PRINCIPLES OF MANAGEMENT MODULE 1

MODULE 1

Contents• Management • Authority• Responsibility • Delegation • Span of control• Organization• Job evaluation and merit rating • Wages – Types of incentives.

MANAGEMENT

Management

• “Management is doing things right; leadership is doing the right things.”

• Management is the art of getting work done through people with satisfaction for the employer, employees and the public.

Importance of management

• Maintain disciple by keeping control

• Co-ordinates all the activities of various dept.

• Suggests new idea and improvements.

• Keeps co-ordination among the staff at various levels.

• Provide stability to the enterprise.

Management Classifications

• Top level Mgmt.– Managing director ,General

manager ,CEO, CMD etc..

• Middle level Mgmt.– Different department

heads.– Responsible for top

management and control over lower level.

• Lower level Mgmt.– Supervisors, Inspectors,

Office superintendent..etc..

Management FunctionsManagement Functions

2. Planning2. Planning

3.Organizing3.Organizing

5. Directing5. Directing

7. Controlling7. Controlling 4. Staffing4. Staffing

1. Forecasting1. Forecasting

ManagementFunctions

ManagementFunctions

6. Co-ordinating6. Co-ordinating

8. Communicating8. Communicating

1. Forecasting1. Forecasting

• An estimate of future events based on past data.

• What should be done in future.

• Success of business greatly depends on efficient forecast.

2. Planning2. Planning

• Think before act / do.

• Establishing the goals and suitable courses of action.

• Without proper planning activities of the firm will become confused and ineffective.

3.Organizing3.Organizing

• Process of grouping the various activities to be done and assigning duties and responsibilities to people in the department.

• Arrange men, material, money and machine for the actual execution of manufacture.

4. Staffing4. Staffing

• Process of filling and keeping filled the various positions in the organizational structure.

• Major functions:• Recruitment• Selection• Placement• Training• Promotion

5. Directing/ Leading5. Directing/ Leading

• “A leader is one who knows the way, goes the way and shows the way.”

• Process of guiding the subordinates towards common goals of organization.

• It involves:• Guiding• Motivating• Supervising

6. Co-ordinating6. Co-ordinating

• Process of harmonizing the different functions of the different dept. of enterprise.

• Coordination two ways:

• Horizontal• Vertical

7. Controlling7. Controlling

• Process which measures the progress of operations and making sure that things are proceeding in the right direction as planned.

• Helps to check the errors and take the corrective action to achieve the desired goal.

8. Communicating8. Communicating

• Communication is the means by which people are linked together in an organisation to achieve a common purpose.– Downward

Communication – Upward

Communication – Crosswise

Communication

8. Decision Making8. Decision Making

• Ability to make decisions when there are alternatives available.

• Quality of a successful manager – make right decision at right time.

…In whole

1. Men2. Material3. Money4. Machine5. Time

1. Men2. Material3. Money4. Machine5. Time

Recourses Recourses OutputOutputManagement Fn.Management Fn.

Goods/ Services

Goods/ Services

1. Forecasting2. Planning3. Organizing4. Staffing5. Directing6. Co-ordinating7. Controlling8. Communicating

1. Forecasting2. Planning3. Organizing4. Staffing5. Directing6. Co-ordinating7. Controlling8. Communicating

AUTHORITY

Authority

• Right to command and power to act.

• Give orders to the subordinates.

• Right to make decisions• Right to control

subordinates.• Types

• Charismatic• Traditional• Bureaucratic/ Legal

Charismatic Authority

• Those in authority possess charisma

• No fixed hierarchy of officials

• No legal rules governing organization

• Short-lived: dependent upon personality of leader.

Examples: Jesus’s disciples

Religious cults

Traditional Authority

• Two forms– Household – relatives,

favourites and servants (e.g. ‘Biraderi’ in Pakistan. ‘Family’ in Sicily).

– Vassals – feudal lords who swear loyalty to monarch and hold land in exchange for military service.

• In both cases social actions are based upon custom/ingrained habit.

Legal Authority

• Legal authority is derived by a position holder from rules, regulations, policies and norms laid down for the systematic functioning of the organization.

Authority vs Responsibility

RESPONSIBILITY

Responsibility

• Work/duty/task assigned by the executives to the subordinates.

• Obligation of a subordinate to whom a duty has been assigned.

DELEGATION

Delegation

• Handing over (Passing on) responsibility and authority to another.

• Elements – Assignment of work– Granting of authority

Delegation of Authority

• Granting (Sharing) of authority to subordinates to accomplish a particular assignment.

• Sharing will be in vertical direction.

• Top Middle Low

SPAN OF CONTROL

Span of control

• No. of subordinates which are directly under their superiors.

• The superiors will have the authority and responsibility.

• Can transfer authority, cannot move away from the responsibility.

ORGANIZATION

Organization

• Large group of persons united to achieve any task/goal.

Characteristics of Organization

• Group of people

• Structure of relationship

• Function of management

• Specifies how duties are to be divided among the departments and employees.

• Co-ordinates and controls the activities of individuals or groups to achieve common objectives of the enterprises.

Importance of Organization

• It facilitates administration.

• It facilitates growth and diversification.

• It facilitates effective use of man power.

• It facilitates optimum use of resources.

Organization Structure

• Systematic arrangement of the people working for the organization, their positions and the relationship between positions.

Types of organization structures

• Line, military or Scalar organization.

• Functional organization

• Line and staff organization

• Line, staff and functional organization

• Matrix or grid organisation

Line, military or Scalar organization

GM

Sales ManagerProduction Manager

Accounts Manager

Salesmen Clerks

Foremen Foundry

Foremen workshop

Foremen assembly

Workers Workers Workers

Functional organization

GM

OFFICE SHOP

Route Clerk

Instruction clerk

DisciplinariansTime & cost clerk

Workers

Gang boss

Repair boss

Speed boss

Inspector

Line and staff organization

Board of DirectorsCompany Secretary Legal advisor

GMMarket research

Other consultants

Purchase manager

HRD Manager

Sales Manager

Production Manager

Chief accounts officer

Design Engineer

Safety officer

Industrial Engineer

Stores officer

Foreman M/c Shop

Workers Workers Workers

Foreman Foundry Foreman assembly

Matrix Organization