2. Principles of Management Definition of Management * Management is the art of getting things done through and with people * Management is a vital function concerned with all aspects of the working of an enterprise. * Management is the function of guiding, directing and unifying human efforts and activities for the accomplishment of given tasks. * Management is the task of planning, coordinating, motivating and controlling efforts and activities towards the specific objectives.

3. Features of Management * It is an art * It is a science or a discipline * It is a process of achieving results * It is a social process involving integration of people for common objectives. * It is geared to lead to the achievement of pre-determined objectives * It is a profession which involves specialised training and is governed by an ethical code arising out of its social obligations.

4. Why Principles of Management 1. To increase efficiency 2. To give a definite and concrete shape of management. 3. To improve research in management 4. To attain social goals by increasing efficiency in the use of resources.

5. Functions of Management I. According to the Henri Fayol : (i) Forecasting and planning (ii) Organising (iii) Commanding (iv) Coordinating (v) Controlling

6. Functions of Management II.According to Gullick P Planning O Organising D Directing S Staffing CO Coordinating R Reporting B Budgeting

7. Functions of Management III. Basic functions (i) Planning (ii) Organising (iii) Staffing (iv) Directing (v) Controlling The Management Process Controlling Planning Staffing Directing Organising

8. I. Planning Planning is deciding in advance the future course of action Planning includes forecasting, objectives, policies, rules, programmes, procedures, strategies, schedules, and budgets. Planning is an intellectual process, goal-oriented, primary function of management, pervades all managerial activities, and directed towards efficiency. Steps in Planning involve : recognition of need for action, setting objectives, deciding premises of planning, identifying alternative courses of action, evaluating courses of action and choosing the best course. Importance of Planning (i) to manage by objectives, (ii) to take care of future uncertainty, (iii) to secure economy in operation, and (iv) to make control effective.

9. II. Organising Organising is a dynamic process and a managerial activity which is necessary for bringing people together and tying them together in the pursuit of common objectives. Organisation refers to the structure of relationships among positions and jobs which is built up for the realisation of common objectives. Organisation is the vehicle through which goals are sought to be attained. Common features of organisation are : division of labour, coordination, accomplishment of objectives or goals, and authority and responsibility structure.

10. Process of Organising (i) Determination of objectives (ii) Enumeration of activities (iii) Classification of activities (iv) Fitting individuals into functions (v) Assignment of authority for action Importance of Organising It facilitates administration * makes growth and diversification possible * provides for the optimum use of technological improvements * stimulates independent, creative thinking and initiative through defined areas of work

11. Staffing * Staffing is concerned with selection, communication, participation, appraisal, counselling, training, compensation, dismissal, transfers, promotions, demotions, etc.

12. IV. Directing Directing is an activity of leading, guiding, instructing, and motivating people to get to their work willingly and achieve the assigned tasks and goals. Directing by nature links preparatory management functions and controlling; relates to all levels of management and is function of all managers; and is continuing function. Principles of direction include individual contribution to objective, harmony of objectives, efficiency of direction, unity of command, directing supervision, managerial communication, comprehension, information availability, and strategic use of information.

13. V. Controlling Controlling implies measurement of accomplishment against the standard and the correction of deviations to assure attainment of objectives according to plans. Fundamentally, control is any process that guides activity toward some pre-determined goal. In essence of the concept is in determining whether the activity is achieving the desired results. Control compares the actual performance with standards of performance, finds deviations and takes corrective actions.

14. Nature of Controlling (i) Planning is the basics of control (ii) Action is the essence of control (iii) Delegation is the key to control (iv) Information is the guide to control Controlling process includes steps : (i) establishment of standards (ii) measurement of performance (iii) finding the deviations (iv) taking remedial action Requirements of good control system suitability, prompt reporting, forward looking, focus on strategic points, flexible, objective, reflection of organisation pattern, economical understandable, and suggestive of remedial action.

15. STYLES OF LEADERSHIP         You do what I say Lets decide together Speaks no evil Sees no evil Hears no evil Authoritarian Participative Lassies-Faire  

16. Principles of Organisation (i) Unity of objective (ii) Efficiency (iii) Span of management (iv) Division of work (v) Functional definition (vi) Scaler principle (chain of command) (vii) Exception principle (viii) Unity of command (ix) Unity of direction (x) Responsibility (xi) Authority and responsibility (xii) Balance (xiii) Flexibility (xiv) Continuity (xv) Facilitation of leadership

17. Determinants of Organisation Structure Organisation structure is the pattern in which various parts or components that is positions and activities of organisation are interrelated and inter connected. Since these positions are held by individuals, the structure is the relationships among people in the organisation. * There is a difference between structure and process as follows  The structure of a system is the arrangement of its sub-systems and components in three-dimensional space at a given moment of time.  Process is a dynamic change in the matter, energy, or information of the system over time. Need for Organisation Structure (OS) arises because large number of people are associated in achieving organisational objectives. The purposes is to ensure that (i) all necessary activities are performed; and no unnecessary activity is performed, (ii) no unnecessary duplication; and (iii) all activities are performed in a synchronized manner.

18. Determinants (i) Environment includes all the conditions, circumstances and influences surrounding and affecting the development of total organisation or any of its internal systems. Environment may be social (general and specific (task). Specific may include customers, suppliers, competitors, socio-political factors and technology. (ii) Technology is another factor affecting organisation structure. Technology is a body of particular type of knowledge and relates to direct problem solving inventions. (iii) Size of Organisation refers to number of employees, scale of operations, size of investments etc. which have an influence on organisation structure. (iv) People - Organisation structure is the result of conscious actions and interactions on the part of people who are engaged in the organisation. These people (superiors and subordinates) influence the organisation structure.

19. Designing of Organisation Structure Need of Organisation Structure : (i) Facilitating management, (ii) encouraging growth (iii) optimum use of technological improvement, (iv) encouraging human use of people, (v) stimulating creativity. Planning for Organisation Structure (i) Consideraton of contextual variables, (ii) departmentation, (iii) balancing, (iv) focusing on operational responsibility, (v) establishing span, (vi) facilitating units, (vii) provision for top management, (viii) structural arrangement, (ix) continuity. Process in Organisation Design (i) Identification of activities (ii) Grouping of activities (iii) Assigning the activities to individuals (iv) Delegation of authority

20. Departmentation is the process of dividing the work of organisation into various units or departments. Departmentation may be based on (a) functions, (b) product, (iii) territory, (iv) customers, (v) process, (vi) time, and (vii) alpha-numerical. Basis for departmentation (i) specialisation, (ii) coordination, (iii) control, (iv) economy, (v) recognition of local conditions, (vi) adequate attention, and (vii) human consideration. Span of Management - How many subordinates can be managed by a superior ? Is there any ideal number ? Classical approach - Experts suggested three to eight persons for effective control.

21. Graicunas theory of superior-subordinate relationship Three types of superior - subordinate relationships identified : (i) Direct single relationships - like A as imperior has three subordinates X,Y,Z. There would be three direct relationships. This is n relationships. (ii) Direct group relationships - like A as superior has relationships with groups A,B & C (This is = n (2 -1) relationships. (iii) Cross relationships - There are mutual relationships among subordinates necessary for working under common superior X with Y, Ywith X and so on. This is = n(n-1). Total relationships = n ( + n-1) or n (2 + n-1)

22. Factors determining span of control (i) Capacity of superior (ii) Capacity of subordinates (iii) Nature of work (iv) Degree of decentralisation (v) Planning (vi) Use of staff assistance (vii) Communication techniques (viii) Supervision from others

23. Delegation of Authority Delegation of authority is the process through which a manager gives authority to others in order to accomplish certain assignments. Effective delegation (i) Authority and responsibility of managers should be clearly defined. (ii) Failing to delegate because of insecurity (iii) Work climate free of fear and frustration (iv) Intelligent planning (v) Proper control techniques (vi) Proper selection of delegants (vii) Free and open lines of communication

24. Centralisation and Decentralisation Delegation and decentralisation are two different terms. The difference is decentralisation is more encompassing than delegation. Decentralisation is a philosophy even when it is a result of delegation of authority. Decentralisation used to denote the dispersal or administrative, physical and functional factors besides the consequence of delegation. Delegation is more analytical and often in management it is used in this context. Centralisation and decentralisation describe the manner in which decision making responsibilities are divided among managers of different levels of managerial hierarchy.

25. Difference between Delegation and Decentralisation Delegation refers to entrustment of responsibility and authority from one individual to another. Decentralisation refers to the systematic delegation of authority in an organisation-wide context. Thus, delegation is said to be the process and decentralisation as the result of the process. There can’t be absolute centralisation or absolute decentralisation in an organisation. There may be centralised administration, limited decentralisation, delegated authority or bottom up administration. Decentralisation benefits (i) Reduces burden of top managers (ii) Facilitates diversification (iii) Ensures marketing innovations (iv) Motivation managers (v) Encourages development (vi) Minimises level of organisation (vii) Better coordination

26. Making decentralisation effective (i) Centralised top policy formulation and control (ii) Appropriate control techniques (iii) Competition among units (iv) Understanding decentralisation (v) Development of managers

27. Form of Organisation Structure (i) Line and staff organisation (ii) Functional organisation (iii) Divisionalisation (iv) Project organisation (v) Matrix organisation (vi) Free form organisation Line Staff and Staff Organisation This refers to a pattern in which staff (advisory people) advise line (directly responsible people) managers to perform their duties. Line managers have a clearly defined and substantial (direct) role to play in the organisation. Line managers delegate their authority and assign activities to subordinates thus form line (superior subordinate) relationship throughout the organisation. The line relationship is created by the force of authority and works as chain of command, chain of communication and carrier of accountability.

28. Staff Relationship ; The nature of staff relationship is purely advisory in nature. Through the staff personnel exercise line authority over the subordinates of their department, yet they don not have any other line authority. They provide advice, assistance, and information upwards. It depends upon the line managers whether the advice is put into action. General Manager PA to GM Staff authority Line authority Finance ManagerPersonnel Manager Finance Officer-I Finance Officer-IIPersonnel Officer Production Manager Marketing Manager Production Plant service Advertising Marketing Research Planning Manager Manager Manager Manager Factory Manager Factory Manager Sales Officer Sales officer

29. Functional Organisation Line Authority of Chief Executive Personnel Finance & Legal Public ManagerAccounts Manager Relations Manager ProductionMarketing ManagerManager Functional Authority Relationship

30. Divisionalised Organisation In divisionalisation, the functional organisation is divided into smaller, flexible, administrative units in order to overcome the problems faced in functional organisations. This way an organisation is divided in relatively many units of smaller sizes to take advantages of small organisations but maintaining the large size. President VP VP VP VP Unit-I Unit-II Unit-III Unit-IV F P P M Divisionalised Organisation

31. Project Organisation When organisation undertakes some projects (contracts) to be implemented according to a time schedule the organisation structure adopted is called project organisation structure. General Manager Project A Project B Quality R&D Contract Sche- QC R&D Contract Sche- controladmn. duling admn. duling Engineering Forecasting Engineering Forecasting Manufacturing Project Organisation

32. Matrix Organisation Matrix Organisation structure is essentially a violation of the classical principle ‘one-man-one-boss’. Matrix organisation is defined as any organisation that employs a multiple command system that includes not only the multiple command structure but also related support mechanism and an associated organisational culture and behavioural pattern. General Manager Division A Division B Prodn. Persnl. Fin. Mktg. Mktg. Fin. Prodn. Line authority Project Mgr-I MM I FM I PM I --------- Staff authority Project Mgr-II MM II FM II PM II Project Mgr-III MM III FM III PM III Matrix Organisation

33. Major Entrepreneurial Competencies - A Research Study Initiative Sees and Acts on Opportunities Persistence Information Seeking Concern for High Quality of Work Commitment to Work Contract Efficiency Orientation Systematic Planning Problem Solving Self-Cpmfidence Assertiveness Persuation Use of Influence Strategies Monitoring Concern for Employee Welfare

34. Are these Competencies Independent ? Most Important Least Important 1. High academic qualification 2. Physical fitness 3. Need to achieve 4. Ventivesomeness 5. Creativity 6. Competitiveness 7. Persistence 8. Patience 9. Leadership 10. Organising ability 11. Need to have power over others 12. Desire for money 13. Independence 14. Coverage 15. Positive outlook

35. Management Information Systems in Pyramidal Form Strategic Planning Tactical Planning Operational Planning Transactional Planning

36. Relationship of MIS & Operations inf. Systems to Business Operations and the levels of Management MANAGEMENT INFORMATION SYSTEMS MIS OPERATIONS INFORMATION SYSTEMS Strategic mgmt. Tactical mgt. Operational mgt. Business operations - Exe- cutive inf. systems - Decision support systems - Inf. reporti ng systems - Office automation - Transaction processing systems - Process control systems

37. Area of use of authority by the leader Area of freedom to people TASK ORIENTED RELATIONSHIP ORIENTED AUTOCRATIC DEMOCRATIC SOURCES OF AUTHORITY Leader makes decisions and announces Leader presents ideas and invites questions/ suggestions Leader presents problems, gets suggestions and makes decisions Leader permits subordinates to function within limits defined by superior Leader ‘sells’ decision Leader presents tentative decision subject to change Leader defines limits and asks group to make decision

38. As for the best leaders, people don’t notice their existence. The next best, the people honour and praise. The next, people fear; the next people hate. When the best leaders’ work is done, the people say, “we did it ourselves”

39. Qualities of Leadership 1. Intelligence 2. Emotional stability and maturity 3. Sociability 4. Initiative 5. Sound judgement 6. Sense of responsibility 7. Objectivity 8. Enthusiasm 9. Physical energy and stamina 10. Communicability 11. Educational and technical skills 12. Quick decision making depending on situations

40. WHAT IS QUALITY ? “… a predictable degree of uniformity and dependability at low cost, suited to the market.” “… doing thins right the first time ….. every time”. W. Edwards Deming (1986) “… fitness for use, as judged by the user”. Joseph M Juran (1989) “… conformance to requirements”. Philip B. Crossby (1979) “… full customer satisfaction by understanding his value perception”. Armand V Feigenbaum (1956) TOTAL QUALITY “… satisfying the external and internal customers’ requirements”. Kauro Ishikawa (CWQC) “… improving the quality of work life with workers’ satisfaction”.

41. INFORMATION SYSTEM PLANNING PROCESS Strategic planning Tactical planning Operational planning Enterprise assessment analysis : Organisation mission, Goal, and Strategies Environ. Analysis : Assess IS env. Develop strategic inf. systems plan Assess orgn’s inf. requore ments Assem- ble master dev. plan Dev. re- source allocat ion plan Dev. operat ional plans - Review strategic orgn. Plan - Identify major claimant groups and their objectives -identify stragetic orgn. initiatives -IS strategies, measures & goals - Overall inf. architecture - Resource allocation mechanism - Management processes - Major application objectives - Inf. System project def. - Project ranking -Multi year dev, schedule - Strategic IS opprt. - Current business envir. - New technology - Current applications portfolio - Current IS resources - Stage of IS maturity - Current inf. needs - Projected inf. needs - Hardware plan. - Software plan - Personal plan - Telecom. Network plan -Facilities plan - Financial plan -Annual op. budget - Individual project plan.

42. MANAGERIAL GRID OF BLACK & MOUTON 1,9 9,9 (Country club) (Team) 5,5 Middle Road 1,1 9,1 (Impoverished) (Task) Low Concern for people High 1 2 3 4 5 6 7 8 9 Low Concern for people High

43. DOCUMENTATION FOR EXPORT Regulatory Documents GR-I form/EP form/PP form/VP or COD form Export Licence Inspection Certificate Consular Invoice Legalized Invoice Certificate of Origin

44. Operational Documents 1. Shipping bill (free, dutiable or drawback) 2. Commercial invoice 3. Packing list 4. Bill of lading or airway bill (Freight paid or freight collect) 5. Marine insurance policy (all risk policy) 6. Application for export assistance 7. Import replenishment licence 8. Cash assistance form 9. Duty drawback form 10. Letter of credit (L/c) 11. Bill of Exchange

45. PARTIES, ACTS AND PUBLICATIONS INVOLVED Parties Involved 1. Exporter 2. Foreign buyer (Importer 3. Negotiating bank 4. RBI 5. Chief Controller of Exports & Imports 6. Collector of customs 7. Port Commissioners 8. Clearing & forwarding agents

46. Acts to be Consulted (i) Customs Act, 1962 (ii) Carriage of Goods by Sea Act, 192 (iii) Foreign Exchange Regulation Act, 1973 (iv) Schedule of charges of goods in respect of port of shipment Publications to be Consulted (a) Handbook of export promotion (b) Export Trade Control - Handbook of Policy and Procedure (c) Import Trade Control Policy - Volumes I & II (d) Import Trade Control - Handbook of Rules & Procedures

47. Action Steps of TQM Implementation

48. Kano’s Model of Customer Satisfaction Basic Features Delighted Customer Performance Features Excellent Features satisfaction Degree of Achievement

49. The Enigma of Six Sigma 66

50. INDIA’S SIX SIGMA STRATEGIES a llied SignalAmorphous Target : Five Sigma metals b ajaj AutoTo beFeasibility Studies and decided Implementation area- Identification under way g E MotorsCompany First defect-free consignment wide shipped in December, 1998 g odrej GEOrganisationSavings of Rs. 4 crore in 1998- wide99. Extended to non- manufacturing processes h ero MotorsWarrantiesTarget : Nine fold decrease in defect rates in 2 years m aruti UdyogPrint projectFeasibility studies and (spares)implementation area identification under way m odi XeroxTo be decided Programme began in 1999-2000 w ipro OrganisationTargets:Achieved 4 sigma in wide2000, six sigma by March 2003

51. THE SIGMA SCALE OF DEFECTS Sigma Defect Rate (PPM) Cost of poor quality (% of sales) Competitive level 6666 3.4 3.4 < 10% World Class 5555 233 233 10% - 15% 44446,21015%-20% Industry Average 333366,80720%-30% 2222308,53730%-40%Non-Competitive 1111690,000 > 40%

52. The Six Sigma Benchmarks Average Company Purchased Material Lot Rejected Rate Restaurant Bills Prescription writing Airline baggage handling Wire transfers Payroll processing Order write-up Journal vouchers Airline flight Fatality Rate Best in Class (0.25 PPM) Sigma (with 1.5  shift) DEFECTS PER MILLION OPPORTUNITIES 1 10 1K 10K 100K 23456 7

53. THE SIX SIGMA PROCESS Management & Leaders PRODUCT BENCHMARKING Management & Technical Leaders PROCESS BASELINE ANALYSIS BREAKTHROUGH COOKBOOK APPLICATION PROJECTS A B C D E F G A B C D E F G Select CTQ characteristics o o o o o o o Define performance standards o o o o o o o Validate measurement systems o o o o o o o Establish product capability o o o o o o o Define performance objectives o o o o o o o Identify various sources o o o o o o o Screen potential causes o o o o o o o Discover variables relationship o o o o o o o Establishing operating tolerances o o o o o o o Validate measurement system o o o o o o o Determine process capability o o o o o o o Implement process controls o o o o o o o AUDIT AND REVIEW CONTROL IMPROVE ANALYSE MEASURE CONTROL IMPROVE ANALYSE MEASURE

54. Six Sigma Resources -Measuring Process Capability : Technicians and calculations for quality and Manufacturing engineers, Davis R Bothe, McGraw Hill -Customer focused quality, What to do on Monday Morning, T Hinton & W Schoeffer, prentice Hall -Measuring Six Sigma and Beyond, R Lawson & B Stuart, Motorola University Press -Quality in the Communication Process, Charles Sangstock Jr., Motorola University Press -Reliability and Maintainability Analysis of Redundant and non- redundant system, M Sparkman & D Heinzelmann, Motorola University Press -Six Sigma productivity analysis and process characterisation, M Harry & Lawson, Motorola University Press -The Nature of Six Sigma Quality, M Harry, Motorola University Press

55. -The foundation of six Sigma Quality, Motorola University Press -Communicating the Quality message, Motorola University Press -Customer Satisfaction assessment guide, Motorola University Press -Total Customer Satisfaction, Motorola University Press

56.  -http://qrec.changwonac.kr/mlru/major/sixsigma/slxslte,html: Portal to Six Sigma siteshttp://qrec.changwonac.kr/mlru/major/sixsigma/slxslte,html: Portal -http://www.sixsigmaqualtec.com/casestudies/index.html; Six Sigma case studieshttp://www.sixsigmaqualtec.com/casestudies/index.html; Six -http://www.sixsigmaqualtec.com/products/index.html; six sigma consulting resourceshttp://www.sixsigmaqualtec.com/products/index.html -http://www.6-sigma.com:training resources from the six sigma academichttp://www.6-sigma.com:training -http://www.ge.com/annual97/sixsigma/create.html: A case study from GE Medicalhttp://www.ge.com/annual97/sixsigma/create.html -http://www.uecl.com/finance/1998annrpt/ssss00.html: An overview of six sigma at Raytheonhttp://www.uecl.com/finance/1998annrpt/ssss00.html -http://www.surya.wipro.com/wision/137/six sigma.html : An overview of Six sigma at Wiprohttp://www.surya.wipro.com/wision/137/six sigma.html -http://deming.eng.clemson.edu/den/archive/98.09/msg00036.html : A discussion Six Sigma and Deminghttp://deming.eng.clemson.edu/den/archive/98.09/msg00036.html

57. -3  -2  -1  X+1  +2  +3  Most of the output of a process will meet your specification (call it X). But some will deviate, to varying extents, measured by the standard deviation (  ). So some units will have a un-specification of X±1  ; some X±2  ; and some X±3  THE MATHEMATICS OF SIX SIGMA

58. -3  -2  -1  X+1  +2  +3  Most of the output of a process will meet your specification (call it X). But some will deviate, to varying extents, measured by the standard deviation (  ). So some units will have a un-specification of X±1  ; some X±2  ; and some X±3  THE MATHEMATICS OF SIX SIGMA Original defects Original design width

59. TEN COMMANDMENTS OF INTRAPRENEURING 1.Come to work each day willing to be piped 2.Circumvent any order aimed at stopping your dreams 3.Do any job needed to make your project work regardless of your job description 4.Find people to help you 5.Follow your intuition about the people you choose and work only with the best 6.Work underground as long as you can. Publicity triggers corporate immune mechanism. 7.Never bet a race unless running in it. 8.It is easier to ask for forgiveness than for permission. 9.Be true to your goals but be realistic about the ways to achieve it. 10.Honour your sponsors.