Principles of management, functions of management, management skills, types of organisation

2.  Efficiently and Effectively
 Efficiently (Focus on Process/means)
 Getting work done with a minimum of effort,
expense, or waste
 Doings things right—most output for least input
 Ability to do the things in right way
 Ex. Ability to determine appropriate objectives
 Effectively (Focus on ends)
 Accomplishing tasks that help fulfill organizational
objectives
 Ability to do the right things
 Ex. Ability to minimize the expenditure in
achieving the objectives

3. ManageMenT
Management is the process of designing &
maintaining an environment in which
individuals, working together in groups,
efficiently accomplish selected aims
PRODUCTTransformatio
n
Men
Machin
eMaterial
Money
M
A
N
A
G
E
M
E
N
T

4. ManageMenT
Things Time
Method Place
Process of
doing
right

6. The Father of Scientific Management
6
F. W. Taylor
(1856-1915)
• Important Contributions
• Time and Motion Studies
– Reduce motions in order to improve
productivity
– to establish appropriate standards
for task performance
• Wage - Incentive System
– More wages when task is performed
according to specifications within the
allotted time
– Ordinary wages if the time allotment
is exceeded

7. Developed the specific principles of Scientific
Management
7

8. Taylor’s 4 Principles of Scientific Management
 Scientifically study each part of a task and develop the
best method for performing the task
 Carefully select workers and train them to perform the
task by using the scientifically developed method
 Cooperate fully with workers to ensure that they use
the proper method
 Divide work and responsibility so that management is
responsible for planning work methods using
scientific principles and workers are responsible for
executing the work accordingly
8

9. Henri Fayol (1841-1925)
FATHER OF MODERN
MANAGEMENT

10. Fayol’s 14 Principles of Management
1. Division of Work
2. Authority
3. Discipline
4. Unity of Command
5. Unity of Direction
6. Subordination of
Individual Interests to
the General Interest
7. Remuneration
8. Centralization
9. Scalar Chain
10. Order
11. Equity
12. Stability of Tenure
of Personnel
13. Initiative
14. Esprit de corps

11. 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
organization.

12. 2. AuthorityThe 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.

13. 3. Discipline
 Employees must obey.
 A successful organization requires the common
effort of workers.
 Penalties should be applied judiciously to
encourage this common effort.

14. 4. Unity Of Command
Each worker should have only one boss with no
other conflicting lines of command.

15. 5. Unity of Direction
The entire organization should be moving
towards a common objective in a common
direction.

16. 6. Subordination of individual interest
The interests of one person should not
take priority over the interests of the
organization as a whole.

17. 7. Remuneration
Payment is an important motivator although by
analyzing a number of possibilities, Fayol points
out that there is no such thing as a perfect system.

18. 8. Centralization (Or Decentralization)
Centralization is lowering the importance of the
subordinate’s 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
working.

19. 9. Scalar chain (Line of Authority)
A hierarchy is necessary for unity of direction. But
lateral communication is also fundamental, as
long as superiors know that such communication
is taking place. Scalar chain refers to the number
of levels in the hierarchy from the ultimate
authority to the lowest level in the organization.
It should not be over-stretched and consist of too-
many levels.

20. 10. Order
Both material order and social order are
necessary. The former minimizes lost time and
useless handling of materials. The latter is
achieved through organization and selection.

21. 11. Equity
All employees should be treated as equally as
possible.

22. 12. Stability of Tenure of Personnel
Employees work better if job security and
career progress are assured to them. An
insecure tenure and a high rate of employee
turnover will affect the organization adversely.

23. 13. Initiative
 Allowing all personnel to show their initiative
in some way is a source of strength for the
organization.
 Management should take steps to encourage
worker initiative, which is defined as new or
additional work activity undertaken through
self direction.

24. 14. Esprit de CorpsManagement should encourage harmony and
general good feelings among employees.

25. Maslow’s
Hierarchy
of Needs
Basic Needs
Safety & Security Needs
Social Needs
Self
Esteem
Self
Actualisation

26. The Management Process
 Plan what is to be done
 Organize how it is to be
done
 Direct the work that is to be
done
 Control or evaluate what
has been done

27. Management
 The attainment of organizational goals in
an effective and efficient manner through
Planning, Organizing, Leading, and
Controlling organizational resources.

28. Management Functions
CONTROLLING
Monitor
activities
And
make corrections
LEADING
Use
influence
to motivate
followers
ORGANIZING
Assign
responsibility
for task
accomplishment
PLANNING
Select
goals
and ways
to attain them
RESOURCES
(Human, Financial, Raw Materials, Technological, Information)
PERFORMANCE
(Attain Goals, Products/Service, Efficiency, Effectiveness)

29. If you are planning for a year,
sow the rice
If you are planning for a decade,
plant the trees
If you are planning for a lifetime,
educate the people
Planning

30. Hierarchy of Plans
Strategic Plans
Plans reflecting decisions about resource
allocations, company priorities, and steps
needed to meet strategic goals
Set
Strategic
Goals
Analyze the
Organization
Analyze the
Environment
Match the
Organization
and its
Environment
Formulate
Strategy
& Strategy Formulation

31. The Nature of Planning
Top management makes
Strategic Plans.
Middle Management
makes Annual Plans (to
implement the above).
Supervisors planning
period is usually a week,
day, or shift ( to deal with
daily work).

32. The Planning Process
 Define the purpose or problem and set
objectives
 Collect & evaluate data relevant to forecasting
the future (focus on the present)
 Develop alternative courses of action
 Decide on the best course of action
 Carry out the plan

33. Forecasting
 Forecasting: Predicting
future needs on the
basis of historical data,
present conditions, and
assured future.
 Forecasting controls
staffing, purchasing,
and production
decisions.
 Forecasting is a very
important function!

34. Qualities of a Good Plan
 Provides a workable solution
and meets the stated
objectives.
 Is comprehensive; it raises all
relevant questions and
answers them.
 Minimizes the degree of
risks.
 Is specific as to time, place,
supplies, tools, etc.
 Is flexible (can be adapted to
a change in the situation).

35. Types of Plans and Planning
 Standing Plan: established routine,
formula, or set of procedures designed to
be used in a reoccurring situation.
 They standardize actions so the
supervisors’ need to manage is reduced to
seeing that workers meet standards and
dealing with unexpected events known as
management by exception.
 Potential drawback: Rigidity, must make
them flexible enough to deal with daily
realities.
 These plans must be updated regularly.

36. The Single Use Plan
 A one time plan developed for a
single occasion or purpose.
 The amount of time you spend
on it depends on its nature and
importance.
 Often its purpose is a major
change of some sort or budgets.

37. Day-by-Day Planning
 Top priority of the first line
supervisor.
 Primary concern is what is to
be done, who will be doing it,
and adjusting various
standing plans.
 Plan before the day begins.
 Establish routines simplify
planning.
 Whenever possible reduce
risks by increasing
predictability.

38. Planning for Change
 Define problem and set
objectives
 Gather past, present, and
probable future data
 Evaluate pros and cons,
generate alternatives
 Make the nessicary decisions
 Implement the plan

39. Management Functions
CONTROLLING
Monitor
activities
And
make corrections
LEADING
Use
influence
to motivate
followers
ORGANIZING
Assign
responsibility
for task
accomplishment
PLANNING
Select
goals
and ways
to attain them
RESOURCES
(Human, Financial, Raw Materials, Technological, Information)
PERFORMANCE
(Attain Goals, Products/Service, Efficiency, Effectiveness)
The work a manager performs to
arrange and relate work to
be done so it can be performed
effectively by people
To provide the means of grouping
people and assigned activities together
so that the unit’s objectives are most
effectively accomplished
1. Define each job within the organization
2. Assign activities
3. Establish clear communication channels
4. Assign responsibility and authority
5. Identify and limit the span of control

40. 40
Specifically, they include:
1. Division of labor
2. Delegation of authority
3. Departmentation
4. Span of control
5. Coordination
Organizational Structure

41. Organizational Chart
A schematic drawing that depicts hierarchical relationships (chain
of command) among all positions in the organization.
Nonmanager
NonmanagersManagers
Key
Nonmanager Nonmanager Nonmanager Nonmanager Nonmanager Nonmanager Nonmanager
Manager
Director Director Director Director Director Director
Manager
Vice President Vice President Vice President
President

42. The Universalism of Management
Business
Across Organizations of Different Size and Types
Governmental
Agencies
Educational
Institutions
Social
Services
Health Care
Delivery
Across Functional Areas
Production Marketing Finance Personnel
Across Organizational Levels
Middle
Management
Top
Management
Lower
Management

43. Leading
A function that includes Motivating employees, Directing
others, selecting the most effective Communication
channels, and Resolve conflicts.

44. Control Process
5 - 44
Establish Standards
Measure Performance
Does measured
performance match
standards?
YES NO
Continue
Current
Activities
Adjust
Performance or
Standards

45. Management Functions
Planning
Organizing
Motivating
Controlling
Management
Functions
Staffing
Directing
Coordinating
Communicating

46. The Role of Managers :
Interpersonal
Role
Informational
Role
Information +
Power and
Responsibility
Decisional
Role

47. The Manager

48. Basic Management Skills
Technical Skills
Skills needed to perform specialized tasks
Human Relations Skills
Skills in understanding and getting along with people
Conceptual Skills
Abilities to think in the abstract, diagnose and analyze
different situations, and see beyond the present situation
Decision-making Skills
Skills in defining problems and selecting the best courses of
action

49. Skills and the
Manager
Fundamental
Management
Skills
Technical Skills
Interpersonal Skills
Conceptual Skills
Diagnostic Skills
Communication Skills
Decision-Making Skills
Time-Management Skills

50. Management Levels and Functional Areas

51. Management Skills

52. MANAGING HUMAN
RELATIONS
Skills needed at all levels
Levels of
Management
Skills needed
Top
Middle
Supervisory 35%
5%
60%
5%
20%
35%
20%

53. The Three Levels of Management
 Top managers
 CEO, president, or vice president
 Middle managers
 Sales manager, branch manager, or
department head
 First-line managers
 Crew leader, supervisor, head nurse,
or office manager

54. TYPES OF ORGANISATIONAL
STRUCTURES
1. LINE, MILITARY OR SCALER ORGANISATION

55. LINE, MILITARY OR SCALER
ORGANISATION
 The oldest and the simples organisational structure.
 There is a hierarchical arrangement of authority.
 Each department is self contained and works
independently of other departments.
 Lines of authority are vertical i.e. from top to bottom.
 Line structures are suitable for,
1. Small businesses where there are few subordinates,
2. Organisations where there is largely of routine
nature and methods of operations are simple.

56. LINE, MILITARY OR SCALER
ORGANISATION
Advantages
 Simple to establish and operate
 Promotes prompt decision making.
 Easy to control as the managers have direct control over
their subordinates.
 Communication is fast and easy as there is only vertical
flow of communication.
Disadvantages
 Lack of specialisation
 Managers might get overloaded with too many things to do.
 Failure of one manager to take proper decisions might
affect the whole organisation.

57. TYPES OF ORGANISATIONAL
STRUCTURES
2. FUNCTIONAL ORGANISATION

58. Functional Organisation
The organisation is divided into a
number of functional areas.
This organisation has grouping of
activities in accordance with the
functions of an organisation such as
production, marketing, finance,
human resource and so on.

59. Functional Organisation
Advantages
 Is logical and reflection of functions
 Follows principle of occupation specialisation
 Simplifies training
 Better control as the manger in charge of each functional
department is usually an specialist.
Disadvantages
 Overspecialisation and narrow viewpoints of key personnel
can limit the organisation growth.
 Reduced coordination between functions.
 Conflicts between different functions could be detrimental
for the organisation as a whole.
 Difficult for general managers to coordinate different
departments.

60. Line and Staff Organisation
 It is a combination of line and functional structures.
 In this organisation structure, the authority flows in a
vertical line and get the help of staff specialist who are
in advisory.
 When the line executives need advice, information
about any specific area, these staff specialists are
consulted.

61. Leadership
Functions of Management

62. A leader is best
when people barely know he exists
Not so good
when people obey and acclaim him
Worse when they despise him
But of a good leader
who talks little
when this work is done
his aim fulfilled
they will say:
“WE DID IT OURSELVES”
- Lao-tse (c. 565 B.C.)
(Philosopher in Ancient China)
Functions of Management

63. Leadership
“I suppose leadership at one time meant
muscles; but today it means getting
along with people.”
-Mohandas K. Gandhi
Functions of Management

64. Leading
“A group of donkeys lead by a lion can defeat a group
of lion lead by a donkey.”
Socrates said
64

65. Leading
 Leading is a process of
 Inspiring, motivating or directing people so that they
will contribute to organizational objective.
 Leading involves motivation, leadership theories
and communication.
 An important role of a manager is to motivate the
people working on a project.
65
Functions of Management

66. Leading
 Leadership involves using power, personality, and
influence,, and communication skills
 Outcome of leadership is highly motivated and
committed workforce
66

67. LEADING
 Trait Approach – focusses on personal qualities
such as height, intelligence, genetic etc
 Transformational Approach – leads the
organisation in new direction through leaders
talent and drive
 Charismatic Approach – leads through personal
magnetism, charm and other qualities – Eg Steve
Jobs of Apple Computers, JW Marriott of Marriott
Hotels
 Narcisstic Approach – leads through personal
skills, magnetic attraction and also are distrustful
of others and consider themselves invincible – Eg
Napolean, Bill Gates,
67

68. 10 Commandments of Leadership
1. Treat everyone with respect and dignity
2. Set the example for others to follow
3. Be active
4. Maintain the highest standards of honesty
and dignity
5. Insist on excellence and hold your people
accountable
6. Build group cohesiveness and pride
7. Show confidence in your people
8. Maintain a strong sense of urgency
9. Be available and visible to your staff
10. Develop yourself to your highest potential
video

69. Qualities of leadership
Key Leadership
Qualities
Positive Self Image Clear Vision
Innovative Ideas
to Problems
Quickly Sense and
Respond to Changes

70. Types of leadership style
 Autocratic leadership style
 Democratic leadership style:
persuasive
or consultative
 Laissez-faire leadership style
© PhotoDisc

71. Leadership styles
 A leadership style where
the leader makes all
decisions independently
or without consulting with
others
 Advantages: good in certain
circumstances, such as
urgent tasks or military
actions
 Disadvantages: poor
decisions, poor level of
employee motivation
Autocratic

72. Leadership styles
 A leadership style where
a leader encourages
employee participation
in decision-making
 persuasive or consultative
 Advantages: better
decisions, employee
motivation
 Disadvantages: delayed
decision, long consultation
Autocratic
Democratic

73. Leadership styles
 A leadership style
where employees are
encouraged to make
their own decisions
within limits.
 Advantages: more
freedom for employees
 Disadvantages: few
guidelines, little
incentive, poor
motivation
 video
Autocratic
Democratic
Laissez-faire
© PhotoDisc

74. Decision Making
Functions of Management

75. Decision Making
 What is Decision Making?
The word decision is defined as:
“A choice between two or more alternatives”.
 Thus decision-making can be defined as:
“The selection of a course of action from among
alternatives ”.

76. Decision Making
 Decision Making is at the heart of organizational
effectiveness, climate, and health.
 Decision Making
 The process by which managers respond to
opportunities and threats that confront them by
analyzing options and making determinations about
specific organizational goals and courses of
action.

77. Decision Making
• Decisions in response to opportunities
occurs when managers respond to ways to improve
organizational performance to benefit customers, employees,
and other stakeholder groups
• Decisions in response to threats
 events inside or outside the organization are adversely
affecting organizational performance

78. Six Steps in Decision Making
Figure 7.4

79. Decision Making Steps
Step 1. Recognize Need for a Decision
 Sparked by an event such as environment changes.
 Managers must first realize that a decision must be
made.
Step 2. Generate Alternatives
 Managers must develop feasible alternative courses of
action.
 If good alternatives are missed, the resulting
decision is poor.
 It is hard to develop creative alternatives, so
managers need to look for new ideas.

80. Decision Making Steps
Step 3. Evaluate Alternatives
 What are the advantages and disadvantages of each
alternative?
 Managers should specify criteria, then evaluate.

81. Decision Making Steps
Criteria
Legality Is the alternative legal and will not violate any
domestic and international laws or
government regulations?
Ethicalness Is the alternative ethical and will not bring
harm stakeholders unnecessarily?
Economic Feasibility Can organization’s performance goals sustain
this alternative?
Practicality Does the management have the capabilities
and resources required to implement the
alternative?
Step 3. Evaluate alternatives

82. Decision Making Steps
Step 4. Choose Among Alternatives
 Rank the various alternatives and make a decision
 Managers must be sure all the information available is
brought to bear on the problem or issue at hand

83. Decision Making Steps
Step 5. Implement Chosen Alternative
 Managers must now carry out the alternative.
 Often a decision is made and not implemented.
Step 6. Learn From Feedback
 Managers should consider what went right and wrong
with the decision and learn for the future.
 Without feedback, managers do not learn from
experience and will repeat the same mistake over.

84. Types of decisions
1. Major & Minor Decisions:
 Major decisions involve more risk & heavy
expenditures and vice versa.
e.g. Major decisions: Purchase of land, machine.
 Minor decisions: Purchase of stationary like pen,
pencils, etc.

85. Types of decisions
2. Policy & operating decisions:
 Top management takes policy decisions whereas
middle & lower management takes operating
decisions.
3. Individual & Group Decisions:
4. Programmed & Non-programmed Decisions:

86. Functions of Management
Communicating

87. Communicating
 Communicating is a process by which instructions,
ideas, thoughts or information are transmitted,
received and understand, by the person working in
organisation.

88. Creating idea
information need
by the sender
Encoding
(Designing)
Transmission of
Message over a
channel
Receiving the
message by
receiver
Receiver analyses,
interprets &
decodes the
message
Action
Feedback

89. Process of Effective Communication
Step 1. Idea Creation: It is preliminary step where the
sender creates an idea to communicate.
Step 2. Encoding: Use of proper codes like printed,
sounds, gestures, pictures and real objects.
Step 3. Transmission: Selection of proper channel like
written papers, letter, lecture, speech, illustration,
pictures, phone calls, etc.
(Contd….)

90. Process of Effective Communication
Step 4. Receiving:
Step 5. Decoding: Decoding means the act of
translating the message by the receiver in his own
words and experience.
Step 6. Action: It is the response from the receiver.
Step 7. Feed Back:
video

91. Methods of Communication
1. Verbal or Written Communication
2. Formal or Informal Communication
3. Downward, Upward or Horizontal
Communication

92. Verbal or Written Communication
Examples of Verbal Communication:
Face to face conversion, telephonic talk,
lectures, conferences, interviews, etc.
Examples of Written Communication:
Letters, memos, emails, notice, circulars,
newsletters, etc.

93. Formal or Informal Communication
Formal Communication
 Mostly in written form.
 e.g. when manager instructs his subordinates by virtue
of his superior position.
Informal Communication

94. Downward, Upward or Horizontal
Communication
 Downward Communication takes place from top
executive to the lower grade executive whereas in
Upward Communication messages are sent from
subordinates to superiors.
 Horizontal Communication takes place between
persons having the same level of authority in the
organisation.

95. CENTRTALISATION &
DECENTRALISATION

96.  “Everything that increasing the role of
subordinates is decentralisation and that decreases
the role is centralisation.”

97. DIFFERENCE BETWEEN
CENTRALISATION &
DECENTRALISATION

98. BASIS FOR
COMPARISON
CENTRALIZATION DECENTRALIZATION
Meaning The retention of
powers and authority
with respect to
planning and decisions,
with the top
management, is known
as Centralization.
The dissemination of
authority,
responsibility and
accountability to the
various management
levels, is known as
Decentralization.
Communication Flow Vertical Open and Free
Decision Making Slow Comparatively faster
Advantage Proper coordination
and Leadership
Sharing of burden and
responsibility

99. BASIS FOR
COMPARISON
CENTRALIZATION DECENTRALIZATION
Power of
decision making
Lies with the top
management.
Multiple persons
have the power
of decision
making.
Reasons Inadequate
control over the
organization
Considerable
control over the
organization
Best suited for Small sized
organization
Large sized
organization