Introduction to Management PDF

Management Concept and Nature SERVICE EXCELLENCE  Outline 1.4 Levels of 1.6 1.2 Features 1.3 Ma...

Management Concept and Nature SERVICE EXCELLENCE  Outline 1.4 Levels of 1.6 1.2 Features 1.3 Management Management 1.1 Concept of and Objectives Management 1.5 Managerial and Process and Management of and Roles Managerial Management Management Administration Skills Function SERVICE EXCELLENCE  Learning Outcomes Explain what is meant by the term management. Differentiate between efficiency and effectiveness. Describe the four primary processes of By the end of this management. lesson, students will be able to: Classify the three levels of managers and identify the skills and primary responsibility of each group. SERVICE EXCELLENCE  1.1 Concepts of Management Every organization, at every level, needs management. An organization as small as a family or temple or a church or big organization such as school, colleges, Universities. SERVICE EXCELLENCE  Concepts of Management It is important for both In today’s global world the profit and non-profit challenges and opportunities organization. of business are enormous. Management helps in doing Businesses will be successful if and getting things done they are effectively managed. through others. SERVICE EXCELLENCE  Concepts of Management Therefore, management is the process that optimizes human, material and financial resource for effective achievement of an organizational goals. The process involves a series of actions (functions) taken by managers. SERVICE EXCELLENCE  Concepts of Management These include optimization which refers to getting maximum output (goods and service) out of minimum inputs (men, materials money machine etc.) and then goals which are the result or ends that managers and other stakeholders (shareholders, consumers, suppliers workers etc.) wish to achieve. SERVICE EXCELLENCE  Concepts of Management Definition of Terry and Franklin: “Management is a distinct process consisting Management of by some activities of planning, organizing, famous actuating and controlling, management performed to determine and accomplish stated objectives with the thinkers; use of human beings and other resources” SERVICE EXCELLENCE  Concepts of Management Daft (2006) on his Jones et al (2000) part define see management as management as F.W. Taylor: “the planning, “the attainment of Management is an organizing, leading organizational goals art of knowing and controlling of in an effective and what is to be done resources to efficient manner and seeing that it is achieve through planning, done in the best organizational goals organizing, leading, possible manner”. effectively and and controlling efficiently”. resources”. SERVICE EXCELLENCE  Concepts of Management In the early 20th century a French K.M. Bartol and D.C. S.P. Robbins and industrialist named Martin (1996) say Mary Coulter: Henri Fayol (1916), “Management is the “Management stated that process of achieving involves coordinating management had five organizational goals and overseeing the main functions: by engaging in the work activities of planning, organizing, four major functions others so that their commanding (that is, of planning, activities are leading), organizing, leading, completed efficiently coordinating, and and controlling. and effectively. controlling. SERVICE EXCELLENCE  Efficiency-key word Efficiency: Refers to getting the most output from the least amount of inputs. Efficiency also is the ability to make the best use of available resources in the process of achieving goals. Efficiency measures relationship between inputs and outputs or how successfully the inputs have been transformed into outputs (Low, 2000). Drucker has stated that efficiency means “doing things right”.... It is concerned with means SERVICE EXCELLENCE  Effectiveness-key word Effectiveness - completing activities so that organizational goals are attained Effectiveness: Drucker has also stated that effectiveness is “doing the right things “ It is concerned with ends SERVICE EXCELLENCE Efficiency and Effectiveness SERVICE EXCELLENCE 1.2 Features and Objectives of Management Management is characteristics by the following features Management is an activity: It is an activity of getting things done through others Management is a process: It is a process through the management functions Management is required for every type of organization Management is required at all organizational levels SERVICE EXCELLENCE  Features of Management Management is goal- Management is oriented: the success intangible: of organization is Management cannot measured by be seen or felt. Management is Management is a achievement of its The result of management dynamic discipline can be observed by goals and management comparing a well managed plays a significant role organization with a poorly in goal achievement. manage organization. SERVICE EXCELLENCE  Objectives of Management Management Help an organization achieve serves the its objective following Promotes effectiveness and objectives to efficiency help Develops the ability of organization managers meet their Human welfare goals. Social welfare SERVICE EXCELLENCE 1.3 Management and Administration There are One view states that, administration is three above management and management is a part of administration. theoretical The other view on the other hand view points states that management is above about administration and administration is part of management. Administration The third view states that and administration and management are Management. the same. SERVICE EXCELLENCE  Management and Administration Administration is above management; This view point has been advocated by American authors Oliver Sheldon, Spriegal, Theo Haimann, McFarland etc. According to them administration is a high level function of laying down policies, plans, objectives. SERVICE EXCELLENCE Management and Administration According to Oliver Sheldon for instance, “administration is concerned with the determination of corporate policy, the coordination of finance, production and distribution, and the ultimate control of executive”. SERVICE EXCELLENCE Management and Administration Management proper is concerned with execution of policy, operates within the limits set up by administration. Accordingly, administration determines the organization; management uses it. Administration defines the goal, management strives towards it. SERVICE EXCELLENCE Management and Administration Management is above administration; This view has been advocated by British authors like Breech, Kimball and Kimball, Richman, etc. According to Breech, “Management is a social process entailing responsibility for the effective and economical planning and regulation of the operation of an enterprise in fulfillment of given purpose or task” SERVICE EXCELLENCE Management and Administration Administration is part of management which is concerned with the installation and carrying out of the procedures by which the programme is laid down and communicated and the process of activities is regulated and check against plans. SERVICE EXCELLENCE  Management and Administration Thus according to this view point management is a high level function concerned with laying organizational plans and policies. Management and Administration are the same; Chester Bernard, George R, Terry and O’ Donnell etc, have advocated that management and administration are the same. According to them the difference is not in their meaning, but in their application. SERVICE EXCELLENCE Management and Administration Whiles managers at top Both administration and Administration and level perform more management are carried management are not administrative functions; out by managers at all performed by different those at lower level levels, that is, top, middle people. perform more managerial and lower levels. functions. SERVICE EXCELLENCE  1.4 Levels of Management Managers perform various managerial (planning, organizing, leading and controlling) and operative (production, personnel, finance and marketing) functions. Depending on the activities performed by managers, they can be classified on the basis of levels. The levels create a hierarchy or scalar chain in the organization structure. SERVICE EXCELLENCE 1.4.1 Levels of Management SERVICE EXCELLENCE Top Management Top level managers consist of managers who work at the highest level of the organizational hierarchy. The number of managers in this group is generally the least. It is responsible for the overall management of the organization. SERVICE EXCELLENCE  Top Management They have titles like Top managers have Chief executive officer (CEO), direct responsibility for president, the upper layer of executive vice president, middle managers. and executive director. SERVICE EXCELLENCE  Top Management Functions They lay down plans, policies and procedures..... They coordinate activities of various department They integrate the internal activities of the organization with the external environment They remain aware of the changes taking place in the external environment and change their internal environment. They carry out overall management of the organization by performing the managerial function of planning, organizing, leading, and controlling. They cater for the demand of various groups of stakeholders. SERVICE EXCELLENCE  Middle Level Middle Management They work beneath top managers within the managerial hierarchy. They have such titles as “manager”, director, chief, department head and division head. Middle managers typically have two or more management levels beneath them. Middle management consists of managers who are departmental heads. They serve as a link between top level and lower level managers. SERVICE EXCELLENCE  Middle Level They communicate policy decisions of top managers to lower level managers and guide lower level managers to implement them. They lay goals, plans and policies for their respective departments and ensures their successful accomplishment. Functions They spend major part of their time about 75% in managing company’s day-to-day operations. They direct the activities of lower and operating employees. They watch the activities of lower level managers and report them to top managers. SERVICE EXCELLENCE  Lower Level Managers Lower/First-line Management It consists of managers known as first- line managers or supervisors. They serve as a link between middle level managers and non-managerial employees. SERVICE EXCELLENCE  Lower Level Managers They supervise the activities of employees They coordinate the work of employees with the organization’s financial and non-financial resources Functions They train them to perform better in order to ensure smooth conduct of their respective business (es)… They evaluate performance of employees and send report to the higher level managers. They plan day-to-day operations SERVICE EXCELLENCE Managerial Processes-levels of Mgt It must be noted that the managerial process varies in emphasis within the managerial hierarchy. For example the Top management perform more planning function than Middle management, while middle management and Top management perform more organizing function than first line management. In contrast, leading is substantially more important for first line managers. However the management function that is common to all three hierarchical levels is controlling. SERVICE EXCELLENCE  1.5 Managerial Roles Managerial roles are specific behaviors associated with the task of management. One of the earliest and most enduring descriptions of managerial roles comes from Henry Mintzberg, who shadowed managers observing what they did during the day. Mintzberg developed a list of roles that he grouped into three categories: interpersonal roles, informational roles, and decisional roles (see Figure 1.2 ). Mintzberg emphasized that managing is an integrated activity, so these roles are rarely distinct. A role is an organized set of behaviours associated with a particular office or position, usually entail multiple roles. For example, roles for a salesperson position in a retail store might include information giver, stock handler and cashier. SERVICE EXCELLENCE  Figure 1.2: Managerial Roles Source: Based on H. Mintzberg, The Nature of Managerial Work (New York: Harper & Row, 1973). SERVICE EXCELLENCE  Managerial Roles a) Interpersonal role: Interpersonal roles involve interacting with other people inside and outside the organization. Management jobs are people- intensive. Seldom do managers work alone for long periods without outside communication. This grows indirectly out of the authority of a manager’s position and involve developing and maintaining positive relationship with significant others. SERVICE EXCELLENCE  Managerial Roles b) Informational role: Informational roles are concerned with collecting, processing, and disseminating information. Managers collect information from various sources both inside and outside the organization, process that information, and distribute it to others who need it. Pertain to receiving and transmitting information so that managers serve as the nerve centre of the organization. Mintzberg found that managers spend 40 percent of their time in these tasks. Mintzberg divided the information roles of management into three types: monitor, disseminator, and spokesperson. SERVICE EXCELLENCE  Managerial Roles c) Decisional role: Management guru Peter Drucker once wrote that whatever managers do, they do through making decisions. The information collected through monitoring is directed toward discovering problems or opportunities, weighing options, making decisions, and ensuring that those decisions are put into action. Whereas interpersonal roles deal with people and informational roles deal with knowledge, decisional roles deal with action. They translate the people and information into processes with the purpose of moving the organization toward its strategic goals. Mintzberg identified four decision roles: entrepreneur , disturbance handler, resource allocator, and negotiator. SERVICE EXCELLENCE 1.6 Knowledge Base and Management Skills To fulfill the managerial roles, managers need to have the “right stuff.” They must possess several competencies - skills, values, and motivational preferences - that allow them to perform their jobs effectively and become proficient at planning and strategizing, organizing, controlling, developing, and leading. Managers must possess knowledge base and management skills to effectively set out the work agendas, work methods and managerial roles for carrying out the managerial functions. SERVICE EXCELLENCE  1.6.1 Knowledge Base Managers obtain this knowledge base required in their work from information about an industry and its technology. Company policies and practices Company goal and plans Company culture The personalities of key organization members Important supplier and customers SERVICE EXCELLENCE  1.6.2 Management Skills Skill is the ability to engage in a set of behaviour that are functionally related to one another and that lead to a desired performance level in a given area. Management skills involve; conceptual, human, and technical skills. SERVICE EXCELLENCE  Managerial Skills As we move down the hierarchy, more technical skills and less conceptual skill are required by mangers. The higher level managers need more conceptual skill than technical skills. Human skill is important at all levels of the organization because managers at all levels deal with work force and as such they must possess human skills to interact with workers. SERVICE EXCELLENCE SERVICE EXCELLENCE  Conceptual Skills Conceptual skills - the ability to see the “big picture,” understand how the various parts of the organization affect each other, and conceptualize how those parts can be organized to improve the performance of the overall organization, the foundation for strategizing and organizing. Managers at the top level must have skills that will enable them analyze the environmental opportunities, exploit them gainfully and correlate them with the organization’s internal system. Managers must be knowledgeable and imaginative to use this skill. SERVICE EXCELLENCE  Human Skills Managers need the abilities to communicate, persuade, manage conflict, motivate, coach, negotiate, and lead to improve employee well-being while achieving organizational objectives. Human skills include working with other department, not just with employees within a particular unit. In other words, successful managers use their human skills to reconcile the needs and goals of their own team members and people in other work units, as well as with customers, suppliers, and others outside the organization. Must be possessed by all managers at all levels. SERVICE EXCELLENCE  Technical skills It enables managers to perform specific activities involving methods, processes, or techniques. These skills include mastery of specific equipment (such as configuring intranet servers, use of zoom, google meet etc.) or correctly following procedures (such as conducting an accounting audit). Frontline managers need a high level of technical expertise, so they typically need this expertise to monitor employee performance, provide meaningful feedback, and help employees solve unusual problems. As an example, call center managers spend up to half of their time monitoring customer calls and giving employees feedback about how to improve their dialogue in the future. These managers would be ineffective in this mentoring role if they lacked sufficient knowledge and the correct procedures for handling customer calls. These skills require the ability to use tools, procedures, techniques and knowledge in one’s area of specialization. It requires a specialized knowledge to perform task that a manager is attempting to accomplish. SERVICE EXCELLENCE MANAGEMENT THEORIES 1 SERVICE EXCELLENCE  MANAGEMENT THEORIES Outline 2.1 Pre-scientific or Pre- Classical Management Theories 2.2 Classical Theory: Taylor’s Scientific, Fayol’s Administrative, & Weber’s Bureaucracy Theories SERVICE EXCELLENCE 2.1 Pre-Classical Contributions A number of individuals in the pre-classical period of the middle and late 1800s offered ideas that laid the groundwork for subsequent, broader inquiries into the nature of management. Among the principal pre-classical contributors are Robert Owen, Charles Babbage and Henry R Towne. SERVICE EXCELLENCE  ROBERT OWEN (1771-1858) A successful British entrepreneur was well ahead of his time in recognizing the importance of human resources. He became particularly interested in the working and living conditions of his employees while running a cotton mill in New Lanark, Scotland. As was common, the mill employed 400 to 500 young children, who worked 13-hour days that included 1 hour off for meals. SERVICE EXCELLENCE ROBERT OWEN (1771-1858) Although his business partners resisted some of his ideas, Owen tried to improve the living condition of the employees by upgrading streets, houses, sanitation and the educational system in New Lanark. At the time, Owen was considered to be radical, but today his views are widely accepted. His ideas laid the groundwork for the human relations movement, which is discussed later in this chapter. SERVICE EXCELLENCE  CHARLES BABAGE (1792-1871) An English mathematician is widely known as the father of modern computing. His projects produced the world’s first practical mechanical calculator and an analytical engine that had the basic element of a modern day computer. Difficulties in directing his various projects, however, helped him to explore new ways of doing things. In the process, he made direct contributions to management theory. SERVICE EXCELLENCE  CHARLES BABAGE (1792-1871) Babbage was enthralled with the idea of work specialization,- the degree to which work was divided into various jobs. He recognized that not only physical work but mental work as well could be specialized. Babbage also devised a profit- sharing plan that had two parts, a bonus that was awarded for useful suggestions and a portion of wages that was depended on factory profit. SERVICE EXCELLENCE  Major Features of Pre-classical Contributors Robert Owen: Advocated concerns for the working and living conditions of workers Charles Babbage: Built the first practical mechanical calculator and a prototype of modern computers: predicted the specialization of mental work: suggested profit sharing. SERVICE EXCELLENCE  Henry R. Towne Outlined the importance of management as a science A manager to be successful in his profession must acquire the knowledge of science and the art of applying it and called for the development of management principles. SERVICE EXCELLENCE Management as a Science & Art Management is called an art because managing requires certain skills which are personal possessions of managers. Science provides the knowledge and art deals with the application of knowledge and skills. SERVICE EXCELLENCE SERVICE EXCELLENCE  Management as a discipline Refers to that branch of knowledge which is connected to study of principles and practices of basic administration. It specifies certain code of conduct to be followed by the manager and also various methods for managing resources efficiently. SERVICE EXCELLENCE 2.2 Classical Theory of Management The classical management theory, was developed during the Industrial Revolution when new problems related to the factory system began to appear. Managers were unsure of how to train employees (many of them non-English speaking immigrants) or deal with increased labor dissatisfaction, so they began to test for solutions. As a result, the classical management theory developed from efforts to find the - “one best way” to perform and manage tasks. SERVICE EXCELLENCE Major Branches to Classical Theory of Management SERVICE EXCELLENCE  Classical Scientific theory This arose because of the need to increase productivity and efficiency. The emphasis was on trying to find the best way to get the most work done by examining how the work process was actually accomplished and by scrutinizing the skills of the workforce. The classical scientific school owes its roots to several major contributors, including: Frederick Taylor, Henry Gantt, and Frank and Lillian Gilbreth. SERVICE EXCELLENCE  Frederick Taylor Frederick Taylor is often called the “father of scientific management.” Taylor believed that organizations should study tasks and develop precise procedures. As an example, in 1898, Taylor calculated how much iron from rail cars Bethlehem Steel plant workers could be unloading if they were using the correct movements, tools, and steps. The result was an amazing 47.5 tons per day instead of the mere 12.5 tons each worker had been averaging. In addition, by redesigning the shovels the workers used, Taylor was able to increase the length of work time and therefore decrease the number of people shoveling from 500 to 140. SERVICE EXCELLENCE Frederick Taylor Lastly, he developed an incentive system that paid workers more money for meeting the new standard. Productivity at Bethlehem Steel shot up overnight. As a result, many theorists followed Taylor’s philosophy when developing their own principles of management. SERVICE EXCELLENCE  Taylor’s Four (4) Principles of Management Develop for every job a “science” that includes rules of motion, standardized work implements, and proper working conditions. Carefully select workers with the right abilities for the job. Carefully train workers to do the job and give them the proper incentives to cooperate with the job “science.” Support workers by carefully planning their work and by smoothing the way as they go about their jobs. SERVICE EXCELLENCE Henry Gantt Henry Gantt, an associate of Taylor, developed the Gantt chart, a bar graph that measures planned and completed work along each stage of production. Based on time instead of quantity, volume, or weight, this visual display chart has been a widely used planning and control tool since its development in 1910. SERVICE EXCELLENCE  Frank and Lillian Gilbreth Frank and Lillian Gilbreth, a husband-and- wife team, studied job motions. In Frank’s early career as an apprentice bricklayer, he was interested in standardization and method study. He watched bricklayers and saw that some workers were slow and inefficient, while others were very productive. He discovered that each bricklayer used a different set of motions to lay bricks. From his observations, Frank isolated the basic movements necessary to do the job and eliminated unnecessary motions. SERVICE EXCELLENCE  Frank and Lillian Gilbreth Workers using these movements raised their output from 1,000 to 2,700 bricks per day. This was the first motion study designed to isolate the best possible method of performing a given job. Later, Frank and his wife Lillian studied job motions using a motion-picture camera and a split-second clock. When her husband died at the age of 56, Lillian continued their work. SERVICE EXCELLENCE Basic in Scientific Management The basic ideas regarding scientific management developed include the following: Developing new standard methods for doing each job. Selecting, training, and developing workers instead of allowing them to choose their own tasks and train themselves. Developing a spirit of cooperation between workers and management to ensure that work is carried out in accordance with devised procedures. Dividing work between workers and management in almost equal shares, with each group taking over the work for which it is best fitted. SERVICE EXCELLENCE Classical Administrative Theory Whereas scientific management focused on the productivity of individuals, the classical administrative approach concentrates on the total organization. The emphasis is on the development of managerial principles rather than work methods. Contributors to this school of thought include Max Weber, Henri Fayol, Mary Parker Follett, and Chester I. Barnard. These theorists studied the flow of information within an organization and emphasized the importance of understanding how an organization operated.  Max Weber In the late 1800s, Max Weber disliked the idea that many European organizations were managed on a “personal” (family-like) basis and that employees were loyal to individual supervisors rather than to the organization. He believed that organizations should be managed impersonally and that a formal organizational structure, where specific rules were followed, was important In other words, he didn’t think that authority should be based on a person’s personality. He thought authority should be something that was part of a person’s job and passed from individual to individual as one person left and another took over. This non-personal objective from organization was called a bureaucracy. SERVICE EXCELLENCE  Max Weber Weber believed that all bureaucracies have the following characteristics: A well-defined hierarchy. All positions within a bureaucracy are structured in a way that permits the higher positions to supervise and control the lower positions. a)This clear chain of command facilitates control and order throughout the organization. b)Division of labour and specialization. All responsibilities in an organization are specialized so that each employee has the necessary expertise to do a particular task. c)Rules and regulations. Standard operating procedures govern all organizational activities to provide certainty and facilitate coordination. SERVICE EXCELLENCE  Max Weber d) Impersonal relationships between managers and employees. Managers should maintain an impersonal relationship with employees so that favoritism and personal prejudice do not influence decisions. e) Competence. Competence and not “whom you know,” should be the basis for all decisions made in hiring, job assignments, and promotions in order to foster ability and merit as the primary characteristics of a bureaucratic organization. f) Records. A bureaucracy needs to maintain complete files regarding all its activities. SERVICE EXCELLENCE  Henri Fayol Henri Fayol, a French mining engineer, developed 14 principles of management based on his management experiences. These principles provide modern-day managers with general guidelines on how a supervisor should organize her/his department and manage her/her staff. Although later research has created controversy over many of the following principles, they are still widely used in management theories. SERVICE EXCELLENCE Henry Fayol-Principles SERVICE EXCELLENCE  Mary Parker Follett However, she also began to She began to talk about such things think somewhat differently as ethics, power, and leadership. Mary Parker Follett stressed than the other theorists of She encouraged managers to allow the importance of an her day, discarding employees to participate in decision organization establishing making. command-style hierarchical common goals for its She stressed the importance of organizations where people rather than techniques - a employees. employees were treated like concept very much before her time. robots. SERVICE EXCELLENCE  Mary Parker Follett As a result, she was a pioneer and often not taken seriously by management scholars of her time. But times changed, and innovative ideas from the past suddenly take on new meanings. Much of what managers do today is based on the fundamentals that Follett established more than 70 years ago. SERVICE EXCELLENCE  Chester Barnard Chester Barnard, who was president of New Jersey Bell Telephone Company, introduced the idea of the informal organization - cliques (exclusive groups of people) that naturally form within a company. He felt that these informal organizations provided necessary and vital communication functions for the overall organization and that they could help the organization accomplish its goals. Barnard felt that it was particularly important for managers to develop a sense of common purpose where a willingness to cooperate is strongly encouraged. He is credited with developing the acceptance theory of management, which emphasizes the willingness of employees to accept that managers have legitimate authority to act. SERVICE EXCELLENCE  Chester Barnard Barnard felt that four factors affected the willingness of employees to accept authority: The employees must understand the communication. The employees accept the communication as being consistent with the organization’s purposes. The employees feel that their actions will be consistent with the needs and desires of the other employees. The employees feel that they are mentally and physically able to carry out the order. Barnard’s sympathy for and understanding of employee needs positioned him as a bridge to the behavioral school of management, the next school of thought to emerge. SERVICE EXCELLENCE MANAGEMENT THEORIES 2 SERVICE EXCELLENCE  MANAGEMENT THEORIES Outline 2.3. Behavioural Theory Human Relations or Neo-classical, Behavioural theories 2.4. Modern Management Theory Quantitative Approach System Theory, Contingency, Theory SERVICE EXCELLENCE 2.3 Behavioral Management Theory As management research continued in the 20th century, questions began to come up regarding the interactions and motivations of the individual within organizations. Management principles which were developed during the classical period were simply not useful in dealing with many management situations and could not explain the behavior of individual employees. SERVICE EXCELLENCE Behavioral Management Theory/ Human Relations Movement It is believed classical theory ignored employee motivation and behavior. As a result, the behavioral school was a natural outgrowth of this revolutionary management experiment. The behavioral management theory is often called the human relations movement because it addresses the human dimension of work. SERVICE EXCELLENCE Behavioral Management Theory/ Human Relations Movement Behavioral theorists believed that a better understanding of human behavior at work, such as motivation, conflict, expectations, and group dynamics, improved productivity. SERVICE EXCELLENCE  Behavioral Management Theory The theorists who contributed to this school viewed employees as; Different individuals, resources, and assets to be developed and worked with them not as machines, as in the past. Several individuals and experiments contributed to this theory. SERVICE EXCELLENCE Some Contributors to the Theory Organizations as communities Mary Parker Follett Theory X and Hawthorne Theory Y studies Douglas Elton Mayo McGregor Human resource Theory of approaches Personality and human needs Assumption: organization Abraham People are social Chris Argyris Maslow and self- actualizing SERVICE EXCELLENCE  Abraham Maslow Abraham Maslow, a practicing psychologist, developed one of the most widely recognized needs theories, a theory of motivation based upon a consideration of human needs. His theory of human needs had three assumptions: 1. Human needs are never completely satisfied. 2. Human behavior is purposeful and is motivated by the need for satisfaction. 3. Needs can be classified according to a hierarchical structure of importance, from the lowest to highest. SERVICE EXCELLENCE Maslow’s Hierarchy of Needs SERVICE EXCELLENCE  Abraham Maslow 5. Self-actualization needs. Assuming that all the previous needs in the hierarchy are satisfied, an individual feels a need to find himself. Maslow’s hierarchy of needs theory helped managers visualize employee motivation. 4. Esteem needs. An individual must develop self-confidence and wants to achieve status, reputation, fame, and glory. 3. Belonging and love needs. After the physical and safety needs are satisfied and are no longer motivators, the need for belonging and love emerges as a primary motivator. The individual strives to establish meaningful relationships with significant others. 2. Safety needs. These needs include the need for basic security, stability, protection, and freedom from fear. A normal state exists for an individual to have all these needs generally satisfied. Otherwise, they become primary motivators. 1. Physiological needs. Maslow grouped all physical needs necessary for maintaining basic human well-being, such as food and drink, into this category. After the need is satisfied, however, it is no longer a motivator. SERVICE EXCELLENCE  Elton Mayo’s Elton Mayo’s contributions came as The Hawthorne experiments part of the Hawthorne studies, a consisted of two studies conducted at series of experiments that rigorously the Hawthorne Works of the Western applied classical management theory Electric Company in Chicago from only to reveal its shortcomings. 1924 to 1932. SERVICE EXCELLENCE  Hawthorne Study The first study was Surprisingly enough, they until the employees were conducted by a group of discovered that worker unable to see what they engineers seeking to productivity increased as were doing, after which determine the relationship the lighting levels performance naturally of lighting levels to worker decreased- that is, declined. productivity. SERVICE EXCELLENCE  Hawthorne Study A few years later, a second group of experiments began. Harvard researchers Elton Mayo and F. J. Roethlisberger supervised a group of five women in a bank wiring room. They gave the women special privileges, such as the right to leave their workstations without permission, take rest periods, enjoy free lunches, and have variations in pay levels and workdays. SERVICE EXCELLENCE  Hawthorne Study This experiment also resulted in significantly increased rates of productivity. In this case, Mayo and Roethlisberger concluded that the increase in productivity resulted from the supervisory arrangement rather than the changes in lighting or other associated worker benefits. SERVICE EXCELLENCE  Hawthorne Study The experimenters became the primary supervisors of the employees, the intense interest they displayed for the workers was the basis for the increased motivation and resulting productivity. Essentially, the experimenters became a part of the study and influenced its outcome. This is the origin of the term Hawthorne effect, which describes the special attention researchers give to a study’s subjects and the impact that attention has on the study’s findings. SERVICE EXCELLENCE Hawthorne Study The general conclusion from the Hawthorne studies was that human relations and the social needs of workers are crucial aspects of business management. This principle of human motivation helped revolutionize theories and practices of management. SERVICE EXCELLENCE  Douglas McGregor Douglas McGregor was heavily influenced by both the Hawthorne studies and Maslow. He believed that two basic kinds of managers exist. One type, the Theory X manager, has a negative view of employees and assumes that they are lazy, untrustworthy, and incapable of assuming responsibility. On the other hand, the Theory Y manager assumes that employees are not only trustworthy and capable of assuming responsibility, but also have high levels of motivation. SERVICE EXCELLENCE  Douglas McGregor An important aspect of McGregor’s idea was his belief that managers who hold either set of assumptions can create self-fulfilling prophecies – that through their behavior, these managers create situations where subordinates act in ways that confirm the manager’s original expectations. SERVICE EXCELLENCE Behavioral Management Theory in Summary As a group, these theorists discovered that people worked for inner satisfaction and not materialistic rewards, shifting the focus to the role of individuals in an organization’s performance. SERVICE EXCELLENCE 2.4 Modern Management Theory Quantitative Modern Management Theory Management Theories System theory Contingency theory SERVICE EXCELLENCE 1. Quantitative School of Management The quantitative school of management is a result of the research conducted during World War II when mathematicians, physicists, and other scientists joined together to solve military problems. The quantitative approach to management involves the use of quantitative techniques, such as statistics, information models, and computer simulations, to improve decision making. SERVICE EXCELLENCE  Quantitative Approach Managers can use computer models to figure out the best way to do something, saving both money and time. Managers use several science applications. Quality control Inventory Queuing management theory Supply chain Linear management programming The scientific applications of mathematical Value chain techniques to Network analysis management models problems SERVICE EXCELLENCE  Operations Management Operations management is a narrow branch of the quantitative approach to management. It focuses on managing the process of transforming materials, labour, and capital into useful goods and/or services. SERVICE EXCELLENCE Management Information Systems Management information systems (MIS) is the most recent subfield of the quantitative school. A management information system organizes past, present, and projected data from both internal and external sources and processes it into usable information, which it then makes available to managers at all organizational levels. SERVICE EXCELLENCE  Quality school of Management The quality school of management is a comprehensive concept for leading and operating an organization, aimed at continually improving performance by focusing on customers while addressing the needs of all stakeholders. In other words, this concept focuses on managing the total organization to deliver high quality to customers. Quality management involves employees in decision making as a way to prevent quality problems. The Kaizen approach uses incremental, continuous improvement for people, products, and processes. The reengineering approach focuses on sensing the need to change, seeing change coming, and reacting effectively to it when it comes. SERVICE EXCELLENCE  2. System Management Theory The systems management theory has had a significant effect on management science. A system is an interrelated set of elements functioning as a whole. An organization as a system is composed of four elements: Inputs - material or human resources Transformation processes - technological and managerial processes Outputs - products or services Feedback - reactions from the environment SERVICE EXCELLENCE SERVICE EXCELLENCE  System Management Theory Types of Systems a) Closed system: An organization that interacts little with its external environment (outside environment) and therefore receives little feedback from it is called a closed system. b) An open system: In contrast, interacts continually with its environment. Therefore, it is well informed about changes within its surroundings and its position relative to these changes. The following terminology is important to your understanding of the systems approach: a) A subsystem is any system that is part of a larger one. b) Entropy is the tendency of systems to deteriorate or break down over time. c) Synergy is the ability of the whole system to equal more than the sum of its parts. SERVICE EXCELLENCE 3. Contingency School of Management The contingency school of management can be summarized as an “it all depends” approach. The appropriate management actions and approaches depend on the situation. Managers with a contingency view use a flexible approach, draw on a variety of theories and experiences, and evaluate many options as they solve problems. Contingency management recognizes that there is no one best way to manage. SERVICE EXCELLENCE  Contingency school of Management In the contingency perspective, managers are faced with the task of determining which managerial approach is likely to be most effective in a given situation. For example, the approach used to manage a group of teenagers working in a fast-food restaurant would be very different from the approach used to manage a medical research team trying to find a cure for a disease. SERVICE EXCELLENCE  Summary of Theories VIEWPOINT INNOVATIVE CONTRIBUTIONS Classical 1. Highlights the need for a scientific approach management. 2. Points out that work methods often can be improved through study. 3. Identifies a number of important principles that are useful in running organizations efficiently. 4. Emphasizes the important of pay as a motivator. Quantitative 1. Provides quantitative aids to decision making. 2. Develop quantitative tools to assist in providing products and services. 3. Pioneers new computer-based information systems of management. SERVICE EXCELLENCE  Summary of Theories VIEWPOINT INNOVATIVE CONTRIBUTIONS Behavioral 1. Spotlight the managerial importance of such factors as communication, group dynamics, motivation and leadership. 2. Articulates practical applications of behavioral studies. 3. Draws on the findings of a number of disciplines such as management, sociology, psychology, anthropology and economics. 4. Highlights the importance of organization members as active human resources rather than passive tools. SERVICE EXCELLENCE  Summary of Theories VIEWPOINT INNOVATIVE CONTRIBUTIONS Contemporary (systems and 1. Emphasizes that organizations can be visualized contingency) as systems of interrelated parts. 2. Points out the potential importance of the environment and feedback to organization success. 3. Argues that there is no one best way to manage and identifies circumstances or contingencies that influence which particular approach will be effective in a given situation. SERVICE EXCELLENCE Planning Function SERVICE EXCELLEENC  Planning Function Outline Meaning and Features of Planning Level of Planning Importance/Objective of Planning Limitation of Planning Process of Planning Principle of Planning Features of a good plan Categories Planning SERVICE EXCELLEENC  Introduction An organization can succeed As a primary function of in effective utilization of its It is required for all organizations: management, planning human, financial and business and non-business and all means making decisions sizes of organizations; small, material resources only regarding, what to do, when medium and large and all levels. when its management to do it, where to do it, decides in advance its whom to do it and how to objectives, and methods of do it. achieving them. SERVICE EXCELLEENC  Introduction (Cont’d) Planning takes place at multiple levels in an organization and is an ingrained part of a manager’s job. While top managers plan for the whole organization, middle level managers plan for their respective departments and lower level managers plan for day-to-day business operations. SERVICE EXCELLEENC Introduction (Cont’d) SERVICE EXCELLEENC Definitions of Planning Definitions of Planning – Provided By Theo Haimann, Terry and Franklin, Henry Fayol, L.F. Urwick, Koontz and O’Donnell and Charles WL Hill Meshane: Planning is a pre-decided course of action which will be taken in future. It deals with the determination of objectives to be achieved and the activities required achieving the objectives SERVICE EXCELLEENC  Definitions of Planning Hill and McShane (2008): ‘Planning A formal process whereby managers choose goals, Daft (2006): “Planning is the identify actions to attain those management function concerned Planning, thus, involves decision goals, allocate responsibility for with defining goals for future making, that is, deciding a course implementing actions to specific organizational performance and of action for framing and individuals or units, measure the deciding on the task and resource achieving objectives. success of actions by comparing use needed to attain them”. actual results against the goals, and revise plans accordingly’. SERVICE EXCELLEENC  Myths about Planning Planning does not attempt to make future decisions: Planning choosing of the more desirable future alternatives open to a company, is the process so that better decisions may be made. Planning is not just forecasting or making projections: Forecasts are mere estimates of the future, and indicate what may or may not happen. However, corporate planning goes beyond these forecasts and asks questions. Planning is not a static process: Indeed, plans are obsolete as soon as they are executed, because the environment assumed in their preparation may have already changed. Planning is a continuous process. SERVICE EXCELLEENC  Importance/Objectives of Planning Generally, Planning is important because it enables the organization to survive and grow in the dynamic, changing environment. In terms of specificity it helps; 1. Achievement of organizational objectives: Planning provides the path for achievement of organizational goals with minimum waste of time, money and energy. 2. Fulfillment of organizational commitments: Organizations have long-term and short-term commitments towards society, depending on their nature. 3. It facilitates decision making: Decision-making is deciding what to do when managers face a problem-solving situation. They have to make decisions like what to produce and how to produce. SERVICE EXCELLEENC  Importance/Objectives of Planning 4. It provides stability to organizations: Organizations that plan their operations are more stable than others. Managers can predict risks to some extent and prepare their organizations to face them when they occur. 5. Overall view of the organization/coordination Planning coordinates the functions performed by individual human beings and departments and unifies them into a single goal (the organizational goal). 6. Optimum utilization of resources/efficiency of operations: Organizations work with limited resources, therefore planning allocates these resources over different objectives and functional areas (production, personnel, finance and marketing) in the order of priority. SERVICE EXCELLEENC  Importance/Objectives of Planning 7. Development of managers: Planning involves imagination, thought and creativity by managers. Therefore, while planning, managers develop their conceptual and analytical skill to coordinate organizational activities with external environment. 8. Promotes innovation/creativity: Planning promotes new ideas, new products, new relationships and thus, promotes innovation and creativity. 9. Basis for control: Planning frames standards of performance and control ensures achievement of standards. Controlling involves measurement of actual performance with comparison to standard performance, finding deviations and taking steps to remove those deviations to make better plans for future. SERVICE EXCELLEENC  Features of Planning Planning is the first function of management, all other functions follow planning. If it is wrong, organization structures will be faulty, 2. Adaptive to environment: Planning is a continuous process. It is done so that organizations can survive in the changing environment. 3. Future oriented: Planning is looking ahead. It is preparing organizations to meet future challenges and opportunities. 4. Goal oriented: Planning will be useless if it does not achieve the desired goals. Planning is, thus, goal oriented. SERVICE EXCELLEENC  FEATURES OF PLANNING 5. Pervasive: It is done for all organizations: business and non-business, profitable and non-profitable, small and big. It is done at each level; top, middle and low, however nature and scope of planning is different given the levels. 6. Intellectual process: Managers cannot plan unless they analyze the firm’s past, present and future. Managers have to conceptually and analytically excel in making plans that can be implemented. They should have judgment, intuition, foresightedness, imagination etc. to make good plans. SERVICE EXCELLEENC  Features of Planning 7. Efficient: Efficiency means cost effective. Time and money are spent on planning to gain in the future. 8. Flexible: Managers have to be quick in changing their plans so that future changes do not derail the plans. 9. Planning and decision-making: Choosing goals out of multiple goals, deciding on ways to achieve them out of a number of alternatives. It helps optimum allocation of resources over different goals and departments etc.. 10. Planning is closely related to control. It specifies future actions and control ensures those actions are carried out by putting in mechanism to measure. SERVICE EXCELLEENC  Why Plans Fail? Despite the best laid plans, there may be situations where plans do not produce the desire results. 1. Multiple goals: If plans are made for too many goals, organizational resources get thinly spread over each of them and chances of effective achievement of goals becomes too difficult. 2. Too much emphasis on future: Over emphasis on future activities and environmental factors and under emphasis on day-to-day working of the organization may result in the failure of plans. 3. Focus on short-term plans: As too much focus on long-range plans can be unpredictable, focus on short-range plans is also harmful. Therefore a balance of both future and short-term is essential. 4. Standardized plans: Depending upon the size, nature and structure of the organization and its activities, plans must be framed for different activities. Failure to do so results in failure to achieve the planned targets. SERVICE EXCELLEENC  Limitations of Planning Planning is inevitable. Its importance and benefits cannot be undermined. However it suffers from some limitations. 1. Costly Process: Planning is costly. It consumes lot of time and money to plan with no guarantee of achieving planned targets. 2. Curbs the initiative of managers: Planning provides pre-decided courses of action, managers cannot change the initiative once the plans are framed and put into action. 3. Planning in advance is not always the right course of action: It is easier to plan than to implement the plans. Actual realities or situations may be different from the planned ones. 4. Multiple goals: If planning is done for too many goals, scarce organizational resources get thinly spread over them. This affects effective attainment of goals. SERVICE EXCELLEENC  Limitations of Planning 5. Too much focus on future: Planning is future-oriented. There could be too much focus on future. Planning must be done every day, every moment and not periodically. 6. Delay in action: Planning involves time. It delays action when managers face emergency situations. 7. False sense of security: When plans are made, it gives a sense of security to organizational member that targets will be fulfilled. It promotes complacency and slows down action. SERVICE EXCELLEENC  Process of Planning Need for planning: The managers realize the need for planning as a first step to planning. Identification of goals: After the need is determined, planners identify what they want to achieve through planning. If, for example, sales are declining because of poor promotion polices of the company, the goal of planning is advertising and promotion management. Analysis of present situation: Being clear of what to achieve, the planners must know how equipped they are to achieve their targets. Identify barriers to planning: Planning cannot be effective if members (those who plan and those who implement) are unwilling to set goals, lack planning skills and are unwilling to accept change. Development of planning premises: Planning process is based upon estimates of future as plans are made to achieve goals in future. The estimates about future markets, consumer preferences, political and economic environment are the planning premises on which business plans are developed.  Process of Planning 6. Development of alternative courses of action: After managers are clear of goals to be attained, they think of ways to achieve them in making alternative plans of action since there can be no best way of doing things. 7. Evaluation of different courses of action: When the alternative courses of action are developed, managers select the most appropriate plan that will adjust to the internal and external environmental conditions and can be achieved with the available resources. 8. Selection of a course of action: When the best course of action is determined, it should be finally selected by managers. 9. Feedback: Feedback means response. When plans are selected and implemented, managers receive information about the success or failure of plans. SERVICE EXCELLEENC  Principle of Planning Principle of contribution to objectives: Plans must be directed towards organizational objectives. Principles of objectives: Since objectives are the basis for planning, they must be clear, specific, measurable and unambiguous. They must be understood and accepted by all the organizational members. Principle of primacy of planning: Planning is pre-requisite to other managerial functions. It must be effectively done so that other functions of management also contribute to the overall organizational goals. Principle of efficiency of plans: Plans must be efficient in their contribution to objective i.e., returns must exceed their costs. Principle of planning premises: Since planning is based on forecasts, clear planning premises must lead to efficient planning process. SERVICE EXCELLEENC  Principle of Planning 6. Principle of strategy and policy framework: Strategies and policies help to attain organizational objectives. Clear policies and strategies lead to clear and effective plans. 7. Planning of limiting factor: Limiting factor limits the capacity of the organization to achieve its goals. 8. Principle of commitment: Plans should cover a time span that allows managers to fulfill their commitment to the decisions. 9. Principle of flexibility: Plans must be flexible to adjust to environmental changes. 10. Principle of navigational change: This principle is closely related to the principle of flexibility. It reviews the plans from time to time and reframes them if the need arises. SERVICE EXCELLEENC  Features of a Good Plan 1. Integration: A good plan should integrate the short-term requirements of the firm with its long term requirements to achieve overall organizational goals. 2. Market research: Planners must conduct thorough market research before framing plans. 3. Economic/ Financial constraints: The future cost and benefits must be carefully analyzed while designing the organizational plans. 4. Co-ordination: A sound plan aims to co-ordinate the working of all functional areas. If functional plans (or departmental plans) are not synchronized with the overall organizational plans, the organization will fail to achieve its goals. SERVICE EXCELLEENC  Features of a Good Plan 5. Consistent: Plans should be followed for a fairly considerable period of time. 6. Flexible: Though consistent, plans should be adjustable (flexible) to the environmental changes. 7. Acceptable: It is important, therefore, that plans are acceptable not only to those who frame them but also to those who implement them. 8. Participative: The acceptability of plans increases if subordinates participate in the planning process. Many organizations follow the principle of participation in planning as it offers the advantages of group decision-making. SERVICE EXCELLEENC Categories of Planning SERVICE EXCELLEENC ORGANIZING SERVICE EXCELLENCE  ORGANIZING Outline Introduction to Concept Nature of Organization (Structure and Process) Importance of Organizing Evolution of organization as a mechanism SERVICE EXCELLENCE  Introduction to Concept Organization is the backbone of management. Without efficient organization, no management can perform its functions smoothly. Sound organization contributes greatly to the continuity and success of the enterprise. Andrew Carnagie, an American industrialist said, "Take away our factories, take away our trade, our avenues of transportation, our money. Leave nothing but our organization, and in four years we shall have re-established ourselves". SERVICE EXCELLENCE  Meaning of Organization In common parlance, “organization” refers to “institution”. An educational institution, private agency, Government department or a business firm are organizations. In the context of management, it refers to formal arrangement of work among members of the institution with clear identification of authority and responsibility that organizational goals are achieved optimally. If duties of each member and their relationship with peers, superiors and subordinates are well defined, the planning process will be effective. SERVICE EXCELLENCE  Meaning of Organization In the view of Jones et al., Hill and McShane (2008), Organizing according to Daft (2000), organizing is structuring Organizing refers to the process (2006) is the management working relationships in a way of deciding who within an function concerned with that allows organizational organization will perform what assigning tasks, grouping tasks members to work together to tasks, where decisions will be into departments and allocating achieve organizational goals. made, who reports to whom, resources to departments. and how different parts of the organization will coordinate their activities to pursue a common goal. SERVICE EXCELLENCE  Meaning of Organization It could also be defined as involving all the managerial work involved in creating an organizational structure and design. The process of arranging people and other resources to work together to accomplish a goal. In a business, organizing typically involves dividing the enterprise into subunits based on functional tasks such as procurement, R&D, production, marketing, sales, customer ser vice, human resources, accounting, and finance and deciding how much decision-making authority to give each subunit. SERVICE EXCELLENCE  Meaning of Organization From the above definitions, it is clear that organizing has the following elements; process of determining the total activities to achieve a given objective, grouping and assigning of activities to individuals, delegating them authority necessary to perform the activities assigned, and establishing authority relationship among different positions in the organization. SERVICE EXCELLENCE Evolution of Organization as a mechanism The evolution of organization as a mechanism that enables people to work most effectively towards the attainment of the organizational goals has emerged as follows: 1. The “Herd” concept: – It views organizations as a group of people who direct efforts towards organizational goals through coercion, punishment and strict adherence to rules and regulations. – It empowers the superiors to decide for their subordinates and assumes subordinates’ obedience to their directions, orders and instructions. SERVICE EXCELLENCE Evolution of organization as a mechanism 2. The “person-to-person” concept: Subordinates are not viewed as a ‘herd’ by the superiors. Superiors contact the subordinates and delegate responsibility and authority to make them work towards organizational goals. 3. The “group” concept: While “person-to-person” concept emphasizes on vertical relationships amongst superiors and subordinates, the “group” concept recognizes the lateral or horizontal relationships also amongst people working at the same level. SERVICE EXCELLENCE  Nature of Organizing The term 'organization' is used in two different senses. In the first sense it is used to denote the process of organizing. In the second sense, it is used to denote the results of that process, namely, the organizational structure. So, the nature of organization can be viewed in two ways : Organization as a structure or framework of relationship and Organization as a process. SERVICE EXCELLENCE  Nature of Organizing - Structure Organizing is a set of relationships that defines vertical and horizontal relationship amongst people who are assigned various tasks and duties. The organizational task is divided into units, people in each unit (departments) are assigned specific tasks and their relationship is defined in such a way that maximizes organizational welfare and individual goals. The relationship amongst people is both vertical and horizontal. SERVICE EXCELLENCE  Nature of Organizing - Structure Vertical relationships: there is authority-responsibility structure of people at different levels in the same department and it is defined Horizontal relationships, there is authority-responsibility structure of people working in different departments at same levels and it is defined. Organization structure specifies division of work activities and shows how different functions or activities are linked; to some extent it also shows the level of specialization of work activities. SERVICE EXCELLENCE  Nature of Organizing - Structure It also indicates the organization’s hierarchy and authority structure, and shows its reporting relationships Organizing as a structure is a network of relationships (authority- responsibility structure) amongst all those who are part of the organization, working at any level in any department. Organization as a structure defines relationships between jobs and people working at those jobs at various levels. It emphasizes more on positions than people. SERVICE EXCELLENCE Nature of Organizing - Process Organizing defines relationships amongst people in such a way that organizational goals are achieved efficiently. It involves identification of work, grouping of work into smaller groups, assigning work to each individual at every level in every department, defining its authority and responsibility, and establishing relationships amongst people to make them work towards the organizational goal in an integrated and coordinated manner. SERVICE EXCELLENCE  Nature of Organizing - Process Organizing as a process consists of two processes: Differentiation means division of work into smaller units and its assignment to various individuals according to their skills and abilities. Integration refers to coordination of different activities towards a common goal. It provides unity of action towards organizational activities. SERVICE EXCELLENCE  Nature of Organizing The following points explain the nature of organization: 1. Structure of relationships: Organization is a system of well-defined tasks and duties assigned to people along with delegation of authority, responsibility and accountability. 2. Managerial function: It is a function of management which integrates human and non-human (physical) resources for achieving organizational goals. It is a function in itself and also helps in performing other managerial functions. 3. Ongoing process: Organizing is a process which involves a series of steps, from determination of objectives to accomplishment of objectives. It is a continuous process which requires management to introduce changes (re- organization) in the way an organization works.  Nature of Organizing 4. Encourages teamwork: Organization comes into existence when there are a number of persons in communication and relationship to each other who are willing to contribute towards a common endeavor. 5. Foundation of management: Success of an institution depends upon its sound organization which entails clear definition of jobs and their division amongst members with clear identification of authority and responsibility is the foundation. 6. Goal-oriented: Every organization is formed for some objective; profit or service. All activities are divided amongst members, departments are created, work is coordinated and continuous monitoring of activities to achieve the objective. The process of organization is, thus, a goal-oriented process. SERVICE EXCELLENCE  Nature of Organizing 7. Adaptive to change: Though organization structure provides stability to activities of members, it is open to change. Changes in the environment, internal or external are incorporated in the organization structure. This makes organization an ongoing process. 8. Situational: No structure can be described as best. Depending upon the nature of the size of the organization and nature of relationships amongst people, the organization also varies. SERVICE EXCELLENCE  Process of Organizing 1. Determination of objectives: Every organization is established for some objective or goal. Various tasks or activities of the organization are determined for achieving this goal. 2. Division of activities: Since one person cannot manage all the activities, the total task are broken into smaller units. Work should be assigned according to qualification and ability of every person. This results in: (a) Increased efficiency: Performing the same task over and over again increases the skill and efficiency of the workers. (b) Facilitates training of less-skilled workers: Since the complex task is broken into smaller units, less-skilled workers can be trained to carry out those activities. SERVICE EXCELLENCE  Process of Organizing 3. Grouping of activities: After the work is assigned to people, those performing similar activities are grouped in one department. Various departments like sales, finance, accounting etc. are filled with people having different skills and expertise but performing similar activities. Grouping of activities into departments is called departmentalization and each department is governed by a set of rules, procedures and standards. SERVICE EXCELLENCE  Process of Organizing 4. Defining authority and responsibility: Every department is headed by a person appointed and responsible for its effective functioning. This is to ensure that competence of departmental head matches job requirements of the department. Each head has the authority to get the work done from his departmental members. He delegates responsibility and authority to members of his department. This creates a structure of relationships where every individual knows his superiors and subordinates and their reporting relationships.RVICE EXCELLENCE  Process of Organizing 5. Co-ordination of activities: When departments work for their objectives, they may develop inter-departmental conflicts. This can obstruct the achievement of organizational goals. For example, the finance department wants to cut down costs, but the marketing department needs additional funds to promote its products. 6. Reviewing and re-organizing: There must be constant appraisal of the above steps so that changes in the environmental factors and their consequences can be managed. SERVICE EXCELLENCE  Importance of Organizing 1. Facilitates administration: The basic elements of organizing (division of work, grouping of activities, distribution of authority and co-ordination) provide for better administration by the top management. 2. Growth and diversification: A well-organized institution is adaptive to change and responsive to growth and diversification. 3. Creates synergies: Division of work provides the benefits of synergies. Synergy means the total task achieved by a group of people is more than the sum total of their individual achievements. SERVICE EXCELLENCE  Importance of Organizing 4. Establishes accountability: Unless each person knows his boss and subordinates, the organization cannot function efficiently. Establishing limitations in the area of operations defines each person's accountability to his immediate boss which gears the organization towards its overall goals. 5. Optimum use of technology: Well-organized structures enable the organizations to optimally use and update their technology to remain competitive in the market. 6. Facilitates communication: Efficiency of the organization depends upon how well the organizational members communicate with each other. A well- designed system of communication (vertical and horizontal) is facilitated through effective organizing efforts of top executives. SERVICE EXCELLENCE  Importance of Organizing 7. Facilitates creativity: Creativity means creating something new or developing new ways of doing existing things. Creativity creates a sense of achievement in the managers in a well-organized structure that provides moral boost for further creative thinking. 8. Improves inter personal relationships: A sound organization structure ensures that the workload is divided into well defined jobs and assigned to each individual according to his abilities and skills. 9. Facilitates coordination: Well defined objectives and plans can fail if organizational activities are not coordinated in a unified direction. 10. Facilitates teamwork: Though all individuals are responsible for specific tasks assigned to them, they work collectively as a team and optimize the use of scarce organizational resources to achieve the organizational goals. SERVICE EXCELLENCE  Importance of Organizing 12. Increase in output: Sound organization divides activities into various departments (production, marketing etc.). These departments specialize in their tasks and increase the organizational output. 13. Optimum allocation of resources: Organizing promotes optimum allocation of resources as they are allocated over different areas (production marketing, personnel etc.) in order of their priority. People are assigned jobs that they are best suited for. All work activities are assigned to different people. There is no duplication of work. SERVICE EXCELLENCE ORGANIZING SERVICE EXCELLENCE  ORGANIZING Outline Organizational Chart Kinds of Organizational Charts Span of Management Principles of Organizing Formal and Informal Organization SERVICE EXCELLENCE  Organizational Chart With increase in size and complexity of organizations, number of departments, sub-units and people working in the organization is also increasing. There is increasing distance between top executives and people at lower levels and interaction amongst them also becomes increasingly complex. To enable people have clear understanding of the various positions, departments and their sub-units and relationship amongst different departments, visual maps are used. SERVICE EXCELLENCE  Organizational Chart This visual representation of organization structure is known as organizational chart. Organizational charts could also be defined as the reporting structure and division of labour in an organization. It could be seen as a picture or diagram of positions in an organization and their formal relationship to one another. It gives clear understanding to every person of his position in the organization vis-a-vis his superiors and subordinates. It clearly defines the authority, responsibility and accountability structure in the organization. SERVICE EXCELLENCE  Organizational Chart The chain of command respects the principle of scalar chain and unity of command. Organizational charts show the following: a. Levels of hierarchy b. Chain of command c. Span of management d. How work is structured within the organization. e. The number of employees reporting to a supervisor f. The number of subordinates a manager can effectively manage. SERVICE EXCELLENCE  Organizational Chart Organization charts are broadly of the following types: 1. Vertical organization charts 2. Horizontal organization charts 3. Circular organization charts Vertical charts depict the flow of authority from top to bottom; horizontal charts show this flow from left to right and circular charts show top position in the innermost circle (concentric circles) which flows towards middle and lower level managers in outward circles. The most commonly adopted organization charts are vertical charts. SERVICE EXCELLENCE Vertical organization charts SERVICE EXCELLENCE Circular Organizational Chart SERVICE EXCELLENCE SERVICE EXCELLENCE  Span of Management The number of workers that a manager can effectively supervise is known as span of management or span of control. In the 19th and middle of 20th century, management writers determined 5 or 6 as the maximum number of subordinates that a manager could effectively manage at the upper level. Beyond this number, managers faced problems like: 1. Overburdened with work. 2. Difficulty in coordinating the activities of large number of people. 3. Difficulty in controlling. SERVICE EXCELLENCE  Span of Management Thus, optimum number of subordinates that a manager could supervise was determinable but today, it is not so. Exact number of employees that managers can effectively supervise cannot be defined. Span of management is situational in nature. Depending on the number of employees that can be supervised or controlled by managers, there can be two kinds of structures in the organization: 1. Tall structures 2. Flat structures SERVICE EXCELLENCE  Span of Management 1. Tall structures – These structures are found in classical bureaucratic organizations. – In this structure a manager can supervise only a few subordinates. – He can, therefore, exercise tight control over their activities. – This creates large number of levels in the organization. This is also known as narrow span of control. – A tall structure or a narrow span of control appears like this. SERVICE EXCELLENCE  Span of Management Disadvantages of a Tall Structure 1. Too many levels in the organization structure complicates co-ordination supervise activities of their amongst levels. 2. More managers are needed to supervise the workers. This increases the overhead expenditure communication amongst superiors and subordinates. 3. Increasing gap between top managers and workers slows the communication process. 4. Decision-making becomes difficult because of too many levels. subordinates. 5. Superiors perform routine jobs of supervising the subordinates and have less time for strategic matters. 6. Employees work under strict control of superiors. This restricts their creative and innovative abilities. SERVICE EXCELLENCE  Span of Management 2. Flat Structures – These structures have a wide span of control. – When one superior supervises a larger number of subordinates, a flat structure is created with lesser number of hierarchical levels. SERVICE EXCELLENCE  Span of Management Disadvantages of a Flat Structure 1. Competence of managers: If managers are competent 1. There is low cost as less in their jobs, they can have a wide span of management. number of managers is 2. Nature of work: If employees perform similar and required to supervise repetitive work, managers can supervise large number of organizational activities. subordinates and, thus, have a wide span of control. 2. The decision-making process Non-repetitive and challenging work requires narrow span is effective as superiors delegate authority to 3. Assistance to managers: If managers have access to subordinates. They are technical or secretarial assistance, larger group of relieved of routine matters subordinates can be managed by them. Span of control and concentrate on strategic matters. 4. Education of subordinates: If subordinates are educated and intelligent to manage their jobs without 3. Subordinates perform their work efficiently since they much assistance from their superiors, a wide span of o are considered worthy of 5. Clear plans and policies: If plans clearly define the doing so by their superiors. organizational/individual goals and policies, supervisors 4. There is better system of can supervise a larger group of subordinates and have a communication as the number of levels is less. 6. Organizational level: The top executives look after 5. It promotes innovative important and specialized activities therefore, the span is abilities of the top narrow at the top level but at lower levels the span can management. be wide since supervisors are mainly concerned with routine jobs. SERVICE EXCELLENCE  Principles of Organizing Principles are the guidelines that promote managerial thinking and action in helping managers to effectively carrying out their organizing function. These principles are as follows: 1. Principle of unity of objectives: – All organizational activities are geared towards attainment of objectives, framed for each level (top, middle and low) and each functional area and must be clearly understood by all to attain objectives. 2. Principle of organizational efficiency: – Organizational goals should be achieved efficiently. It means optimum (efficient) use of resources, that is, maximum output should be achieved out of minimum inputs. 3. Principle of division of labour: – Division of labour means breaking the main task into smaller units. SERVICE EXCELLENCE  Principles of Organizing 4. Principle of authority-responsibility: Authority and responsibility must go hand in hand. Responsibility means obligation to carry out the assigned task. 5. Principle of delegation: The total work load is divided into parts. A part is assigned to subordinates and authority is given to efficiently carry out that task. 6. Principle of scalar chain: Scalar chain is the line of authority running from top to lower levels. Authority flows from top to bottom in this chain and responsibilities flow from bottom to top. 7. Principle of span of control: Span of control means the number of workers that a manager can effectively supervise. SERVICE EXCELLENCE  Principles of Organizing 8. Principle of unity of command: It states that one subordinate should have one boss. People should receive orders from their immediate boss only. This brings discipline and order in the organization. 9. Principle of balance: There must be balance between different principles of organizing. Balance must be maintained between centralization and decentralization, narrow and wide span of control. 10. Principle of flexibility: Organization should be flexible. Changes in structure should be according to changes in environmental factors. SERVICE EXCELLENCE  Principles of Organizing 11. Principle of continuity: Organization should adapt to the environmental changes for its long run survival, growth and expansion. 12. Principle of exception: Every matter should not be reported to top managers. Only significant deviations should be reported to them. 13. Principle of simplicity: Organization structure should be simple that can be understood by everyone. People can work efficiently in a simple structure as they are clear of various jobs and authority / responsibility associated with each job. SERVICE EXCELLENCE  Principles of Organizing 14. Principle of departmentation: It means dividing activities into specialized groups (departments) where each department performs specialized organizational task. 15. Principle of decentralization: It means delegation of authority to lower-level managers. It increases the decision-making authority of lower-level managers and increases organizational efficiency. SERVICE EXCELLENCE  Principles of Organizing 16. Principle of unity of direction: All organizational activities of similar nature are grouped in one unit (production or marketing), headed by the departmental manager and direct their efforts towards a single objective; the departmental objective. 17. Principle of co-operation: All individuals and departments should co-operate with each other and help the organization achieve its goals. SERVICE EXCELLENCE Formal and Informal Organization Formal Organization – Formal organization is a well-defined structure of authority and responsibility that defines delegation of authority and relationships amongst various organizational members. – It works along pre-defined sets of policies, plans, procedures, schedules and programmes. – Most of the decisions in a formal organization are based on pre-determined policies. SERVICE EXCELLENCE Formal and Informal Organization It is a dimension of organizational structure that refers to the extent to which rules, – procedures and other guides to action are written and enforced. Louis A. Allen defines formal organization as – "a system of well defined jobs, each bearing a definite measure of authority, – responsibility and accountability, – the whole consciously designed to enable the people of the enterprise to work most effectively together in accomplishing their objectives." SERVICE EXCELLENCE Formal and Informal Organization Formal organization is a deliberately designed structure – with formal authority, – responsibility, rules, – regulations and channels of communication. Some degree of formalization is necessary for organizations to function effectively – to avoid taking time-consuming decisions to handle conflicting situations – and exercise control over the activities of subordinates. SERVICE EXCELLENCE Formal and Informal Organization Features 1. Job-oriented: – It focuses more on jobs than people. – It allocates jobs to people – and defines the structure of relationships amongst them for achieving the formal organizational objectives. 2. Division of work: – Work load is divided into smaller units and assigned to individuals on the basis of their skills and abilities. – Division of work amongst people results in specialization and increases organizational output. 3. Departmentation: – Departmentation is the basis or foundation of organization structure, that is, organization structure depends upon departmentation. SERVICE EXCELLENCE Formal and Informal Organization Features 4. Formal authority: People at various positions exercise authority by virtue of their position in the organizational hierarchy. 5. Delegation: Work is officially delegated from top levels to lower levels. The work load is divided into various units, a part is assigned to subordinates and authority is given to them to carry out the assigned task. 6. Coordination: Managers coordinate or integrate the activities of individuals and units into a concerted effort so that departments and individuals work towards a common goal. 7. Based on principles of organizing: Formal organization is based on formal principles of organizing. Benefits of Formal Organization 1. It clearly defines objectives of the organiza