Management Concepts

Management: The art of getting work done through people, with satisfaction for employer, and the public It is necessary to guide, direct, coordinate & control human efforts towards the fulfillment of the goals Goals of the enterprises are fulfilled through the use of resources like men, money, materials & machines It may called as Art as well as Science

Main Characteristics Does not frame policies, it only implements/executes the policy laid down by administration It is the servant of administration It requires technical ability to function properly Uses organization for achieving the goals of an enterprises It is productive in nature Functions: planning, organizing, staffing, motivation, directing, coordination, control

Administration: It consist of deciding determination of the goals & policies of the enterprise Concerned mainly with decision making, policy making & making necessary adjustments Coordinates finance, production & distribution It frames the organizational structure & exercises control over the enterprises ◦ Organizes his own work & his subordinates ◦ Delegates responsibility & authority ◦ Measures, evaluates & control position activities

Organization: It is the framework of management It is the group of persons It is a structure of relationship among the individuals working together for a common goal Function of putting together the different parts of an enterprise into working condition It means the determination & assignment of duties to individuals Building, developing & maintaining of a structure of working relationships

Difference & Relationship Administration determines the objectives & policies of the enterprise, Management carries out these policies to achieve objectives of the enterprise Organization is the keystone on which the entire structure of any enterprise is based Administration gives proper direction, Management properly execute and Organization is effective machinery for accomplishing company objectives in a team spirit In brief, “Management carries out the policies of Administration through the framework of the Organization”.

Importance of Management: Management creates a vital, dynamic & life giving force to the enterprise It provides new ideas & vision to the organization to do better It tackles business problems & provides a tool for the best way of doing things It helps personality development thereby raising efficiency & productivity Management only can meet the challenge of the change Provides stability to the enterprise by changing & modifying the resources in accordance with changing environment of society.

Managerial Skill: Technical Skill Decision making skill Organizational skill Communicational skill Motivating skill Leadership skill Conceptual Skill Human Relation Skill

Contribution of Henri Fayol Henri Fayol, the father of management was born in 1841 in France. He analyzed the process of management. His conclusion was that all the work done in business enterprises can be divided into six groups: ◦ Technical activities (production, manufacture) ◦ Commercial activities (buying, selling, exchange) ◦ Financial activities (optimum use of capital) ◦ Security activity (protection of property, persons) ◦ Accounting activity (cost, statistics) ◦ Managerial activity (planning, organization, command, coordination & control)

The Principles: Division of work Authority & responsibility Discipline Unity of command Units of direction Subordination of individual to general interest Remuneration Centralization of authority Scalar chain Order Equity of treatment Stability Initiative Esprit de corps

Division of work Henry Fayol has stressed on the specialization of jobs. He recommended that work of all kinds must be divided & subdivided and allotted to various persons according to their expertise in a particular area. makes it simpler and results in efficiency. Helps the individual in acquiring speed, accuracy in his performance. leads to efficiency & economy in spheres of business.

Authority & responsibility Authority & responsibility are co-existing If authority is given to a person, he should also be made responsible. In a same way, if anyone is made responsible for any job, he should also have concerned authority. Authority refers to the right of superiors to get exactness from their sub-ordinates whereas responsibility means obligation for the performance of the job assigned. There should be a balance between the two i.e. they must go hand in hand.

Unity of Direction & Unity of command

Equity Equity means combination of fairness, kindness & justice. The employees should be treated with kindness & equity if devotion is expected of them. It implies that managers should be fair and impartial while dealing with the subordinates. They should give similar treatment to people of similar position. They should not discriminate with respect to age, caste, sex, religion, relation etc. Fayol was of opinion that, “at times force and harshness might become necessary for the sake of equity”. Equity is essential to create and maintain cordial relations between the managers and sub-ordinate.

Order This principle is concerned with proper & systematic arrangement of things and people. Arrangement of things is called material order and placement of people is called social order. Material order- There should be safe, appropriate and specific place for every article and every place to be effectively used for specific activity and commodity. Social order- Selection and appointment of most suitable person on the suitable job. There should be a specific place for every one and everyone should have a specific place so that they can easily be contacted whenever need arises.

Discipline According to Fayol, “Discipline means sincerity, obedience, respect of authority & observance of rules and regulations of the enterprise”. This principle applies that subordinate should respect their superiors and obey their order. Discipline is not only required on path of subordinates but also on the part of management.

Initiative Workers should be encouraged to take initiative in the work assigned to them. It means eagerness to initiate actions without being asked to do so. Fayol advised that management should provide opportunity to its employees to suggest ideas, experiences & new method of work. It helps in developing an atmosphere of trust and understanding. People then enjoy working in the organization because it adds to their zeal and energy. To suggest improvement in formulation & implementation of place.

Fair Remuneration The quantum and method of remuneration to be paid to the workers should be fair, reasonable, satisfactory & rewarding of the efforts. Wages should be determined on the basis of cost of living, work assigned, financial position of the business, wage rate prevailing etc. Fayol also recommended provision of other benefits such as free education, medical & residential facilities to workers.

Stability of Tenure Fayol emphasized that employees should not be moved frequently from one job position to another i.e. the period of service in a job should be fixed. Therefore employees should be appointed after keeping in view principles of recruitment & selection but once they are appointed their services should be served. According to Fayol. “Time is required for an employee to get used to a new work & succeed to doing it well but if he is removed before that he will not be able to render worthwhile services”. Stability of job creates team spirit and a sense of belongingness among workers

Scalar Chain Fayol defines scalar chain as ’The chain of superiors ranging from the ultimate authority to the lowest”. Every orders, instructions, messages, requests, explanation etc. has to pass through Scalar chain. A Gang Plank is a temporary arrangement between two different points to facilitate quick & easy communication Gang Plank clarifies that management principles are not rigid rather they are very flexible. They can be moulded and modified as per the requirements of situations

In the figure given, if D has to communicate with G he will first send the communication upwards with the help of C, B to A. Then downwards with the help of E and F to G which will take quite some time and by that time. It may not be worth therefore a gang plank has been developed between the two.

Sub-Ordination of Individual Interest to General Interest An organization is much bigger than the individual it constitutes therefore interest of the undertaking should prevail in all circumstances. As far as possible, reconciliation should be achieved between individual and group interests. But in case of conflict, individual must sacrifice for bigger interests.

Espirit De’ Corps (can be achieved through unity of command) It refers to team spirit i.e. harmony in the work groups and mutual understanding among the members. Spirit De’ Corps inspires workers to work harder. There should be proper co-ordination of work at all levels. Subordinates should be encouraged to develop informal relations among themselves. Efforts should be made to create enthusiasm and keenness among subordinates so that they can work to the maximum ability.

Efficient employees should be rewarded and those who are not up to the mark should be given a chance to improve their performance. Subordinates should be made conscious of that whatever they are doing is of great importance to the business & society. He also cautioned against the more use of Britain communication to the subordinates i.e. face to face communication should be developed.

Centralization & De-Centralization Centralization means concentration of authority at the top level. In other words, centralization is a situation in which top management retains most of the decision making authority. Decentralization means disposal of decision making authority to all the levels of the organization. In other words, sharing authority downwards is decentralization. According to Fayol, “Degree of centralization or decentralization depends on no. of factors like size of business, experience of superiors, dependability & ability of subordinates etc. Anything which increases the role of subordinate is decentralization & anything which decreases it is centralization.

Personnel Management Concerns with obtaining, organizing, utilizing and motivating the human resources required by an organization. It develops requisite organization climate and management styles to promote effective effort of cooperation and trust among all employees. Aims at getting effective results by organizing and directing the co-operative efforts of human beings.

Important objectives of the personnel management To make an effective contribution to the achievements of the organization and to the fulfillment of its social responsibilities. To design and develop en effective organization which will respond appropriately to change. To group the activities logically together To achieve effective integration of the activities To train and develop manpower to achieve maximum effectiveness

To make the best use of the skills and capacities of employees To design and implement effective reward and incentive systems To integrate and balance individual needs with those of the organization To encourage more active and productive participation at all levels To meet the organization's social and legal responsibilities

To provide good, healthy and safe working conditions To provide equal opportunity for employment and promotion To provide a reasonable degree of security and continuity of employment To enable better two-way communications.

Role of Personnel Department Advise top management in selecting strategies and approaches that will optimize the contribution of human resource Serve as an effective link between management and employees Improve the quality of information sharing through two-way communications It must normally be aware of what is happening in the outside world

To carry out research and keep in touch with current developments in legislation, social thought, the behavioral sciences to keep closely in touch with trends within the organization measuring its employees' level of morale, motivation, commitment

Functions of Personnel Management: Managerial Functions: Planning, Organizing, Directing and Controlling Operative Functions: Related to specific activities like employment, development (HRD), compensation and relations

Managerial Functions Planning: ◦ Determining the future course of action to achieve the desired results. ◦ It is a preventive measure for future crisis. ◦ determines the personnel programme regarding Recruitment, Selection and Training of Personnel’s of the organization.

Organizing: ◦ It is concerned with proper grouping of the personnel activities and assigning different groups of activities to different individuals along with delegation of Authority. ◦ Creation of a proper Structural framework. Directing: ◦ Supervising and Guiding the personnel to execute Plans. ◦ Direction is more important than Design. ◦ Direction most importantly consists of Motivation and Leadership.

Controlling: ◦ Measuring the employee’s Performance, Correcting Negative Deviations & assuring accomplishment of Plans efficiently. ◦ Controlling = Detection of Deviations + Correction of Deviations

Operative Functions: Employment: ◦ concerned with procuring and employing people possessing necessary skills, knowledge, aptitude, etc to achieve organizational objectives. ◦ It covers functions like Job analysis, Manpower Planning, Recruitment, Selection, Placement, Induction and Internal Mobility.

Human Resource Development: ◦ The process of improving, moulding, changing and developing skills, knowledge, creative ability, aptitude, values, commitment etc. based on job and organizational requirements. - Performance Appraisal - Training - Management Development - Career Planning and Development - Organization Development

Compensation: ◦ The process of providing equitable and fair remuneration to the employees. ◦ It includes job evaluation, wage and salary administration, incentives, bonus, fringe benefits, social security measures etc. Human Relations: It is the process of interaction among human beings. It is an area of Management practice in integrating people at work in a way that motivates them to work together productively, cooperatively and with economic, social and psychological satisfaction.