential, and

3. Reciprocal .


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Coordination

Pooled Interdependence : The lowest level of interdependence is called

pooled interdependence. Departments with this low degree of

interdependence tend to operate with little interaction, as the output of

each of the units is pooled at the organizational level.

Sequential Interdependence : When two departments operate in a state of

sequential interdependence, the output of one department becomes the

input for the other in a sequential manner.

Reciprocal Interdependence: The most complex and interrelated level is

reciprocal interdependence, whereby activities flow both ways for both

departments.


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Coordination

Characteristics of Good Co-Ordination Co-Ordination is a continuous process carried on by the managers. Co-ordination should not be made through orders. Co-ordinating activities must respond to time, policies, programs and

objectives. Co-ordinating approach should be balanced and as far as possible it should

be of both the types vertical as well as horizontal. It should be based on personal contact, mutual co-operation, mutual

confidence, good human relations and above all on the continuityprinciples.

It should aim at morale boosting of the workers.


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Coordination

Principles of Co-ordination Principle of Early Beginning The success of co-ordinating activities depends

on the beginning itself. If it has started at an early stage it proves fruitful. Planning isthe beginning of an enterprise. Co-ordination should from this very stage startfunctioning.

Principle of Direct Contact Instead of issuing orders and instructions it isbetter and helpful if the co-ordinating parties meet personally and talk over thematter. This helps in mutual understanding and creates mutual confidence

Principle of Reciproc ity This helps in co-ordinating the efforts of each otherthus help in establishing an effective and harmonious relation between each other.

Principle of Continuity Co-ordination is a continuous process. It goes onrelentlessly from the very beginning.


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VIII. Decision Making


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VIII. DECISION MAKINGDecisions and Decision Making

A decision may be defined as a choice made from available alternatives.

Four decision-making activities:

1. The manager identifies the existence of a problem or an opportunity to improve asituation.

2. The manager generates a set of alternate courses of action.

3. The manager selects one of the alternatives.

4. The manager implements the selected course of action.


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Types Of Decisions

Programmed Decisions : are those that are applied to routine situationsthat have occurred often and for which decision rules and procedureshave been developed and used again and again. These rules are recordedas the organizations standard operating manual / procedures (SOM /

SOP )Non-programmed Decisions: are applied to non-routine situations thatare new and different from situations experienced in the past. There areno standard methods that appear to be appropriate. So manager mustapply judgment, intuition, and creative thinking to the development of

alternatives that are compatible with past operating procedures andorganizational policy.


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Decision Making Environments

Certainty: A state of certainty exists only when the manager knows the available

alternatives as well as the conditions and consequences of those actions.

Risk: A state of risk exists when the manager is aware of all the alternatives, but is

unaware of their consequences.

Uncertainty: Most significant decisions made in todays complex environment are

formulated under a state of uncertainty, where there is an unawareness of all the

alternatives and so also the outcomes even for the known alternatives.

Ambiguity: The most difficult decision situation is the state of ambiguity, in which

the problem to be resolved or the goals to be reached are not clear.


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Models of Decision Making

Classical Model: Is a prescriptive approach that is based on critical

economic assumptions. Traditional management

theory assumed that managers made decisions

to serve the economic interests of the

organisation.

Administrative Model (Simon, 1987):

This model is a normative approach in that it


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When faced with a decision situation, Manager should:

Classical model Administrative modelObtain complete andperfect informationEliminate uncertaintyEvaluate everything rationallyand logically

Use incomplete and imperfectinformationAre constrained by boundedrationalityTend to satisfy

and end up with a decisionthat best serves the interests

of the organisation

and end up with a decisionthat may or may not serve the

interest of the organisation


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Administrative Model of Decision Making

Simons model is based on two concepts: 1) Bounded rationality infers that decision

makers have limits or boundaries on the extentto which they can be rational. The decisionmakers rationality is limited by inherentlyindividualized beliefs, values, attitudes,

education, skills, habits, and unconsciousreflexes. It is also limited by the complexity of the organization and its environments as well

as the amount of information to be processed


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2) Satisficing infers that the decision maker willtend to select the first solution alternative thatsatisfies some minimal set of outcomeexpectations. That is, the manager is not in aposition to sort through all the alternatives insearch of that single course of action that will

maximize the economic returns for theorganization. Instead, the manager willprobably opt for the first solution that appears

to resolve a problem situation, even if better


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The Steps of Rational DecisionMaking

1) Recognize and Define the DecisionSituation

2) Identify Appropriate Alternatives3) Evaluate Each Alternative4) Select the Best Alternative

5) Implement the Selected Alternative6) Evaluate the Results and follow-up


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Behavioural Nature of Decision Making

1) Political Forces and CoalitionsOne of the major behavioral influences in decision making is the existenceof political forcesWithin the organization, a coalition is defined as an informal allianceamong individuals or groups that is designed to achieve some common

objective.2) Intuition

Intuition can be defined as an innate belief about something withoutconscious analysis.

3) Escalation of Commitment

Too often, managers make decisions and then become so committed tothat course of action, that they continue with it long after it becomes quiteobvious that the results are less than successful, or that better alternativesare now available.


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Deciding Who is to Decide

Individual Decisions

Consultative Decisions

Group Decisions


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Quantitative Decision Making Tools

Payoff MatrixPayoff Matrix depicts the probable value of each of the

decision alternatives, by displaying the various outcomes

and the probabilities of their occurrence.Decision Tree

Decision Tree is graphic representation of the sequence of decisions required in determining the expected values of

alternative courses of action.

Queuing ModelsQueuing Models are used by managers to control various sorts

of waiting lines.


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Quantitative Decision Making Tools

Distribution ModelsDistribution Model helps the marketing manager deal with

the problems of product distribution.

Inventory ModelsInventory Model helps the manager determine how much

inventory to maintain.

Game TheoryGame Theory is a technique for the application of computers

to the measurement of outcome under a variety of contingencies.

principles of management 3

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