Role and Importance of management

Scientific management F. W. Taylor- father of scientific management His principles: Replace the rules of thumb with scientific rules Obtain a harmony in group action Achieve co-operation of human beings, rather than chaotic individualism Work for maximum output Develop all workers to the fullest possible potential for their own highest possible prosperity Disciples of Taylor-C. B. Barth, H. L. Gantt, L. Gilberth

Principles of Operational Management (Henry Fayol) Division of work Authority and responsibility Discipline Unity of command Unity of direction Subordination of individual to corporate interest Centralization Equity Stability of tenure – controlled turnover of people Initiative

Functions of the Manager An individual who gets the things done is manager. The activities which are performed through the managerial functions are: Planning Organization Staffing Directing Coordinating Controlling

Planning Determining the goals and objectives and evolving strategies, policies, programmes and procedures for the achievement of these goals. Decision making

Organization Evolving the structure of the people and their roles Specifying the authority structure and assigning the activities to the people backed by the delegation of the authority

Staffing Manning the positions in the organization structure Requires defining the manpower needs per position (ex: cadre ratio) Appropriate selection of the person/persons

Directing Implementing the process of management The manager is required to guide, clarify and solve the problems of the people and their activities Motivate the people

Coordinating Brings a harmony and smoothness in the various group activities and individual efforts Synchronizing individual actions and the efforts which may differ because of differences in the personal goals and the common goals, the differences in the interpretation in the methods and directions Differences in the approach, timing, efforts and interests are needed to be coordinated

Controlling Measurement of an output, comparing it with the goals, the objectives and the targets and taking corrective actions, if necessary Evaluates the performance, highlights abnormal deviations, guides a manger to take specific corrective actions Ensures an achievement of the plan Essence of controlling lies in good planning The control is central to the managerial function

Managers and the environment All managers work in an environment in which the organization operates Number of forces are generated in the environment which have an impact on the managerial performance Forces may be from within or from outside Internal environment is controllable while external is beyond his control External environment: 5 classes

Economic environment Capital: required to run the organization, long-term, short-term, internal sources, borrowed (interest charged forms the cost of capital) Labour: cost of labour is determined every 2-3 years by a union agreement based upon the cost of living index, wage standards, the availability of labour etc. Price changes: decrease in the demand and supply, changes in the consumer behavior, consumption pattern and the money supply and so on

Economic environment Productivity: result of the capital, labour and technology. Better technology affects the cost and the productivity Fiscal and monetary policy: announced and controlled by the government. The organizations profit position is affected by this policy Customers: rules the business in a buyer’s market. Customer behaviour is unpredictable. it is not always possible to predict these changes well in advance in order to take any managerial action to meet the changes situation

Technological environment Has major impact on business Affects the business prospects, cuts down the profits, and forces the management to change the course of the business operations Requires changes in product design and promotes new concepts New business opportunities Changes the work culture, the methods and the systems Ex: aviation, electronics, energy, communication, consumer goods industry, medicines etc.

Social environment Built around the attitudes, the desires, the expectations, the degree of intelligence and education, the beliefs and customs, the religion, the caste and creed of the people. Deeply routed in the society Ex: use of fertilizers, marketing in rural and urban areas, frozen goods

Political environment Most important factor which affects the business in Indian environment The unstable political environment brings stagnancy in business development The changes in ruling party bring economic policy changes The sectoral preferences and its policies change with ruling party which have a long term impact on business performance

Ethical environment Some business problems arise due to failing in the ethical grounds The business ethics emerge from the professional conduct, the business norms and codes on confidentiality, the payment and documentation etc.

All these factors are beyond the control of the manager All these factors are beyond the control of the manager. At best he can predict, access, evaluate and take such actions which will help them to control the situation

Management as a control system Establish standards of performance Measure performance Corrective action No action OK Not OK Actual vs STD.

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