CONCEPTS OF MANAGEMENT

INTRODUCTION
Management is the process of reaching organizational goals by working with and through
people and other organizational resources.
Management has the following 3 characteristics:
1. It is a process or series of continuing and related activities.
2. It involves and concentrates on reaching organizational goals.
3. It reaches these goals by working with and through people and other organizational
resources.







MANAGEMENT FUNCTIONS:

Planning
The planning function of management controls all the planning that allows the organization
to run smoothly. Planning also involves knowledge of the companys resources and the
future objectives of the business.
Organizing
The organizing function of leadership controls the overall structure of the company
complete the tasks. Organizing also involves developing the organizational structure and
chain of command within the company.

Staffing
The staffing function of management controls all recruitment and personnel needs of the
organization. The main purpose of staffing is to hire the right people for the right jobs to
achieve the objectives of the organization.. Without the staffing function, the business
would fail because the business would not be properly staffed to meet its goals.
Directing
The coordinating function of leadership controls all the organizing, planning and staffing
activities of the company and ensures all activities function together for the good of the
organization. Coordinating typically takes place in meetings and other planning sessions
with the department heads of the company to ensure all departments are on the same page
in terms of objectives and goals.

Controlling
The controlling function of management is useful for ensuring all other functions of the
organization are in place and are operating successfully. Controlling involves establishing
performance standards and monitoring output of employees to ensure each employees
performance meets those standards .The controlling process often leads to the
identification of situations and problems that need to be addressed by creating new
performance standards. The level of performance affects the success of all aspects of the
organization.
DEVELOPMENT OF MANAGEMENT THOUGHT:
Bureaucratic management:
Weber's theory of bureaucratic management has two essential elements. First, it entails
structuring an organization into a hierarchy. Secondly, the organization and its members are
governed by clearly defined rational-legal decision-making rules. Each element helps an
organization to achieve its goals.
Scientific management:
1. Replace working by "rule of thumb," or simple habit and common sense, and instead
use the scientific method to study work and determine the most efficient way to
perform specific tasks.
2. Rather than simply assign workers to just any job, match workers to their jobs based
on capability and motivation, and train them to work at maximum efficiency.
3. Monitor worker performance, and provide instructions and supervision to ensure that
they're using the most efficient ways of working.
4. Allocate the work between managers and workers so that the managers spend their
time planning and training, allowing the workers to perform their tasks efficiently.

ADMINISTRATIVE THEORY:
Administrative management theory attempts to find a rational way to design an
organization as a whole. The theory generally calls for a formalized administrative structure,
a clear division of labour, and delegation of power and authority to administrators relevant
to their areas of responsibilities.




SCOPE OF MANAGEMENT
The scope of management is very wide. Basically, it refers to three distinct ideas:
1.MANAGEMENT AS AN ECONOMIC RESOURCE
Management is one of the factors of production along with land, labour and capital. In
modern organizations, the effective use of the five Ms of management (money, materials,
manpower, machinery and methods or ways of doing things) depends to a great extent on
the quality of management.
2. System of Authority
According to Herbison and Myers, management is the rule-making and rule-enforcing body.
It is bound together by a web of relationships between superiors and subordinates, that is,
people are bound by authority relationships. Managers working at top levels enjoy more
authority than people working at lower levels.
3. A Class or Elite
Sociologists view management as a distinct class in society having its own value system. The
managerial class has become very important in modern organizations owing to its
contribution to business success. As a separate group, the term management refers to the
group of individuals occupying managerial positions. All the managers from the chief
executive to the first line supervisors are collectively addressed as Management, which
refers to the group.










Purpose of Management
The purpose of management is to serve customers. Yet if one looks through most
management books, or even a dictionary, for a definition of management, ninety-nine point
nine percent of the time the word customer will not be mentioned. This is astonishing
because serving customers in order to obtain a profit is the crux of every business
organization. Equally as remiss is the fact that most definitions neatly filter out service in
their descriptions of management. Instead, when it comes to explaining what management
is about, words and terms such as leading, controlling, planning, organizing, and setting
goals and objectives are used. Lets face it, aseptic words and terms are great for
dictionaries and academic tomes, but they fall terribly short when it comes to explaining,
warts and all, the full scope of what management entails. So how can the art and science of
management be summed up in a few succinct words? Well, the truth be told, it cant
because management is about more than leading, controlling, planning, organizing, and
setting goals and objectives. Suffice it to say that all this combined with planning, organizing,
leading, and controlling is a tough, relentless and time-consuming job that demands regular
assessment, constant improvement and the ability to give more than is taken. In other
words, the same strange mix of concrete and ethereal qualities that enables entrepreneurs
to do their thing also fuels the very attributes that enable good managers to do theirs.


EVOLUTION OF MANAGEMENT THOUGHT

1. Early Practices
a. Adam Smith
b. Charles Babbage
c. Robert Oven

2. The Classical Era
a. F.W. Taylor
b. Henry Fayol
c. Max Weber

3. The Behavioural Era
a. Hugo Munsterberg

4. Human Relations Era
a. Elton Mayo
b. Dale Carnegie
c. Abraham Maslow
5. Modern Era (TQM, Six Sigma, ISO, QS, BPR, etc.)



Taylors Scientific Management Theory
Scientific management theory arose in part from the need to increase productivity. In the
United States especially, skilled labor was in short supply at the beginning of the twentieth
century. The only way to expand productivity was to raise the efficiency of workers.
Instead of relying on traditional work methods, he analyzed and timed steel workers
movements on a series of jobs. Using time study as his base, he broke each job down into its
components and designed the quickest and best methods of performing each component.

Implementations of scientific management usually failed to account for several inherent
challenges:
Individuals are different from each other: the most efficient way of working for one
person may be inefficient for another.
The economic interests of workers and management are rarely identical, so that both
the measurement processes and the retraining required by Taylor's methods are
frequently resented and sometimes sabotaged by the workforce.








FAYOLS CLASSICAL ORGANISATION THEORY

The branch of classical management - classical organisation theory - grew out of the need to
find guidelines for managing such complex organisations as factories.
Henri Fayol (1841-1925) is generally hailed as the founder of the classical management
school - not because he was the first to investigate managerial behaviour but because he
was the first to systematise it. Fayol believed that sound management practice falls into
certain patterns that can be identified and analysed. From this basic insight, he drew up a
blueprint for a cohesive doctrine of management, one that retains much of its force to this
day.
Fayol believed that with scientific forecasting and proper methods of management,
satisfactory results were inevitable. In his faith in scientific methods, Fayol was like Taylor,
his contemporary. While Taylor was basically concerned with organisational functions,
however, Fayol was interested in the total organisation.

FAYOLS PRINCIPLES OF MAN

1. Division of Work. This principle is the same as Adam Smiths division of labor.
Specialization increases output by making employees more efficient.
2. Authority. Managers must be able to give orders. Authority gives them this right. Along
with authority, however, goes responsibility. Whenever authority is exercised, responsibility
arises.
3. Discipline. Employees must obey and respect the rules that govern the organization.
Good discipline is the result of effective leadership, a clear understanding between
management and workers regarding the organizations rules, and the judicious use of
penalties for infractions of the rules.
4. Unity of Command. Every employee should receive orders from only one superior.
5. Unity of Direction. Each group of organizational activities that have the same objective
should be directed by one manager using one plan.
6. Subordination of Individual Interests to the General Interests. The interests of any one
employee or group of employees should not take precedence over the interest of the
organization as a whole.
7. Remuneration. Workers must be paid a fair wage for their services.
8. Centralization. Centralization refers to the degree to which subordinates are involved in
decision making. Whether decision making is centralized (to management) or decentralized
(to subordinates) is a question of proper proportion. The problem is to find the optimum
degree of centralization for each situation.
9. Scalar Chain. The line of authority from top management to the lowest ranks represents
the scalar chain. Communications should follow this chain. However, if following the chain
creates delays, cross-communications can be allowed if agreed to by all parties and
superiors are kept informed.
10. Order. People and materials should be in the right place at the right time.
11. Equity. Managers should be kind and fair to their subordinates.
12. Stability of Tenure of Personnel. High employee turnover is inefficient. Management
should provide orderly personnel planning and ensure that replacements are available to fill
vacancies.
13. Initiative. Employees who are allowed to originate and carry out plans will exert high
levels of effort.
14. Esprit de Corps. Promoting team spirit will build harmony and unity within the
organization.


IMPORTANCE OF GOALS

Provides Focus
When organizations set goals for employees, it shows employees the organizations
priorities. Employees then know what to focus on in the coming quarter or year, thus
prioritizing projects and other tasks as they weigh how their work will impact those goals. It
also provides focus for management when deciding on major projects and how to best
divide tasks among employees.
Increases Motivation
Organizational goals give employees something to strive for in their daily tasks. For example,
instead of merely aiming for general profitability, employees can work to improve
profitability 10 percent by year-end. Most people strive to be successful, but having a
specific standard that constitutes success will especially motivate them to strive for
excellence. If goals are tied to other external awards, such as group recognition or rewards,
it can further improve the motivation level.

Improves Group Cohesion
Many business goals cannot be reached unless employees of all levels work together as a
whole to reach the goals. This can improve group cohesion and collaboration when
employees realize the goals will only be reached when teamwork is present. Managers can
further enforce this through group rewards given when the organization meets its goals.
Increases Employee Worth
Including employees in the goal-setting process will increase their buy-in for the project and
the business as a whole. It tells them their input is valued and important, thus giving them a
sense of ownership. Consequently, the goals are no longer only management they are the
goals of everyone in the organization.
Offers Measurability
Set goals using the SMART principle: specific, measurable, attainable, relevant and timely.
This will enable employees to gauge their progress, see how their efforts are having an
impact and assess how far they have yet to go to reach the goal.





Process of management
Planning
Planning is one of the four functions of management.
Planning is the process of setting objectives and identifying how to achieve them.
Planning improves focus and action orientation.
Planning improves coordination and control.
Planning improves time management.
Planning Steps





The Formal planning process.
Step 1: Goal Formulation
We will need to determine the goals and objectives of our organisation and then work
according to them. Knowing the vision and mission of organisation is very important for
utilising the resources they have.
Define objectives
Stretch goals performance targets that require hard work
Determine current status compared to objectives
Develop premises regarding future conditions and generate alternative scenarios for
what may happen
Analyze alternatives and make a plan
Implement and evaluate the plan
Step 2: Identification of current objectives and strategy
We have to determine what has to be done differently to achieve organisational goals. If
organisation fails to meet key objectives in most of the cases then goal formation process
may change. Objectives and strategy are well communicated throughout the organisation.
Many managers determine their organisations current strategy by asking themselves such
questions as:
1. What is our business and what should it be?
2. Who are our customers and who should they be?
3. Where are we heading?
4. What major competitive advantages do we enjoy?
5. In what areas of competence do we excel?
Step 3: Environmental Analysis
If we are aware of organisational goals and existing strategies, we can easily define the
aspects of the environment which will have greatest influence on the organisation ability to
achieve its objectives. E.g. we can utilise many of the surplus waste in steel industry to make
other small tools.
Step 4: Resource Analysis
Resource analysis is necessary to identify the organisations competitive advantages and
disadvantages, its strengths and weaknesses relative to its present and likely future
competitors.
Step 5: Identification of strategic opportunities and threats
It involves determining the opportunities available to the organisation and the threats it
faces. Step 2, 3 and 4 comes in this step
Step 6: Determination of extent of required strategic change
A performance gap is the difference between the objectives established in the goal
formulation process and the results that are likely to be achieved if we continue with the
existing strategy. Performance gaps arise when organisations choose more difficult
objectives or fail to meet former objectives because of effective responses by competitors,
changes in the environment, or loss of resources.
Step 7: Strategic decision making
It is important to have alternative strategic approaches. To overcome the performance gap
it is essential to change existing strategy. E.g if new product fails to make an impact on the
consumers then research and development will surely help to fill the existing performance
gaps
Step 8: Strategy Implementation
Once the strategy has been determined it has to be implemented into daily operations of
organisation. The strategy has to be carried out effectively in the organisation.
Step 9: Measurement and control of progress
Periodic check is required by manager once the implementation work has been initiated.
The two main questions relevant to strategic control are:
1. Is the strategy being implemented as planned? And
2. Is the strategy achieving the intended results?

Decision Making
It involves what we have to choose when we have two options in front of us.
E.g. If company y has to go through retrenchment process while facing some economic crisis
in market then they have to make important decision like who are the employees that will
be retrenched. They have two options weather they can choose 10 senior employees or 15
junior employees. Making a decision between two is difficult. Here different factor needs to
be considered to make final decision.
While we are all aware that life is full of tough decisions that need to be made, we may not
realise that hasty decisions may not always be the right one.
Be Proactive
Not Reactive
Managers make decisions affecting the organization daily and communicate those decisions
to other organizational members.
Some decisions affect a large number of organization members, cost a great deal of money
to Carry out, or have a long term effect on the organization. Such significant decisions can
have a major impact, not only on the management systems itself, but on the career of the
manager who makes them.
Other decisions are fairly insignificant, affecting only a small member of organization
members, costing little to carry out, and producing only a short term effect on the
organization.
TYPES OF DECISIONS:
PROGRAMMED DECISIONS:
Programmed decisions are routine and repetitive, and the organization typically develops
specific ways to handle them. A programmed decision might involve determining how
products will be arranged on the shelves of a supermarket. For this kind of routine,
repetitive problem, standard arrangement decisions are typically made according to
established management guidelines.
NON PROGRAMMED DECISIONS:
Non programmed decisions are typically one shot decisions that are usually less structured
than programmed decision.
5 ELEMENTS OF THE DECISION SITUATION:
1. The Decision Makers
2. Goals to be served
3. Relevant Alternatives
4. Ordering of Alternatives
5. Choice of Alternatives
DECISION MAKING PROCESS:
Decision making steps this model depicts are as follows:
1. Identify an existing problem
2. List possible alternatives for solving the problem
3. Select the most beneficial of these alternatives.
4. Implement the selected alternative.
5. Gather feedback to find out if the implemented alternative is solving the identified
problem.

Decision Making
Model