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Why Study MGMT Theory
Why Study MGMT Theory
- Behavioral
Limitations
Human being are assumed rational, motivated.
Productivity to profitability
Labour
exploitation
Customers
Henri Fayol[1841-1925]
• Disprove managers were/are born and
they are made
• Divide business operations functionally:
3. Technical
4. Commercial
5. Financial
6. Security
7. Accounting
8. Management
14 Principles
1. Division of Labour- 8. Centralization:Retain
Specialise Central Authority
2. Authority- Right to give 9. Hierarchy- Neat box
orders 10. Orderliness: materials
3. Discipline and people at the right
place
4. Unity of Command
11.Equity- Fair, firm,
5. Unity of Direction friendly
6. Subordination of 12. Stability of staff
individual goal to 13. Initiative- freedom
common conceive & carry out
7. Remuneration 14. Esprit-de-corps
Bureaucracy Max Weber
(1864-1920)
• Compliance based
- ideal for governments
- inflexible
inhibits productivity
Behavioural school
Organisation is people
Classical school – ‘people side’ neglected
Use sociology psychology and related fields
to purpose more effective ways to manage
people.
Hawthorne Experiments
1. Sympathetic supervision reinforced
motivation – Employee works harder if
they believed that management was
concerned about their welfare and special
attention was paid
2. The social environment of employees
have a positive influence on productivity
• Work is dull
• Coworkers influence
• Shared antagonism
• Peer pressure, group pressure has a stronger
influence
Strategy Systems
Shared
Values
Skills Style
Staff
SYSTEMS APPROACH
• Organization considered as unified
purposeful system composed of interrelated
parts.
- Activity of one affects the others
- meshed – integrated – coordinated
made up of subsystem
- those that make up the whole
system.
Each subsystem works independently.
SYNERGY
Derailed
• Problem with interpersonal
• Failure to meet business objectives
• Failure to build & lead a team.
• Inability to change and adapt during a transition
Effectiveness and efficiency
• Do right things
• Do things right
• Choose right goals
• Limited Resources
• Concentrate resources are underutilized or
and efforts on them wasted.
• The job gets done
but…..
Balanced emphasis
The job gets Limited resources
done and are not
………. wasted
Key Aspects
Getting the most
of limited resources
Achieving
organizational
Working with &
objectives Balance
effectiveness
through others
efficiency
Management Process
- Planning
- decision making
- organising
- staffing
-communicating
- motivating
- leading
-controlling
Managerial Roles: ten roles
Figurehead ceremonial.
Leader
The liason role;
communicating particularly with external,
horizontal and vertical
Informational Role (securing information
above the operation
The disseminator
- to subordinates
The Spokesperson role
- external
Decision role
The entrepreneur role
The disturbance handler
The resource allocator
The negotiator
- dealing with others.
Claimants
Employees Inputs
Consumers
Suppliers Human
Government Capital
Shareholders Managerial
Community Technological
Scientific
Role of manager Basis of Management Orgn. theory
-Interpersonal Theory Systems theory
-Informational Bureaucratic
-Decision Contingency
Planning
Organising
Staffing
Motivation
Actuating Leadership
Communication
Controlling
Products
Services
Outputs Profits
Satisfaction
Goal integration
Management Levels
First line – supervisors
Middle Managers – responsible for other
managers operating
employees
Top Managers
Overall management
Skills
Technical/procedural Conceptual
Conceptual Technical
Company’s Mission
the … - specific purpose
1.Clear usually from the start becomes hazy over a period of
time
- need clarity when business grows
Identifying Alternatives
What are the most promising alternatives to
accomplishing our objectives?
Comparing Alternatives
In Light of Goals Sought
which alternatives will give us the best
chance of meeting our goals at the lowest cost
and highest profit
Choosing an Alternative
Selecting the course of action we will pursue
Formulating supporting plans to
buy equipments
buy materials
hire and train workers
develop a new product
It should feasible
precise –clear
motivating – distinctive
and strategic
ONGC: to stimulate, continue and
accelerate efforts to develop and maximise
contribution of the energy sector to the
economy of the country
Step 3
Identify the aids and barriers to the goals
Step 4
Develop a plan or set of actions for reaching goals
The Hierarchy of Plans
MISSION STATEMENT
STRATEGIC PLANS
Operational Plans
Commitment principle
- materials
- capital equipment
- recruitment engineering
- new product development
- plant
- production facilities
- financing