Fundamentals of Management

ABC ‘s of Management
Goals/objectives: Purpose of any organization for its existence. Goals are building blocks
for an organization.

Organization: Two or more resources, which are brought together to achieve a specific
objective/goal.

Resources: They are inputs for a company; generally we call them as M’s of management.

What is MANAGEMENT?

 Derived from a word called manage, which means management of horse

 Management is a process of converting input to output.
 There are different dimension for defining the term MANAGEMENT,
 Golden Rule in Management- “No golden rules”
 Four dimensions to define management is as follows:
o Production/ Efficiency orientation: (F.W Taylor) Management is an Art of
knowing what you want to do then seeing that it is done in the best and
cheapest way.
o Decision orientation: (Peter Ducker) Management is simply the process of
decision making.
o People orientation: (Koontz) Management is an Art of getting things through
and with people in formally organized groups.
o Function orientation: (Henry Fayol ) Management is process of involving
planning, organizing, staffing, directing and controlling human efforts.

Finally…….

MAN A GEM ENT

Business: Is state of being busy for an individual, group, or society.

or
One’s regular occupation/ profession, entity/ company / corporation
 Survival Stability/ Consistency

Profitability Objectives of Growth

Business

Effectiveness Efficiency

Dynamic

Characteristics
of Business

Complex Multi-faceted /Multidimensional

Understand

Difficult

Predict Control
Elements Business: Inputs/Resources (M’s), Process, Output, Environment and Feedback.

Internal Environment(Micro)
Input Process Output
Men Goods
Material
Money Services
Minute(Time)
Method Satisfaction
(Technique)
Machinery
Matter (Info)
Goodwill
Market
Etc Value etc

Feedback

External Environment (Macro)

Elements of Internal Environment: are Customers, Suppliers, Competitors, Rivals, Buyers,

and Substitutes

Elements of External Environment: are Social, Political, Legal, Economical, Ecological and
Technological. (SPLEET/PESTLE).
Process: Process is a systematic (rational) and sequential (Step by step) way of doing
things.

Elements of Management Process: Includes the following:

 Forecasting
 Planning
 Organizing
 Staffing
 Coordinating
 Directing
o Communication
o Motivation
o Leadership
o Supervision
 Controlling
 Decision making etc.

Management functions: POSDCoRB - Luther Gullick coined the keyword ’POSDCORB’

which formulates the responsibility of a chief executive or administrator. It is developed as a
means to structure and analyze management activities and sets a new paradigm in Public
Administration.
Who are MANGERS?

MANGE R S

What are the different levels of MANAGEMENT?

What are the qualities MANGERS should have to manage well?

 SMART
 KASH

Specific
Measurable
Attainable/ Attitude
Realistic/ Resourceful
Timely/Tactful

Knowledge
Abilities/Attitude
Skills
Habits
 Robert L Katz Managerial Skills

Forecasting
Forecasting: Predicting something well in advance. “It is systematic attempt to probe into the
future by inference from known facts”.

Importance of Forecasting:

 Key to planning
 Leads to success in organization
 Predicts environmental changes.

Methods of Forecasting:
 Qualitative
o Opinions
o Judgments
o Delphi
 Quantitative
o Time series
o Econometrics
 o Regression analysis

Limitations of Forecasting

 Assumption
 Time consuming
 Cost
 Uncertainty
 Inaccuracy
 Rigidity
 Attitude of Management
 Faulty design
 Lack of skills/ training.

Planning
Planning: Looking ahead, 5W + 1 H (What, where, when, why, who and How)- Laddering
technology.

“It is an intellectual process, the conscious determination of course of action, basing of

decisions on purpose, facts and considered estimates”. -Harold Koontz and “O” Donnell.

Characteristics of Planning:
 Primacy function
 Goal oriented
 Pervasive force ( Unifying/Universal force)
 Continuous function
 Involves choice between alternatives
 Accomplishment of objectives
 Is flexible/Dynamic.

Importance of Planning:
 Makes systematic/ orderly activities
 Healthy organizational climate
 Directions
 Basis for all other functions
 Attention on objectives
 Reduces Uncertainty
 Cater to change
 Increases effectiveness.
Limitations/Barriers of Planning
 Assumption
 Time consuming
 Cost
 Uncertainty
 Inaccuracy
 Rigidity
 Attitude of Management
 Lack of skills/ training
 Internal inflexibility
o Psychological inflexibility
o Policy and procedural
o Capital investment
 External inflexibility
o Political climate
o Unions
o Technological changes

Types of Plans
Dimensions Categories

Coverage of activities ---> Corporate, SBU, Functional

Importance of contents ---> Strategic, Tactical, Operational

Time period involved ---> Long, Intermediate, Short

Approach adopted ---> Proactive, Concurrent, Reactive

Degree of Formalization ---> Formal, Informal.

Based on usage ---> Single use (Programs, Budget, Projects) Standing (Policies, Procedures, Rules)

Proactive, Concurrent Reactive

Feed forward Online Feedback
Predictive Contingency(Nothing is ready made) Historical
Anticipatory Situational Experiential
 Hierarchy of Plans

Vision

Mission

Goals/Objectives

Strategies

Policies

Procedure

Rules

Budgets

Programs

Pre-Requisite/Guideline for effective planning

 Develop accurate forecasts
 Gain acceptance for plan
 Plan must be sound one
 Develop an effective planning organisation
  Be objective
 Measure firms market value
 Decide in advance the criteria for abandoning a project
 Set up a monitoring system
 Revise the long term plans every year
 Fit the plan to the situation

Approaches to planning
 Top down Approach
 Bottom up Approach
 Mixed/Composite/Hybrid Approach
 Team Approach

Techniques of planning:
 Budgeting
 MBO-1954, (Peter Ducker, Planning and Control)
 PERT, CPM – 1950 USA –US Navy

Steps in Planning
Analyzing opportunities

Establishing objectives
Internal & External Premises
Determining the planning
Controllable, Semi controllable and Un
premises controllable premises

Tangible & Intangible premises

Identifying Alternatives

Evaluation

Selection

Implementation
 Organizing
“Involves the establishment of an internal structure of roles through
determination of activities required to achieve the goals of an
enterprise and each part of it, the grouping of these activities, the
assignment of such groups of activities to manager, the delegation of
authority”.
OR
“Establishing the effective authority relationships among selected
works, persons and workplaces in order for the group to work
together effectively”

Process of Organization
Identify the work

Division of work

Hierarchy

Providing for measurement

Evaluation and Control

Delegation of authority and

assign responsibility
 Coordination
Staffing
Putting the right person, with right skills, at a right place in right
time, in right manner, with right cost.
Why Staffing?
 Competent and qualifies to fit vacancies
 Increase productivity
 Present and future staff requirements
 Succession planning
 Basis for career development and Training and development
 Best use of HR.
HRM
HRU HRD HRE
Human Resources Utilization:
 Job Analysis = Job Description + Job Specification
(JA= JD+JS)
 Job Design
 Manpower planning/ HRP
 Recruitment and Selection
o Sources of Recruitment
 Internal Sources
 Promotion
 Transfer
 Notified vacancies
 Referrals
 Deputation
  Deployment etc
 External Sources
 Employment exchanges (Private & Public)
 Advertisements
 Educational Institutions (Campus Interviews)
 Employee Referrals
 Internet
 Associations
 Charity etc…

Steps in Staffing
Establishing the business needs

Describe the job

Describe the person to do the

job

Attract the candidate (AIDA)

Assess and select

Offer letter

Induction

Retention
 Steps in Selection-(Go-No-Go guage)
Placement

Final Selection

Medical examination

Background Investigation

Interview
Employment Test
Preliminary Interview

Application Blank

REJECT

 Placement
 Induction (General, Specific, Follow-up)
 Orientation
 Socialization
Human Resources Development:
 Training and Development
 Performance Appraisal
 Career Development
 Succession planning
 Compensation Management
Human Resources Environment:
 Industrial relations
 Quality of work life
 Work life balance
 HR Accounting
 HR Auditing
 Grievance handling etc

Training and Development

Dimensions Training Development

Level Lower Middle and Top
Skills Technical Human, Conceptual
Time span Short term Long
Results Immediate Long term
Why Training?
KASH
Systematic Approach to training
 TNA
 Conduct
 Feedback- (Context/content, Input, Reactions, and
Output, (CIRO- framework) -Krick Patrick method of
training evaluation.
Types
a). On the job
o Coaching
o Apprenticeship
o Job rotation
o Vestibule training
o Self improvement

b). Off the Job

o Lectures
o Conference
o GD
o Role Play
o Case Study-Christopher Long dell
o T-Group/ Sensitivity training

Expectations = Actual
50 <or> 50- problem (They are not equal)
 Controlling (Looking back)
“Implies the measurement of accomplishment against the standard,
and the correction of deviations to assure attainment of objectives
according to plan”. -Koontz “o” Donnel

Process of controlling

Establishment of standards

Measurement of actual performance

Comparing the actual performance with

Standards

Taking a corrective action

Types of Control:
 Critical point control /KRA/CSF/KPI/KPA
 Control by exception
 Proactive, Online, Reactive control
 Market control (Supply and demand)
 Clan control (Culture)
 Bureaucratic control (rules and regulations)
Techniques of Control:
 Budgetary control
 Financial statements,
 Break –even analysis
 MIS
 Management Audit
 MBO
Principles of Control:
 Principle of assurance of objective
 Principle of future directed
 Principle of control responsibility
 Principle of efficiency of control
 Principle of direct control
 Principle of reflection of plans
 Principle of organizational suitability
 Principle of standards
 Principle of critical point control
 Principle of exception
 Principle of flexibility
 Principle of action
Directing (Guiding function)
Concerns the total manner in which a manager influences
the actions of subordinates. It’s the final action of a manager
in getting orders to act after all preparation have been
completed.
 Importance of Directing
 Unity of command
 Harmony
 Direct Supervision
 Appropriate leadership style
 Use of motivational techniques
 Follow-up

Elements of Directing
- Communication
- Motivation
- Leadership
- Supervision

Supervision: Overseeing the subordinates at work.

Functions of supervision:
 Communicating the orders
 Making the work more interesting
 Introduction of new methods of work
 Selecting the workers
 Inducting the new employees and training them
 Handling grievances
 Enforcing safety
 Effective communication
 Enforcing discipline etc…
 Communication
Communicare- To share, to impart, to participate, convey, transmit (Latin)
Communis – Common (Greek)

“It’s the process of exchange of ideas and understanding among

themselves”

“It’s an exchange of facts, ideas, opinions or emotions by two or

more persons” -Newmen & Summer

“Sum total of all the things that a person does, when he wants to
create an understanding in the mind of another. It involves a
systematic and continuous process of telling, listening and
understanding” - Loius A .Allen

Importance:
 Improves managerial performance
 Life blood for organization
 Tool for management
 Helps in decision making
 Expressing ideas, feelings, suggestions,
 Increases effectiveness and efficiency

Features /Nature of communication:

 Pervasive
 Continuous process
 Unavoidable
 Two-way process
 Needs focus/ concentration
 Reduces Mis-understanding
 Resolves conflicts.
Process of communication
Study of body language – Kinesics
Study of Space Language- Proximice
Study of touch- Haptics
Study of lime language-Paralanguage (Voice, Speed, Pitch, Volume…)
IM POSSIBLE, LIFEISNOWHERE
 History of Management
When did it start?

Story Egyptian pyramid- 2800 B.C

2.3 million stone blocks
2.5 tones each
480 feet’s height
Base area13 acres
1,00,000 men working for 20 years

Whether management is an Arts or an Science?

Science Arts
Advances by knowledge Practice
Proves Feels
Predicts Guesses
Defines Describes
Measures Opines
Impresses Expresses
 MOTIVATION

Movere -> Motive -> Urge to do something.

Expectations - Actual

Deficiency

Need

Drive-Urge

Motive-Stimulus

Motivating-Process

Motivation-Force field

Reinforcement
Need Types:
1)Primary/Basic/Un-learned/Physiological/Biological/Existence
need.
Ex:- Food, Shelter, clothing etc
2).Secondary/Learned/Experiential/Interactional/Derived need.
 Ex:- Car, Mobile, etc
3).General need.
Ex:- Love, Manipulation, Curiosity, affection etc

Motivation:-
“is the willingness to extend high levels of effort towards organizational
goals. Conditioned by the efforts ability to satisfy some individual
needs” - Stephen Robbins.

Performance = function (Motivation, Environment, Abilities)

Motivation = Function(Performance, Environment, Abilities)

Characteristics of motivation:
 Psychological concepts(Internal-Intrinsic)
 Its total, not piece meal
 Continuous process
 Causes goal–directed behavior
 May be financial or non-financial
 Complex process utilization
 Can fallow Pull and Push mechanism

Importance of motivation:
 Higher efficiency, effectiveness
 Optimum utilization of resources
 Reduces labour turnover
 Better Industrial Relation
 Facilitate change.

Process of Motivation: When Need satisfied

Deficiency Need Tension Search behavior

Favorable environment
 Need satisfied
Reduction in tension

Process of Motivation: When Need is not satisfied

Deficiency Need Tension Search behavior

Un-Favorable environment

Need Not satisfied

Increase in tension

Flight-(external Frustration Apathy-(Internal

withdrawal) withdrawal)

Aggression

Internalized Externalized

Towards Source Towards Others

In-animate object Person

Theories of motivation
 Theory X and Theory Y
 Contemporary theories
o Content theories (Focus on internal needs of an individual)
 Abraham Maslow’s Hierarchy need theory-Five need theory
 Fredrick Herzberg Two factors theory
  Clayton Alderfer ERG theory-Extended Maslow’s theory
 David Mc.Celland Three need theory-Socially acquired theory
o Process theories(Focus on how individual satisfy the needs how
they judge the satisfaction level)
 Victor Vroom’s expectancy theory
 John Stacy. Adams equity theory
 Edwin lock goal setting theory
 Porter Lawler Model
o Reinforcement theories(Focus on relationship between behavior
and its consequences)
 B.F. Skinner Reinforcement Theory (Law of effect)
Stimuli Response Further response

Douglas Mc. Gregor’s Theory X and Y

Theory- X Theory -Y
 Stick Method  Carrot method
 Hard Approach  Soft Approach
 Inherent dislike for work  Work is natural like rest or play
 Un ambitious and prefer to  Ambitious and Capable of directing
be directed by others their own and other behaviour
 Avoid Responsibilities  Accept and seek responsibilities
 Focus on lower level needs  High order needs
 Centralization  Decentralization
 People lack self motivation  Are self motivated
 Autocratic leadership  Democratic leadership.

Abraham Maslow’s Hierarchy need theory-Five need theory

Fredrick Herzberg Two factors theory
Clayton Alderfer ERG theory-Extended Maslow’s theory
 David Mc.Celland Three need theory-Socially acquired theory
Three Needs are
nPwr – (Strive for influence),
nAch - (Strive for Success),
nAff - (Strive for Relationship),

TAT - Thematic Apperception Test

 John Stacy Adams equity theory

Equity ratio = Output/Input

Others
You

Others
 Leadership
“Is a process of process of influence”

Leadership = function (Leader, Follower, Situation)

L = f (L,F, S)

Who is a Leader?
Leader is the one who
L -Leads
E -Encourages
A -Acts
D -Directs
E -Empowers
R –Reflects
( Note :- Follow the Power point presentation )
 Management Concepts

Power: The ability or capacity to influence the

behavior/attitude of other individual.
Or
To mange influence is power.

Influence: The ability of individual to create some

changes in others environment.

A B
Authority: The right to guide and direct the actions of
others.

Characteristics of Authority:
 It’s legal /legitimate based on position
 Relationship between two individuals
 To achieve organizational goals
 It gives right of decision making

Delegation of Authority: is a process a manager

follows in dividing the work assigned to him so that he
performs that part which only he, because of his
unique organization, placement can perform
effectively and so that he can get others to help with
what remain

Process of Delegation of Authority

Determination of results expected

Assignment of duties

Granting of Authority

Creating accountability for

performance
Note :- Authority can be delegated not Responsibility

Responsibility – is a obligation to make sure that authority is

properly used and that duties are properly carries out.

Accountability – is the liability created for the use of authority.

It’s the answerability for performance of assigned duties.

Responsibility Charting – Way of summarizing the

relationship between tasks and performers/ actors.

Why Centralization?
 To facilitate personal leadership
 To provide integration
 To increase efficiency
 To achieve uniformity of action
Conditions for Decentralization?
 Size and complexity of organization
 Degree of diversification
 Availability of competent
 Complexities in situation
Span of Control/Management/Supervision/Authority
Graiciunas –French Management consultant
made mathematical formula.
No .of direct relationships = n
No .of cross relationships = n(n-1)
No .of group relationships = n(2n-1-1)
Total No .of relationships = n(2n/2 + (n-1))
Where n= No of subordinates.

Role Negotiation – Nobody gets anything without providing

something in exchange.

Decision Making
Decision: Judgment

Decision Making: is a process of choosing the best

alternative among pool of alternatives.
It’s an executive function (Chester . I Barnard)

Elements of Programmed Decision Making

 Statement of clear
objectives
 Define problem
 Formulate
hypothesis
 Collection of facts
 Test hypothesis
 Explanation of
results
Quantitative Techniques in Decision Making:
 Linear Programming (Mathematical technique)
 Probability Decision theory
 Game Theory
 Queuing Theory
 Simulation
 Network Analysis (PERT, CPM)

Modern Techniques for Non -Programmed Decision Making:

 Creative Techniques (Non routine problem)/ Brainstorming
 Participative technique
 Heuristics (Trial and error step by step process)
Guidelines for effective decision making:
 Understand the problem well
 Define the goals well
 Ensure that decision contribute to goal
 Adopt diagnostic Approach
 Ensure successful implementation of the decision
 Evaluate the results
 Multiple minds
 Decentralization
 Use of experts
 Good Communication and coordination
 Use MIS and DSS
 Be flexible