Modern Management Techniques

8/12/2017
 Plan of Presentation

Introduction to
Management
Management techniques

Characteristics of management techniques

Classification of management techniques
Network Analysis
PERT
CPM
Management by Objectives
Total Quality Management
Summary
Conclusion

8/12/2017
 Introduction

What is Management?
To co-ordinate the efforts of people
to accomplish goals
objectives
using available resources
efficiently and effectively
Transforming resources to utility.

8/12/2017
 Co-ordinating Organizing

Planning

Commanding

Forecasting

Controlling

8/12/2017
 Management Techniques
Definition :
Systematic and analytical methods used
to assist in decision-making, the
improvement of efficiency and
effectiveness and in particular, the
conduct of the two key managerial
activities of planning and control

8/12/2017
 Characteristics of management techniques:

Systematic :
Consist of specified and often sequential methods of tackling a
problem, providing information for decision making or improving
operational efficiency.
Ensure that each step is carried out in prescribed manner.

8/12/2017
 Analytical
Techniques have been developed by considering what and possibly quantitative
methods are required to deal with every aspect of a situation and achieve an end
result.
They subject complex situations to close and systematic examination and resolve
them into their key elements.

8/12/2017
 Quantitative
Management techniques measure in numerical or financial terms what is
happening and quantify forecasts of future trends.
Management techniques place monetary values on performance reports,
forecasts, plans.

8/12/2017
 Applications of management techniques.
General management
Marketing management
Operations management
Financial management
Human resource management
Information technology
Management science
Planning and resource allocation
Efficiency and effectiveness

8/12/2017
 Traditional methods of management are primarily based on behavioural
sciences.
Personnel selection
Training and retraining
Motivational methods
Development of communication channels and skills
Supervision
Leadership development
Team building and conflict resolution

8/12/2017
 The conventional methods of management are no longer adequate to
meet the demand of todays projects
With larger and complicated organisations with their own unique
organisational and structural issues a need has been felt for better, more
effective and innovative managerial methods

8/12/2017
 Modern management
techniques

8/12/2017
A. Statistical techniques
1) Time trends and forecasting
2) Decision theory and tree
B. Activity analysis
1) Time motion studies
2) Work sampling and activity analysis
3) Queuing theory
4) Gantt chart and work shedule.

8/12/2017
C. Mathematical techniques
1) Simulation study /model
2) System analysis
3) Linear programming
4) Inventory control
5) Precedence and arrow diagramming
6) Network analysis
7) PERT
8) CPM

8/12/2017
D. Financial techniques
1) Monitoring expenditure
2) Cost accounting and analysis
3) DALY
4) Cost Benefit Analysis
5) Cost effective analysis
6) Performance budget
7) PPBS
8) Zero base budgeting
9) Input output analysis
10) Out come budget

8/12/2017
E) Miscellaneous
1) Management by Objectives and appraisal by results
2) Management by exception
3) Situation analysis
4) Current state assesment
5) SWOT Analysis
6) Log frame Analysis

8/12/2017
 Network analysis

Network is a graphical representation of all the Activities and Events

arranged in a logical and sequential order
A project is broken up into small operations which are arranged into logical
sequence.
The order in which these actions are to be performed is decided and a network
diagram shows the relationship between the various operations involved.
Time required for accomplishment of different tasks can also be considered.

8/12/2017
 Activity: Activity is the actual performance of the job. This consumes
resources (Time, human resources, money, and material)
Event: An event refers to start or completion of a job. This does not
consume any resources

8/12/2017
 1. In a network diagram, arrows represent the
activities and circles represent the events.

2. The tail of an arrow represents the start of

an activity and the head represent the
completion of the activity.

8/12/2017
 -involved 250 prime contractors
-9000 job contractors. It had about
19 million components.

-In such projects it is

possible that a delay in the delivery
of a small component might hold
the progress of
entire project.

-PERT was used successfully and

the total time of completion was
reduced from 7 years to 5 years.

8/12/2017
 PERT and CPM are the two most popular network analysis technique
used to assist managers in planning and controlling large scale projects

PERT- (Programme Evaluation Review Technique)

CPM - (Critical Path Method)

8/12/2017
 Network representation: There are two types of
systems

AOA system AON system

(Activity on Arrow (Activity on Node
system) system )

In this activities are In this method activities

represented by an are represented in the
arrows circles.

8/12/2017
 Program evaluation review technique

PERT involves planning, monitoring and controlling of projects where

time taken for each activity in the project is not known.
Consists of identification of various events necessary in the final
achievement of the objective/
Flow diagram consisting of events shown by circles or squares in their
logical sequence is drawn.

8/12/2017
 It uses probability to estimate the timings of various activities in the
project
classically used in long-term projects like construction of hospitals,
ships, roadways and buildings, in planning & launching of new health
programs, products & services, in publication of books etc where exact
time for each phase is not known with certainty

8/12/2017
 Draw the PERT network for the following
project
Event A is followed by events B & C
Event D is preceded by events B & C
Event H is the successor to event E
Event E is the successor to event B
Event F is the successor to event D & G
Event C is the predecessor to event G
Event J is preceded by events F,G, & H

H
B
J
D
A
F

8/12/2017
 Under PERT, three time-estimates are made, as under:
a) Most Likely Time ;is the time taken most frequently in completing a particular
activity.

b) Optimistic Time is time in which an activity can be completed, if all goes as per
the pre-determined plan.

c) Pessimistic Time is the time taken to complete an activity under most adverse
conditions. This is thus the longest possible time taken to complete a project.

8/12/2017
 From the above estimates, expected time for completion of an activity is
computed as :

8/12/2017
 Critical Path Method (CPM)

Here, it is assumed that durations of individual activities in a project are

known with certainty
The method thus helps to determine the earliest possible start time &
latest possible start time for each activity
Identifies the critical activities, which are critical because if any of these
activities are delayed by even a short period, the entire project will be
delayed

8/12/2017
 CRITICAL PATH
Meaning: The longest path in a project network which determine the duration of
the project is known as critical path.

8/12/2017
 B
3

2 E
4
H

A 5 F

4 5 6 1
2
G
C
2 D 3

8/12/2017
 Float (Slack)
refers to the amount of time by which a particular event or an activity can be
delayed without affecting the time schedule of the network.
Float (Slack) is defined as the difference between latest allowable and
the earliest expected time.
Event Float/Slack = LS ES
Where LS = Latest start time
ES = Early start time.

8/12/2017
8/12/2017
 Management by Objectives (MBO)

Is a process of defining objectives within an organization so

that management and employees agree to the objectives and understand
what they need to do in the organization in order to achieve them.
The term "management by objectives" was first popularized by Peter
Drucker in his 1954 book The Practice of Management.

8/12/2017
 According to George Odiorne
MBO is a process whereby the superior and the subordinates managers
of an enterprise jointly identify its common goals, define each
individuals major areas of responsibility in terms of the result expected
of him, and us these measures as guides for operating the unit and
assessing the contribution of each of its members.

8/12/2017
 The important feature of MBO which distinguishes it from other
planning and control
processes is the emphasis on results (objectives) rather than on activities &
processes
MBO, being based on behavioural approach to management, is based on
concepts as under :
(a) Emphasis on results rather than activities.
(b) Defining objectives (expected results) for specific
positions.
(c) Participatory or Joint objective setting.
(d) Identification of Key Result Areas (KRAs)
(e) Establishing a Periodic Review System

8/12/2017
 Concept of MBO
Let people know what is expected of them:

This concept assumes People perform better when they know what is expected
and can establish a relationship between individual goals and organisational
goals.

Allow employees to participate in setting goals:

This concept assumes People want to participate in the determination of goals.

8/12/2017
 Tell people how they are doing:
This concept assumes that people need to know how are they performing
Reward on the basis of accomplishment: This concept assumes that
people need recognition, opportunities for growth, and a sense of achievement
in their work.

8/12/2017
 Process Of MBO

Identifying the
Key Result Areas Setting up
Action Planning
(KRAs) Objectives

Performance Performance
appraisal Review

8/12/2017
 Identifying the Key Result Areas (KRAs) : KRAs delineate
The broad areas on which the organisation must focus its attention
They are based on the concept that a smaller part of managers activities
yield larger proportion of his results

8/12/2017
 The process of identifying KRAs by the top management consists of the
following broad steps :-
(i) SWOT Analysis : Analysis of Strengths, Weaknesses,
Opportunities and Threats.
(ii) Brainstorming exercise to identify all possible KRAs.
(iii) Discussion, analysis & classification to arrive at an agreed list of KRAs.
(iv) Establishment of specific objectives in each KRA.
(v) Preparation of Action Plans, including assignment of
responsibilities for results to be achieved.

8/12/2017
 Setting up Objectives
The next step is to set up objectives within these KRAs, which have to
be measurable and quantifiable
An objective is a statement of expected results, which provides
guidelines for decisions and actions at lower level & provides standards
against which performance is assessed.

8/12/2017
 Any objective thus, should have the following four elements, which are
also determinants of improved performance, viz.,
Quantity,
Quality,
Cost
Time.
Objectives are successful as guidelines only if they are quantifiable &
measurable. If you can not count, can not describe, can not measure
what you want, you probably do not know what you want, and hence
can not use it as an objective in your plan of action.

8/12/2017
 Action Planning
Action plans are the means to convert objectives into reality.
Objectives describe what is to be achieved, whereas action plans
describe how these objectives are to be achieved.

8/12/2017
 The four broad steps essential in all action plans are:

(i) Choice of strategies which are essential for achieving

objectives.
(ii) Fixing the responsibility for achieving each objective.
(iii) Resource allocation for achieving the objectives.
(iv) Scheduling specific activities in specific sequence for
maximum utilization of resources

8/12/2017
 Performance Review
The main purpose of performance review in MBO process is to provide
corrective feedback to the concerned person
focuses on performance appraisal, improvement, future corrective
action, frequency of reviews & self appraisal.

8/12/2017
 Performance review under MBO

8/12/2017
8/12/2017
 Total Quality Management (TQM)

Quality can be defined as the totality of features and characteristics of a

product / service which have the ability to satisfy the clients felt /
implied needs.

Total Quality Management (TQM) as a management tool, focuses on

continuous improvement of procedures and processes involved in any
activity or any services

8/12/2017
 The basic principles of TQM:
(a) Satisfy the consumer:TQM involves satisfying the felt or perceived needs of
the customer, which tend to change with time and circumstances
(b) Management based on facts: Every manager needs to have access to correct
facts about the product or services being offered by the organisation.
(c) People-centric management:
(d) Ongoing improvement: It is an ongoing process which aims to improve the
every day routine procedures & processes involved in product /service.

8/12/2017
 Some important TQM methods

Acceptable Quality Level (AQL)

provides a set of predetermined rules and standards for acceptance or rejection of a
product, so that each item inspected for its quality is classified as acceptable or
unacceptable.
Affinity diagrams
provide some type of relationship to groups within an organisation. Such methods
are useful when a team attempts to translate the customer requirements into an
organisational structure

8/12/2017
 Arrow diagram
is used to depict the time required to solve aproblem in the organisation.
Benchmarking
provides comparison with pre-determined standard of quality of product/service,
thereby focusing on overall mission of the organisation and is a process which
compares the performance (quality) with that of others, thereby ensuring better
performance through comparison.

8/12/2017
 Consensus
reaching is a way of examining alternatives so that an organisation can collectively
reach a conclusion which is acceptable to all members of the organisation.
Contingency planning
is the process of planning for unforeseen circumstances to ensure least wastage of
resources and to avoid fire-fighting at the last moment.
Cost benefit analysis
involves the analysis of real cost and benefit involved in the project. It is used to
assess if the solution is practical and achievable in terms of the cost incurred by
the organisation.

8/12/2017
 Criteria testing
is the process of listing the various criteria and evaluating an alternative course of
action against these pre-determined & pre-decided criteria
Deming Wheel (PDCA)
is a graphical representation of essential requirements to satisfy a customers
equirements, namely, plan (P), do (D), check (C) & action (A). Such a
managerial tool is used extensively to develop new products & services based on
the felt needs of the clients.

8/12/2017
 Error proofing (pokayoke)
is the managerial process of designing and conducting an operation in such a
manner so as to eliminate specific errors which cause major disruption of process
/ services, thereby causing dissatisfaction to customers
Gannt Charts
are graphical representation of the essential steps for completing a project. Thus
the entire project is broken down into smaller component steps and a graph is
created to depict the time scheduling of each step. Gannt charts make it easier to
identify the various steps involved and also easily indicate (visually) when the
deadline for particular step in the project has been missed.

8/12/2017
 Summary

With larger and complicated organisations with their own unique

organisational and structural issues a need has been felt for better, more
effective and innovative managerial methods, some of which are
Network Analysis, Management By Objectives (MBO) and Total
Quality Management (TQM).

8/12/2017
 Network analysis is a means of planning and controlling processes. In
this, a project is broken up into small operations which are arranged into
logical sequence.
Time management of a project, an important managerial control
technique, can be done through Critical Path Method (CPM) and Project
Evaluation & Review Technique (PERT).

8/12/2017
 Management By Objectives (MBO) is a modern managerial tool by
which managers can improve their performance and their overall
effectiveness
It can be defined as a managerial approach which uses objectives as a focal point
to improve managerial performance & effectiveness at individual and
organisational levels.
Total Quality Management (TQM) focuses on continuous improvement
of procedures and processes involved in any activity or any services

8/12/2017
 Conclusion

There is need and scope for adoption of such techniques to health sector
management to ensure efficiency.
Methods used may be less exact as the sophisticated quantitative
techniques in common usage may not be immediately applicable in the
health field.
Several of these techniques have shown their use fullness in healthcare
establishment.
Though many of these modern techniques require the services of a
specialist, it is advantageous if health officers have some knowledge and
appreciation of the purpose, methodology use fullness of common
techniques

8/12/2017