unit-i

BY M.ARCHANAASSISTANT PROFESSOR

*Unit-I: OVERVIEW OF MANAGEMENT

Unit-I: OVERVIEW OF MANAGEMENT

Objective Meaning of managementConcept of management being both art and science.Difference between management and administration.Important management thoughtsMajor contribution of F.W.Taylor and Henry Fayol.Various functions and their importance.Various types of management.



DEFINITION OF MANAGEMENT

HAROLD KOONTZ defined as Management is an art of getting things done through and with people in formally organized groups.

HENRY FAYOL defined as To manage is to forecast, to plan, to organize, to co-ordinate and to control.



DEFINITION OF MANAGEMENTPETER DRUCKER defined as Management is a multipurpose organ that manages a business and manages manager, and manages worker and work.

FEDRICK WINSLOW TAYLOR defined as Management is the art of knowing exactly what do you want to do and then seeing that it is done in the best and cheapest way.*Unit-I: OVERVIEW OF MANAGEMENT


WHAT IS MANAGEMENT ?

DEFINITION:Management is the art of getting things done through and with people.

CONSIDERING VARIOUS ASPECTS OF MANAGEMENTManagement is the process of achieving organizational goals by engaging in the four major functions of planning, organizing, leading and controlling by co-ordination of human, material, technological and financial resources



A process of designing and maintaining an environment in which individuals working together in groups, achieve their objectives effectively and efficiently.A process consisting of all those functions required in getting work done through others without confusion, wastage of resources and overlap.Means to manage resources by planning, organizing, directing and controlling various activities of an enterprise such that all efforts are directed towards specific and objectives.These implies, management is a process and has universal applicability.Management is applicable to all levels in an organization.Management is concerned with productivity (effectiveness and efficiency).*Unit-I: OVERVIEW OF MANAGEMENT


Requirements for managementHuman resource*Unit-I: OVERVIEW OF MANAGEMENT


material*Unit-I: OVERVIEW OF MANAGEMENT


Financial resource*Unit-I: OVERVIEW OF MANAGEMENT


CHARACTERISTICS OF MANAGEMENT

Is a Process /a function.Is a Social Process.Involves Group Effort.Aims at achieving predetermined objectives.Required at all levels of managementIs a ProfessionIs comprised of following functions:Planning OrganizingDirectingControlling Co-ordinationIs an art and science.*Unit-I: OVERVIEW OF MANAGEMENT


Nature of ManagementActivity based & continuousPurposefulIntegrative ProcessInvolves decision makingEmphasizes people & not thingsSocial processManagement & administration are synonymousIs a processBoth art& scienceAims atproductivityuniversal*Unit-I: OVERVIEW OF MANAGEMENT


Nature of management and its Purpose.Universal:- has universal applicability.- applies to all types of organizations.- applicable to all formally organized group efforts.

Activity based and continuous:- applicable to organized activities that takes place on a continuous basis.- organized activity can take a variety of forms.

Purposeful:- Management has a purpose is a goal oriented organized activity.- focus is to achieve predetermined objectives.- the focus is to bring about successful action.*Unit-I: OVERVIEW OF MANAGEMENT


Nature of management and its Purpose.Integrative process:- Management aims to establish integration between1. various resources of the organization.2. objectives of the organization and the requirements of its external environment. E .g., customers, society, government etc.Involves decision-making:- Management involves decision making -means the evaluation and selection of alternatives in a complex environment with a purpose of getting things done through others.- exists at all levels of management.Emphasizes people and not things:-the basic principle is that people are more important than things.- this principle emphasizes that managers are to be leaders whom people will like to follow and not bosses who must be obeyed.-people are to be made to work through motivation, morale etc and not through fear, fine and threats.*Unit-I: OVERVIEW OF MANAGEMENT


Nature of management and its Purpose.Is a process:-In management there are specific inputs, processes and outputs.INPUTSPROCESSOUTPUTSEx: Men Machine Material Money MethodsEx: Planning Organizing Staffing Directing ControllingEx: Objectives*Unit-I: OVERVIEW OF MANAGEMENT


Nature of management and its Purpose.Aim at Productivity (creating surplus):-Aim of management is to reach the objective using minimum resources and productive operations.-Productivity is defined as the human efforts to produce more and more with less and less input of resources as a result of which the benefits of production is distributed more equally among maximum number of people.

-Production: Concerned only with the volume of o/p totally ignoring the resources used to achieve that level of o/p.-Productivity: takes into account the quantity and quality of resources employed, i.e., the efficiency with which the resources are employed.- efficiency is the achievement of result with fewer amounts of resources.



SCOPE OF MANAGEMENT

Management as an ArtManagement as a ScienceManagement as a profession



Management as an Art

The following features states that it is a art.CreativeIndividual approach Application and dedication Initiativeintelligence



Management as a Science

The following features states that it is a social science.Systematic decision makingSituational outputUniversal management processUniversally accepted principles*Unit-I: OVERVIEW OF MANAGEMENT


Management as a profession

Basic criteria's of a profession are mentioned below

Systematic knowledgeExperimental attitudeCode of ethicsEntrance into an associationRequirements of license*Unit-I: OVERVIEW OF MANAGEMENT


Management Science or Art?Management Science:Different people facing same situation-will not think, act or react in the same way.Hence management science is not accurate as that of physical science.But, is an organized management, hence referred as science.Management Art:As a practice it is an ART.Implies personal creative power + Skills in performance.Is said to be art of arts since it organizes disorganized parts, communicating the vision to achieve the goals and human talents.*Unit-I: OVERVIEW OF MANAGEMENT


MANAGEMENT AS A SCIENCE PROVIDES PRINCIPLES AND AS AN ART HELPS IN TACKLING SITUATIONS.



Management Science or ArtScience concentrates on Knowing.Art concentrates on doing.

Thus management is a blend of art and science, which is used to achieve effectiveness and efficiency. It is an art as it consists of organizing and using human talent to get the job done. It is a science as the management techniques are subjected to measurement and factual determination.*Unit-I: OVERVIEW OF MANAGEMENT


Management and administration*Unit-I: OVERVIEW OF MANAGEMENT

Management Administration 1. Function Directing human-goalsDetermination of goal and policies2. Position Servant of administrationControlling management and organization3. Technical ability Requires to function properlyDoes not requires4. Productive natureProductive in natureNon productive5. Levels 3 levelsOnly relate to top levels6. Role It executes the workIt gives the proper direction


Management and Administration

Management- It is an art of getting things done through & with the people in formally organized groups.

Administration- According to Theo Haimann, Administration means overall determination of policies, setting of major objectives, the identification of general purposes and laying down of broad programmes and projects.According to Newman, Administration means guidance, leadership & control of the efforts of the groups towards some common goals.



Management and Administration

Two subdivisions of management

Administrative management.Is basically a thinking function mostly performed by higher levels of management. Is concerned with determining goals and laying down policies.Operative management.Is basically a doing function mostly performed by lower levels of management.Is concerned with execution of policies for the attainment of goals.*Unit-I: OVERVIEW OF MANAGEMENT


Management and Administration*Unit-I: OVERVIEW OF MANAGEMENT

ADMINISTRATIONMANAGEMENT1. Is a determinative function1. Is a execution function i.e., executing policies within the limits setup by administration.2. Determines the organization and defines the goal.2. Uses administration for the particular objectives set before it and strives to achieve it.


Management functions*Unit-I: OVERVIEW OF MANAGEMENT


MANAGEMENT PROCESSHUMAN RESOURCEPHYSICAL RESOURCEORGANISATIONAL GOALSINFORMATION RESOURCESFINANCIAL RESOURCES*Unit-I: OVERVIEW OF MANAGEMENT


WHAT A MANAGER DOES?ROLES OF A MANAGER- Achieve Objectives through and with people- Identity and Utilitise Resources OptimumPlan, Analyse, Interpret, Collobrate, educate, Problem solver,Communicator, build team, Change agent, Chief executive.InterpersonalrolesInformationrolesDecisional rolesFigurehead

Leader

LiasonMonitoring

Disseminator

SpokesmanEntrepreneur

Disturbance handler

Resource allocator

Negotiator*Unit-I: OVERVIEW OF MANAGEMENT


MANAGEMENT LEVELS*Unit-I: OVERVIEW OF MANAGEMENT


Top Level Managers Middle LevelManagersFirst LevelSupervisorsPlanningOrganizingLeadingControllingTIME SPENT IN CARRYING OUT MANAGERIAL FUNCTIONS*Unit-I: OVERVIEW OF MANAGEMENT


Top LevelTechnicalSkillsHumanSkillsConceptualand DesignSkillsSupervisory Level Solution delivery



THE GOALS OF ALL MANAGERS & ORGANIZATIONSGoal to make profit.Profit the measure of a surplus of sales dollars over expense dollars.In business firms goal is long-term increase in stock value.- Managers can achieve as much as possible of a desired goal with the available resources.In non-business firms not responsible for total business profits.



Performance of different managers in an management and administration.*Unit-I: OVERVIEW OF MANAGEMENT

Performed byHigher level managersMiddle & lower level managersType of functionDeterminative or thinking functionExecutive or doing functionConcerned withDetermining goals & laying down policiesExecution of policies for attaining goals.NoteEvery manager spends time in both administrative and operative management (but the properties vary depending on the managerial level).


On the Basis of Functions*Unit-I: OVERVIEW OF MANAGEMENT

BasisManagementAdministrationMeaningManagement is an art of getting things done through others by directing their efforts towards achievement of pre-determined goals.It is concerned with formulation of broad objectives, plans & policies.NatureManagement is an executing function.Administration is a decision-making function.ProcessManagement decides who should do it & how should he do it.Administration decides what is to be done & when it is to be done.FunctionManagement is a doing function because managers get work done under their supervision.Administration is a thinking function because plans & policies are determined under it.SkillsTechnical and Human skillsConceptual and Human skills LevelMiddle & lower level functionTop level function


On the Basis of Usage*Unit-I: OVERVIEW OF MANAGEMENT

BasisManagementAdministrationApplicabilityIt is applicable to business concerns i.e. profit-making organization.It is applicable to non-business concerns i.e. clubs, schools, hospitals etc.InfluenceThe management decisions are influenced by the values, opinions, beliefs & decisions of the managers.The administration is influenced by public opinion, govt. policies, religious organizations, customs etc.StatusManagement constitutes the employees of the organization who are paid remuneration (in the form of salaries & wages).Administration represents owners of the enterprise who earn return on their capital invested & profits in the form of dividend.


Management principles are the statements of fundamental truth based on logic which provides guidelines for managerial decision making and actions. These principles are derived: --On the basis of observation and analysis i.e. practical experience of managers. -By conducting experimental studies.



Principle was derived on the basis of observation and analysis i.e. practical experience of managerNot only to business but also to political, religious, philanthropic, and military.*Unit-I: OVERVIEW OF MANAGEMENT


Fayol's definition of management roles and actions distinguishes between Five Elements: Prevoyance: (Forecast & Plan). Examining the future and drawing up a plan of action. The elements of strategy. To organize: Build up the structure, both material and human, of the undertaking. To command: Maintain the activity among the personnel. To coordinate: Binding together, unifying and harmonizing all activity and effort. To control: Seeing that everything occurs in conformity with established rule and expressed command.



Henri Fayol (1841-1925)-French Management Theorist-20th century.Fayol -The father of modern operational management theory.Fayol -one of the most influential contributors to modern concepts of management.Proposed five primary functions of management-planning, organizing, commanding, coordinating, and controlling.Daft (2005) have reduced the five functions to four: planning, organizing, leading, and controlling.Fayol suggested that it is important to have unity of command-one supervisor for one person.*Unit-I: OVERVIEW OF MANAGEMENT


Specialization allows the individual to build up experience, and to continuously improve his skills. Thereby he can be more productive.



The right to issue commands, along with which must go the balanced responsibility for its function.



Employees must obey, but this is two-sided: employees will only obey orders if management play their part by providing good leadership.



only one supervisor



People engaged in the same kind of activities must have the same objectives in a single plan. This is essential to ensure unity and coordination in the enterprise. Unity of command does not exist without unity of direction but does not necessarily flows from it.



Management must see that the goals of the firms are always paramount.



Payment is an important motivator although by analyzing a number of possibilities, Fayol points out that there is no such thing as a perfect system *Unit-I: OVERVIEW OF MANAGEMENT


This is a matter of degree depending on the condition of the business and the quality of its personnel.



A hierarchy is necessary for unity of direction. But lateral communication is also fundamental, as long as superiors know that such communication is taking place. Scalar chain refers to the number of levels in the hierarchy from the ultimate authority to the lowest level in the organization. It should not be over-stretched and consist of too-many levels *Unit-I: OVERVIEW OF MANAGEMENT


Both material order and social order are necessary. The former minimizes lost time and useless handling of materials. The latter is achieved through organization and selection.*Unit-I: OVERVIEW OF MANAGEMENT


In running a business a combination of kindliness and justice is needed. Treating employees well is important to achieve equity.*Unit-I: OVERVIEW OF MANAGEMENT


Employees work better if job security and career progress are assured to them. An insecure tenure and a high rate of employee turnover will affect the organization adversely.*Unit-I: OVERVIEW OF MANAGEMENT


Allowing all personnel to show their initiative in some way is a source of strength for the organization. Even though it may well involve a sacrifice of personal vanity on the part of many managers.



Management must foster the morale of its employees. He further suggests that: real talent is needed to coordinate effort, encourage keenness, use each persons abilities, and reward each ones merit without arousing possible jealousies and disturbing harmonious relations. *Unit-I: OVERVIEW OF MANAGEMENT


Fayol's definition of management roles and actions distinguishes between Five Elements:

Prevoyance. (Forecast & Plan). Examining the future and drawing up a plan of action. The elements of strategy.

To organize. Build up the structure, both material and human, of the undertaking.

To command. Maintain the activity among the personnel.

To coordinate. Binding together, unifying and harmonizing all activity and effort.

To control. Seeing that everything occurs in conformity with established rule and expressed command.



Change and Organization.

Decision-making.

Skills -Can be used to improve the basic effectiveness of a manager.

Understand that management can be seen as a variety of activities, which can be listed and grouped.



8 Key Result Areas Where Managers Must Pursue Clear Objectives - Kotelnikov, 2008

Marketing

In order for a business to create a customer, there needs to be a market.

Innovation

New ideas are required by a business in order to create a demand for a product.

Human organization Financial resources Physical resources

According to Drucker, 2007 the above three Key Result Areas are interlinked and all businesses depend on them. These are known as the factors of production.



Productivity Resources must be used productively and the productivity must grow in order for the business to survive.

Social responsibility A business exists in a society therefore it has certain obligations towards the community and is responsible for its impact on the environment.

Profit requirementsProfit is essential for a business to succeed. It is one of the main reasons behind the existence of a business and without it there would be no way of covering the risk of potential losses, financing future projects and most importantly none of the other above areas would exist without profit.*Unit-I: OVERVIEW OF MANAGEMENT


Contribution of TaylorFredrick Winslow Taylor ( March 20, 1856 - March 21, 1915) - Father of Scientific Management.

Conducted various experiments during this process which forms the basis of scientific management.

Implies application of scientific principles for studying & identifying management problems.

Scientific Management is an art of knowing exactly what you want your men to do and seeing that they do it in the best and cheapest way.



Principles of Scientific Management

Development of Science for each part of mens job

This principle suggests that work assigned to any employee should be observed, analyzed with respect to each and every element and part and time involved in it. This is done by the use of method of enquiry, investigation, data collection, analysis and framing of rules. Under scientific management, decisions are made on the basis of facts and by the application of scientific decisions.




Scientific Selection, Training & Development of WorkersThere should be scientifically designed procedure for the selection of workers. Physical, mental & other requirement should be specified for each and every job. Workers should be selected & trained to make them fit for the job. The management has to provide opportunities for development of workers having better capabilities. According to Taylor, efforts should be made to develop each employee to his greatest level, efficiency & prosperity.




Co-operation between Management & workers

Taylor believed in co-operation and not individualism. It is only through co-operation that the goals of the enterprise can be achieved efficiently. There should be no conflict between managers & workers. Taylor believed that interest of employer & employees should be fully harmonized so as to secure mutually understanding relations between them.




Division of Responsibility

This principle determines the concrete nature of roles to be played by different level of managers & workers. The management should assume the responsibility of planning the work whereas workers should be concerned with execution of task. Thus planning is to be separated from execution.




Mental RevolutionThe workers and managers should have a complete change of outlook towards their mutual relation and work effort. It requires that management should create suitable working condition and solve all problems scientifically. Similarly workers should attend their jobs with utmost attention, devotion and carefulness. They should not waste the resources of enterprise. Handsome remuneration should be provided to workers to boost up their moral. It will create a sense of belongingness among worker. They will be disciplined, loyal and sincere in fulfilling the task assigned to them. There will be more production and economical growth at a faster rate.




Maximum Prosperity for Employer & EmployeesThe aim of scientific management is to see maximum prosperity for employer and employees. It is important only when there is opportunity for each worker to attain his highest efficiency. Maximum output & optimum utilization of resources will bring higher profits for the employer & better wages for the workers. There should be maximum output in place of restricted output. Both managers & workers should be paid handsomely.



Techniques of Scientific Management

Time StudyIt is a technique which enables the manager to ascertain standard time taken for performing a specified job. Every job or every part of it is studied in detail. This technique is based on the study of an average worker having reasonable skill and ability. Average worker is selected and assigned the job and then with the help of a stop watch, time is ascertained for performing that particular job. Taylor maintained that Fair days work should be determined through observations, experiment and analysis by keeping in view an average worker. Standard Time Working Hours = Fair Days Work




Motion StudyIn this study, movement of body and limbs required to perform a job are closely observed. In other words, it refers to the study of movement of an operator on machine involved in a particular task. The purpose of motion study is to eliminate useless motions and determine the best way of doing the job. By undertaking motion study an attempt is made to know whether some elements of a job can be eliminated combined or their sequence can be changed to achieve necessary rhythm. Motion study increases the efficiency and productivity of workers by cutting down all wasteful motions.




Functional ForemanshipTaylor advocated functional foremanship for achieving ultimate specification. This technique was developed to improve the quality of work as single supervisor may not be an expert in all the aspects of the work. Therefore workers are to be supervised by specialist foreman. The scheme of functional foremanship is an extension of principle of specialization at the supervisory level. Taylor advocated appointment of 8 foramen, 4 at the planning level & other 4 at implementation level.



Functional Foremanship*Unit-I: OVERVIEW OF MANAGEMENT



The names & function of these specialist foremen are: - Instruction card clerk concerned with tagging down of instructions according to which workers are required to perform their job Time & cost clerk is concerned with setting a time table for doing a job & specifying the material and labor cost involved in it. Route clerk determines the route through which raw materials has to be passed. Shop Disciplinarians are concerned with making rules and regulations to ensure discipline in the organization. Gang boss makes the arrangement of workers, machines, tools, workers etc. Speed boss concerned with maintaining the speed and to remove delays in the production process. Repair boss concerned with maintenance of machine, tools and equipments. Inspector is concerned with maintaining the quality of product.




StandardizationIt implies that the physical attitude of products should be such that it meets the requirements & needs of customers. Taylor advocated that tools & equipments as well as working conditions should be standardized to achieve standard output from workers. Standardization is a means of achieving economics of production. It seems to ensure The line of product is restricted to predetermined type, form, design, size, weight, quality. Etc There is manufacture of identical parts and components. Quality & standards have been maintained. Standard of performance are established for workers at all levels.




Differential Piece Wage PlanThis tech of wage payment is based on efficiency of worker. The efficient workers are paid more wages than inefficient one. On the other hand, those workers who produce less than standard no. of pieces are paid wages at lower rate than prevailing rate i.e. worker is penalized for his inefficiency. This system is a source of incentive to workers who improving their efficiency in order to get more wages. It also encourages inefficient workers to improve their performance and achieve their standards. It leads to mass production which minimizes cost and maximizes profits.




Other TechniquesVarious other techniques have been developed to create ordeal relationship between management and workers and also to create better understanding on part of works. Those includes use of instruction cards, strict rules & regulations, graphs, slides, charts etc, so as to increase efficiency of workers.



Study of Fayol and TaylorBoth the persons have contributed to development of science of management. The work of Taylor & Fayol was, of course, especially complementary. They both realized that problem of personnel & its management at all levels is the key to individual success. Both applied scientific method to this problem that Taylor worked primarily from operative level, from bottom to upward, while Fayol concentrated on managing director and work downwards, was merely a reflection of their very different careers. *Unit-I: OVERVIEW OF MANAGEMENT


Study of Fayol and TaylorThey both differ from each other in following aspects: -Taylor looked at management from supervisory viewpoint & tried to improve efficiency at operating level. He moved upwards while formulating theory. On the other hand, Fayol analyzed management from level of top management downward. Thus, Fayol could afford a broader vision than Taylor. Taylor called his philosophy Scientific Management while Fayol described his approach as A general theory of administration. Main aim of Taylor to improve labor productivity & to eliminate all type of waste through standardization of work & tools. Fayol attempted to develop a universal theory of management and stressed upon need for teaching the theory of management. Taylor focused his attention on fact by management and his principles are applicable on shop floor. But Fayol concentrated on function of managers and on general principles of management wheel that could be equally applied in all.*Unit-I: OVERVIEW OF MANAGEMENT


Study of Fayol and TaylorSimilarity - Both emphasized mutual co-operation between employment and employees.Spheres of Human ActivityFayols theory is more widely applicable than that of Taylor, although Taylors philosophy has undergone a big change under influence of modern development, but Fayols principles of management have stood the test of time and are still being accepted as the core of management theory.Psychologists View PointAccording to Psychologists, Taylor's study had following drawbacks: -Ignores human factors - Considers them as machines. Ignores human requirements, want and aspirations. Separation of Planning and Doing. Dissatisfaction - Comparing performance with others. No best way - Scientific management does not give one best way for solving problems.



Study of Fayol and Taylor*Unit-I: OVERVIEW OF MANAGEMENT

BasisTaylorFayolHuman aspectdisregards human elements and there is more stress on improving men, materials and methodsFayol pays due regards on human element. E.g. Principle of initiative, Espirit De Corps and Equity recognizes a need for human relationsStatusFather of scientific managementFather of management principlesEfficiency & administrationStressed on efficiencyStressed on general administration


Study of Fayol and Taylor*Unit-I: OVERVIEW OF MANAGEMENT

BasisTaylorFayolApproachIt has micro-approach because it is restricted to factory onlyIt has macro-approach and discuses general principles of management which are applicable in every field of management.Scope of principlesThese principles are restricted to production activitiesThese are applicable in all kinds of organization regarding their management affairsAchievementScientific managementAdministrative management


FUNCTIONS OF MANAGEMENT Planning Look ahead and chart out future course of operationFormulation of Objectives, Policies, Procedure, Rules, Programmes and Budgets OrganisingBringing people together and tying them together in the pursuit of common objectives.Enumeration of activities, classification of activities, fitting individuals into functions, assignment of authority for action.*Unit-I: OVERVIEW OF MANAGEMENT


FUNCTIONS OF MANAGEMENTDirectingAct of guiding, overseeing and leading people.Motivation, leadership, decision making.ControllingLaying standards, comparing actuals and correcting deviation-achieve objectives according to plans.Co-ordination Synchronizing and unifying the actions of a group of people.*Unit-I: OVERVIEW OF MANAGEMENT


FUNCTIONS OF MANAGEMENTManagers task to design an internal as well as external environment for performance with in an organization.

Understanding of & are responsive to the many elements of external environment economic, technological, social, political and ethical factors.



MANAGEMENT AS AN ESSENTIAL FOR ANY ORGANIZATIONResponsibility of managers to make individuals contribute the best to achieve the group objective.

Applies to small & large organizations, to profit and not-for-profit enterprises.

Enterprise Businesses, Government agencies, hospitals, universities etc,.*Unit-I: OVERVIEW OF MANAGEMENT


APPROACHES TO MANAGEMENTEmpirical or case approachManagerial roles approachContingency or situational approachMathematical or management Science approachDecision theory approachReengineering approachSystems approachSociotechnical systems approachCooperative social systems approachGroup behaviour approachInterpersonal behaviour approachMcKinseys 7-S frameworkTQM approachManagement Process or operational approach



EMPIRICAL OR CASE APPROACHCharacteristics/Contributions:Studies experience through cases.Identifies successes and failures.Limitations:Situations are all different.No attempt to identify principles.Limited value for developing management theory.*Unit-I: OVERVIEW OF MANAGEMENT


Empirical or case approachCase situationWhy?SuccessFailure*Unit-I: OVERVIEW OF MANAGEMENT


MANAGERIAL ROLES APPROACHCharacteristics/Contributions:Original study consisted of observations of 5 chief executives.On the basis of this study, 10 managerial roles were identified-3 interpersonal, 3 informational, 4 decision roles.Limitations:Original sample - small.Some activities - not managerial.Some managerial activities are left out. (appraising)





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3 Informational Roles

4 Decisional Roles

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Interpersonal3.4

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To resize chart data range, drag lower right corner of range.

Contingency or situational approachCharacteristics/Contributions:Depends on circumstances.Recognizes the influence of given solutions on organizational behaviour patterns. Limitations:Managers realized - no one best way to do things.Difficult to determine all relevant contingency factors.Complex.



Mathematical or Management Science ApproachCharacteristics/Contributions:Sees managing as mathematical processes, concepts, symbols & models.Looks at management- purely logical process, expressed in mathematical symbols & relationshipsLimitations:Preoccupation with mathematical models.Many aspects in managing can not be modeled.Is a useful tool but hardly an approach to management.



E = F(Xi1 Yi1)*Unit-I: OVERVIEW OF MANAGEMENT


Decision Theory ApproachCharacteristics/Contributions:Focuses on the making of decisions, persons or groups making decisions and decision making process.Some theorist use decision making to study all enterprise activities.Limitations:There is more to managing than making decisions.The focus is at the same time, too narrow and too wide.



Reengineering ApproachCharacteristics/Contributions:Concerned with fundamental rethinking, process analysis, redesign and dramatic results.Limitations:Neglects external environment.Possibly it knows customers needs.Neglects human needs.Ignores total management systems.



Systems ApproachCharacteristics/Contributions:Systems concept have broad applicability.Systems have boundaries, but they also interact with the external environment i.e, organizations are open systems.Limitation:Can hardly be considered a new approach to management.



Socio-technical Systems ApproachCharacteristics/Contributions:Technical system has a great effect on social system (personal attitudes, group behaviour)Focuses on production, office operation & other areas with close relationship between the technical systems & people.Limitations:Emphasizes only blue color and lower level officer.Ignores much of other managerial knowledge.



Cooperative Social Systems ApproachCharacteristics/Contributions:Concerned with both interpersonal and group behavioral aspects leading to a system of cooperation.Expanded concept includes any cooperative group with the clear purpose. Limitations:Too broad a field for the study of managementIt overlooks many managerial concepts, principles & techniques.



Types of Business Organizations1. Sole ProprietorshipsThe vast majority of small business starts out as sole proprietorships- very dangerous. These firms are owned by one person, usually the individual who has day-to-day responsibility for running the business. Sole proprietors own all the assets of the business and the profits generated by it. They also assume "complete personal" responsibility for all of its liabilities or debts.*Unit-I: OVERVIEW OF MANAGEMENT


Advantages of Sole ProprietorshipEasiest and least expensive form of ownership to organize. Sole proprietors are in complete control, within the law, to make all decisions. Sole proprietors receive all income generated by the business to keep or reinvest. Profits from the business flow-through directly to the owner's personal tax return. The business is easy to dissolve, if desired.



Disadvantages of Sole ProprietorshipUnlimited liability and are legally responsible for all debts against the business. Their business and personal assets are 100% at risk. Has almost been ability to raise investment funds. Are limited to using funds from personal savings or consumer loans. Have a hard time attracting high-caliber employees, or those that are motivated by the opportunity to own a part of the business.Employee benefits such as owner's medical insurance premiums are not directly deductible from business income (partially deductible as an adjustment to income).*Unit-I: OVERVIEW OF MANAGEMENT


Types of Business Organizations...PartnershipsIn a Partnership, two or more people share ownership of a single business. The Partners should have a legal agreement that sets forth how decisions will be made, profits will be shared, disputes will be resolved, how future partners will be admitted to the partnership, how partners can be bought out, or what steps will be taken to dissolve the partnership when needed. They also must decide up front how much time and capital each will contribute, etc.



Advantages of a PartnershipPartnerships are relatively easy to establish; however time should be invested in developing the partnership agreement. With more than one owner, the ability to raise funds may be increased. The profits from the business flow directly through to the partners' personal taxes. Prospective employees may be attracted to the business if given the incentive to become a partner.



Disadvantages of a PartnershipPartners are jointly and individually liable for the actions of the other partners. Profits must be shared with others. Since decisions are shared, disagreements can occur. Some employee benefits are not deductible from business income on tax returns. The partnerships have a limited life; it may end upon a partner withdrawal or death.



Types of Business OrganizationsTypes of Partnerships that should be considered:General Partnership Partners divide responsibility for management and liability, as well as the shares of profit or loss according to their internal agreement. Equal shares are assumed unless there is a written agreement that states differently.Limited Partnership and Partnership with limited liability "Limited" means that most of the partners have limited liability (to the extent of their investment) as well as limited input regarding management decisions, which generally encourages investors for investing in capital assets. This form of ownership is not often used for operating retail or service businesses. Forming a limited partnership is more complex and formal than that of a general partnership.



Types of Business OrganizationsJoint Venture Acts like a general partnership, but is clearly for a limited period of time or a single project. If the partners in a joint venture repeat the activity, they will be recognized as an ongoing partnership and will have to file as such, and distribute accumulated partnership assets upon dissolution of the entity.



Types of Business OrganizationsCorporations A corporation, chartered by the state in which it is headquartered, is considered by law to be a unique "entity", separate and apart from those who own it. A corporation can be taxed; it can be sued; it can enter into contractual agreements. The owners of a corporation are its shareholders. The shareholders elect a board of directors to oversee the major policies and decisions. The corporation has a life of its own and does not dissolve when ownership changes.



Advantages of a CorporationShareholders have limited liability for the corporation's debts or judgments against the corporations. Generally, shareholders can only be held accountable for their investment in stock of the company. Corporations can raise additional funds through the sale of stock. A corporation may deduct the cost of benefits it provides to officers and employees. Can elect S corporation status if certain requirements are met. This election enables company to be taxed similar to a partnership.



Disadvantages of a CorporationThe process of incorporation requires more time and money than other forms of organization. Corporations are monitored by federal, state and some local agencies, and as a result may have more paperwork to comply with regulations. Incorporating may result in higher overall taxes. Dividends paid to shareholders are not deductible from business income, thus this income can be taxed twice.



Types of Business OrganizationsSubchapter S CorporationsA tax election only; this election enables the shareholder to treat the earnings and profits as distributions, and have them pass thru directly to their personal tax return. The catch here is that the shareholder, if working for the company, and if there is a profit, must pay herself wages, and it must meet standards of "reasonable compensation". This can vary by geographical region as well as occupation, but the basic rule is to pay yourself what you would have to pay someone to do your job, as long as there is enough profit. *Unit-I: OVERVIEW OF MANAGEMENT


Types of Business OrganizationsLimited Liability Company (LLC)The LLC is a relatively new type of hybrid business structure that is now permissible in most states. It is designed to provide the limited liability features of a corporation and the tax efficiencies and operational flexibility of a partnership.The owners are members, and the duration of the LLC is usually determined when the organization papers are filed. The time limit can be continued if desired by a vote of the members at the time of expiration. LLC's must not have more than two of the four characteristics that define corporations: Limited liability to the extent of assets; continuity of life; centralization of management;free transferability of ownership interests.



unit-i

Documents

overview of management

various types of management

various functions

major functions of planning

following functions

various activities

financial resources

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