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Functions of management
Management operates through various functions, often classified as planning, organizing,
leading/motivating and controlling.
Planning: deciding what needs to happen in the future (today, next week, next
month, next year, over the next five years, etc.) and generating plans for action.
Organizing: making optimum use of the resources required to enable the
successful carrying out of plans.
Leading/Motivating: exhibiting skills in these areas for getting others to play an
effective part in achieving plans.
Controlling: monitoring checking progress against plans, which may need
modification based on feedback.
Theoretical scope
Mary Parker Follett (18681933), who wrote on the topic in the early twentieth century,
defined management as "the art of getting things done through people". One can also
think of management functionally, as the action of measuring a quantity on a regular
basis and of adjusting some initial plan; or as the actions taken to reach one's intended
goal. This applies even in situations where planning does not take place. From this
perspective, Frenchman Henri Fayol considers management to consist of five functions:
1. planning
2. organizing
3. leading
4. co-ordinating
5. controlling
Some people, however, find this definition, while useful, far too narrow. The phrase
"management is what managers do" occurs widely, suggesting the difficulty of defining
management, the shifting nature of definitions, and the connection of managerial
practices with the existence of a managerial cadre or class.
One habit of thought regards management as equivalent to "business administration",
although this then excludes management in places outside commerce, as for example in
charities and in the public sector. Nonetheless, many people refer to university
departments which teach management as "business schools." Some institutions (such as
the Harvard Business School) use that name while others (such as the Yale School of
Management) employ the more inclusive term "management."
Speakers of English may also use the term "management" or "the management" as a
collective word describing the managers of an organization, for example of a corporation.
Human resource management
Operations management or production management
Strategic management
Marketing management
Financial management
Information technology management responsible for management information
systems
Managerial levels/hierarchy
The management of a large organisation may have three levels:
Senior management (or "top management" or "upper management")
Middle management
Low-level management, such as supervisors or team-leaders
Contributions
Elements
First. They develop a science for each element of a man's work, which replaces the old
rule-of-thumb method.
Second. They scientifically select and then train, teach, and develop the workman,
whereas in the past he chose his own work and trained himself as best he could.
Third. They heartily cooperate with the men so as to insure all of the work being done in
accordance with the principles of the science which has been developed.
Fourth. There is an almost equal division of the work and the responsibility between the
management and the workmen. The management take over all work for which they are
better fitted than the workmen, while in the past almost all of the work and the greater
part of the responsibility were thrown upon the men.
14 Principles of Management
(Henri Fayol)
1. Division of Work. Specialization allows the individual to build up
experience, and to continuously improve his skills. Thereby he can be more
productive.
2. Authority. The right to issue commands, along with which must go the
balanced responsibility for its function.
3. Discipline. Employees must obey, but this is two-sided: employees will
only obey orders if management play their part by providing good leadership.
4. Unity of Command. Each worker should have only one boss with no
other conflicting lines of command.
5. Unity of Direction. People engaged in the same kind of activities must
have the same objectives in a single plan. This is essential to ensure unity and
coordination in the enterprise. Unity of command does not exist without unity of
direction but does not necessarily flows from it.
6. Subordination of individual interest (to the general interest).
Management must see that the goals of the firms are always paramount.
7. Remuneration. Payment is an important motivator although by analyzing
a number of possibilities, Fayol points out that there is no such thing as a perfect
system.
8. Centralization (or Decentralization). This is a matter of degree depending
on the condition of the business and the quality of its personnel.
9. Scalar chain (Line of Authority). A hierarchy is necessary for unity of
direction. But lateral communication is also fundamental, as long as superiors
know that such communication is taking place. Scalar chain refers to the number
of levels in the hierarchy from the ultimate authority to the lowest level in the
organization. It should not be over-stretched and consist of too-many levels.
10. Order. Both material order and social order are necessary. The former
minimizes lost time and useless handling of materials. The latter is achieved
through organization and selection.
11. Equity. In running a business a combination of kindliness and justice is
needed. Treating employees well is important to achieve equity.
12. Stability of Tenure of Personnel. Employees work better if job security
and career progress are assured to them. An insecure tenure and a high rate of
employee turnover will affect the organization adversely.
13. Initiative. Allowing all personnel to show their initiative in some way is a
source of strength for the organization. Even though it may well involve a
sacrifice of personal vanity on the part of many managers.
14. Esprit de Corps. Management must foster the morale of its employees.
He further suggests that: real talent is needed to coordinate effort, encourage
keenness, use each persons abilities, and reward each ones merit without
arousing possible jealousies and disturbing harmonious relations.
Planning is the (psychological) process of thinking about the activities required to create
a desired future on some scale. This thought process is essential to the creation and
refinement of a plan, or integration of it with other plans. The term is also used to
describe the formal procedures used in such an endeavor, such as the creation of
documents, diagrams, or meetings to discuss the important issues to be addressed, the
objectives to be met, and the strategy to be followed. Beyond this, planning has a
different meaning depending on the political or economic context in which it is used.
In organizations
Planning is also a management function, concerned with defining goals for future
organizational performance and deciding on the tasks and resources to be used in order to
attain those goals. To meet the goals, managers may develop plans such as a business
plan or a marketing plan. Planning always have a purpose. The purpose may be
achievement of certain goals or targets. The planning helps to achieve these goals or
target by using the available time and resources. To minimize the timing and resources
also require proper planning.
Strategic management
General approaches
In general terms, there are two main approaches, which are opposite but complement
each other in some ways, to strategic management:
based on economic theory deals with issues like competitive rivalry, resource
allocation, economies of scale
assumptions rationality, self discipline behaviour, profit maximization
The Sociological Approach
deals primarily with human interactions
SWOT analysis
SWOT Analysis, is a strategic planning tool used to evaluate the Strengths, Weaknesses,
Opportunities, and Threats involved in a project or in a business venture. It involves
specifying the objective of the business venture or project and identifying the internal and
external factors that are favorable and unfavorable to achieving that objective. The
technique is credited to Albert Humphrey, who led a research project at Stanford
University in the 1960s and 1970s using data from the Fortune 500 companies.
.
Identification of SWOTs is essential because subsequent steps in the process of planning
for achievement of the selected objective are to be derived from the SWOTs.
First, the decision makers have to determine whether the objective is attainable, given the
SWOTs. If the objective is NOT attainable a different objective must be selected and the
process repeated.
The internal factors may be viewed as strengths or weaknesses depending upon their
impact on the organization's objectives. What may represent strengths with respect to one
objective may be weaknesses for another objective. The factors may include all of the
4P's; as well as personnel, finance, manufacturing capabilities, and so on. The external
factors may include macroeconomic matters, technological change, legislation, and socio-
cultural changes, as well as changes in the marketplace or competitive position. The
results are often presented in the form of a matrix.
SWOT analysis is just one method of categorization and has its own weaknesses. For
example, it may tend to persuade companies to compile lists rather than think about what
is really important in achieving objectives. It also presents the resulting lists uncritically
and without clear prioritization so that, for example, weak opportunities may appear to
balance strong threats.
It is prudent not to eliminate too quickly any candidate SWOT entry. The importance of
individual SWOTs will be revealed by the value of the strategies it generates. A SWOT
item that produces valuable strategies is important. A SWOT item that generates no
strategies is not important.
Avoiding Errors
Conducting a SWOT analysis before defining and agreeing upon an objective (a desired
end state). SWOTs should not exist in the abstract. They can exist only with reference to
an objective. If the desired end state is not openly defined and agreed upon, the
participants may have different end states in mind and the results will be ineffective.
Opportunities external to the company are often confused with strengths internal to the
company. They should be kept separate.
SWOTs are sometimes confused with possible strategies. SWOTs are descriptions of
conditions, while possible strategies define actions. This error is made especially with
reference to opportunity analysis. To avoid this error, it may be useful to think of
opportunities as "auspicious conditions".
Examples of SWOTs
Environmental conditions
Corporate planning
As part of the development of strategies and plans to enable the organization to achieve
its objectives, then that organization will use a systematic/rigorous process known as
corporate planning. SWOT alongside PEST/PESTLE can be used as a basis for the
analysis of business and environmental factors.[1]
Environmental scanning
Internal appraisals of the organisations SWOT, this needs to include an assessment of the
present situation as well as a portfolio of products/services and an analysis of the
product/service life cycle
Analysis of existing strategies, this should determine relevance from the results
of an internal/external appraisal. This may include gap analysis which will look at
environmental factors
Strategic Issues defined key factors in the development of a corporate plan
which needs to be addressed by the organisation
Develop new/revised strategies revised analysis of strategic issues may mean
the objectives need to change
Establish critical success factors the achievement of objectives and strategy
implementation
Preparation of operational, resource, projects plans for strategy implementation
Monitoring results mapping against plans, taking corrective action which may
mean amending objectives/strategies.
Human resources
A SWOT carried out on a Human Resource Department may look like this:
Principle of motivation
Principle of exception-
Principle of participation-taking employ suggestion
Managerial qualities
Educational qualification
Technical knowledge
Health
Morale
Work experience
Admin power
Knowledge about the company
Creativity
Ability to instruct & inspire
Ability to communicate
Listener
Cooperation
To judge the people
Leadership qualities
Social responsibilities
Human relation