principles of management or vbm

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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 bycustomers 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, poorprocesses 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 bycustomers (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 firms

employees (such as getting a haircut or eating at a restaurant ). The nature of these interactions

strongly influences the customers perceptions of service quality. Customers will often judge

the quality of the service they receive based on their assessment of the people providing thatservice. They may also make judgments about other customers they encounter. Successful


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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 effectivecommunications. 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 firms 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

Taylors 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


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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 modelwas 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..

Taylors 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 days 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.


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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.


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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.

Taylors 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 Taylors

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 days

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 companys 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


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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, 1916He 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. Althoughthere is little evidence that management scholars, either in England or in the United States, paid

much heed to Fayols 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 Greers translation of one of Fayols 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


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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.


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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 organizingfunction manager determine which tasks are to be done.


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Leading

Leading is the management function that involves influencing others to engage in the work

behaviors necessary to reach organizational goals. Leading includes communicating withothers, 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 thenecessary regulating, managers need to monitor ongoing activities.

Key management 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 managers ability to work well with others, both as a

member of a group and as a leader who gets things done through other.


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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.

Job Types 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 amongmanagers 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 atthe interface between management and the rest of the work force.


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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 managersthan 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 monitoringactivities 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 mostimportant 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. Whirlpools 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 managementrequire strong human skills because they all must getthings done through people. Ironically, promotions to

first-level management are often based on individualsgood technical skills, with little consideration given to


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entrepreneurial role varies in some important way depending on a managers 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 usuallyindividuals 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 strongbacking 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 orhave a particular stake in the status quo. An ORCHESTRATOR maintains the balance of


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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 ofthe 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 ontop of market development for specific products. Such as cookies or margarine.


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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 ODonnell

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 SteinerPlaning 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.


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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

companys 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.


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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


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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 aPEST 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.

2.

3.

4 .

5.

.

1.

2.

3.

4 .

5

.

Opportunities Threats


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1.

2.

3.

4 .

5

.

1.

2.

3.

4 .

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 itsdevelopment of a strategic plan to use them to its advantage.


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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


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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.


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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.


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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 greaterresponsibilities . It involves higher status and an increase in salary.


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[+/-

]

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 skilledpeople, who have produced excellent work in the past. Once a leader has established that his


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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 persons 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.


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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

Line and Staff 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 ofgiving advise and council.

Functional Authority:

Right to control processes , policies or other matters in departments ,other than a persons own .

Functional authority is a small slice of a line managers authority and should be used sparingly.

Delegation of Authority


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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 authoritydelegation 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 inwhich individuals working together in groups efficiently accomplishesselected 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.


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Technical Skills

Knowledge and proficiency in avidities involving method, process and

procedures for Example, mechanics work with tools and their supervisorsshould 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 whichpeople create of an environment in which people feel secure and free toexpress their opinion.

Conceptual Skills

Ability to see the big picture to recognize significant element in asituation and to understand the relationship among the elements.

Design Skills

Ability to solve problem in ways that will benefit the enterprise managersare not merely problem watchers they work out practical solution to theirproblems.

Evolution of management thought.

Development of thought on management dates back to the days whenpeople 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


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the age of 45 and spent the remaining 14 years of his life as anunpaid consultant and promoting his ideas on scientific management.

3. Taylors major lancer was efficiency in production mode only to lowercosts and raise profits but also to increase pay for workers throughtheir higher productivity.

Taylors Principles.

A careful study of time and motion under lines his famous work. Principlesof scientific Management: various pay plans based on out put were used toincrease the surplus to make sure that workers who produced were paidaccording to their productivity. Taylor emphasized the importance of carefuladvance planning by managers and the responsibility of managers todesign 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 harmoniouscooperation; he developed graphic method of describing plant andimproving managerial control the famous Gantt chart.

Frank and Lillian GillBreth.

1. Frank was a bricklayer became the chief superident of a buildingcontractor and the formed his own building contracting firm.

2. He reduced the number of bricklaying motions from 18 to 5 anddoubled a bricklayers productivity. He became a famous consultantof improvement of human productivity.

3. Lillian was an industrial psychologist and great helped frank in hisconsultancy. After her husbands death, she carried on hisconsultancy 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 6groups.

1. Technical (Production)

2. Commercial (Buying, Selling and exchanging)3. Financial (Search for and optimum use of capital.)


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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 influencemanagement thought industrial psychology: Hugo Munesterbergsobjectives were to discover.

2. How to find people whose mental qualities best fit them for the workthey 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)


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[+/-

] Hawthorne Effect

Elton Mayo and his researchers saw that shortening workdays. Modifyingrest periods changing illuminations for the test group and varying incentivepay system did not explain changes in productivity. They found thatimprovement in productivity was due to such social factors as moralesatisfactory interrelationships between members of a work group (A senseof belonging) and effective management that understands humanbehavior and uses interpersonal skills as motivating, counseling, Leadingand communicating. This phenomenon of noticing people is called thehawthorn Effect. Recent contributors to management thought.

1. Peter F.Drucker.2. W.Edwards Deming.3. Lanrence Peter.4. William Ouchi.5. T.Peters & R. Waterman.

[+/-] Approaches to Management Analysis

The managerial roles approach. Professor Mintzberg of McGill Universityobserved what managers actually do to determine what managerialactivities (or roles) are.

MCKINSEYS 7-S Approach. The seven Ss 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.


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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


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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 thefield 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 Role2. Planning Difficulties3. Demand of Capital

4. business and individual in with5. Accounting Problem


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6. Time & risk management7. Cash flowv/s earning8. The capital market9. Primary & Secondary market

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

NEED THEORY OF MOTIVATION / MASLOWS THEORY OF NEEDS

MOTIVATION: Motivation as the processes that account for an individuals intensity,

direction and persistence of effort toward attaining a goal. Finally motivation has a persistencedimension. 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.

HIERARCHY OF NEEDS THEORY

Its probably safe to say that the most well known theory of motivation is Abraham Maslows

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.


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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


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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.

principles of management or vbm

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