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2.

Good managers must have the technical proficiency necessary to understand the job
requirements and credibly lead others. Beyond this minimal requirement, good managers must
also be able to effectively motivate teams of diverse individuals to perform consistently on a
daily basis. Thats just for starters, though. The most important qualifications help managers
create a high performing work environment that is beneficial to the company, its culture and its
customers. These managers can excel in any field.

Able to Leverage Strengths


Managers must be able to work with a number of employees who bring a wide variety of
talents and capabilities to the workplace. The strongest managers appreciate differences and
refuse to waste time trying to turn around a weakness. They understand that the highest return
is in maximizing strengths. Still, they do not ignore weaknesses. Rather, they mitigate them by
altering plans, tactics and job responsibilities to most effectively leverage the diverse strengths
of the team members. Qualified managers understand their own capabilities as well, and
surround themselves with mentors, peers and employees who can balance their shortcomings,
rendering weaknesses irrelevant.

Anticipate Changes in the Business Environment


The current business environment is more dynamic than ever. The most qualified managers are
able to scan the horizon, anticipate changes, and formulate proactive strategies to maintain
consistent productivity. They do not wait to be blindsided; rather, they take the initiative to
discover what is around the next corner. They are able to do this because they follow industry
trends, pay attention to changing technologies, interact with opinion makers, and take time to
understand customers changing needs.

Understand What Makes People Tick


The best managers know what drives others to do their best work. Further, they understand
how employees learn, how they build relationships, how they think, and how they make
decisions. To do this, qualified managers must have excellent interpersonal skills, including the
ability to communicate clearly and listen empathetically. Strong managers embrace diverse
skill sets and encourage other to do the same. The most qualified managers are able to make
every employee feel valued and free to contribute creative solutions -- even when those ideas
run contrary to conventional wisdom.

Emotionally Intelligent
The most qualified managers are emotionally intelligent. Emotional intelligence describes the
skills we use to understand and manage our own emotions, as well as the emotions of others.
Managers exhibiting high levels of emotional intelligence respond constructively even when the
stakes are raised or the business environment changes. They demonstrate maturity and
understand how to manage themselves rather than expecting others to accommodate their
moods and behaviors.

15.

4 main steps in control process in management are:


Control as a management function involves the following steps:
1. Establishing Standards:

Standards are criteria against which results are measured. They are norms to achieve the
goals. Standards are usually measured in terms of output. They can also be measured in
non-monetary terms like loyalty, customer attraction, goodwill etc. Some of the standards
are as.
a. Time standards:
The goal will be set on the basis of time lapse in performing a task.
b. Cost standards:
These indicate the financial expenditures involved per unit, e.g. material cost per unit, cost
per person, etc.
c. Income standards:
These relate to financial rewards received due to a particular activity like sales volume per
month, year etc.
d. Market share:
This relates to the share of the company's product in the market.
e. Productivity:
Productivity can be measured on the basis of units produced per man hour etc.
f. Profitability:
These goals will be set with the consideration of cost per unit, market share, etc.
2. Measuring Performance

Measurement involves comparison between what is accomplished and what was intended
to be accomplished. The measurement of actual performance must be in the units similar
to those of predetermined criterion. The unit or the yardstick thus chosen be clear, well-

defined and easily identified, and should be uniform and homogenous throughout the
measurement process.
The performance can be measured by the following steps:
(a) Strategic control points:
It is not possible to check everything that is being done. So it is necessary to pick strategic
control points for measurement. Some of these points are:
(i) Income:
It is a significant control point and must be as much per unit of time as was expected. If the
income is significantly off form the expectation then the reasons should be investigated
and a corrective action taken.
(ii) Expenses:
Total and operational cost per unit must be computed and must be adhered to. Key
expense data must be reviewed periodically.
(iii) Inventory:
Some minimum inventory of both the finished product as well as raw materials must be
kept in stock as a buffer. Any change in inventory level would determine whether the
production is to be increased or decreased.
(iv) Quality of the product:
Standards of established quality must be maintained especially in food processing, drug
manufacturing, automobiles, etc. The process should be continuously observed for any
deviations.
(v) Absenteeism:
Excessive absenteeism of personnel is a serious reflection on the environment and
working conditions. Absenteeism in excess of chance expectations must be seriously
investigated.
(b) Meclzanised measuring devices:

This involves a wide variant of technical instruments used for measurement of machine
operations, product "quality for size and ingredients and production processes. These
instruments may be mechanical, electronic or chemical in nature.
(c) Ratio analysis:
Ratio analysis is one of the most important management tools. It describes the relationship
of one business variable to another.
The following are some of the important ratios:
i) Net sales to working capital:
The working capital must be utilised adequately. If the inventory turnover is rapid then the
same working capital can be used again and again. Hence for perishable goods, this ratio
is high. Any change in ratio will signal a deviation from the norm.
ii) Net sales to inventory:
The greater the turnover of inventory, generally, the higher the profit on investment.
iii) Current ratio:
This is the ratio of current asset (cash, receivables etc.) to current liabilities, and is used to
determine a firm's ability to pay the short term debts.
iv) Net profits to net sale:
This ratio measures the short-run profitability of a business.
v) Net profits to tangible net worth:
Net worth is the difference between tangible assets (not good will, etc) and total liabilities.
This ratio of net worth is used to measure profitability over a long period.
vi) Net profits to net working capital:
The net-working capital is the operating capital at hand. This would determine the ability of
the business to finance day-to-day operations.
vii) Collection period on credit sales:
The collection period should be as short as possible. Any deviation from established
collection period should be promptly investigated.

viii) Inventory to net working capital:


This ratio is to determine the extent of working capital tied up in inventory. Generally, this
ratio should be less than 80 per cent, ix) Total debt to tangible net worth: This ratio would
determine the financial soundness of the business. This ratio should remain as low as
possible.
(d) Comparative statistical analysis:
The operations of one company can be usefully compared with similar operations of
another company or with industry averages. It is a very useful performance measuring
device.
(e) Personal observation:
Personal observation both formal and informal can be used in certain situation as a
measuring device for performances, specially, the performance of the personnel. The
informal observation is generally a day-to-day routine type. A manager may walk through a
store to have a general idea about how people are working.
3. Comparing the Actual Performance with Expected Performance

This is the active principle of the process. The previous two, setting the goals and the
measurement format are the preparatory parts of the process. It is the responsibility of the
management to compare the actual performance against the standards established.
This comparison is less complicate if the measurement units for the standards set and the
performance measured are the same and quantified. The comparison becomes more
difficult when these require subjective evaluations
Ralph C. Davis identifies four phases in the comparison.
1. Receiving the raw data.
2. Accumulation, classification and recording of this information.
3. Periodic evaluation of completed action to date.
4. Reporting the status of accomplishment to higher line authority.
At the third phase, deviations if any are noted between standards and performance. If
clear cut deviations are there, then management must study the:(i) Causes for deviation

(ii) Effect of deviation


(iii) Size of deviation
(iv) Positive or negative deviation.
4. Correcting Deviations:

The final element in the process is the taking corrective action. Measuring and comparing
performance, detecting shortcomings, failures or deviations, from plans will be of no avail if
it does point to the needed corrective action.
Thus controlling to be effective, should involve not only the detection of lapses but also
probe into the failure spots, fixation of responsibility for the failures at the right quarters,
recommendation of the best possible steps to correct them. These corrective actions must
be applied when the work is in progress. The primary objective should be avoidance of
such failures in future.
The required corrective action can be determined from the qualified data as per the
standards laid out and the performance evaluation already done. This step should be
taken promptly, otherwise losses may be cumulative and remedial action will be all the
more difficult to take.
Corrective action must be well balanced, avoiding over controlling and at the same time
letting not things to drift.

6. It is Based on Clearly Defined Objectives:


A good plan is based upon clear, well-defined and easily understood objectives. General
objectives like improving morale or increasing profits are ambiguous in nature and do not
lend to specific steps and plans. If possible, objectives must be quantified for sake of
simplicity.

Good Planning: Characteristics # 2.


It is Simple:
A goods plan must be simple and comprehensive. When the plan is simple, all employees
of the organisation can know its significance and it can be easily put into operation, which
leads to achieve objective.

Good Planning: Characteristics # 3.


It Provides for a Proper Analysis and Classification of Action:
It provides for a proper analysis and classification of action i.e., it establishes standards. A
good plan should establish standard. Comparing actual results with standards can make a
proper analysis. It leads to effective control.

Good Planning: Characteristics # 4.


It is Flexible:
Planning should be flexible enough to incorporate any changes in the resources, if
necessary. Additionally, it should be responsive to changed conditions so that if future
events do not follow the anticipation, the same plan can be modified and adopted to the
altered situation.

Good Planning: Characteristics # 5.


It is Balanced, Practicable and Suitable According to the Size and form of the
Business:
A good plan should be well balanced so that the existing resources are properly utilized for
all functions and short-term gains are not at the cost of long-term gains and vice-versa.

Good Planning: Characteristics # 6.


It is Time-Bound:
The time period allowed for achieving goals should be reasonable even though planning is
an attempt to anticipate the future. Long-range planning are more uncertain. Hence, the
time period covered should be reasonable and reasonably stable.

Good Planning: Characteristics # 7.


It uses Available Resources to the Utmost before Creating New Authorities
and New Resources:
A good plan strives for optimal utility of physical as well as human resources in unison and
harmony.

Good Planning: Characteristics # 8.


Participation by Subordinates:
Planning should not be an exclusive responsibility of top management. Subordinates will
not be responsible if a plan is imposed upon them. Also subordinate participation generally
ensures the sincere and serious effort on their part to make the plan successful.

Good Planning: Characteristics # 9.


Unity:
Planning is initiated by different managers of different divisions at different times. It is
necessary that a good plan should incorporate all these departments, maintaining the
consistency, and centralised objective must be the focus.

Good Planning: Characteristics # 10.


It is Comprehensive:
It is comprehensive and includes each and every aspect of the objectives.

Category

Informational

Interpersonal

Decisional

Role

Activity

Examples

Monitor

Seek and acquire


work-related
information

Scan/read trade press,


periodicals, reports;
attend seminars and
training; maintain personal
contacts

Disseminator

Communicate/
disseminate
information to others
within the organization

Send memos and reports;


inform staffers and
subordinates of decisions

Spokesperso
n

Communicate/transmit
information to
outsiders

Pass on memos, reports


and informational
materials; participate in
conferences/meetings and
report progress

Figurehead

Perform social and


legal duties, act as
symbolic leader

Greet visitors, sign legal


documents, attend ribbon
cutting ceremonies,
host receptions, etc.

Leader

Direct and motivate


subordinates, select
and train employees

Includes almost all


interactions with
subordinates

Liaison

Establish and maintain


contacts within and
outside the
organization

Business correspondence,
participation in meetings
with representatives
of other divisions or
organizations.

Entrepreneur

Identify new ideas and


initiate improvement
projects

Implement innovations;
Plan for the future

Disturbance
Handler

Deals with disputes or


problems and takes
corrective action

Settle conflicts between


subordinates; Choose
strategic alternatives;
Overcome crisis situations

Some of the main differences between formal and informal organisation are: (i) origin (ii)
Structure (iii) Purpose (iv) Control (v) Influence process (vi) Communication (vii) Size!

(i) Origin:
A formal organisation is created to fulfil some objectives.
Hence, a formal organisation is basically goal-oriented. It is built around the general
principles or organisation and the members of formal organisation are fully aware of these
principles. Informal organisation, on the other hand, develops automatically and
spontaneously. In other words, formal organisations are deliberately created whereas
informal organisations are spontaneously formed.

(ii) Structure:
A formal organisation has a definite and specially designed structure reflected in
organisation chart rendering a pictorial representation of the authority relationships. The
authority structure is rigid and defined. Informal organisations are structure less groups.
These are initiated by the workers themselves to serve the needs of workers.

(iii) Purpose:
Formal organisations are created to achieve goals defined by management. Normally,
profit maximisation or wealth maximisation are the fundamental objectives of a formal
organisation. On the other hand, the basic aim of an informal organisation is to satisfy the
individual goals of members. Social satisfaction is the fundamental objective of an informal
organisation.

(iv) Control:
In formal organisations, control points are established to constrain behaviour, restrain the
members from going off the prescribed track. Thus, there exist a rigid system of rules and
regulations which all the members are supposed to follow. Informal organisations are not
tied to a rigid system of rules and regulations. However, every informal group outlines
specific norms which the entire members are not supposed to violate in order to continue
their membership.

(v) Influence process:


In formal organisations, authority is equated with influence. The person at the top
becomes the most influential person. People enjoying authority become powerful in the

minds of subordinates. In a sharp contrast, influence in informal organisation is attached


to the individual person. Informal group attaches more value to that man who is able to
satisfy the needs of the group members.

(vi) Communication:
There is a formal, official channel of communication in formal organisation.
Communication is largely a one-way traffic here. The informal organisation designs its own
channel of communication (known as grapevine) for both organisational and social
communication process. The grapevine tends to outstrips formal channels on speed.

(vii) Size:
Formal organisations can balloon to gigantic, unmanageable proportions depending on
their success in capturing the market. In a sharp contrast, informal organisations tend to
be small and manageable, and beyond a particular point members do not join groups. That
is say, if the group membership is large; members join some other group (or form some
other group).