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Management: Definitions,
Roles & Skills
Management: Definitions
“Management is the process of designing and
maintaining an environment in which individuals,
working together in groups, efficiently accomplish
selected aim(s) viz. to create a surplus(s).” ….
Weihrich & Koontz
Management: Definition …ctd.
♦ Applies to and through any kind of organization
♦ Applies to Managers at all levels
♦ Concerned with “Doing the right things right at all times”:
1. Effectiveness: Achievement of objectives (Right Things);
2. Efficiency: Achieving those objectives with least amount/
sacrifice of resources (Things Right);
3. Continuous Improvement: in creating increasing ‘surplus’
(at all times);
– “Improve or die” = survival of the fittest
– “what gets measured, gets managed and improved” e.g.
Productivity= Output / Input ratio
Collective, cohesive and consistent human effort towards
accomplishing a common objective.
Management: Definition …ctd.
Additionally, Managers need to factor in external
environmental forces:
Political Regulatory
Economic
Organization
Societal
Globalization
Technological
Con
Human Skills:
cept
Ability to work with people,
Exec.
HUM
understand and motivate
ual
groups & individuals.
AN
Conceptual Skills: Mgr.
Tec
Mental ability to recognize,
hnic
analyze, diagnose and think
Supr.
al
through complex situations.
Principles of Management
Management: A Systems
Approach
Systems approach to Management
ENVIRONMENT
Transformation
input output
process
System Boundary
Systems Concepts
♦ System Boundaries and Subsystems
> Systems often consist of numerous subsystems.
> Each subsystem has elements, interactions with
other subsystems, and objectives.
> Subsystems perform specialized tasks for the
overall system.
♦ Subsystem Interfaces and Interface
Problems
Organizing
Controlling
Planning
Staffing
Outputs
Leading
Inputs
(External
(Goal
To
Oriented)
Orgnzn.)
Management Process
First Step: Planning
Planning
Planning involves selecting
objectives or goals and the course of
actions to achieve them:
Provides the bridge to take us from
where we are to where we want to go;
Decision making in choosing the best
from alternative courses of action and is
integral to planning;
Plans as foundation of
Management
What kind of
resources
needed?
How to control in
case of deviation
from plan ?
The primacy of
Types of Plans
Mission / Purpose
The basic function or ‘reason for
existence’ of an enterprise/ organization
Budgeting Formulating
(Numberizing Plans) Supporting Comparing &
plans choosing an
alternative
e.g., Sales budget e.g., plan to buy Decision
Operational Expense Equipment, recruit & train making
budget, Employees, develop product
The Planning Process
Planning Period:
Short range plans e.g. material procurement plan in a
factory
Long range plans e.g. product development plan,
plant/production facility installation;
“Urgent” drives out the “Important” – mismatch between
short & long term plans!
Planning horizon must allow for actions to run their
course – requiring ‘commitments’:
Thus “decisions today” are key to good plans;
Long-term plans reap benefits of good short-term plans.
Steps in Planning
Being aware of Setting Goals/
Opportunity Objectives
Mission Board of
Directors
Overall
Objectives & CEO
Key result areas.
Division Division
Head Head
Divisional objectives Product X Product Y
Strategic
choice
The Strategic Planning Process
Planning Premises
2. Differentiation:
B’marking Partnering To constantly offer
innovative
and unique solutions.
Competitor Supplier Supplier
technology & quality has
focus.
Ultimate competitive position:
- position w.r.t major Customers 3. Customization:
- K.S.Fs of Competitors To offer required services in
- leveraging of suppliers the
Lean Management
required manner is the
Generic Strategy: BCG Matrix
Red: Marketing Perspective; Blue: Financial Perspective
Hi Cash Source Lo
Hi Hi
Market Growth rate
STAR ???
“Hold” “Build”
Cash Use
Cash Cow DOGS
“Harvest” “Divest”
Lo Lo
Hi Lo
Relative Market Share
Planning Premises & Strategies …
ctd.
Budgeting Formulating Comparing &
( Numberizing Plans) Supporting choosing an
plans alternative
Say, Sales budget Say, plan to buy Decisio
Operational Expense Equipment, recruit & train n
budget, Employees, develop product making
Capital expenditure etc
budget
Deployment (MBO etc.)
Management Process:
Organizing for results
Nature of Organizing
Organizing may be broadly defined as:
1. The identification and classification of required
activities;
2. The grouping of those activities towards
attaining their set objectives;
3. The assignment of those groupings to a
responsible manager, duly empowered;
4. The provision for coordination among, within
and across the groups in the organization.
Organization structures are designed to:
Clarify tasks & responsibilities,
Remove obstacles,
Furnish decision making & communication
network
Nature of Organizing …ctd.
The Business Organization Model: “Value
Chain” (Porter,1985)
Support Activities
Firm Infrastructure
M
ar
gi
Technology Development
n
Procurement
Inbound OutboundMarketing
n
Operations Service
gi
Logistics Logistics & Sales
ar
M
Primary Activities
margin reflects the reward for the risks run by the company.
All activities together need to generate ‘value’ greater
Nature of Organizing …ctd.
The Value Chain: “Primary Activities”
Inbound Logistics: relate to receiving, storing
and disseminating inputs;
$ $ $
# Span of control
$ Car pool
#
Nature of Organizing …ctd.
“Departmentation”
Grouping activities & people into departments
makes it conceptually possible to expand
organizations to an infinite degree.
Different patterns have been successfully used
to group activities:
By simple nos. is a simple method – works well for the
lowest levels where work is routine, uniform and non-
specialized; time-grouping is an extension of this
method where shift-working is required;
By enterprise functions – embodies what enterprises
typically do e.g. Production, Engineering, Sales etc.
This method, defined by F.W.Taylor, is arguably the
most prevalent method still used.
“Departmentation” …ctd.
By territory or geography – is very common when the
geographical spread is wide. It was a device introduced to speed
up management in similar units for easy and swift communication
e.g. Sales: N/E/W/S; Fire Brigade: Camp, Hinjewadi, Aundh etc.
By Customer/Account orientation – reflecting the primary interest
in nature of markets/business/customer e.g. Banks: Institutional
banking, Small Savings etc.
By Process groups – encountered primarily in specialized/
manufacturing operations where processes are vital e.g.
Advertising: Copy-writing, Creative etc.; Manufacturing: Steel
Melting, Wire-drawing etc.
By Product Lines – has evolved with enterprises becoming “multi-
line” with ‘function’ needing adaptation/integration to suit specific
products e.g. Tata Motors: Passenger Vehicles / Commercial
vehicles
“Departmentation” …ctd.
By ‘grid’ control – in essence combining the
‘functional’ and the ‘product-line’ patterns to best
effect. Functional excellence is not subjugated to
Operational ease. In ‘projects’, this
serves to bring together the diversity of skills
required into one team.
The Strategic Business Unit: companies today are
organizing themselves as ‘companies within a
company’ to allow for maximum flexibility and
freedom of operations, especially when the
products/businesses are unconnected e.g. General
Electric. Generally, SBU’s have:
Their own Missions, Goals and Strategies;
Distinct and definable set of competitors;
Deploy and manage resources in key areas;
A reasonable ‘size’.
“Departmentation” …ctd.
Example of “Grid Control” & S.B.U’s
C.E.O
Sin.
T&D
Nature of Organizing …ctd.
Span-of-Management
The purpose of organizing is to make human
cooperation effective and is limited by:
the number of persons a manager can ‘supervise’
effectively and efficiently;
while the total number is dictated by the quantum of
work/ nature of task/spread etc. Thus the two
dimensions, “Level” (depth) and “Span of control”
(width) are interrelated .
The reason for creating Levels of organization is the
limitation in the span of control. “Effective span” is
influenced by:
Training/skill of subordinates and personal contact
required;
Clarity of delegation of authority;
Clarity of plans, use of objective standards and
communication techniques;
Span-of-Management …ctd.
Levels, per se, are not desireable:
They are expensive – as they increase, both
infrastructure costs and staffing tends to increase;
Real work is accomplished at the ‘gemba’ (Japanese:
workplace) where the actual value-
addition/transformation takes place. The contribution of
levels on top are not directly co- relatable, thus best
avoided;
Communication become complicated – omissions,
filterations and misinterpretations lead to wasted and
misdirected effort;
Planning and control become tortuous, requiring
complicated coordination and alignment between levels.
Studies reveal that between 8 to 10 people at ‘higher’
levels and upto 15 at lower levels is a good “span”.