Chapter 2 Management Process

What is Management? Management is Key Function of any organization. It is nothing but getting the things done by the other people with the help of optimum resources to achieve the desired goals.

Resources are organizational assets Managers The people responsible for supervising the use of an organization’s resources to meet its goals. Resources are organizational assets People Skills Knowledge Information Raw materials Machinery Financial capital

What is Management? Management is concerned with preparing, organizing and directing human efforts towards achievement of the aims. Management includes ability to plan, organise and supervise the business activities and it involves leadership and administrative skills.

What is management? Management is not only a science, but also an art. As the management involves handling of human beings, it is an art, and because the process of management has a scientific base, it is considered as a science.

Evolution of Management Progress, development and changes in the concept of management is termed as Evolution of Management. Management is there from historical period. Man started his developments by managing his difficulties. Since last 30,000 years human being is applying management skills.

Evolution of Management Ancient Egyptian, Greek, Roman, Chinese writers have mentioned the term management in various aspects. In last, 10,000 years human erected monuments in many parts of the world. Eg. Pyramids of Egypt, Great Wall of china, Forts in India are extra ordinary management. It shows great skill of ancient mankind in the management of creation and production.

Evolution of Management Later on Military and naval leaders have display spectacular feats of organization and management. During 20th century management came academically. In, 1881, first Business Management School was started.

Evolution of Management Theory

Job Specialization and the Division of Labor Adam Smith (18th century economist) Observed that firms manufactured pins in one of two different ways: - Craft-style- each worker did all steps. - Production-each worker specialized in one step.

Job Specialization and the Division of Labor Adam Smith (18th century economist) Realized that job specialization resulted in much higher efficiency and productivity Breaking down the total job allowed for the division of labor in which workers became very skilled at their specific tasks.

F.W. Taylor and Scientific Management Before Taylor( 1856- 1915), business was managed by Rule of Thumb and common sense. He Found inefficiency all around. To improve efficiency Taylor suggested- Separate Planning from work. Organize workshop on the basis of functional specialization Carefully select workers and train them. Find new ways for jobs to be performed . Standardize tools and equipment's. Establish fair levels of performance and pay a premium for higher performance.

Henry Fayol (1841-1925) He published his book in “General and Industrial Administration” in 1895. According to Fayol, there are six main groups of operations in any business : Technical Commercial Financial, Security Accounting, and Administration.

Definition's of Management F.W. Taylor- ” Management is an art of knowing what to do, when to do in best and cheapest way.” Henry Fayol- “ To forecast and plan, to organise, to command, to coordinate and to control is called management.” Mary Parker – “It is getting things done by others.” Drucker- ”The systematic organisation of economic resources”.

Levels of Management

Top Management Also called as Strategical management. It is represented by Board of Directors (BOD) Chief Executive Officer (CEO) Chairman/ President Managing Directors (MD) General Managers (GM) They are handling overall Functions.

Top Management Functions of Top Level Management To do overall strategic work. To determine and finalise aims/ goals. To define vision of work. To workout long term plans. Top management is the highest authority of the organization. Responsible for overall developments in an organization.

Middle Management Also called tactical level of managers. It is represented by Factory Manager Heads of Department Plant Manager Senior Managers. They are Accountable for the work done by juniors.

Middle Management To plan the executive strategies. To plan medium scale policies. To transmit ideas of Top level management to lower level management. To help Top management in strategic decisions. To guide Lower Management in operation work.

Lower Management Also called as operational level managers. It represents- Shift in-charges Senior supervisors Junior Managers Trainee Engineers. Foreman They have direct responsibility of machinery and materials.

Lower Management Functions- To supervise the operations. To plan and execute daily work schedules. To solve bottleneck problems & difficult situations of workers. To keep daily records. Skilled workers, operators are working below them.

Scientific Management by F.W. Taylor F.W. Taylor is Known as the Father of Scientific Management. Taylor is known for his systematic development of management techniques. Taylor developed four principles of management: Research, Standardization, control, cooperation.

Scientific Management Defined by Frederick Taylor in the late 1800’s Wanted to replace “rule of thumb” To reduce the time a worker spent on each task by optimizing the way the task was done.

Four Principles of Scientific Management Research- Study the ways jobs are performed now and determine new ways to do them. Gather detailed time and motion information. Try different methods to see which is best.

Four Principles of Scientific Management 2) Standardization- Codify the new methods into rules. Teach to all workers the new method.

Four Principles of Scientific Management Control- Select workers whose skills match the rules. Cooperation- Establish fair levels of performance and pay a premium for higher performance. Workers should benefit from higher output

Scientific Vs Traditional Management Scientific Management Traditional Management It prefers Scientific approach for selection, training and placement of employees. It practices recruitment and allotment of work directly to employees. Works on research and experimentation It works on trial and Errors Productivity is more Productivity is less Efforts to reduce the waste Efforts to produce more w/o caring waste Quality of work is assured Not Assured

Fayol’s Principles of Management Division of Labor: allows for job specialization. jobs can have too much specialization leading to poor quality and worker dissatisfaction. Authority and Responsibility both formal and informal authority resulting from special expertise. Unity of Command Employees should have only one boss.

Fayol’s Principles of Management Line of Authority A clear chain of command from top to bottom of the firm. Centralization The degree to which authority rests at the top of the organization. Unity of Direction A single plan of action to guide the organization.

Fayol’s Principles of Management Equity - The provision of justice and the fair and impartial treatment of all employees. Order - The arrangement of employees where they will be of the most value to the organization and to provide career opportunities. Initiative - The fostering of creativity and innovation by encouraging employees to act on their own.

Fayol’s Principles of Management Discipline Obedient, applied, respectful employees are necessary for the organization to function. Remuneration of Personnel An equitable uniform payment system that motivates contributes to organizational success.

Fayol’s Principles of Management Stability of Tenure of Personnel Long-term employment is important for the development of skills that improve the organization’s performance. Subordination of Individual Interest to the Common Interest The interest of the organization takes precedence over that of the individual employee.

Fayol’s Principles of Management Esprit de corps Comradeship, shared enthusiasm foster devotion to the common cause (organization).