MANAGEMENT PRINCIPLES & PRACTICES

Prof.B.G.Varma

MANAGEMENT THEORY, PRINCIPLES & PRACTICES

Reference Books Management - A Global Perspective,11th edition by Koontz.H, Delhi2005. Principles of mgt by KoontzH,weihrich,

Essential of Mgt- An international Perspective by Koontz.H&Weihrich.

Mgt Theory & Practice by Moshal.B.S

Course Objective
This is a foundation course designed to introduce students to 1. the Theory of General Management

2.Organisation System as a Framework of the Professional Practice as a Manager in the Business Enterprises of Construction Projects .

Moulding an Engineer
Moulding an Engineer into a Techno Manager is a sculpturing process involving lot of designing and chiseling to bring out a fascinating and functional personality in the field of construction.

Lesson Plan
-Evolution of management thought (Gen mgt, Scientific Mgt, Modern mgt, Mgt Systems & Styles Managerial Grid, ) 6 Sessions. -Management process and functions (Planning,Organizing,Directing.decision making,Staffing,Controling) 3 sessions

-Organization Behaviour (Attitude, Motivation, Communication,Group dynamics, Leadership, Team Building, Change Mgt, Professional Ethics, Training & development)

Business organizations Structure and Functions

Construction Forms, enterprise, Corporate Mgt, Business Mgt, Project Mgt

DEFINITIONS

Principle: A fundamental truth serving as the foundation for belief. Practice: the actual application of Theory & Principles.

MANAGEMENT
Management is Planning Organizing Directing and Controlling of 6 Ms (Men,Material,Machinery,Money, Minutes and Marketing)

Management is a social process involving co-ordination of Human, Financial & Material resources through the functions of PODC in order to achieve the stated objectives and goals efficiently and effectively.

CHARACTERISTICS OF MANAGEMENT

Magt A Process, Discipline. Magt. A Force. Magt. A group activity. Magt. Intangible & Dynamics Magt. All pervasive. Magt. Result orient.

DEFINITIONS
Management is Conceptualization, Prioritization, and Actualization Of Enterprises Vision, Mission, Values Through Planning, Organizing, Directing And controlling of Prime Resources such as People, Material, Finance, Machinery, Time & Marketing.

DEFINITIONS

Concept an intellectual mental frame work for understanding an aspect. Enterprise is a challenging Project undertaken for construction to produce Goods & Services that yield profits for all stake holders Investors, Employees, Customers, Govt & Public in general.

DEFINITIONS

Mission: WHY WE DO? PURPOSE of what we do.

It

identifies

the

Vision: WHAT WE DO? It identifies what we want to achieve in FUTURE.. Values: HOW WE DO? It identifies how we CONDUCT our activities to achieve what we want in future.

POPULAR GLOBAL COMPANIES VISION - MISSION VALUES

VISION Ford To democratize the automobile. Sony - To wipe of world wide poor quality image. Boeing -To become the dominant player in commercial aircraft and bring the world into the jet age.

POPULAR GLOBAL COMPANIES VISION - MISSION VALUES

MISS ION 3m

Sony

nike

To solve unsolved problems innovatively. To experience the joy of advancing and applying technology for the benefit of the public. To experience the emotion of competition winning and crushing competitors.
To make people happy.

Walt Disney

POPULAR GLOBAL COMPANIES VISION - MISSION VALUES

VALUES Sony

doing the Walt Disney

Elevation of the Japanese culture and national status, encouraging individual ability and creativity being the pioneer and impossible Creativity, dreams, imagination & Disney Magic preservation.

DEFINITIONS

Planning :- Thinking & Selecting objectives and the actions to achieve them with perfection in implementation. Organizing: - Establishing a structure of business,
authority, rules for people to fulfill their objectives.

Directing:- Instructing an individual to reach a destination. Controlling: Measuring and correcting individual performance to ensure that events confirm to plans.

Management as a matrix of functions and processes as shown below:

Men Function Process

Material

Machinery

Money

Minutes (Time)

Marketing

Planning

Thinking & Selecting objectives and the actions to achieve them with perfection in implementation. Establishing a structure of business, authority, rules for people to fulfill their objectives. Instructing an individual/ group to reach a destination. Measuring and correcting individual performance to ensure that events confirm to plans.

Organising Directing Controlling

DEFINITIONS

Management is taking inputs, transforming them into outputs either goods or services Productivity = Outputs/Inputs (Maintaining Quality & time schedule.) Effectiveness is a capacity for achieving of objectives Efficiency is an achievement of objectives with the least amount of resources.

DEFINITIONS
After World War II, USA was the world leader in Productivity. Now often one looks to Japan to find answers to our Productivity problems Kaizen: A Japanese term which points at the importance of continuous improvement. The idea is continuously taking small steps in improvements & it will be the key to long term success.

DEFINITIONS

Quality Circles : a Participative Management Technique, used extensively by the Japanese, in which small groups of employees meet for an hour or two each week to discuss specific problems or suggestions for work improvement. Just - in time : A suppliers delivery of components and parts to the production line just in time to be assembled. Other name for this or similar methods are Zero inventory and Stockless production

Management

Management - Art or Science

Science: A systematic organized body of knowledge on any subject. Engineering: The branch of science concerned with design, structure, building and use of any materials, engines and machines. Technology: The branch of knowledge concerned with productivity through applied sciences for development of any equipment or process for gainful application.

Science
Science has got three specific characters 1.It is a systematic and organized knowledge based on scientific methods of observation. 2.Inferences are arrived after continuous observations and experiments. 3.It has logical principles which are well defined and universally applicable.

Art

Arts uses the known rules,principles,skills,expertise,wisdom experince to achieve the desired results. The expression or application of creative skills concerned with human social life. The Science and Art are not mutually exclusive but complementary to each other.

Management has got scientific principles which constitute the elements of science and skill & talent which are the attributes of art. Therefore management is both Science and Art.

Effective Management

Effective Management is extracting voluntary cooperation from the people, motivating them and getting the things done within the stipulated time, without compromising on the quality of the results. Management involves dealing with people who have different understanding, sensitivity, knowledge, capability, responsibility, maturity

Hence it is definitely an art and it can be acquired only by practicing the theoretical knowledge skillfully and prudently. Management skills are acquired by constant practice.

Understanding Human behavior Tactfulness Pragmatism Creativity Team spirit Are needed by a Successful Manager for Effective Management

Evolution of Mgt thought The concept of Mgt is as old as Human Civilization. One of the most important human activities is managing. Ever since people began forming groups to accomplish aims what they could not achieve as individuals, management has become essential to ensure coordination of individual efforts.

The Profession of Mgt has been built upon the concepts, theory and knowledge mostly drawn from Sociology, Psychology , economics ,Politics, Law and Industrial Engineering.

Sociology- the study of the development of structure and functioning of human society. Psychology; the scientific study of human mind and its functions relating to mental characteristics and attitude of a person. Economics: the branch of knowledge concerned with production, distribution and transfer of wealth among the nations and people concerned

Politics: the activities associated with governing people of an area/country with gaining and using authority Law: a system of rules recognized by a state/country as governing the actions of its members Industrial Engineering:

Industrial Engineering (often now supplemented as "Industrial & Systems Engineering" or "Industrial & Operations Engineering") It is concerned with the development, improvement, implementation and evaluation of integrated systems of people, money, knowledge, information, equipment, energy, materials and processes.

Its underlying concepts overlap considerably with certain businessoriented disciplines such as Operations Management.

Culture: A particular system of society at a particular time and place- a set of shared attitudes, values goals and practices that characterized as an institution, organization. Civilization: A society in advanced state of social development reinforced by quality of excellence in thoughts, manners and taste . An organized culture encompassing many communities often on a scale of nation or a large group of people.

Administration is implementation of activities through controlling of arrangements and operations by rules & regulations within the legal frame work of a particular procedure. Discipline is the practice of training people to obey code of behavior to eliminate friction and to ensure smooth function of human actions.

Strategy describes how an organization intends to create more sustainable values for its stakeholders than its competitors. Policy is a course of action proposed and adopted by an organization to conduct a particular activity in a particular way taking into consideration - the situation, time and place to ensure smooth function

SCIENTIFIC MANAGEMENT

1911 - Frederick Taylor who is generally regarded as the father of scientific management was an engineer himself who had worked for many years on the shop floor.

Taylor propounded that 1.There was no inherent conflict between employees and employers. 2. Employee wanted more income, employers wanted more profits and the consumer wanted a better price. All of them could be benefited only if the plant itself produced more. Therefore, it was in the interest of everyone to produce more and thereby take more.

3. Taylor felt that the real problem was in determining a fair day's pay for a fair day's work. For this, if a quantitative method could be evolved wherein a worker could know the basis of his wages, and in which his income moved up along with the increase of efforts put in, then he would be more rational and more production oriented.

Taylor said that the onus to devise such methods rested on employers. 4. It is for employers to establish a scientific approach to management which he said was based on 9 basic rules: 1.Replacing thumb rule with organized knowledge. 2. Obtaining harmony in group action . 3.Achieving co-operation of all.

4.Working for maximum output rather than restricted output. 5.Developing of workers' ability to their fullest extent possible for their own and their company's prosperity. 6.Time and Motion Studies.

7.Clear procedures of work (Authority, Instructions, Training, Manuals of Operations) 8.A rational Wage structure (making wage system reflect individual merit, moving up income with increased inputs, incentive systems, pay scales etc.) 9.Right person for the right job (systematic employment, recruitment, selection policies )

In due course of time his views were codified and came to be known as Taylorism. Taylor's concepts and perceptions of management have undergone changes over the years but his basic edicts are still valid the world over in one form or the other.

MODERN MANAGEMENT

1916 - Henri Fayol the French industrialist was considered as the Father of Modern Mgt. He said that all Activities of an Enterprise could be divided into 6 groups viz.

Technical - production Commercial - buying, selling and exchange Financial - creating resources and making optimal use of capital Security - protection of property, persons and health Accounting - book keeping, statistics and feed back, and Managerial - planning, organization, direction, coordination and control

Fayol pointed out that the first 5 activities are well-known and they existed in businesses of any kind and size. Therefore Fayol devoted his attention to the analysis of the 6th i.e. Managerial.

Fayol said that persons responsible for Mgt must have the following managerial qualities. Physical - good health and vigour Mental - ability to understand, learn, judge, adopt and predict. Moral - energy, firmness, willingness to accept responsibility, initiative, loyalty, tact, dignity.

Educational - expert knowledge of one's own field and ability to work with the techniques of other disciplines. Technical - expertise in one's own profession Experience - performance in the past which a person is able to analyze, codify and use for work in future.

Thereafter, Fayol went on to identify and establish the following fourteen general principles of management: Division of work authority and responsibility Discipline unity of command

unity of direction subordination of self-interest to the corporate interest human relations centralization

chain of authority orderliness i.e. place for everything and everything in place quality stability of tenure i.e. offering a career initiative team spirit

MANAGERIAL RESPONSIBILITIES AT DIFFERENT LEVELS

Board of Directors MD/VP/GM
Departmental Magt. First line Magt. Operating Units

Manage the Business Manage the

Managers

Managing Work.

Managing Workers
Work Performance.

MANAGERIAL SKILLS

1. Technical skills 2. Human Skills 3. Conceptual Skills

TECHNICAL SKILLS
Knowledge and proficiency in handling.

Methods
Procedures

Techniques
Processes etc.

HUMAN SKILLS

Communication
Motivation

Leadership
Interpersonal (Behavioural).

Team spirit

CONCEPTUAL SKILLS

Problem Solving
Decision Making

Analytical
Change Management.

Design

T E C H N I C A L

H U M A
N

C O N C E P T U A L

Top Level

Middle Level

Lowe r Level

MANAGERIAL SKILLS AT DIFFERENT LEVELS

Management By Objectives

The term Management By Objectives" was first popularized by Peter Drucker in his 1954 book 'The Practice of Management'. A Comprehensive understanding of the inter-relationship among Man, Work and Society.

A mutual goal settling processing in which Managers and their people establish individual goals, review their progress regularly and then mutually evaluate achievement and reset the goals.

Management by Objectives (MBO) is a process of agreeing upon objectives within an organization so that Employer and Employees agree to the objectives and understand what they are in the organization. The essence of MBO is participative goal setting, choosing course of actions and decision making.

An important part of the MBO is the measurement and the comparison of the employees actual performance with the standards set. Ideally, when employees themselves have been involved with the goal setting and choosing the course of action to be followed by them, they are more likely to fulfill their responsibilities.

Unique features and advantage of the MBO process

The principle behind Management by Objectives (MBO) is basically for employees to have clarity of the roles and responsibilities expected of them. They then understand the objectives they must do and the over all achievement of the organization. They also help with the personal goals of each employee.

Some of the important features and advantages of MBO are: Motivation Involving employees in the whole process of goal setting and increasing employee empowerment increases employee job satisfaction and commitment. Better communication and Coordination Frequent reviews and interactions between superiors and subordinates helps to maintain harmonious relationships within the enterprise and also solve many problems faced during the period.

Clarity of goals Subordinates have a higher commitment to objectives that they set themselves than those imposed on them by their managers. Managers can ensure that objectives of the subordinates are linked to the organisation 's objectives.

Objectives prioritization Realistic schedule preparation Weekly targets actualization Fortnightly achievements evaluation Short falls concentration Make up by follow up action.

Stage-1
Collectively Formulate Objectiv.

Stage-2
Collectively Formulate Plan

MBO Process
Stage- 4
Collectively Monitor Perform.

Stage-3
Subordinate Implements Plan

Management By Objectives

ADVANTAGES OF MBO
1. 2. 3. 4. 5. 6. 7. Better Utilization of Resources. Aid in planning. Development of Personnel. Better Team Work. Concentration on KRAs. Objective Evaluation. MBO is Result Oriented.

Case Study

A remote village in India is having a population of 2500 consisting of 40% above 50 years, 25% above 25 years & 35% children of school going age . Govt of India identified the following development activities for the village. - 2Km road connecting national highway.

A health centre. A school for children day time & for adults night time. A reputed Construction Company having a huge project near by has to adopt the Village to take up the above stated development activities as a Corporate Social Responsibility.

The Company has identified YOU as the Competent Project Manager for this CSR( Corporate Social Responsibility). What you want to recommend as your priority among the 3 development activities?. How do you Plan & Organize 6 Ms for execution?.