Unit 1(P5): Introduction to Management: Process and Functions of Management

What is management process and functions?

There are four basic functions of management which is applicable to all industries. They include: planning, organizing, leading and controlling. Manager in process must first plan, then organize according to plan, lead other to achieve the plan, and finally evaluate the effectiveness and efficientness of the plan and activities undertaken.

•Planning is the primary function where manger creates a detailed action plan aimed at some organizational goal. 

•Organizing is the second step which involves the manager determining how to distribute resources and coordinate them. 

•Leading is the third step that is accomplished by communication, motivating inspiring and encouraging employees towards a higher level of productivity 

•Controlling is the final function of management in which the manager, once a plan has been carried out, evaluates the results against the goals. If a goal is not being met, the manager must also take any necessary corrective action needed to continue to work towards that goal. 

•Some adds staffing as the fifth function which includes tasks like, evaluating, recruiting, selecting, training, and placing appropriate individuals into defined job roles.

Planning:

•It is the foundation pillar of management. It is the base upon which the all other areas of management are built. Planning requires administration to assess where the company presently is and where it would be in the upcoming years. From there, an appropriate course of action is determined and implemented to attain the company's goals and objectives.

•Planning plays a pivotal role in business management; it helps to visualize the future problems and keeps management ready with possible solutions.

•According to KOONTZ, “Planning is deciding in advance - what to do, when to do & how to do. It bridges the gap from where we are & where we want to be”.

•It is an exercise in problem solving & decision making determination to achieve desired goals.

•Planning is necessary to ensure proper utilization of human & non-human resources, it is all pervasive, an intellectual activity and it also helps in avoiding confusion, uncertainties, risks, wastage etc.

•This step involves mapping out exactly how to achieve a particular goal. 

•Planning involves taking decisions on vision, mission, values, objectives, strategies and policies of an organization.

•Planning is done for immediate, short term, medium term and long term periods, it is a guideline for execution/implementation.

•It is a measure to check the effectiveness and efficiency of an organization.

Organizing:

•The second of the managerial functions is organizing. This step requires determine how to distribute resources and organize employees according to the plan. 

•The second function of the management is getting prepared and getting organized. Management must organize all its resources beforehand, to put into practice, the course of action, which has been decided upon in the base function of planning.

•It is the process of bringing together physical, financial and human resources and developing productive relationship among them for achievement of organizational goals. 

•According to Henry Fayol, “To organize a business is to provide it with everything useful or its functioning i.e. raw material, tools, capital and personnel’s”. To organize a business involves determining & providing human and non-human resources to the organizational structure. 

•Organizing as a process involves: Identification of activities, Classification of grouping of activities, Assignment of duties, Delegation of authority and creation of responsibility, Coordinating authority and responsibility relationships, Designing organization structures and departmentation, Defining relationships between departments and job positions

Leading:

•Directing or leading is the third function of management. Working under this function helps the management in controlling and supervising the actions of staff. This helps them in assisting the staff, to achieve the company's goals and also accomplish their personal or career goals, which can be powered by motivation, communication, department dynamics, and department leadership.

•This step involves communicating, motivating, inspiring, and encouraging employees towards a higher level of productivity. An employee will follow the directions of a manager because they have to, but an employee will voluntarily follow the directions of a leader because they believe in who he or she is as a person, what he or she stands for, and for the manner in which they are inspired by the leader.

•Leading: Attracting people to the organization, Specifying job responsibilities, grouping jobs into work units, Marshalling and allocation of resources, creating good working conditions

•It is that part of managerial function which actuates the organizational methods to work efficiently for achievement of organizational purposes. 

•It is considered life-spark of the enterprise which sets it in motion the action of people because planning, organizing and staffing are the mere preparations for doing the work. Leading is that inert-personnel aspect of management which deals directly with influencing, guiding, supervising, motivating sub-ordinate for the achievement of organizational goals. 

•A manager needs to do more than just plan, organize, and staff her team to achieve a goal. She must also lead. Leading involves motivating, communicating, guiding, and encouraging. It requires the manager to coach, assist, and problem solve with employees.

Controlling:

•It implies measurement of accomplishment against the standards and correction of deviation if any to ensure achievement of organizational goals. The purpose of controlling is to ensure that everything occurs in conformity with the standards. An efficient system of control helps to predict deviations before they actually occur.

•Theo Haimann, “Controlling is the process of checking whether or not proper progress is being made towards the objectives and goals and acting if necessary, to correct any deviation”. 

•According to Koontz & O’Donell “Controlling is the measurement & correction of performance activities of subordinates in order to make sure that the enterprise objectives and plans desired to obtain them as being accomplished”. 

•Therefore controlling has following steps: Establishment of standard performance, Measurement of actual performance, Comparison of actual performance with the standards and finding out deviation if any, Corrective action.

•Controlling is the last of the four functions of management. It involves establishing performance standards based on the company's objectives, and evaluating and reporting actual job performance. Once management has done both of these things, it should compare the two to determine any necessary corrective or preventive action.

                       Effective and efficient management leads to success, which is the attainment of objectives and goals that an organization sets for it. Of course, for achieving the ultimate goal, management needs to work creatively in problem solving and execute all the four functions. Management not only has to see goals accomplished, but also sees to it that the strategy adopted is feasible for the company.

Although there is a basic logic for describing these activities in this sequence (as indicated by the solid arrows), most managers engage in more than one activity at a time and often move back and forth between the activities in unpredictable ways (as shown by the dotted arrow), the true reality of management. The similarities that pervade most settings are the phases in the management process. the differences include the emphasis, sequencing, and implication of each phase.

Unit 1(P4): Introduction to Management: Principles of Management

Principles of Management?

Heneri Fayol (French Industralist):( 1841-1925)

He attempts to systematize the practice of management to provide guidance and direction to manager.

He was the first to focus on management as function: planning, organizing, leading, and controlling, and believed as the core management process. Developed 14 principles of management.

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. This is because a division of work leads to specialization, and specialization increases efficiency, and efficiency improves the productivity and profitability of the organization.    

                                                                                                              

2) AUTHORITY: The 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.  According to Henri Fayol, there should be a balance between Authority (Power) and Responsibility (Duties). Authority must be equal to Responsibility. If the authority is more than responsibility then chances are that a manager may misuse it. If responsibility is more than authority then he may feel frustrated. (Delegation of authority)   

                                                     

3) DISCIPLINE: A successful organization requires the common effort of workers regarding obedience and respect. Penalties should be applied judiciously to encourage this common effort. Discipline means a respect for the rules and regulation of the organization. Discipline may be Self-discipline, or it may be Enforced discipline. Self-discipline is the best discipline. However, if there is no self-discipline, then discipline should be enforced through penalties, fines, etc. No organization can survive without discipline.                                                                    

4) UNITY OF COMMAND: Workers should receive orders and instruction from only one manager. According to this principle, a subordinate (employee) must have only one superior (boss or manager). A subordinate must receive orders from only one superior. In other words, a subordinate must report to only one superior. According to Fayol, if one subordinate receives orders from more than one superior then there will be disorder. This will affect the discipline, efficiency, productivity and profitability of the organization.                                                                                           

5) UNITY OF DIRECTION: The entire organization should be moving towards a common objective in a common direction. All activities which have the same objective must be directed by one manager, and he must use one plan. This is called Unity of Direction. For example, all marketing activities such as advertising, sales promotion, pricing policy, etc., must be directed by only one manager. He must use only one plan for all the marketing activities. Fayol advocates "One head and one plan" which means that group efforts on a particular plan be led and directed by a single person. This enables effective co-ordination of individual efforts and energy. This fulfils the principles of unity of command and brings uniformity in the work of same nature. In this way the principle of direction create dedication to purpose and loyalty. It emphasizes the attainment of common goal under one head.     

                                                                                           

6) SUBORDINATION OF INDIVIDUAL INTERESTS TO THE GENERAL INTERESTS: The interests of one person should not take priority over the interests of the organization as a whole. In an organization, there are two types of interest, viz., the individual interest of the employees, and the general interest of the organization. The individual interest should be given less importance, while the general interest should be given most importance.                                                                                                                                

7) REMUNERATION: Remuneration is the price for services received. Many variables, such as cost of living, supply of qualified personnel, general business conditions, and success of the business, should be considered in determining a worker’s rate of pay.  Fairness in remuneration must be assured in accordance with their contribution. This policy should give maximum satisfaction to both employer and employees. It should include both financial and non-financial incentives.                                                                                                

8) CENTRALIZATION: Fayol defined centralization as lowering the importance of the subordinate 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. The optimum balance must be found for each organization.                                                                                                              

9) SCALAR CHAIN: Managers in hierarchies are part of a chain like authority scale. Each manager, from the first line supervisor to the president, possess certain amounts of authority. The President possesses the most authority; the first line supervisor the least. Lower level managers should always keep upper level managers informed of their work activities. The existence of a scalar chain and adherence to it are necessary if the organization is to be successful. Scalar Chain is a line of authority. This line joins all the members (managers and employees) from top to bottom. Every member must know who is his superior. He must also know who is his subordinate. Scalar Chain is necessary for good communication. Scalar Chain must not be broken in norm circumstances. However, if quick action is necessary, then this chain can be broken. 

10) ORDER: For the sake of efficiency and coordination, all materials and people related to a specific kind of work should be treated as equally as possible and should be in their proper place. Misplacement will lead to misuse and disorder   Putting right thing in right place so that it can be used in right time to get the right output.            

                                                           

11) EQUITY: All employees should be treated as equally as possible. The managers should use the equity while dealing with the employees. Equity is a combination of kindness and justice. There should not be any discrimination as regards caste, sex and religion. An effective management always accords sympathetic and human treatment. The management should be kind, honest and impartial with the employees. In other words, kindness and justice should be exercised by management in dealing with their subordinates. Equity creates loyalty and devotion in the employees.                                                                                                            
12) STABILITY OF TENURE OF PERSONNEL: Retaining productive employees should always be a high priority of management. Recruitment and Selection Costs, as well as increased product-reject rates are usually associated with hiring new workers.   An employee needs time to learn his job and to become efficient. Therefore, he should be given time to become efficient. When he becomes efficient, he should be made permanent. In other words, the employees should have job security.                                                                                              

13) INITIATIVE: Management should take steps to encourage worker initiative, which is defined as new or additional work activity undertaken through self direction.  Management should encourage initiative. That is, they should encourage the employees to make their own plans and to execute these plans. This is because an initiative gives satisfaction to the employees and brings success to the organization. Under this principle, the successful management provides an opportunity to its employees to suggest their new ideas, experiences and more convenient methods of work in respect of employee empowerment      
                                          

14) ESPIRIT DE CORPS: Management should encourage harmony and general good feelings among employees. Esprit de Corps means "Team Spirit". Therefore, the management should create unity, co-operation and team-spirit among the employees. They should avoid the divide and rule policy

Others:

15. Span of control: The number of subordinate under the immediate supervision of one manger should be limited to manageable number.

16. Management by exception: Focus on selectivity in work and priority in decisions.

17. Shortest decision path: the decisions must be made as closely as possible in time and place to the object of the decision and to those affected by it.

Unit 1(P3): Introduction to Management: Characteristics of Management

Characteristics of Management?

1. Achieving objectives.

2. Working with others.

3. Attaining effectiveness and efficiency, 

i) Efficiency refers to doing things in a right manner.            Effectiveness refers to doing the right thing

ii) Focus on process, gives importance to means.                Focus on achieving end goal.

iii) It is concerned with present state or status quo.               It is concerned with future variable.

iv) It is documentation and repetition of the same steps.        It encourages innovation, demanding to think

v) Output to input ratio                                                        Looks whether actual output

vi) Focus on getting max out put with minimum input.            Focus on  the desired output with given input.

vii) Reactive to change                                                          Proactive to change.

viii) It emphasizes on reduction of time and wastage.               It emphasizes on intended outcome. 

ix) Using resources wisely and in a cost effective way            Making right decisions and implementing.

4. Takes situational approach/ contingency approach (suggest there will never be a generic solution to any particular problem).

5. Coping with the environment.

6. Continuous and never ending process.

7. Management is pervasive/ universality in application. (Spreading widely throughout an area or a group of people).

8. Responding to social needs (Focus on social responsibility, Organization takes input form society and give output to society).

9. Result oriented science (Management problem and issues can be approached in rational, logical, objective, and systematic way; manager use data, facts, and objective and can use quantitative model and decision-making techniques to arrive at correct decisions) and Art (Managers may often make decisions and solve problems on the basis of intuition, experience, instinct, and personal insight, relying on conceptual, communication, interpersonal, and time management skill).