principles of management trimester i.doc

8/10/2019 PRINCIPLES OF MANAGEMENT TRIMESTER I.doc

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GOAL INPUTS OFCLAIMANTS. Employees .Governments

. Consumers .

INPUTS1. HUMAN. CAPITAL!. MANAGE"IAL

#. TECHNOLOGIC

M$n$%eri$l &no'le(%e) %o$ls o*

+l$im$nts) $n( use o* inputs

,P$rt I -Te /$sis o* M$n$%ement

Teory $n( S+ien+e0

PLANNING,P$rt 0

CONT"OLLING,P$rt 0

O"GANI2ING,P$rt !0

STAFFING,P$rt #0

LEA3ING,P$rt 40

TO P"O3UCE OUTPUTS

OUTPUTSPRODUCTS SATISFACTIONSERVICES GOALINTEGRATIONPROFITS OTHER

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Opportun

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S8STEMS APP"OACH TO MANAGEMENT


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Assi)n'ent

1. LEADERSHIP2. 9PR. 9USINESS 5 SOCIET:; ETHICS; CSR


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CHAPTE" I- MANAGEMENT 7 SCIENCE) THEO"8 AN3 P"ACTICE

>RO3E ? Resu#ts on#& +or( en-iron'en


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1st Century 7Te"!no#o)&; G#o%a#i*ation; Entrepreneurs!ip

C$r$+teristi+ o* e5+ellent $n( most $(mire( +omp$nies

1. A"tion oriente$

2. A+are o6 "usto'er nee$s. Pro'ote$ 'ana)eria# autono'& an$ entrepreneurs!ip


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3e


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EME"GENCE OF MANAGEMENT THOUGHT

1. 2.3. #a%lor -4!rt of knowing what %ou want to do and then seeing that it is done the best and cheape

wa%5.

6. &enr% 2a%ol 74#o 8anage is to forecast to plan to organise to command to co-ordinate and to

control5.

9. Peter 2.rucker 758anagement is work and as such it has its own skills its own tools and its own

techniues5.


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Dieren"e %et+een ana)e'ent an$ A$'inistration

MANAGEMENT AM!N!"T#AT!$N

Ai' E,e"utin) t!e o%Je"ti-es$eter'ine$ %& a$'inistration

!im: etermine the objectives and

policies of a business enterprise

2unction of industr% concerned- in the eecution of polic%

- within the limits setup b%

administration

liver "heldon2unction of industr% concerned-

- with determination of corporate polic%

- co-ordination of finance productionand distributionunder the control of

the eecutive

2lorence


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M$n$%ement levels in $n or%$ni>$tion

1. #op 8anagement 7

Planning formulation of polic% resource mobilization co-ordination motivation of personnel

evaluation.

6. 8iddle 8anagement 7

2ormulation of policies to a lesser etent eecution of activities - co-ordination motivation

supervision monitoring and planning control.

9. (ower 8anagement 7

"upervision and control of da% to da% activities including administrative procedures.


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M$n$%eri$l s&ills $n( or%$ni>$tion$l ier$r+y

Four (in$s o6 s(i##s 6or a$'inistrators

1. Te"!ni"a# s(i##s ? skills that reflect both an understanding of and a proficiency in a specialized field. Technicalskills include knowledge of and proficiency in a certain specialized field, such as engineering, computers,

accounting, or manufacturing. These skills are more important at lower levels (supervisory) of management since

these managers are dealing directly with employees doing the organizations work.

. Hu'an s(i##s ? associated with a managers ability to work well with others both as a member of a group anda leader who gets things done through others. !ecause managers deal directly with people, this skill is crucial"

#anagers with good human skills are able to get the best out of their people. They know how to communicate,

motivate, lead, and inspire enthusiasm and trust. These skills are e$ually important at all levels of management.

%. Con"eptua# s(i##s = skills related to the ability to visualize the organization as a whole, discerninterrelationships among organizational parts, and understand how the organization fit into the wider conte&t of t

industry, community, and world. 'onceptual skills are the skills that allow managers to o%tain; interpret an$app#& in6or'ationand ability to think and to conceptualize about abstract and comple& situations. sing thesskills, managers must be able to see the organization as a whole, understand the relationships among various

submits, and visualize how the organization fits into its broader environment.

. Desi)n s(i##s = to so#-e pro%#e's in +a&s t!at +i## %enet t!e enterprise

At t!e top 'ana)e'ent #e-e#; "on"eptua# an$ $esi)n a%i#ities an$ !u'an s(i##s are -a#ua%#

+it! #itt#e nee$ 6or te"!ni"a# a%i#ities.

At t!e 'i$$#e 'ana)e'ent #e-e#; t!e nee$ 6or te"!ni"a# s(i##s $e"reases; !u'an s(i##s are

sti## essentia#; +!i#e "on"eptua# s(i##s )ain in i'portan"e.

Ot!er s(i##s

*. A$'inistrati-e s(i##s = a%i#it& to p#an; or)ani*e an$ "oor$inate a"ti-ities+. Po#iti"a# s(i##s = a%i#it& to un$erstan$ !o+ t!in)s )et $one outsi$e o6 6or'a# "!anne#s. E'otiona# inte##i)en"e = a%i#it& to inte##i)ent#& use &our e'otions

Time spent on m$n$%eri$l *un+tions $t (ierent or%$ni>$tion$l levels

Top #e-e# 'ana)ers spen$ 'ore ti'e on p#annin) an$ or)ani*in) t!an $o t!e #o+er #e-e#

'ana)ers. Lea$in) is 'ore 6or rst #e-e# super-isors; an$ ti'e spent on "ontro##in) -aries

s#i)!t#& 6or 'ana)ers at -arious #e-e#s


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APP"OACHES TO MANAGEMENT

EPIRICAL OR CASE APPROACH-n this approach, one tries to understand

management principles with the help of cases.-t also identifies the situations, whereinorganizations have either succeeded or failed

by following this approach.

INTK9ERGS TEN ANAGERIAL ROLES

APPROACHoles are separated into three subcategories/-) -nterpersonal contact (1, , %)--) -nformation processing (, *, +)---) 0ecision making (12)

1. 3-456570/ the manager performs ceremonialand symbolic duties as head of the organisation8

. 95705/ fosters a proper work atmosphere andmotivates and develops subordinates8

%. 9-7:-;


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CONTINGENC: OR SITUATIONALAPPROACH

-n this approach, the main assumption is that

there is no hard and fast rule for all situations.

#anagerial practice depends uponcircumstances. 0ifferent circumstances maynecessitate the use of different methods.

ATHEATICAL OR MANAGEENTSCIENCEAPPROACH

This approach treats management as a logical

process, which can be e&pressed in terms ofmathematical symbols and relationships.

DECISION THEOR: APPROACH

3ocus on the making of decisions, persons orgroups making decisions, and the decisionmaking process.

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THEOR:

Pro"ess o6

$e"ision

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a"ti-it&

In$i-i$ua#

$e"ision

'a(in

Va#ues

o6

$e"ision

Nature o6

or)ani*ation

stru"tureIn6or'ation

6or $e"ision

'a(in

Group

$e"ision

'a(in


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REENGINEERING APPROACH

T!e 6un$a'enta# ret!in(in) an$ ra$i"a#re$esi)n o6 %usiness pro"esses to a"!ie-e$ra'ati" i'pro-e'ents in "riti"a#

"onte'porar& 'o$ern 'easures o6per6or'an"e; su"! as "ost; 8ua#it&;ser-i"e; an$ spee$. It en"o'passes t!een-isionin) o6 ne+ +or( strate)ies; t!ea"tua# pro"ess $esi)n a"ti-it&; an$ t!ei'p#e'entation o6 t!e "!an)e in a## its"o'p#e, te"!no#o)i"a#; !u'an; an$or)ani*ationa# $i'ensions.

SOCIOTECHNICAL S:STES APPROACH

Technical system has great effect on socialsystem (personal attitudes, group behavior).3ocus on production, office operations, and

other areas with close relationships between

technical system and people.


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GROUP 9EHAVIOUR APPROACH

5mphasis on behavior of people in groups.

!ased on sociology and social psychology.=rimarily study of group behavior patterns.

The study of large groups is often calledA;rganization behaviorB.

INTERPERSONAL 9EHAVIOUR APPROACH

3ocus on interpersonal behavior, human

relations, leadership, and motivation. !asedon individual psychology.

CINSE:S B?S FRAE3OR

The seven :s are (1) :trategy, () :tructure,

(%) :ystems, () :tyle, (*) :taff, (+) :haredvalues, () :kills.


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TOTAL UALIT: ANAGEENT APPROACH

#otal ualit% management is a managementapproach centred on ualit% based on the

participation of an organisation=s people andaiming at long term success >I" ?@A6:1BB@C.#his is achieved through customer satisfaction

and benefits all members of the organisation and

societ%.

In other words #D8 is a philosoph% formanaging an organisation in a wa% which

enables it to meet stakeholder needs and

epectations efficientl% and effectivel% without

compromising ethical values.

ANAGEENT PROCESS OR OPERATIONALAPPROACH

0raws together concepts, principles,

techni$ues, and knowledge from other fieldsand managerial approaches. The attempt is to

develop science and theory with practicalapplication. 0istinguishes between

managerial and nonmanagerial knowledge.

0evelops classification system built aroundthe managerial functions of planning,

organizing, staffing, leading, and controlling.

S8STEMS APP"OACH TO MANAGEMENT P"OCESS


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INPUT OUTPUT ODEL


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CHAPTE" #- ESSENTIALS OF PLANNING AN3 MANAGING /8 O/DECTI:ES

P#annin)

Se#e"tin) 'issions an$ o%Je"ti-es as +e## as t!e a"tions to a"!ie-e t!e'; +!i"! re8uires$e"ision 'a(in) "!oosin) a "ourse o6 a"tion 6ro' a'on) a#ternati-es.

P#ans pro-i$e a rationa# approa"! to a"!ie-in) pre?se#e"te$ o%Je"ti-es.

A#so i'p#ies 'ana)eria# inno-ation.

P#annin) %ri$)es t!e )ap 6ro' +!ere +e are to +!ere +e +ant to )o.

PLANNING AN3 CONT"OLLING A"E INSEPE"A/LE.


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T8PE OF PLANS1. issions or purposes2. O%Je"ti-es o6 )oa#s. Strate)ies


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I$enties t!e %asi" purpose or 6un"tion o6 tas(s o6 an enterprise or a)en"& or an& part oit.

O6e+tives o* %o$ls

T!e en$s to+ar$ +!i"! a"ti-it& is ai'e$.

Str$te%iesT!e $eter'ination o6 t!e %asi" #on)?ter' o%Je"ti-es o6 an enterprise an$ t!e a$option o"ourses o6 a"tion an$ a##o"ation o6 resour"es ne"essar& to a"!ie-e t!ese )oa#s.

Poli+ies

Genera# state'ents or un$erstan$in)s t!at )ui$e or "!anne# t!in(in) in $e"ision'a(in).Po#i"ies $ene an area +it!in +!i"! a $e"ision is to %e 'a$e an$ ensure t!at t!$e"ision +i## %e "onsistent +it!; an$ "ontri%ute to an o%Je"ti-e.Po#i"ies !e#p $e"i$e issue%e6ore t!e& %e"o'e pro%#e's; 'a(e it unne"essar& to ana#&*e t!e sa'e situation e-er&ti'e it "o'es up an$ uni6& ot!er p#ans; t!us per'ittin) 'ana)ers to $e#e)ate aut!orit&an$ sti## 'aintain "ontro# o-er +!at t!eir su%or$inates $o.Mark areas in whichmanagers can use their discretion.

Pro+e(ures

P#ans t!at esta%#is! a re8uire$ 'et!o$ o6 !an$#in) 6uture a"ti-ities.T!e& are "!rono#o)ise8uen"es o6 re8uire$ a"tions.T!e& are )ui$es to a"tion; rat!er t!an to t!in(in); an$ t!$etai# t!e e,a"t 'anner in +!i"! "ertain a"ti-ities 'ust %e a""o'p#is!e$.

"ules

Spe## out spe"i" re8uire$ a"tions or non?a"tions; a##o+in) no $is"retion.It ree"ts a'ana)e'ent $e"ision t!at a "ertain a"tion 'ust or 'ust not %e ta(en.Rules allow nodiscretion in their application.

Pro%r$msA "o'p#e, o6 )oa#s; po#i"ies; pro"e$ures; ru#es; tas( assi)n'ents; steps to %e ta(en;resour"es to %e e'p#o&e$ an$ ot!er e#e'ents ne"essar& to "arr& out a )i-en "ourse o6a"tion. T!e& are or$inari#& supporte$ %& %u$)ets.

/u(%ets

A state'ent o6 e,pe"te$ resu#ts e,presse$ in nu'eri"a# ter's.It 'a& %e "a##e$ a8uantie$ p#an. A %u$)et is t!e 6un$a'enta# p#annin) instru'ent in 'an& "o'panies9u$)et 6or"es a "o'pan& to 'a(e in a$-an"e; a nu'eri"a# "o'pi#ation o6 e,pe"te$ "aso+; e,penses an$ re-enues; "apita# out#a&s; or #a%or or 'a"!ine?!our uti#i*ation.


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MANAGEMENT /8 O/DECTI:ES

A "o'pre!ensi-e 'ana)eria# s&ste' t!at inte)rates 'an& (e& 'ana)eria# a"ti-ities in a

s&ste'ati" 'anner an$ is "ons"ious#& $ire"te$ to+ar$s t!e ee"ti-e an$ e"ient

a"!ie-e'ent o6 or)ani*ationa# an$ in$i-i$ua# o%Je"ti-es.

O/DECTI:ES- SART Spe"i"; easura%#e; Appropriate; Rea#isti"; Ti'e 9oun$

O%Je"ti-es or )oa#s are t!e en$s to+ar$s +!i"! an a"ti-it& is ai'e$.

O%Je"ti-es "an %e

Lon)?ter' or s!ort?ter' 9roa$ or spe"i" Veria%#e or non?-eria%#e


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THE M/O P"OCESS

9ENEFITS OF 9O LIITATIONS OF 9O

Resu#ts oriente$ p#annin). I'pro-e'ent o6 'ana)in). C#arit& o6 or)ani*ationa# ro#es an$

stru"tures as +e## as $e#e)ation o6aut!orit& a""or$in) to resu#ts. e,pe"te$o6 t!e peop#e o""up&in) t!e ro#es.

En"oura)e'ent o6 "o''it'ent topersona# an$ or)ani*ationa# )oa#s.

De-e#op'ent o6 ee"ti-e "ontro#s t!at'easure resu#ts an$ #ea$ to "orre"ti-ea"tions.

Personne# Satis6a"tion.

Fai#ure o6 tea"! an$ app#& t!e p!i#osop!o6 9O.

Fai#ure to )i-e )ui$e#ines to )oa# setters Di"u#t& in settin) -eria%#e 5 reasona

)oa#s. E'p!asis on s!ort?ter' )oa#s at t!e

e,pense o6 t!e #on)er?ran)e !ea#t! o6 t!or)ani*ation.

Ine,i%i#it&. Ot!er Dan)ers su"! as o-eruse o6

8uantitati-e )oa#s.


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Step 2 For ea"! o6 t!e -a#ues &ou 'ar(e$ +it! an A in P!ase I; #ist an$ or)ani*e t!e' into

)roups o6 si'i#ar or re#ate$ +or$s. :ou s!ou#$ !a-e %et+een an$ 1 )roups. A -a#ue 'a&

appear in 'ore t!an one )roup.

Step On"e )roupe$; i$enti6& t!e o-erar"!in) t!e'e o6 t!e )roup


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ST"ATEGIC PLANNING P"OCESS MO3EL


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HIE"A"CH8 OF ST"ATEG8 FO"MULATION

Corporate Level Strategy:

Con"erne$ +it! %roa$ $e"isions a%out t!e tota# or)ani*ationYs s"ope an$ $ire"tion.

Consi$er +!at "!an)es s!ou#$ %e 'a$e in our )ro+t! o%Je"ti-e an$ strate)& 6or a"!ie-in)

t!e #ines o6 %usiness +e are in; an$ !o+ t!ese #ines o6 %usiness t to)et!er.

T!ree "o'ponents o6 "orporate #e-e# strate)&

a )ro+t! or $ire"tiona# strate)& +!at s!ou#$ %e our )ro+t! o%Je"ti-e; ran)in) 6ro'

retren"!'ent t!rou)! sta%i#it& to -ar&in) $e)rees o6 )ro+t! ? an$ !o+ $o +e a""o'p#is!

t!is

Gro+t! o6 "o'pan& "an %e a"!ie-e$ t!rou)! ERGER; ACUISITION; TAEOVER; 4OINTVENTURES

I Gro+t! strate)iesa) Concentration +it!in e,istin) in$ustries % Diversifcationinto ot!er #ines o6 %usiness

or in$ustries.vertical integration horizontal growth relatedor "on"entri"

$i-ersi"ationunrelated"on)#o'erate$i-ersi"ation

II Sta%i#it& Strate)iesa Pause an$ T!en Pro"ee$ % No C!an)e " Gra% Prots 3!i#e :ou Ca


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III Retren"!'ent Strate)iesa Turnaroun$ % Capti-e Co'pan&

Strate)&" Se## Out $ Li8ui$ation

% port6o#io strate)& +!at s!ou#$ %e our port6o#io o6 #ines o6 %usiness; +!i"! i'p#i"it#&

re8uires re"onsi$erin) !o+ 'u"! "on"entration or $i-ersi"ation +e s!ou#$ !a-e

i? 9CG Growth-Share Matrix model"onsi$ers t+o re#ati-e#& si'p#e -aria%#es )ro+t! rate o

t!e in$ustr& as an in$i"ation o6 in$ustr& attra"ti-eness; an$ re#ati-e 'ar(et s!are as an

in$i"ation o6 its re#ati-e "o'petiti-e stren)t!.

ii? T!e GE Business Screen; a#so asso"iate$ +it! "inse&; "onsi$ers t+o "o'posite

-aria%#es; +!i"! "an %e "usto'i*e$ %& t!e user; 6or a in$ustr& attra"ti-eness e.); one

"ou#$ in"#u$e in$ustr& si*e an$ )ro+t! rate; prota%i#it&; pri"in) pra"ti"es; 6a-ore$ treat'e

in )o-ern'ent $ea#in)s; et". an$ % "o'petiti-e stren)t! e.).; 'ar(et s!are; te"!no#o)i"

position; prota%i#it&; si*e; et".

" parentin) strate)& !o+ +e a##o"ate resour"es an$ 'ana)e "apa%i#ities an$ a"ti-ities

a"ross t!e port6o#io ?? +!ere $o +e put spe"ia# e'p!asis; an$ !o+ 'u"! $o +e inte)rate o

-arious #ines o6 %usiness. It in"#u$es e-a#uatin) an$ 'a(in) $e"isions on t!e 6o##o+in)

> Priorities in a##o"atin) resour"es +!i"! %usiness units +i## %e stresse$

> 3!at are "riti"a# su""ess 6a"tors in ea"! %usiness unit; an$ !o+ "an t!e "o'pan& $o

+e## on t!e'

> Coor$ination o6 a"ti-ities e.).; !ori*onta# strate)ies an$ trans6er o6 "apa%i#ities a'on

%usiness units

> Ho+ 'u"! inte)ration o6 %usiness units is $esira%#e.

Corporate strate)& in-o#-es 6our (in$s o6 initiati-es

i. a(in) t!e ne"essar& 'o-es to esta%#is! positions in $ierent %usinesses an$ a"!ie-e appropriatea'ount an$ (in$ o6 $i-ersi"ation. A (e& part o6 "orporate strate)& is 'a(in) $e"isionson !o+ 'an&; +!at t&pes; an$ +!i"! spe"i" #ines o6 %usiness t!e "o'pan& s!ou#$ %e

T!is 'a& in-o#-e $e"i$in) to in"rease or $e"rease t!e a'ount an$ %rea$t! o6$i-ersi"ation. It 'a& in-o#-e "#osin) out so'e LO9Ys #ines o6 %usiness; a$$in) ot!ersan$/or "!an)in) e'p!asis a'on) LO9Ys.

ii. Initiatin) a"tions to %oost t!e "o'%ine$ per6or'an"e o6 t!e %usinesses t!e "o'pan& !a$i-ersie$ into T!is 'a& in-o#-e -i)orous#& pursuin) rapi$?)ro+t! strate)ies in t!e 'opro'isin) LO9Ys; (eepin) t!e ot!er "ore %usinesses !ea#t!&; initiatin) turnaroun$ eortin +ea(?per6or'in) LO9Ys +it! pro'ise; an$ $roppin) LO9Ys t!at are no #on)er attra"ti-or $onYt t into t!e "orporationYs o-era## p#ans. It a#so 'a& in-o#-e supp#&in) nan"ia#;'ana)eria#; an$ ot!er resour"es; or a"8uirin) an$/or 'er)in) ot!er "o'panies +it! ane,istin) LO9.


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iii. Pursuin) +a&s to "apture -a#ua%#e "ross?%usiness strate)i" ts an$ turn t!e' into"o'petiti-e a$-anta)es espe"ia##& trans6errin) an$ s!arin) re#ate$ te"!no#o)&;pro"ure'ent #e-era)e; operatin) 6a"i#ities; $istri%ution "!anne#s; an$/or "usto'ers.

i-. Esta%#is!in) in-est'ent priorities an$ 'o-in) 'ore "orporate resour"es into t!e 'ost

attra"ti-e LO9Ys.


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Competitive Strategy (often called Business Level Strategy): T!is in-o#-es $e"i$in

!o+ t!e "o'pan& +i## "o'pete +it!in ea"! #ine o6 %usiness LO9 or strate)i" %usiness uni

S9U.

- Competitive str$te%y is $6out 6ein% (ierent. It me$ns (eli6er$tely +oosin%

to per*orm $+tivities (ierently or to per*orm (ierent $+tivities t$n riv$ls to

(eliver $ uni;ue mi5 o* v$lue.i"!ae# E. Porter

- Te essen+e o* str$te%y lies in +re$tin% tomorro's +ompetitive $(v$nt$%es

*$ster t$n +ompetitors mimi+ te ones you possess to($y. Gar& Ha'e# 5 C. .

Pra!a#a$

orter!s "our Generic Com#etitive Strategies

A %usiness nee$s to 'a(e t+o 6un$a'enta# $e"isions in esta%#is!in) its "o'petiti-ea$-anta)e a +!et!er to "o'pete pri'ari#& on pri"e !e sa&s Q"ost;Q +!i"! is ne"essar&

sustain "o'petiti-e pri"es; %ut pri"e is +!at t!e "usto'er respon$s to or to "o'pete

t!rou)! pro-i$in) so'e $istin"ti-e points o6 $ierentiation t!at Justi6& !i)!er pri"es; an$ %

!o+ %roa$ a 'ar(et tar)et it +i## ai' at its "o'petiti-e s"ope.

i O-era## Pri"e Cost Lea$ers!ipii Dierentiationiii Pri"e Cost Fo"usi- Dierentiation Fo"us- 9est?Cost Pro-i$er Strate)& not one o6 Porters 6our strate)ies; %ut +ritten %& ot!ers


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unctional Strategy: T!ese 'ore #o"a#i*e$ an$ s!orter?!ori*on strate)ies $ea# +it! !o+

ea"! 6un"tiona# area an$ unit +i## "arr& out its 6un"tiona# a"ti-ities to %e ee"ti-e an$

'a,i'i*e resour"e pro$u"ti-it&.

Fun"tiona# strate)ies are re#ati-e#& s!ort?ter' a"ti-ities t!at ea"! 6un"tiona# area +it!in a

"o'pan& +i## "arr& out to i'p#e'ent t!e %roa$er; #on)er?ter' "orporate #e-e# an$ %usiness

#e-e# strate)ies. Ea"! 6un"tiona# area !as a nu'%er o6 strate)& "!oi"es; t!at intera"t +it!an$ 'ust %e "onsistent +it! t!e o-era## "o'pan& strate)ies.

T!ree %asi" "!ara"teristi"s $istin)uis! 6un"tiona# strate)ies 6ro' "orporate #e-e# an$

%usiness #e-e# strate)ies

- s!orter ti'e !ori*on- )reater spe"i"it&- pri'ar& in-o#-e'ent o6 operatin) 'ana)ers.


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0 FOU" ALTE"NATI:E ST"ATEGIES OF TOBS MAT"I9

Ti'e Di'ension an$ TO3S atri,


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0 /USINESS PO"TFOLIO MAT"I9 = /OSTON CONSULTING G"OUP ,/CG0 MAT"I9


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CHAPTE" - 3ECISION MAING

De"ision 'a(in) $ene$ as t!e se#e"tion o6 a "ourse o6 a"tion 6ro' a'on) a#ternati-es.

- Pro)ra''e$ Vs Non pro)ra''e$ $e"isions- De"ision 'a(in) un$er "ertaint&; un"ertaint& an$ ris(

3e+ision m$&in% pro+ess

1. Pre'isin)2. I$enti6&in) a#ternati-es an$ #i'itin) 6a"tors. E-a#uatin) a#ternati-es in ter's o6 t!e )oa# sou)!t

a. uantitati-e an$ 8ua#itati-e 6a"tors%. ar)ina# ana#&sis". Cost?ee"ti-e ana#&sis


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C"EATI:IT8 AN3 INNO:ATION

CREATIVIT:

T!e a%i#it& an$ po+er to $e-e#op ne+ i$eas.

INNOVATION

The process of translating an idea or invention into a good or service that creates value or for which

customers will pay.

Cre$tive pro+ess

1. Un"ons"ious s"annin)2. Intuition. Insi)!t


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CHAPTE" J- O"GANI2ING) ENT"EP"ENEU"ING AN3 "EENGINEE"ING


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INT"AP"ENEU"

A person +!o 6o"uses on inno-ation an$ "reati-it& an$ +!o trans6or's a $rea' or an i$ea

into a prota%#e -enture %& operatin) +it!in an esta%#is!e$ or)ani*ationa# en-iron'ent.

ENT"EP"ENEU"

A person +!o $oes si'i#ar t!in)s as t!e entrepreneur %ut outsi$e t!e or)ani*ationa# settin


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"een%ineerin%

Fun$a'enta# ret!in(in) 5 ra$i"a# re$esi)n o6 %usiness pro"esses to a"!ie-e $ra'ati"i'pro-e'ents in "riti"a# "onte'porar& 'easures o6 per6or'an"e; su"! as "ost; 8ua#it&;

ser-i"e; an$ spee$.


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CHAPTE" K- O"GANI2ATION ST"UCTU"E = 3EPA"TMENTATION

CLASSIFICATION-

- 9& enterprise 6un"tion- 9& territor& or )eo)rap!&- 9& "usto'er )roup- 9& pro$u"t- atri, or )ri$ or)ani*ation or proJe"t or pro$u"t 'ana)e'ent- Strate)i" %usiness units


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CHAPTE" 1K- S8STEM AN3 P"OCESS OF CONT"OLLING

Contro##in) is t!e 'easure'ent an$ "orre"tion o6 per6or'an"e in or$er to 'a(e sure t!at

enterprise o%Je"ti-es an$ t!e p#ans $e-ise$ to attain t!e' are %ein) a""o'p#is!e$.

ana)e'ent Contro# is t!e pro"ess oriente$ to -eri6&

? t!e a$-an"e'ent status o6 t!e p#anne$ o%Je"ti-es

? t!e e"a"& an$ e"ien"& o6 t!e or)ani*ation t!rou)! t!e ana#&sis o6 t!e resour"es; "osts

an$ pro"ee$s.

/$si+ +ontrol pro+ess

Deter'inin) areas to "ontro#

Esta%#is!in) stan$ar$s

easurin) an$ "o'pare a"tua# per6or'an"e a)ainst stan$ar$s

Conne"tin) -ariations 6ro' stan$ar$s an$ p#ans

Re+ar$in) )oo$ per6or'an"e

Ta(in) "orre"ti-e a"tion +!en ne"essar&

A$Justin) stan$ar$s +!en ne"essar&

C"ITICAL CONT"OL POINTS) STAN3A"3S AN3 /ENCHMA"ING

Ee"ti-e "ontro# re8uires attention to 6a"tors "riti"a# to e-a#uatin) per6or'an"e a)ainstp#ans.

Types o* +riti+$l point st$n($r(s

1. Physical Standards: Physical standards are nonmonetary measurements and are common at the operati

level, where materials are used, labor is employee, services are rendered, and goods are produced. The

may reflect quantities, such as labor-hours per unit of output, sounds of fuel per horsepower per hour, to

miles of freight traffic carried, units of production per machine-hour, or feet of wise per ton of copper,

closeness of tolerances, rate of climb of an airplane, durability of a fabric, or fastness of color.

. !ost Standards: !ost standards are monetary measurements and li"e physical standards, are common a

the operating level. The attach monetary values to specific aspects of operations. #llustrative of cost

standards are such widely used measures as direct and indirect costs per unit or per hour, material cost

unit, machine-hour costs, cost per seat-mile, selling cost per dollar unit of sales, and cost per foot of oil w

drilled.


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$. !apital Standards: There are a variety of capital standards, all arising from the application of monetary

measurements to physical items. They have to do with the capital invested in the firm rather than with

operating costs and are therefore primarily related to the balance sheet rather than to the income

statement. Perhaps the most widely used standard for new investment, as well as for overall control, is

return on investment. The typical balance sheet will disclose other capital standards, such as the ratios o

current assets to current liabilities, debt to het worth, fi%ed investment to total investment, cash andreceivables to payables, and bonds to stoc"s, as well as the si&e and turnover of inventories.

'. (evenue Standards: (evenue standards arise from attaching monetary values to sales. They may includ

such as revenue per bus passenger-mile, average sales per customer, and sales per capital in a given

mar"et area.

). Program Standards: * manager may be assigned to install a variable budget program, a program for

formally following the development of new products, or a program for improving the quality of a sales forc

*lthough some sub+ective +udgment may have to be applied in appraising program performance, timing a

other factors can be used as ob+ective standards.

. #ntangible Standards: ore difficult to set are standards not e%pressed in either physical or monetary

measurements. hat standard can a manager use for determining the competence of the divisional

purchasing agent or the personnel director/ hat can one use for determining whether the advertising

program is successful/ *re supervisors loyal to the company0s ob+ectives/ *re the office staff alert/ Such

questions show the difficulty of establishing standards or goals for clear quantitative or qualitative

measurement.

. 2oals as Standards: ith the present tendency for better-managed enterprises to establish an entire

networ" of verifiable or quantitative goals at every level of management, the use of intangible standards,

while still important, is diminishing. #n comple% program operations, as well as in the performance of

mangers themselves, modern managers are finding that through research and thin"ing it is possible to

define goals that can be used as performance standards. hile the quantitative goals are li"ely to ta"e th

form of the standards outlined above, the definition of qualitative goals represents an important

development in the area of standards. 3or e%ample, if the program of a district sales office is spelled out

include such elements as training sales people in accordance with a plan with specific characteristics, th

plan and its characteristics themselves furnish standards that tend to become ob+ective and therefore

4tangible.4

5. Strategic Plans as !ontrol Points for Strategic !ontrol: Strategic control requires systematic monitoring a

strategic control points and modifying the organi&ation0s strategy based on this evaluation. *s pointed ou

earlier, planning and controlling are closely related. Therefore, strategic plans require strategic control.

oreover, since control facilitates comparison of intended goals with actual performance, it also provides

opportunities for learning, which in turn is the basis for organi&ational change. 3inally, through the use of

strategic control, one gains insights not only about organi&ational performance but also about the ever-

changing environment.

Benchmarking

-s the practice of identifying, understanding, and adapting the successful business practices and processes use

by other companies (or even other departments within the same company) to increase your own business

success. -t is a business strategy that is used by manufacturers and serviceoriented companies alike.


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!enchmarking is most often implemented by e&amining other organizations within the same industry.

Types/1. 4eneric benchmarking !enchmarking relies on the study of general business practices that are not indust

specific

. 3unctional benchmarking study of specific business or manufacturing functions%. -ndustry benchmarking study of general industry characteristics. Tactical benchmarking study of strategies in general*. =erformance benchmarking study of numerical characteristics of specific products or processes

Feedback systems/ measure outputs of a process and feed into the system or the inputs of the system

corrective actions to obtain desired outputs.

FEEDBACK LOOP OF MANAGEMENT CONTOL

FEE3/AC :E"SUS FEE3FO"BA"3 S8STEMS

Fee(*or'$r( system 'onitors inputs into a pro"ess to as"ertain +!et!er t!e inputs are

p#anne$; i6 not; inputs / pro"ess; are "!an)e$ to o%tain t!e $esire$ resu#ts.

Desire$

per6or'an

A"tua#

per6or'an

easure

a"tua#

Co'pare

a"tua#

per6or'an"e

I'p#e'en

t

"orre"tion

s

Pro)ra'

o6

"orre"ti-e

a"tion

Ana#&*e

"auses o6

$e-iations

I$enti6&

$e-iations


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Control o* over$ll per*orm$n+e-

1. Dire"t super-ision an$ o%ser-ation2. Se#6 "ontro#

. Finan"ia# state'ents = prot an$ #oss a""ount; %a#an"e s!eets; ratio ana#&ses =prota%i#it&; #i8ui$it&; so#-en"&

principles of management trimester i.doc

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