Diploma in Quality Management Module 2 General Management Concepts

GENERAL MANAGEMENT CONCEPTS

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Diploma in Quality Management Module 2 General Management Concepts

GENERAL MANAGEMENT CONCEPTS

TEXT BOOKS RECOMMENDED 1. 2. 3. 4. 5. Management by Helleregal and Slocum Published by Addition Wesley, Massachussets. Contemporary Management by David R Hampton Published by McGraw Hill Book Co., Manager Revolution by Hatekeyama Published by Stanford Productivity Press. The Versatile Manager by Blake and Mouton Published by Richard D Irsin Inc., Organizational Behaviour by Fred Luthans Published by Mcgraw-Hill International.

WHAT IS MANAGEMENT?
There are various definitions proposed for the term. For example,

Management consists of getting things done through others. A manager is one who accomplishes objectives by directing the efforts of others Management is designing and maintaining an environment in which individuals working together in groups can accomplish objectives Management is the primary force within an organization which co-ordinates the activities of its sub-systems and relates them to the environment Management is the work involved in combining and directing the use of resources to achieve a particular purpose
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Diploma in Quality Management Module 2 General Management Concepts There are more definitions proposed; but it is evident that the primary aim of these definitions is to support a given approach to Management. The presence of so many definitions also suggests that it is difficult to define Management comprehensively by a few short sentences. However everybody agrees

Management is a process undertaken by a superior to achieve organizational objectives with minimum financial, human and other resources.
that Therefore the need for Management arises with the basic economic principle of

Scarcity of

resources and optimizing efficiency.

HISTORICAL BACKGROUND
Management as seen today has developed over a period of time, which can be broadly classified into

five concept-based periods Pre-industrial Period Management by Classical approach Management by Behavioral approach Management by System approach Management by Contingency approach Pre-Industrial Period

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Diploma in Quality Management Module 2 General Management Concepts

mass production came into being only during the Industrial Era. During the Pre-industrial era products were rather made item by item than
The Pre-industrial era differs primarily from the industrial era by the fact that the manufactured.

completing whole task of designing, making and finishing. There was hardly any division of labour. Craftsmanship went from father to son and remained in the family. The motivational
An individual had the pride of forces or stimuli were different from those present today. Because of that the Management techniques had paternal appeal and primarily had Carro and Stick approach.

Scientific Management advancement in technology, mass production and standardization.

Scientific management came after the Industrial revolution and was a result of

Frederick Taylor (1856-1915) is considered to be the father of Scientific Management. He was an Engineer who studied the work of unskilled and skilled labourers basically and came up with the idea that there is one best way of doing a job. He proposed that the conflict between workers and management is due to inefficient use of resources. He said that workers can be motivated by money and thereby increase productivity. The concept of economic man was thus evolved and wages were designed on piece rate basis. Taylor was the first person to promote the idea of increase in profit through increase in productivity. Taylors principle can be summarized as follows;
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Diploma in Quality Management Module 2 General Management Concepts

Work simplification Works norms and standards Working methods and one best way of doing a job Proper selection of workers Training of workers to work in the best way Reward on piece rate basis Defined responsibilities among workers and managers

These principles brought about following changes Division of labour Division of task and specialization Financial Incentives or rewards for hard work Pride taken away from master craftsman Reduce bargaining power of the master craftsman Increased work force Migration of work force

Taylor was probably the first person to propose the feasibility of profit increase through higher productivity rather than minimizing costs. Subsequent to Taylor several other researches on Scientific management proposed new concepts on the subject. For example Gilberth (Mr and Mrs) introduced the
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Diploma in Quality Management Module 2 General Management Concepts Time and Motion studies to improve efficiency. They classified body movement into basic therbligs such as grasp, reach, bend etc. and explain how efficiency can be improved by careful selection of therbligs.

Henry Gantt

propose famous work plan chart known as explained how they can be used to minimize the time required for completion of a certain task.

Gantt chart

and

Henry Fayol (1841-1925) was another academician who did present more broad base concepts and ideas supplementing Scientific Management.

Henry Fayol identified five functions of a Manager i.e. Planning, Organizing, Commanding, Coordinating and Controlling. He further set out certain guidelines to
follow in order to perform these functions effectively.

Principles of Management as Proposed by Henry Fayol (a) Division of Labour Work should be divided and subdivided into smallest and feasible elements to take advantage of gains from specialization. (b) Parity of Authority and Responsibility Each jobholder should be delegated with sufficient authority to carry out assigned job responsibilities. (c) Discipline Employees should obey whatever clearly stated agreements exist between them
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Diploma in Quality Management Module 2 General Management Concepts

(d) (e) (f) (g) (h) (i) (j) (k)

and the organization; managers should fairly sanction all instances of breached discipline. Unity of Command Employees should receive orders from and be accountable to only one superior. Unity of Direction Activities, which have same purpose, should be grouped together and operated under the same plan. Subordination of individual interests to general interests The interests of the organization take precedence over the interests of the individual. Fair remuneration Pay should be based on achievement of assigned job responsibilities Centralization Authority should be delegated in proportion to responsibility Scalar Chain An unbroken chain of command should exist through which all directives and communication flow. Order Each job should be defined so that the jobholder clearly understands it and its relationship to other jobs Equity Established rules and regulations should be enforced fairly
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Diploma in Quality Management Module 2 General Management Concepts

(l)

Stability of Personnel Employees should be encouraged to establish loyalty to the organization and make long-term commitment (m) Initiative Employees should be encouraged to exercise independent judgment within the bounds of their delegated authority and defined jobs (n) Esprit de Corps Employees should be encouraged to define their interests with those of the organization and thereby achieve unity of effort. Behavioral Approach to Management
Where as the Scientific Management approach proposes the Economic man concept the Behavioral approach management proposed the

Social man concept.

Behavioral approach is a development of human relation approach originated from famous Hawthorn studies. As a result of studies done at Chicago Hawthorn plant of Western Electrical, it was proposed

Physical conditions and factors were not an important as the sociological environment of work. The
that factory must be looked not merely as a technical system but also as a social system. In these systems

groups would have its own status, reward, leadership and other informal systems established.
The work group had their own informal production targets and decides what the fair days work is. The grievances of workers are entirely different to what the management thought as grievances.

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Diploma in Quality Management Module 2 General Management Concepts

groups could result in higher production and productivity if properly motivated. Thus Hawthorn studies
Properly constituted surfaced the human dignity of workers and need for counseling and accepting group behaviour. The Behavioral approach is a further development of Human relation approach. In this approach, attempts were made to study the behavior more scientifically with the help of Psychology, Sociology and Anthropology. Behavioral approach emphasis the importance of

Values, Norms, Attitudes

and Perception of workers.

Accordingly it proposes that upliftment of these characteristics in workers in order to achieve organizational objectives more efficiently and effectively.

System Approach to Management

System approach considers any organization as a collection of systems. These systems are made of

Identifying, understanding and managing this system of interrelated processes for a given objective will contribute to the effectiveness and efficiency of the organization. It should also be emphasized that any
interrelated processes and organization is a sub-system of its immediate environment, which consists of Economic, Cultural, Social, Educational and Political environment. These again are a subsystem of still larger international environment. Therefore any managerial action should take into consideration the norms, values, rules and regulations of these systems.

Contingency Approach techniques and practices to be adopted depend on the situation and there is no one best way of managing. There are alternative solutions to any managerial problems and one has to adopt method giving optimum results.
Contingency approach simply states that
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Diploma in Quality Management Module 2 General Management Concepts Therefore solution to a given managerial problem.

strategic planning approach is vital for arriving at an effective

Management Levels and their Scope

In majority of organizations, the structure of the management consists of three levels, commonly known as Top, Middle and Junior level management. Although the functions of any manager are same, their scope and application differs. The variation in nature of functions to be performed by different levels is illustrated in the following diagram.

TOP LEVEL

MIDDLE LEVEL
CONCEPTUAL

JUNIOR
CONCEPTUAL

Type of functions (ability required)

CONCEPTUAL

TECHNICAL TECHNICAL PERSONNEL PERSONNEL

TECHNICAL PERSONNEL

EFFECT OF DECISIONS Nature :Scope :10

Tenure :Resource requirement :- High

Strategic Operational Applicable to whole Applicable to Organization a Division SRI LANKA Long term STANDARDS INSTITUTION Medium term
Training Division

Functional Applicable only to a small unit Short term Low

Medium

Diploma in Quality Management Module 2 General Management Concepts

Management Functions Notwithstanding above explanation, the work content of any manager at any level consists of functions coming under categories of Planning, Organizing, Coordinating and Directing

Planning
Planning is setting out the course of action for the future activities with the objective of

obtaining desired and intended results. It is therefore anticipatory decision-making process. Planning is necessary as resources are scarce and has to be utilized efficiently and effectively to achieve objectives. In the planning process one decides on the best course of action and allocation of
resources (available and acquirable) in order to obtain optimum results with regard to an intended or desired objective. As such Planning involves following steps.

Setting objectives Studying the present state Studying the resources needed and actions to be taken Setting up systems and procedures to fill the gap Setting up implementation procedure or action plan

Implementation of the Plan and its auditing too can be considered as a part of the Planning process.

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Diploma in Quality Management Module 2 General Management Concepts

Strategic and Operational. Strategic Planning is broad based and concerned mainly with policy matters of the organization. It is long term spanning not less than a year (may be even ten
In general there are two major types of Planning; years or more) Strategic Planning is influenced by both internal and external environment and therefore should take into consideration Strength and Weaknesses of the organization as well as Opportunities and Threats of the external environment. (SWOT analysis).

short term ranging from one day to one year and aimed mainly at increasing efficiency of various departments. While Strategic planning is a function of Top management, operational planning is done by middle and junior managers.
On the other hand Operational Planning is Compare & Contrast

Organizing
Once an action plan is made it has to be implemented effectively. Organizing is the first step of

implementation. An organization cannot survive unless this function is done effectively.

Organizing involves following steps

a) b) c) d)

Determination of activities to be performed Grouping activities (Departments) Assignment of people to perform tasks Assign Authority, Responsibility and Accountability

Organizing involves development of proper structure for the business. Some models in this regard are

Functional organization - Divides the units to perform specific function different from the others Product organization - Divides the units on the basis of a product/s, project/s or program/s.
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Diploma in Quality Management Module 2 General Management Concepts

Territorial organization - Divides the units on the basis geographic territory Client centered organization - Divides the units to serve a specific client group
In all these steps, the primary purpose should be efficient and effective implementation of the Plan. In actual practice many often business entities are organized on a Composite structure of the above.

Coordinating
As different parts of a plan are implemented through different people in same or different divisions, it is essential to coordinate these activities to optimize outcome. As much as allocation of functions to departments is necessary,

proper coordination within and between

departments too is vital for successful performance. Unless coordination is effective, chaos will creep in and whole management system will disintegrate. Coordination also helps to prevents sub-optimization in different divisions. Coordination primarily can be of
two types viz. Vertical coordination and Lateral coordination. In vertical coordination chain of command, Unity of command and Span of control should be considered for effectiveness. Techniques used in Lateral coordination are Assigning responsibilities to both departments, Creating an intermediary position, Matrix organization and unitary organization

Controlling (Directing)
Once the implementation of an action plan is commenced, need for controlling too arises. Controlling involves following steps

Setting up targets or desired results (this is usually given in the action plan) Measurement of Actual result or outcome
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Diploma in Quality Management Module 2 General Management Concepts

Evaluation of deviation Deciding on a corrective action if necessary Implementation of the corrective action
Some academicians in recent times prefer the term directing to controlling taking into consideration their literal meanings. In addition the leadership quality of a manager has been brought in as a contributory factor to the efficiency of management through Directing. Directing, represent a more proactive approach where as controlling is associated with more reactive approach.

Decision Making
Another important aspect in management is decision making. It would be useful at this point to study why and how decision-making should be done.

A problem is a situation where there is a gap between the desirable and intended state of affairs and the actual or current state of affairs. Problems are
Decisions had to be made to solve problems. classified in various ways such as the familiarity of the problem and the situation.

Depending on the nature of the problem one can make either a programmed or a Non-programmed decision.

Programmed Decisions
prior knowledge and experience of the same or very similar problem. These are routine decisions applicable
Decisions based on the

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Diploma in Quality Management Module 2 General Management Concepts

to routine situations. routine procedures.

These decisions can even be

documented as

Nonprogrammed Decisions
creative thinking and analysis of a problem falls into this category. These are usually non-routine and require conceptualization of the related environment and affairs to achieve at an effective solution. In addition one needs to follow a proper decision making process before arriving at a solution.
Decisions that have to be made after

There are three basic approaches applied in decisionmaking. They are a) Rational approach b) Incremental approach c) Decisions arrived on Intuition
Compare & Contrast

Use of Quantitative techniques such as Break-even analysis, Pay off matrix, Decision Tree and Linear programming etc., borrowed from other fields are quite common in present day decision-making.

Start

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Diploma in Quality Management Module 2 General Management Concepts

Rational Approach
Identify the Problem

Steps as shown in the flow chart are followed in this approach to decision making The first step in the rational approach is to identify the problem. The problem is then analyzed in detail to identify root causes. A cause and effect diagram may be used here. After this analysis alternate solutions should be collected. A brain storming session may be of use here. Once sufficient alternatives are available, they should be analyzed for efficiency and effectiveness taking into consideration cost and benefits too. Solution which may originate another problem, as they usually do, should be avoided or tackled accordingly. Once the best alternative is selected a strategy for its implementation too, should be prepared. The rational approach assumes that the decision makers behavior is rational and also the company management is progressive. This is more or less a perfect approach and very often time consuming and, a costly procedure. Due to these and certain other reasons, managers tend to adopt short cut procedures more often than not.

Analyze the Problem

Evolve alternative solution.

Select the best solution

Develop strategy

Implement solution

Problem solved

Yes
End

No

Incremental Approach
The incremental approach to decision making is based on the concept that a state of affairs can be

adding and/or removing little things one by one from the situation. Bad things are removed and good things are added to the system without changing it drastically. Risk evaders prefer this approach and in
improved by addition it is an on-line approach, which may be less costly.

Decisions Arrived on Intuition

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Diploma in Quality Management Module 2 General Management Concepts A manager might not consider either of the above approach but arrive at a decision by intuition.

Intuition is the ability to perceive a state of affairs without proper reasoning but as a result of a vast number of characteristics such as knowledge, experience, belief, confidence etc. It is like the sixth sense, which sees the future. If a decision made by this
approach is successful, one may say that the manager who made the decision is lucky. Decision by Intuition is comparable to solving a set of mathematical equations where the number of equations is much less than the number of variables. Leadership Much has been written on the subject of what constitutes good leadership but it is true to say that the effectiveness of leaders is best measured by looking at the impact they have on the performance of those they lead. Excellent leadership can deliver results from an organisation well above what could reasonably be predicted; conversely, poor leadership often results in under performing businesses, unhappy employees and highly defensive organizational behaviours. Leadership is sometimes described as the ability to foster commitment, creativity and productive attitudes in others through effective self-knowledge and interpersonal skills. In short, leadership is the ability to bring out the best in people. When you look at organizing events it's somebody having so called leadership qualities, take the initiative. They are the people who are willing to tell other people what to do while maintaining respect of others as well. Others too will follow them, for whatever reason. These Leaders have a clear idea of what they want and why they want it. They also have ability to convince others through effective communication to gain co-operation and support of others to achieve their goals. But what is it that makes someone exceptional in this respect? It seems to be one of those qualities that you know when you see it, but is difficult to describe or define precisely. Many associate leadership with one person leading. Four things stand out in this respect. i.e. First, to lead involves influencing others. Second, where there are leaders there are followers. Third, leaders seem to come to the fore when there is a crisis or special problem. In other words, they often become visible when an innovative response is needed. Fourth, leaders are people who have a clear idea of what they want to achieve and why.

Thus, leaders are people who are able to think and act creatively in non-routine situations and who set out to influence the actions, beliefs and feelings of others. In this sense being a leader is personal. It flows from an individuals qualities and actions. However, it is also often linked to some other role such

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Diploma in Quality Management Module 2 General Management Concepts as manager or expert. However not all managers, for example, are leaders; and not all leaders are managers.

In the recent literature of leadership there have been four main generations of theory: Trait theories. Behavioural theories. Contingency theories. Transformational theories.

It is important to recognize that none of the four generations is mutually exclusive or totally timebound. Although it is true that the progression of thinking tends to follow a sequential path, it is quite possible for elements of one generation to crop up in another. Traits Approach This approach assumes that leaders are born, not made and members select leaders, not nurture or train them Surveys of early trait research by Stogdill (1948) and Mann (1959) reported that many studies identified personality characteristics that appear to differentiate leaders from followers. Many have listed a set of traits that are thought to be central to effective leadership. The basic idea remains that if a person possesses these she or he will be able to take the lead in very different situations. An example list suggested is given below Gardners Leadership Attributes Physical vitality and stamina Intelligence and action-oriented judgment Eagerness to accept responsibility Task competence Understanding of followers and their needs Skill in dealing with people Need for achievement Capacity to motivate people Courage and resolution Trustworthiness Decisiveness Self-confidence Adaptability/flexibility

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Diploma in Quality Management Module 2 General Management Concepts This theory has been challenged in many ways. Points to be considered are; is the list fixed, is the list not susceptible to situation, is the list gender dependent etc. Behavioural Approach Once the Traits approach is challenged, researchers turned to what leaders did - how they behaved (especially towards followers). They moved from leaders to leadership - and this became the dominant way of approaching leadership within organizations in the 1950 s and early 1960s. Different patterns of behaviour were grouped together and labelled as styles. Examples of behaviours noticed are; Concern for task. Here leaders emphasize the achievement of concrete objectives. They look for high levels of productivity, and ways to organize people and activities in order to meet those objectives. Concern for people. In this style, leaders look upon their followers as people - their needs, interests, problems, development and so on. They are not simply units of production or means to an end. Directive leadership. This style is characterized by leaders taking decisions for others - and expecting followers or subordinates to follow instructions. Participative leadership. Here leaders try to share decision-making with others

Subsequent to the Behavioral approach, very comprehensive research has been done on the interrelationship of behavior, leadership style and management style. For example, Autocrat tends to adopt X type management while Democrat tends to adopt Y type management.

Theory X

Average person has an inherent dislike of work. People must be coerced, controlled, directed, and threatened with punishment. Average person prefers to be directed, and wishes to avoid responsibility.

Theory Y

Physical and mental effort is as natural as play or rest. Man will exercise self-direction for objectives to which he is committed. Commitment to objectives is a function of reward. Average person learns to accept and seek responsibility. Imagination and creativity is widely distributed. People's potentials are only partially utilized.

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Diploma in Quality Management Module 2 General Management Concepts

Tannenbaum & Schmidt defined a continuum of leadership behaviour Boss Cantered Leadership Subordinate Cantered Leadership

Use of authority by the Manager Area of Freedom for subordinates

Manger makes decision and announce it

Manager sells decision

Manager presents ideas and invites questions

Manager presents tentative decision subject to change

Manager presents problem, gets suggestions, makes decision

Manager defines limits; asks group to make decision

Manager permits subordinates to function within limits defined by superior

The continuum of behaviour has following milestones.

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Diploma in Quality Management Module 2 General Management Concepts Tells: leader identifies problem, chooses a decision, announces to subordinates, no participation Sells: leader chooses a decision but attempts to persuade subordinates to accept it Consults: leader identifies problem, listens to advice of subordinates, chooses a decision Joins: leader defines problem and the limits of possible decisions; the group take decision with leader as just a member Three Classic categories of Leaders, defined on the basis of behaviour, are described below. The Autocrat The autocratic leader dominates team-members, using unilateralism to achieve a singular objective. This approach to leadership generally results in passive resistance from team-members and requires continual pressure and direction from the leader in order to get things done. Generally, an authoritarian approach is not a good way to get the best performance from a team. There are, however, some instances where an autocratic style of leadership may not be inappropriate. Some situations may call for urgent action, and in these cases an autocratic style of leadership may be best. In addition, most people are familiar with autocratic leadership and therefore have less trouble adopting that style. Furthermore, in some situations, sub-ordinates may actually prefer an autocratic style. The Laissez-Faire Manager The Laissez-Faire manager exercises little control over his group, leaving them to sort out their roles and tackle their work, without participating in this process himself. In general, this approach leaves the team floundering with little direction or motivation. Again, there are situations where the Laissez-Faire approach can be effective. The Laissez-Faire technique is usually only appropriate when leading a team of highly motivated and skilled people, who have produced excellent work in the past. Once a leader has established that his team is confident, capable and motivated, it is often best to step back and let them get on with the task, since interfering can generate resentment and detract from their effectiveness. By handing over ownership, a leader can empower his group to achieve their goals. The Democrat The democratic leader makes decisions by consulting his team, whilst still maintaining control of the group. The democratic leader allows his team to decide how the task will be tackled and who will perform which task. The democratic leader can be seen in two lights: A good democratic leader encourages participation and delegates wisely, but never loses sight of the fact that he bears the crucial responsibility of leadership. He values group discussion and input from his team and can be seen as drawing from a pool of his team members' strong points in order to obtain the best

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Diploma in Quality Management Module 2 General Management Concepts performance from his team. He motivates his team by empowering them to direct themselves, and guides them with a loose reign. However, the democrat can also be seen as being so unsure of himself and his relationship with his subordinates that everything is a matter for group discussion and decision. Clearly, this type of "leader" is not really leading at all. Managerial Grid Blake & Mouton (1964) and Likert (1961), use a two dimensional grid to define a set of leadership styles. X 9 Concern For People 1 X 1 Concern for production X X (1,9) (9,9) (5,5) (1,1) (9,1) X 9 Country club management Team management Middle of the roader Impoverished management Authority compliance

Leadership and Power Ownership of following powers would be useful for a leader to be effective. Reward power: ability and resources to obtain rewards for those who comply, e.g. pay, promotion, recognition, privileges. Coercive power: ability to punish or to bring about undesirable outcomes, e.g. withholding pay rises & promotion, withdrawing friendship, formal reprimands Legitimate power: the right to exercise power because of leader's position in the organisation Referent power: subordinate's identification with the leader because of attractiveness, reputation, or charisma Expert power: competence, special knowledge or expertise in a given area. Expert power is normally limited to narrow, well-defined areas or specialization

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