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Management: Definitions, Roles


Principles of Management Management: Definitions, Roles & Skills * * * * * There are many types of plans. Short term , Long term ... – PowerPoint PPT presentation

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Title: Management: Definitions, Roles

Principles of Management
  • Management Definitions, Roles Skills

Management Definitions
  • Management is the process of designing and
    maintaining an environment in which individuals,
    working together in groups, efficiently
    accomplish selected aim(s) viz. to create a
    surplus(s). . Weihrich Koontz
  • Management is not an absolute rather it is
    socially and culturally determined. Across all
    cultures and in all societies, people coming
    together to perform certain collective acts
    encounter common problems having to do with
    establishing direction, coordination and
    motivation. Culture affects how these problems
    are perceived and resolved. The Art of Japanese
    Management by R. Pascale A. Athos .

Management Definition ctd.
  • Applies to and through any kind of organization
  • Applies to Managers at all levels
  • Concerned with Doing the right things right at
    all times
  • Effectiveness Achievement of objectives (Right
  • Efficiency Achieving those objectives with least
    amount/ sacrifice of resources (Things Right)
  • Continuous Improvement in creating increasing
    surplus (at all times)
  • Improve or die survival of the fittest
  • what gets measured, gets managed and improved
    e.g. Productivity Output / Input ratio
  • Collective, cohesive and consistent human effort
    towards accomplishing a common objective.

Management Definition ctd.
Additionally, Managers need to factor in external
environmental forces
For maximum benefit to the organization
Management Roles Skills
  • Management - what managers do
  • Fredrick Taylors path-breaking scientific
  • Henri Fayols classical definition of
    functions, now modified to
  • Plan -- Organize -- Lead(CommandCoordinate) --
  • Mintzbergs map of managerial roles
  • Interpersonal Informational Decisional
  • Katzs interpretation of skills
  • Technical / Human / Conceptual
  • Management get things done through others
  • Leadership The ability to influence a group
    towards achievement of goals.
  • Motivation The willingness to exert high level
    of effort towards goals
  • CommunicationThe transference and understanding
    of meaning

Management roles skills ctd.
Managerial Roles (Mintzberg)
  • Role Description Examples
  • Interpersonal
  • Figurehead symbolic head required to
    show Ceremonial,
  • face in social legal conditions. Civic
  • Leader Motivating directing subordinates projec
    t plan
  • Liaison Networking outside for
    information Industry -
  • favours group meets
  • Informational
  • Monitor nerve centre and interpretator Reports
  • Disseminator networking within the
    organization Meetings etc.
  • Spokesperson Transmit intent to outsiders
    expert Board Meets
  • Decisional
  • Entrepreneur Opportunity finding
    reacting Strategy Plan
  • Trouble shooter Handling unexpected
    disturbance Contingency
  • Resource allocator Initiating/approving
    changes Budgeting
  • Negotiator Getting best deal for
    Organization Contracts

Management roles skills
Managerial Skills(Katz others)
  • Technical Skills
  • Application of specialized knowledge or expertise
    acquired though formal training its use.
  • Human Skills
  • Ability to work with people, understand and
    motivate groups individuals.
  • Conceptual Skills
  • Mental ability to recognize, analyze, diagnose
    and think through complex situations.

Skills Needed
Principles of Management 2
  • Management A Systems Approach

Systems approach to Management
Organization as a System receives Input,
transforms it through a Process for Output and
Operates in an Environment (economic, regulatory
and other forces)
Systems approach to Management ctd.
Systems approach to Management ctd.
Systems approach to Management ctd.
Inputs 5 Ms of Management
  • Inputs or the resources managers deal with are
  • Man human resources, both inside and connected
    with an organization
  • Materials goods (hard software, processed or
    semi-finished) and services required to create
    the sellable end product
  • Machines technology and expertise deployed
    towards the transformation process
  • Methods systems, procedures and processes
    seamlessly put together for the transformation
  • Measurement score-keeping and in-process
    monitoring continuously with due feedback to keep
    on-course on time.
  • Money is required for generating all theses Ms
    managers need to acquire, deploy, generate and
    distribute money as a primary need for business!

Systems approach to Management ctd.
Output for Stake-holders in Business
  • Stake Something wagered or risked
  • an interest in an enterprise with contingent
    gain or loss Webster s dictionary
  • Holders who have stake in Business
  • Shareholders are the owners. They have put in
    their money in the enterprise, expecting better
    returns from it than from other ventures
  • Society includes the State, provincial and local
    governments for the improvement of quality of
    life of its citizens

Systems approach to Management ctd.
Output for Stake-holders in Business ctd.
  • Suppliers continuity of their enterprise depends
    on the success of the customer enterprise
  • Customers require the goods and services
    provided by the enterprise, better than than
    those from its competitors. The enterprise is, in
    turn, a supplier to its customers
  • Employees livelihood depends on the progress and
    success of the employing enterprise
  • There is a freedom of choice (for association)
    between each of these stake-holders and the
    enterprise in the longer term
  • But they sink or swim together in the shorter
  • Length of term definition varies with individuals!

Systems approach to Management ctd.
Management as a system transforms inputs
  • by the process of
  • Planning
  • Organizing
  • Staffing
  • Leading
  • Controlling
  • to accomplish certain pre-determined, (as derived
    from stakeholder needs) goals or objectives

Systems approach to Management ctd.
Stakeholders Shareholders Society
Customers Employees Suppliers
Man, Machine Material, Method, Measurement
Product/Services, Profits, Customer Societal
satisfaction, Other Long-term Goals
Inputs (Goal Oriented)
Outputs (External To Orgnzn.)
Stake holder Feedback (reenergizing the system)
EXTERNAL ENVIRONMENT(Opportunities, Constraints)
Principles of Management 3
  • Management Process
  • First Step Planning

  • Planning involves selecting objectives or goals
    and the course of actions to achieve them
  • Provides the bridge to take us from where we are
    to where we want to go
  • Is a rational approach to achieving pre-selected
    objectives - based on innovation, knowledge and
  • Decision making in choosing the best from
    alternative courses of action and is integral to

Plans as foundation of Management
The primacy of Planning
Types of Plans
  • Mission / Purpose
  • The basic function or reason for existence of
    an enterprise/ organization

Case in point Mission of Indira Institute
To train our students to become the best
business minds and entrepreneurs today, who will
lead their companies successfully into the future
tomorrow , locally, nationally and globally.
Type of Plans (Contd)
  • Objectives/ Goals
  • The end towards which activity of an organization
    is aimed, e.g.
  • For a Business enterprise profit, surplus
  • For a Management Institute The number of
    employable/useful trainees
  • Strategies
  • Determination of the long term objectives and
    adoption of a course of action
  • Gives a frame work for linked action-plans,
    communicated systematically to guide thinking and

Types of Plans (contd)
  • Policies
  • Plans that are general directional statements
    (or understandings) that guide/help in decision
  • Repeat decisions taken reflexively
  • Delegation of tasks without loss of control.
  • Some discretion is permissible depending on
    circumstances thus encouraging initiative within
    limits and situational adjustments
  • Issues with Policy
  • Seldom documented in writing
  • Subject to interpretations

Types of Plans (contd)
  • Procedures
  • Plans that are chronological sequences of
    required actions task-oriented in nature
  • Cuts across department boundaries (sub-systems)
    in an organization e.g. customer complaint
    handling procedure
  • Procedures and policies are inter related e.g.
    authorization for paid leave
  • Policy governs quota, responsible authority etc.
  • Procedure governs application, grant and
  • Rules
  • Specific actions or non-actions allowing no
  • Caution rules (and procedures too) limit

Types of Plans (contd)
  • Programs
  • Action plans (mainly non-routine or for changed
    activities) including, task assignments, steps to
    be taken, resources to be deployed etc. to
    achieve a (new/renewed) goal
  • Primary program may require supporting programs,
    spreading across the enterprise
  • Perfect coordination between supporting primary
    programs essential to avoid delays, unnecessary
    costs and expected roll-out.
  • Programs are a complex of (sub)goals, policies,
    rules and other elements necessary for the course
    of action e.g. obtaining ISO certification.

Types of Plans (contd)
  • Budgets
  • A statement of expected results expressed in
    Numerical terms e.g. financial operating budget
    profit plan
  • Budgets enforce precision in thinking
  • Making a budget is planning by itself
  • Encourages innovation a different way to work
  • Budgets serve for Control
  • Enforces discipline in execution of plans
  • Instills cost consciousness
  • Makes people (constantly) plan!

Steps in Planning
The Planning Process
  • Planning Period
  • Short range plans e.g. material procurement plan
    in a factory
  • Long range plans e.g. product development plan,
    plant/production facility installation
  • Urgent drives out the Important mismatch
    between short long term plans!
  • Planning horizon must allow for actions to run
    their course requiring commitments
  • Thus decisions today are key to good plans
  • Long-term plans reap benefits of good short-term

Steps in Planning
Being aware of Opportunity
Setting Goals/ Objectives
Considering, Market, Competition, Customers
wants, Own strengths weakness
What to accomplish when
Objective Important end towards which
activities are directed therefore needs
verification at the end of the plan period.
Hierarchy of Objectives Org. Levels
Objectives set end results they need to be
supported by a hierarchy of sub-objectives, duly
networked through the organization to avoid
discord and wasted effort.
Hierarchy of Objectives Org. Levels ctd.
  • The Organizational Objectives is deployed into
    the objectives of
  • Divisions ?Departments ? Individual objectives
  • The cascade principle seamless flow
  • Mutual support interlocking of goals is
  • Managers must ensure that the components of the
    network fit each other
  • Departments/divisions can be blind-sided.

Hierarchy of Objectives Org. Levels ctd.
While setting Objectives, ideally, Top Management
should get information / buy-in from lower
levels to set realistic goals for a good result.
Key Result Areas (KRA)
  • Are areas in which performance is essential for
    the success of an enterprise
  • Examples of generic KRAs
  • Market share
  • Return on Investment (ROI)
  • Service level
  • Customer satisfaction
  • Peter Drucker recommends Market standing,
    innovation, productivity, physical financial
    resource, profitability, managerial performance
    development, worker performance attitude and
    public responsibility.

Management By Objectives (MBO)
  • A comprehensive managerial system that integrates
    many key managerial activities in a systematic
    manner and that is consciously directed towards
    the effective and efficient achievement of
    organizations and individual objectives
  • Set-out by Peter Drucker in 1954
  • Integrated to personal performance appraisal by
    Douglas McGregor in 1957
  • Has formed the basis for many theories on
  • Has been criticized for introducing a short-term
    focus and undesirable behaviour
  • Currently viewed as a way of managing not a
    specific tool.

MBO (contd)
  • Managing the MBO way involves
  • Identifying clearly defined KRAs
  • Setting verifiable measurement of KRAs
  • Facilitating self-direction, accountability
    commitment by subordinates
  • Motivation of subordinates to achieve and exceed
    set targets
  • Emphasis on performance rather than on

Guidelines for setting Objectives
  • Clear Verifiable
  • Clarity scores over precision approximately
    right over accurately wrong!
  • Expressed in Quantitative terms
  • Figures
  • Percentage
  • Time frame (by which date)
  • Should cover main deliverables of the job/
  • Challenging yet reasonable S.M.A.R.T

Guidelines for setting Objectives (Contd)
  • Identification of assumptions underlying the
  • Consistency of
  • objectives with those of superiors, Organization
    other departments
  • Short time action-plans with Long-term objectives
  • Inclusion of personal growth, development and
    improvement targets
  • Ensuring availability of and access to needed
  • Documentation and communication of objectives to
    concerned persons

Benefits of MBO
  • Result oriented planning of goals, resources,
  • Setting of standards for Control
  • Decentralization of Management and clarification
    of Organizational roles responsibilities
  • Accountabilty commitment of employees
  • Enables timely corrective actions (as required)

Weaknesses of MBO
  • Emphasis on
  • short term at the expense of long term
  • Results over Process
  • Individual over collective effort
  • Failure to grasp and deploy the concept of
    seamless cascade
  • Difficulty in setting agreed, harmonized goals
  • Danger of inflexibility

Planning Premises Strategies
Setting Goals/ Objectives
Planning premises
Identifying alternatives
Comparing choosing an alternative
What to accomplish when
Decision making
Internal external environment
Strategic Planning Process
Strategy determination of the purpose / the
basic long-term objectives
the adoption of courses of action and
allocation of resources required to
achieve the aims.
Planning Premises Strategies ctd.
The Strategic Planning Process
Planning Premises
Porters Five Forces an Model for analysis of
the Externals environment.
Planning Premises forecast of demand
  • Estimate of future demand is made by qualitative
    methods, time-series methods and/or causal
  • Qualitative ? relies on judgement of experts to
    translate to quantities
  • Time-series ? statistically interpolate demand on
    historical data
  • Causal method ? seek co-relation on cause and
    effect basis between two (or more) variables to
    quantify demand
  • However, all forecasting methods are limited by
  • Handling of un-quantifiable factors e.g. national
  • Unrealistic assumptions fuelled by a desire to
  • Excessive data required (often unobtainable) to
    make accurate forecasts
  • Uncertainty with environmental changes
    Technology, Govt. Policy, International
    alignments, New materials/sources, Climate etc.
  • Coping with uncertainties require
  • Sensitivity analysis What if scenarios (trust
  • Planning for contingencies with defined cut-in

Generic Strategy
  • Competitive Advantage
  • Cost Leadership
  • To continually work reducing
  • the cost prices of products.
  • Supplier Q-C-D has very high
  • priority.
  • Differentiation
  • To constantly offer innovative
  • and unique solutions. Supplier
  • technology quality has focus.
  • Customization
  • To offer required services in the
  • required manner is the focus.
  • Speed and flexibility important.

Ultimate competitive position - position w.r.t
major Customers - K.S.Fs of Competitors -
leveraging of suppliers
Generic Strategy BCG MatrixRed Marketing
Perspective Blue Financial Perspective
Planning Premises Strategies ctd.
Decision Making is the core of the planning
process a plan does not come into being unless
a decision i.e. certain commitments of
resources, managerial time and money are made
and risks are taken. Caution A Plan is not
intentions and should not suffer from Analysis
Decision Making
  • Decision making is a rational choice process,
    bounded by
  • Limitations time, information and logic
  • Behaviour Risk averseness and biases.
  • A key step in the process is to identify those
    limiting factors, road-blocks to each effective
    (right thing) alternative then finding a
    solution with least sacrifice of resources
    (thing right)
  • Factors quantitative, qualitative/intangible
  • Finding solutions
  • marginal analyses benefits with incremental
  • cost-effectiveness assessment of benefits over

Decision Makingctd.
How to select Amongst the Alternatives ?
Decision Makingctd.
  • Decision making takes place under varying degrees
    of uncertain conditions and risks. Techniques
    used to aid the process are
  • Risk analysis every decision is based on
    interactions amongst different factors/variables
    each of which have their own probabilities
    (towards success). Analysis of these
    probabilities yield a risk profile for each
    alternative path. In the absence of defined
    probabilities, estimates can be used.
  • Decision trees the outcome (measure pre-decided
    e.g. cost or time) of every step in the decision
    is charted and a course selected on the most
    favourable outcome. Very much like making a trip,
    navigating by using a road-map (refer example in
    W K, Management a global perspective/10th
    edn. Pg. 209)

Decision Makingctd.
  • Flow Charts as a process-guide to taking a
    decision and helps as a check-list of key
    variables, the sequence in which they fall and
    the interrelations. Key to making a choice or
    re-examining the path taken are also indicated as
    risk-reduction devices.
  • (refer example in W K, Management a global
    perspective/10th edn. Figure 8-5)
  • Decision Support Systems a wide variety of
    (proprietary) computer based programs are
    available for managers to use their time more
    effectively for decision making of
    semi-structured tasks by providing alternative
    evaluations. They focus on the process of
    decision making, taking data provide by the
    management information systems in enterprises.

Principles of Management 4
Management Process Organizing for results
Nature of Organizing
  • Organizing may be broadly defined as
  • The identification and classification of required
  • The grouping of those activities towards
    attaining their set objectives
  • The assignment of those groupings to a
    responsible manager, duly empowered
  • The provision for coordination among, within and
    across the groups in the organization.
  • Organization structures are designed to
  • Clarify tasks responsibilities,
  • Remove obstacles,
  • Furnish decision making communication network
  • Support attainment of enterprise objectives

Nature of Organizing ctd.
The Business Organization Model Value Chain
The margin reflects the reward for the risks run
by the company.
All activities together need to generate value
greater than the sum of its costs.
Nature of Organizing ctd.
The Value Chain Primary Activities
  • Inbound Logistics relate to receiving, storing
    and disseminating inputs
  • Operations associated with transformation of
    inputs into final product form
  • Outbound Logistics relate to collecting, storing
    and physically distributing the products to
  • Marketing Sales relate to advertising,
    Promotion, sales, distribution-channel selection
    management and Pricing
  • Service associated with enhancement or
    maintenance of product value over life

Nature of Organizing ctd.
The Value Chain Support Activities
  • Procurement relates to the function of
    purchasing inputs used across the firms primary
    and support activities
  • Technology Development relates to know-how,
    processes procedures, technology embodied in
    the product design and delivery. Most activities
    have their own sub-set of technology
  • Human Resource Management directed at
    recruiting, training, developing and compensating
    all personnel
  • Firm Infrastructure associated with serving and
    supporting the firm as a whole, with the company
    as its customer eg. Finance accounting,

Nature of Organizing ctd.
  • Most practicing mangers would translate this
    value chain to imply an organization as
  • a formalized, intentional structure of roles
    and positions
  • Thus formal organization implies the
    intentional structure of roles in an enterprise.
  • However, in an enterprise informal organization
    will form, not necessarily bad and is
  • a network of personal and social relations not
    established or required by formal organizations
    but arising spontaneously as people associate
    with each other.

Nature of Organizing ctd.
The building block of an organization is the
Department a group charged with independent
task responsibility.

Nature of Organizing ctd.Departmentation
  • Grouping activities people into departments
    makes it conceptually possible to expand
    organizations to an infinite degree.
  • Different patterns have been successfully used to
    group activities
  • By simple nos. is a simple method works well
    for the lowest levels where work is routine,
    uniform and non-specialized time-grouping is an
    extension of this method where shift-working is
  • By enterprise functions embodies what
    enterprises typically do e.g. Production,
    Engineering, Sales etc. This method, defined by
    F.W.Taylor, is arguably the most prevalent method
    still used.

Departmentation ctd.
  • By territory or geography is very common when
    the geographical spread is wide. It was a device
    introduced to speed up management in similar
    units for easy and swift communication e.g.
    Sales N/E/W/S Fire Brigade Camp, Hinjewadi,
    Aundh etc.
  • By Customer/Account orientation reflecting the
    primary interest in nature of markets/business/cus
    tomer e.g. Banks Institutional banking, Small
    Savings etc.
  • By Process groups encountered primarily in
    specialized/ manufacturing operations where
    processes are vital e.g. Advertising
    Copy-writing, Creative etc. Manufacturing Steel
    Melting, Wire-drawing etc.
  • By Product Lines has evolved with enterprises
    becoming multi-line with function needing
    adaptation/integration to suit specific products
    e.g. Tata Motors Passenger Vehicles / Commercial

Departmentation ctd.
  • By grid control in essence combining the
    functional and the product-line patterns to
    best effect. Functional excellence is not
    subjugated to Operational ease.
    In projects, this serves to bring
    together the diversity of skills required into
    one team.
  • The Strategic Business Unit companies today are
    organizing themselves as companies within a
    company to allow for maximum flexibility and
    freedom of operations, especially when the
    products/businesses are unconnected e.g. General
    Electric. Generally, SBUs have
  • Their own Missions, Goals and Strategies
  • Distinct and definable set of competitors
  • Deploy and manage resources in key areas
  • A reasonable size.

Departmentation ctd.
Example of Grid Control S.B.Us
BU 1
BU 2
Plant 1
Nature of Organizing ctd. Span-of-Management
  • The purpose of organizing is to make human
    cooperation effective and is limited by
  • the number of persons a manager can supervise
    effectively and efficiently
  • while the total number is dictated by the quantum
    of work/ nature of task/spread etc. Thus the two
    dimensions, Level (depth) and Span of control
    (width) are interrelated .
  • The reason for creating Levels of organization is
    the limitation in the span of control. Effective
    span is influenced by
  • Training/skill of subordinates and personal
    contact required
  • Clarity of delegation of authority
  • Clarity of plans, use of objective standards and
    communication techniques
  • Rate of change
  • Maturity and experience of the manager and

Span-of-Management ctd.
  • Levels, per se, are not desireable
  • They are expensive as they increase, both
    infrastructure costs and staffing tends to
  • Real work is accomplished at the gemba
    (Japanese workplace) where the actual
    value-addition/transformation takes place. The
    contribution of levels on top are not directly
    co- relatable, thus best avoided
  • Communication become complicated omissions,
    filterations and misinterpretations lead to
    wasted and misdirected effort
  • Planning and control become tortuous, requiring
    complicated coordination and alignment between
  • Studies reveal that between 8 to 10 people at
    higher levels and upto 15 at lower levels is a
    good span. Increasingly, enterprises are
    attempting to cut back levels to 5 or less.

Management Principles
  • Developed by Henri Fayol 
  • 1. DIVISION OF WORK Work should be divided among
    individuals and groups to ensure  that effort and
    attention are focused on special portions of the
    task. Fayol presented work specialization as the
    best way to use the human resources of the
  • 2. AUTHORITY The concepts of Authority and
    responsibility are closely related. Authority was
    defined by Fayol as the right to give orders and
    the power to exact obedience. Responsibility
    involves being accountable, and is therefore
    naturally associated with authority. Whoever
    assumes authority also assumes responsibility.  
  • 3. DISCIPLINE A successful organization requires
    the common effort of workers. Penalties should be
    applied judiciously to encourage this common
  • 4. UNITY OF COMMAND Workers should receive
    orders from only one manager.
  • 5. UNITY OF DIRECTION The entire organization
    should be moving towards a common objective in a
    common direction.

Management Principles (ctd)
    GENERAL INTERESTS The interests of one person
    should not take priority over the interests of
    the organization as a whole.
  • 7. REMUNERATION Many variables, such as cost of
    living, supply of qualified personnel, general
    business conditions, and success of the business,
    should be considered in determining a workers
    rate of pay.
  • 8. CENTRALIZATION Fayol defined centralization
    as lowering the importance of the subordinate
    role. Decentralization is increasing the
    importance. The degree to which centralization or
    decentralization should be adopted depends on the
    specific organization in which the manager is
  • 9. SCALAR CHAIN Managers in hierarchies are part
    of a chain like authority scale. Each manager,
    from the first line supervisor to the president,
    possess certain amounts of authority. The
    President possesses the most authority the first
    line supervisor the least. Lower level managers
    should always keep upper level managers informed
    of their work activities. The existence of a
    scalar chain and adherence to it are necessary if
    the organization is to be successful.            

Management Principles (ctd)
  • 10. ORDER For the sake of efficiency and
    coordination, all materials and people related to
    a specific kind of work should be treated as
    equally as possible.                            
  • 11. EQUITY All employees should be treated as
    equally as possible.
    productive employees should always be a high
    priority of management. Recruitment and Selection
    Costs, as well as increased product-reject rates
    are usually associated with hiring new workers.
  • 13. INITIATIVE Management should take steps to
    encourage worker initiative, which is defined as
    new or additional work activity undertaken
    through self direction.                          
  • 14. ESPIRIT DE CORPS Management should encourage
    harmony and general good feelings among
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