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2.1.1 Etymology
The verb 'manage' comes from the Italianmaneggiare (to handle, especially tools),
which derives from the Latinword manus (hand). The French word mesnagement (later
management, as follows :
the organizations goals indirectly by directing the efforts of others not by performing
the task himself. On the other hand, a person who is not a manager makes his
The term concepts of Management has been interpreted in several ways, some of
1. Management is an Activity
been defined as the art of getting things done throught the efforts of other people.
a. Interpesonal activities
b. Decisional activities
c. Informative activities
2. Management is a Processs
achieve objectives.
achieved only when relations between people are productive. Human factor is
d. Intercative process, management are contained within each other. For example,
when a manager prepares plans. He is also laying down standard for control.
place among productive factors as it combine and coordinate all other resources.
4. Management as a Team
Management consists of all those who have the responbility of guiding and
coordinating the efforts of other as a group of persons. The persons are called as
managers who operate at different levels of authority, top, middle, and operating.
6. Management as a Group
all those individuals who perform managerial functions. All the managers for
known as management.
goals.
2.1.3 Characteristics of Management
2. Management is universal
The essence of management lies in the coordination of individual efforts into a team.
force, management creates a whole that is more than the sum of individual parts. It
5. Management is Multidiciplinary
it depends upon wide knowledge derived from several disciplines like engineering,
sociology, psychology, economics, anthropology. The vast body of knowledge in
group goals.
7. Management is Intangible
Management is an unseen or invisible force. It cannot be seen but its presence can be
felt everywhere in the form of result. Hiwever, the managers who perform the
Art implies the application of knowledge and skills to bring about the desired result.
The desired results. The essential elements of arts are : practical knowledge,
pertaining to a specific field of study. It contains general principles and facts which
explains phenomenon. These principles and theories help to explain past event and
process of a continuous and getting done through in social process involving the
government.
The meaning of management functions is the role of management. Pal (2014) said
in his journal there are some management expert who divided management functions,
namely:
Koontz and O'Donnell divide these functions into planning, organizing, staffing,
Planning is the most fundamental and the most pervasive of all management
know in advance what is to be done, what activities they have to perform in order
2. Organizing
The design of pattern of roles and relathionships that constribute to the goal.
Roles are assigned, authority, and responsibility are determined, and provision is
3. Staffing
and continuing evaluation of the individuals who hold the required positions
identified in the organizing process. Some theorists class the staffing function
within the organizing function, rather than viewing it as a separate function. (Jones
4. Directing
their optimum performance with zeal and enthusiasm. The function of directing
a. Communication
b. Motivation
c. Leadership
5. Coordinating
organization that they all together pull in the direction of organizational objectives.
It is thus the process of tying together all the organizational decisions, operations,
organizational objectives.
6. Reporting
which should be brought to the attention of various levels of management who use
7. Budgeting
Management Budgeting is a process of measuring and converting plans for the use
of real (i.e. physical resources) into financial values. It is the classic problem of
how to add together quantities of apples and oranges into a meaningful economic
measurement, the only practical way for everyday use is to express their economic
to seek objectives. It is a human and social process directed at individuals to get things
get things done. Like other processess, it consist of many actions or functions which are
with the task of determining objectives and devising ways and means to accomplish
1. Planning
deciding in the present about the future objectives and the courses of action for
a. Determination of objectives
2. Organizing
planned goals
organization.
3. Actuating
Actuating involves getting the members of the organization to perform in ways that
4. Controling
and are known to employees and their superiors. It also implies a flexible and
sometimes becomes difficult to separate one from the other. Butalthough it can notbe
positions in an enterprise. The levels of management depend upon its size, technical
The real significance of levels is that they explain authority relationships in group of
organization. These positions are created through the process of delegation of authority
from top to lower levels. Considering the hierarchy of authority and responsibility, one
1. Top Level
Top level is the ultimate source of authority and it lays down goals, policies and
plans for the group of organization. It devotes more time on planning and
the overall direction and success of all company activities. The authorityof top
management include :
2. Middle Level
The job of middle level is to implement the policies and plans framed by the top
level. It serves as an essential link between the top level and the lower level or
operative management. They are responsible to the top level for the functioning of
their departments. They devote more time on the organization and motivation
functions of management. They provide the guidance and the structure for a
purposeful enterprise. Without them the top management's plans and ambitious
expectations will not be fruitfully realized. The following are the main authoritesof
middle level :
b. To prepare the organizational set up in their own departments for fulfilling the
plans.
e. To compile all the instructions and issue them to supervisor under their control.
properly.
j. To make suitable recommendations to the top level for the better execution of
3. Operational level
It is placed at the bottom of the hierarchy of management, and actual operations are
withthe rank and file or workers. Lower levels authority and responsibility is
limited, as follow:
b. To interpret and divide the plans of the management into short-range operating
plans.
In modern business the job management has become very difficult. Several skills
These skills of managers have been classified into four categories, namely technical,
Technical skills refer to the ability and knowledge in using the equipment,
technique and procedures involved in performing specific tasks. These skills require
There are two things a manager should understand about technical skills. In the
first place, he must know which skills should be employed in his particular enterprise
and be familiar enough with their potentiality to ask discerning questions of his
technical advisors. Secondly a manager must understand both the role of each skill
Human skills consists of the ability to work effectively with other people both as
individual and as members of a group. These are required to win cooperation of others
and to build effective work teams. Such skills require a sense of feeling for others and
subordinates and peers. An awareness of the importance of human skills should be part
of a managers orientation and such skills should be developed throughout the career.
While technical skills involve mastery of things human skills are concerned with
understanding of People.
Conceptual skills comprise the ability to see the whole organisation and the
interrelationships between its parts. These skills refer to the ability to visualise the
entire picture or to consider a situation in its totality. Such skills help the manager to
conceptualise the environment, to analyse the forces working in a situation and take a
broad and farsighted view of the organisation. Conceptual skills also include the
competence to understand a problem in all its aspects and to use original thinking in
solving the problem. Such competence is necessary for rational decision-making. Thus
technical skills deal with jobs, human skills with persons and conceptual skills with
ideas. These types of skills are interrelated. But the proportion or relative significance
of these skills varies with the level of management as shown in the figure:
Top management
Conceptual
skill
Middle management
Human skill
Technical skill
Operating management
Technical skills are most important at the supervisory or operating level where a
comparatively less important for them. Conceptual skills are very important for top
relating the business enterprise to its industry and the economy. Thus, the relative
This would be self evident as management is the process of getting things done through
people. Human skills are equally important at all levels of management because every
Diagnostic skills include the ability to determine by analysis and examination the
nature and circumstances of particular conditions. It is not only the ability to specify
why something happened but also the ability to develop certain possible outcomes. It is
the ability to cut through unimportant aspects and quickly get to the heart of the
problem. Diagnostic skills are probably the most difficult ones to develop because they
require the proper blend of analytic ability with common sense and intelligence to be
effective.
2.3. LEADERSHIP
the Encharta Dictionary, a: Manager is somebody who is responsible for directing and
controlling the work and staff of a business, or of a department within it. Leader is
This is quite a difference. We have talked about managers up until now in this text.
However, managers and leaders are different. We need managers but we are seeing an
increasing need to have leaders. They are not the same thing, they operate differently
and they need different skills. Management is doing things right; leadershio is the right
things (Drucker)
Leadership theories
The chart and the accompanying description will combine a number of popular
leadership theories.
Leadership leadership
Use of authority
By the manager
Area of freedom
subordinate
If we look at the autocratic manager, that person will basically tell their employees
what to do. As the chart indicates, the manager makes the decision and announces it.
Input by employees is not sought and is not gven. Power and authority rest with the
manager. In this situation, the manager may also retain most of te information.
If we move to the right, part-way through the graph, we come to the democratic
leader. As the chart indicates, the manager is still retaining power and authority,
especially because it as their role to make the final decision. However, this
manager/leader will be far more likely to share information and actively solicit input.
On the far right of diagram, we have the participative leader. This leader may let
the individual or group make the decision and then simply inform the leader what that
decision. In this case, the leaders opinion has no more weight than anyone else in the
group.
One question that is often asked at this point is what about the manager who asks
for our opinions but doesnt really listen to what we have to say? What kind of manager
are they? my answer always is that this a lousy manager who does not have any
integrity. If the manager does not want to listen to the employees, then she/he shouldnt
ask for employee input. Employees know when the manager doesnt really care for
employees opinions. This is one of the prime ways to destroy the relationship and trust
This is different from soliciting input and then the manager choosing to do
something else. As long as the employees are listened to and their opinion truly
considered, if the manager then chooses another option, the manager can still be
describe as democratic. The big difference come down to listening. The key to success
Another interesting dynamic is the manager/leader who thinks they use one style
but actually act another way. This generally happens with an authocratic manager who
believe that they are authocratic. After all, in todays business world, the description of
the autocratic manager doesnt sound as good as the other style. autocratic it self is
a term that does not sound positive. A manager can say they have a democratic style
and may believe that they are democratic managers but its the actions that count. If
The field of management is very wide, so its needs to be classified into following
Financial management seeks to ensure the right amount and type of funds to
business at the right time and at reasonable cost. It comprises the following activities:
1. Estimating the volume of funds required for both long-term and short-term needs of
business.
and liquidity of funds and the creditworthiness and profitability of business, and
5. Administration of earnings
Thus, financial management involves the planning, organising and controlling of the
financial resources.
procurement and utilization of fund for business purpose. Its sub areas are as follows:
has to pay.
4. Costing: Costing deals with recording of costs, their classification, analysis and cost
control.
5. Estimating the volume of funds required for both long term and short term needs of
business.
To be a successful, a company must meet its first main goals: identifying, creating,
Just as a tool needs all three legs to stand, a successful company must have all three
1. Financial securities
Economic conditions and policies also effect the cost of money. These
include:
3. Financial Institution
2) Credit unions
3) Commercial banks
c. Investment funds
funds rather than owning deposit account. Examples include mutual funds,
4. Financial market
There are many differnt financial markets in a developed economy. Each market
location.
Marketing is about identifying and meeting human and social needs. One of the shortest
the activity,set of institutions, and processes for creating, communicating, delivering, and
exchanging offerings thathave value for customers, clients, partners, and society at large.
Coping with these exchange processes calls for a considerable amount of work and skill.
Marketing management takes place when at least one party to a potential exchange thinks
Marketers market 10 main types of entities: goods, services, events, experiences, persons,
1. Goods
Physical goods constitute the bulk of most countries production and marketing efforts.
Each year, U.S. companies market billions of fresh, canned, bagged, and frozen food
products and millions of cars, refrigerators, televisions, machines, and other mainstays of a
modern economy.
2. Services
of services. The U.S. economy today produces a 7030 services-to-goods mix. Services
include the work of airlines, hotels, car rental firms, barbers and beauticians, maintenance
and repair people, and accountants, bankers, lawyers, engineers, doctors, software
programmers, and management consultants. Many market offerings mix goods and
3. Events
Marketers promote time-based events, such as major trade shows, artistic performances,
and company anniversaries. Global sporting events such as the Olympics and the World
4. Experiences
By orchestrating several services and goods, a firm can create, stage, and market
experiences. Walt Disney Worlds Magic Kingdom allows customers to visit a fairy
kingdom, a pirate ship, or a haunted house. There is also a market for customized
experiences, such as a week at a baseball camp with retired baseball greats, a four-day rock
Artists, musicians, CEOs, physicians, high-profile lawyers and financiers, and other
professionals all get help from celebrity marketers. Some people have done a masterful job
of marketing themselves David Beckham, Oprah Winfrey, and the Rolling Stones.
Management consultant Tom Peters, a master at self-branding, has advised each person to
become a brand.
6. Places
Cities, states, regions, and whole nations compete to attract tourists, residents, factories,
7. Properties
Properties are intangible rights of ownership to either real property (real estate) or
financial property (stocks and bonds). They are bought and sold, and these exchanges
require marketing. Real estate agents work for property owners or sellers, or they buy and
sell residential or commercial real estate. Investment companies and banks market
8. Organizations
Organizations work to build a strong, favorable, and unique image in the minds of their
target publics. In the United Kingdom, Tescos Every Little Helps marketing program
reflects the food marketers attention to detail in everything it does, within the store and in
the community and environment. The campaign has vaulted Tesco to the top of the UK
corporations, and nonprofits all use marketing to boost their public images and compete
9. Information
Information is essentially what books, schools, and universities produce, market, and
Every market offering includes a basic idea. Charles Revson of Revlon once observed: In
the factory we make cosmetics; in the drugstore we sell hope. Products and services are
platforms for delivering some idea or benefit. Social marketers are busy promoting such
ideas as Friends Dont Let Friends Drive Drunk and A Mind Is a Terrible Thing to
Waste.
A marketer is someone who seeks a response attention, apurchase, a vote, a donation from
another party, called the prospect. If two parties are seeking tosell something to each other, we
call them both marketers. Marketers are skilled at stimulating demand for their products, but
thats a limited view of whatthey do. Just as production and logistics professionals are
responsible for supply management, marketersare responsible for demand management. They
seek to influence the level, timing, and compositionof demand to meet the organizations
1. Negative demand
Consumers dislike the product and may even pay to avoid it.
2. Nonexistent demand
3. Latent demand
Consumers may share a strong need that cannot be satisfied by an existing product.
4. Declining demand
5. Irregular demand
Consumer purchases vary on a seasonal, monthly, weekly, daily, or even hourly basis.
6. Full demand
Consumers are adequately buying all products put into the marketplace.
7. Overfull demand
More consumers would like to buy the product than can be satisfied.
8. Unwholesome demand
Marketing management not only involves distribution of the product to the buyers,
but also identifying of consumers needs. It may need number of steps. Sub areas are as
follows:
5. Advertising: This area deals with advertising of product, introducing new product in
market by various means and encourage the customer to buy thee products.
6. Sales management: Sales management deals with fixation of prices, actual transfer
of products to the customer after fulfilling certain formalities and after sales
services.
1. Consumer markets
Companies selling mass consumer goods and services such as juices,cosmetics, athletic
shoes, and air travel spend a great deal of time establishing a strong brand imageby
developing a superior product and packaging, ensuring its availability, and backing it
2. Business markets
buyers skilled at evaluating competitive offerings. Business buyers buy goods to makeor
resell a product to others at a profit. Business marketers must demonstrate how their
productswill help achieve higher revenue or lower costs. Advertising can play a role, but
the sales force, theprice, and the companys reputation may play a greater one.
3. Global markets
Companies in the global marketplace must decide which countries to enter;how to enter
solomanufacturer); how to adapt product and service features to each country; how to price
productsin different countries; and how to design communications for different cultures.
They face differentrequirements for buying and disposing of property; cultural, language,
legal and politicaldifferences; and currency fluctuations. Yet, the payoff can be huge.
carefully. Lower selling prices affect the features and quality the seller canbuild into the
offering. Much government purchasing calls for bids, and buyers often focus onpractical
solutions and favor the lowest bid in the absence of extenuating factors.
various resources used in the production or operations sub system of the organization into value
added product or services in a controlled manner as per the policies of the organization.
range of inputs into the required (products or services) having the requisite quality level.
The set of interrelated management activities, which are involved in manufacturing certain
management.
1. Concept Of Production
intoanother form through chemical or mechanical process to create or enhance the utility
ofthe product to the user. Thus production is a value addition process. At each stage
For over two centuries operations and production management has been recognised as
breaking of jobs down into subtask and recognisesn workers to specialised tasks in which
they would become highly skilled and officient. In the early twentieth century, F.W.tylor
implemented Smiths theories and developed scientific management. From then till 1930,
many techniques were developed prevailing the traditional view. Brief information about the
1900 Scientific management time study and work study Frederick W. Taylor
developed; dividing planning and doing of work
1935 Statistical sampling applied to quality control: H.F. Dodge & H.G. Roming
inspection sampling plans
1940 Operations research applications in World War II P.M. Blacker and others.
1946 Digital computer Linear programming John Mauchlly and J.P. Eckert
1947 Mathematical programming, on-linear and stochastic G.B. Dantzig, Williams &
others
1950 Commercial digital computer: large-scale A. Charnes, W.W. Cooper
computations available. processes & others
1960 Integrating operations into overall strategy and policy, L. Cummings, L. Porter
Computer applications to manufacturing,
1970 Scheduling and control, Material requirement planning W. Skinner J. Orlicky and
(MRP) G. Wright
1980 Quality and productivity applications from Japan: W.E. Deming and J. Juran.
robotics, CAD-CAM
F.W. Taylors works become more widely known, managers developed techniques
great detail to eliminate wasteful efforts and achieve greater efficiency. At the same
time, psychologists, socialists and other social scientists began to study people and
analytical approaches.
With the 1970s emerges two distinct changes in our views. The most obvious
of these, reflected in the new name operations management was a shift in the
service and manufacturing sectors of the economy. As service sector became more
broadening of our field to service organizations. The second, more suitable change
management practices.
3. Production System
organization. It is that activity whereby resources, flowing within a defined system, are
combined and transformed in a controlled manner to add value in accordance with the
d. There exists a feedback about the activities, which is essential to control and improve
system performance.
4. Classification of Production System
Production systems can be classified as Job Shop, Batch, Mass and Continuous
Production systems.
Continous
Production
Mass Production
Production/
operations volume
Batch Product
Job shop
production
products designed and produced as per the specification of customers within prefixed
time and cost. The distinguishing feature of this is low volume and high variety of
products. A job shop comprises of general purpose machines arranged into different
1) Characteristics
c) Highly skilled operators who can take up each job as a challenge because
of uniqueness.
produced.
3) Limitations
cost
b. Batch Production
the functional departments in lots or batches and each lot may have a different
1) Characteristics
batch and change of set up is required for processing the next batch.
d) When manufacturing lead time and cost are lower as compared to job
order production.
2) Advantages
3) Limitations
production.
c. Mass Production
Product and process standardisation exists and all outputs follow the same path.
1) Characteristics
back tracking.
2) Advantages
3) Limitations
b) Line layout needs major change with the changes in the product design.
d. Continuous Production
from the first operations to the finished product. The items are made to flow
4) Characteristics
5) Advantages
automatic.
exist.
quality and quantity at the right time and right manufacturing cost.
a. Right Quality
The quality of product is established based upon the customers needs. The right
quality is not necessarily best quality. It is determined by the cost of the product
b. Right Quantity
they are produced in excess of demand the capital will block up in the form of
products.
c. Right Time
established) cost.
The terms Human Resource Management (HRM) and Human Resources (HR)
management of an organizations most valued assets the people working there who
One of the first explicit statements of the HRM concept was made by the
MichiganSchool (Fombrunet al, 1984). They held that HR systems and the
generic processes or functions that are performed in all organizations. These are:
c. Rewards : the reward system is one of the most under-utilized and mishandled
organization is able to achieve success through people. As Ulrich and Lake (1990)
remark: HRM systems can be the source of organizational capabilities that allow
a. Organizational effectiveness
Extensive research has shown that such practices can make a significant impact
work.
businesses need to invest in that asset to ensure their survival and growth. HRM
aims to ensure that the organization obtains and retains the skilled, committed
and well-motivated workforce it needs. This means taking steps to assess and
satisfy future people needs and to enhance and develop the inherent capacities
c. Knowledge management
aims to support the development of firm-specific knowledge and skills that are
introducing policies and processes that ensure that people are valued and
rewarded for what they do and achieve and for the levels of skill and
e. Employee relations
HRM aims to develop and implement policies that balance and adapt to the
personal needs, work style and aspirations and the provision of equal
The research conducted by Grattonet al (1999) found that there was generally a
wide gap between the sort of rhetoric expressed above and reality.
Managements may start with good intentions to do some or all of these things
but the realization of them theory in use is often very difficult. This arises
the organization.
c. Developing a close fit of HR policies, procedures and systems with one another.
quickly to change.
boundaries.
The characteristics of the HRM concept as they emerged from the writings of
a. Diverse;
c. Commitment-oriented;
d. Based on the belief that people should be treated as assets (human capital);
managementresponsibility;
In recent years, Total Quality Management (TQM) has received worldwide attention
may be defined as a continuous quest for excellence by creating the right skills and
totally at all times. TQM is an organization-wide activity that has to reach every
organizing and involving the whole organization; every department, every activity,
total system (socio-technical), where all the activities carried out are geared towards
Zaire and Simintiras have propounded this viewpoint by stating: Total Quality
Management is the combination of the socio-technical process towards doing the right
things (externally), everything right (internally) first time and all the time, with
1. The product and service dimension: the degree to which the customer is satisfied
2. The people dimension: the degree to which the customer is satisfied with the
3. The process dimension: the degree to which the supplier is satisfied with the internal
understand the word inventory, as a stock of goods, but the generally accepted meaning
of the word goods in the accounting language, is the stock of finished goods only.
within many locations of a supply network to precede the regular and planned course of
finished goods. Inventory can be something as simple as a bottle of glass cleaner used
1. Dollars
2. Space
3. Labor to receive, check quality, put away, retrieve, select, pack, ship, and account
for
5. Theft
Inventory costs generally fall into ordering costs and holdingcosts. Ordering, or
acquisition, costs come about regardless ofthe actual value of the goods. These costs
include the salaries ofthose purchasing the product, costs of expediting the
inventory,and so on.
waste. However, in environments where an organization suffers from poor cash flow or
lacks strong control over : 1) electronic information transfer among all departments and
all significant suppliers, 2) lead times, and 3) quality of materials received, inventory
plays important roles. Some of the more important reasons for obtaining and holding
inventory are:
you need to control how much raw material, parts, and subassemblies you process
at a given time. Inventory buffers what you need from what you process.
always know how much you are likely to need at any given time, but you still need
to satisfy customer or production demand on time. If you can see how customers
are acting in the supply chain, surprises in fluctuations in demand are held to a
minimum.
timed product releases, price or term penalties for nonperformance, better verbal
and electronic communications between the parties, etc. This will result in a
the impact of cost inflation. Note that contracting to assure a price does not require
actually taking delivery at the time of purchase. Many suppliers prefer to deliver
unit ( SKU) at one time. (Note: The acronym SKU, standing for stockkeeping
unit, is a common term in the inventory world. It generally stands for a specific
5. Quantity discounts: Often bulk discounts are available if you buy in large rather
6. Lower ordering costs: If you buy a larger quantity of an item less frequently, the
ordering costs are less than buying smaller quantities over and over again.
A. STRATEGIC MANAGEMENT
mission while managing the relationship of the organization to its environment (James
M. Higgins).
Strategic management is defined as the set of decisions and actions resulting in the
and controlling decisions focused on achieving these objectives in the present and
the organization with its changing environment in the most advantageous way possible
(Lester A. Digman)
management processes and decisions which determine the long-term structure and
and changed.
c. Time scales. The strategic time horizon is long. However, it for company in real
structure. The decisions which result from the way that managers work together
normally shall centre upon all activities which affect the organization.
Strategic management process involves the entire range of decisions. The strategic
understand strategic management, we must know where strategic decisions are made in
organizations.
management, board of directors, and planning staff tend to be those positions that have
the most significant involvement and influence in the strategic management process of
traced to a breakdown at the level of the board or top management. However, the final
decisions and actions that determines the long run performance of a corporation. It
Crucial considerations :
a) Demand
b) Competition
c) Technology
d) Scarcity
Major steps:
1) Preparations of missions
2) Setting of Objectives
3) Fixation of goals
4) Policies
5) Analysis of environment
1) Formulation of strategies
2) Implementation of strategies
1) SWOT Analysis
2) Evaluation
a. Andrews Models
b. Gluecks Models
e. Koreys Models
f. Schematic Models
B. Operation Management
1. Definition
management.
The operations managers have the prime responsibility for processing inputs into
outputs. They must bring together under production plan that effectively uses the
materials, capacity and knowledge available in the production facility. Given a demand
on the system work must be scheduled and controlled to produce goods and/or services
required. Control must be exercised over such parameters such as costs, quality and
inventory levels.
2. Resources
Resources are the human, material and capital inputs to the production process.
Human resources are the key assets of an organisation. As the technology advances, a
large proportion of human input is in planning and controlling activities. By using the
intellectual capabilities of people, managers can multiply the value of their employees
into by many times. Material resources are the physical facilities and materials such as
plant equipment, inventories and supplies. These are the major assets of an
organisation. Capital in the form of stock, bonds, and or taxes and contributions is a
vital asset. Capital is a store of value, which is used to regulate the flow of the other
resources.
3. Systems
according to the plan. The business systems are subsystem of large social systems.
operations, which will function for the good of the organisation. A systems approach to
goals. The system approach to specific problems requires that the problem first be
identified and isolated from the maze of the less relevant data that constitute the
environment. The problem abstracted from the overall (macro) environment. Then it
can be broken into manageable (micro) parts and analysed and solutions proposed.
Doing this analysis is advantageous before making any changes. If the solution appears
to solve the problem in a satisfactory way, changes can be made to the real system in an
The ability of any system to achieve its objective depends on its design and its
the relationships that must exist between inputs, transformation activities and outputs in
order to achieve the system objectives. With the most structured design, there will be
less planning and decision-making in the operations ofthe system. System control
consists of all actions necessary to ensure that activities conform to preconceived plans
A closed loop control system can automatically function on the basis of data from
them into goodsand services having a higher value than the original inputs. The
transformation process applied willbe in the form of technology to the inputs. The
effectiveness of the production factors in thetransformation process is known as
productivity.The productivity refers to the ratio between values of output per work hour
The firms overall ratio must be greater than 1, then we can say value is added to
ResourceUtilisation.
6. Customer Service
The first objective of operating systems is to utilize resources for the satisfaction of
can satisfy the customer in terms of costand timing. Thus, providing the right thing at a
7. Resource Utilisation
resources, i.e. obtainingmaximum effect from resources or minimising their loss, under
utilisation or waste.
The extent ofthe utilisation of the resources potential might be expressed in terms
etc. Each measure indicates the extent towhich the potential or capacity of such
customer serviceand resource utilisation. An improvement in one will often give rise to
management must be tackled with these two objectives in mind, and because of this
8. Operations Objectives
capabilities for meeting the organizations goals and strategy. The sub-goals of the
b. Process characteristics.
d. Efficiency
e. Effective employee relations and cost control of labour.
The priorities among these operations sub-goals and their relative emphases
should be direct reflections of the organizations mission. Relating these six operations
sub-goals to the broader strategic choices above, it is clear that quality, efficiency, and
adaptability but also relates to product/service and process characteristics: Once choices
about product and process are made, boundaries for meeting the other operations
TACTICAL
MANAGERS
DECISIONS
OPERATIONAL
DECISIONS MOST EMPLOYEES
2.5. THE EVOLUTION OF MANAGEMENT THEORY
Management has been progressively evaluated through the following three stages.
1. Bureaucracy : 1900
1. Bureaucracy
was the first of management theorists who were concerned the management structure with
the sets of rule and regulations. Bureaucracy management depends upon administration
devices. Max Weber presents the ideal organization structure. There are four major
duties
b) Hierarchy of authority : Positions organized in a hierarchical manner resulting in a
scalar chain
d) Formal rules : There must be formal rules and controls regarding the conduct of
a) Hierarchy of authority.
g) It is a closed system.
2. Scientific management
Frederick Winslow Taylor was first person who gave Scientific Management in
1911. He also called the father of scientific management. Scientific Management was
Taylor, scientific management means knowing exactly what you want men to do and
seeing that they do it in the best and cheapest way. Scientific management is based on
the analysis, planning and control functions. And job accomplished by analyzing, and
works can selected and trained scientifically. In this, management role is to determine the
kind of work for which an employee suited and hire and assign workers accordingly.
Management is not responsible for execution of work but they are responsible for how
the work is done. Co-operation between management and workers can enhance the work
understanding, trust and confidence between the management and workers for achieving
organization.
a) Science not rule of thumb : the first principle of scientific management requires
scientific study and analysis of each element of a job in order to replace the old
rule of thumb approach development of a science for each element of a mans job
requires that decisions should be made on the basis of facts rather than opinions
and beliefs.
b) Scientific selection, training and development of workers : this principles requires
that workers should be selected and trained in accordance with the requirements of
their skills and efficiency. Efforts should be made to develop each employee to his
greatest efficiency.
management and workers to ensure that work is done in accordance with the
responsibility for which it is better suited. Management should decide the methods
of work, working conditions, time for completion of work instead of leaving them
to the discreation of the works. In other words, management should take more
responsibility for planning and supervision of the work, while the workers should
e) Maximum prosperity for both employers and employee : the aim of management
should be to secure maximum prosperity for each employee along with maximum
prosperity for the employer.This can be possible when efficiency and output are
higher profits to the employers coupled with higher wages and salaries for
employees.
and workers with respect to their mutual relations and in relation to work effort.
Instead of fighting on the division of surplus of industry, they should work together
i) Less wastage.
3. Administrative management
Henri Fayol was real father of modern Management. Henri Fayol is the French
industrialist in 1841-1925. He was a mining engineer in. Henri Fayol spent his entire
working career in French industry, French cool and iron combine of commentary
Henri Fayol was concerned the principles of organization and the function of
knowledge. He always insisted that if scientific forecasting and proper methods are
used in management than company can get satisfactory results. According to Fayol,
are :
fourteen principles.
a) Division of work: Division of work means specialization. Each job and work
should be divided into small task and should be assigned to specialist of it.
b) Authority and responsibility: Authority means right to give order and command
d) Unity of command: A subordinate should receive order from only one boss.
e) Unity of direction: It means that all the works of an organization must work
i) Scalar Chain: Scalar chain is the chain or line of command from superior to
subordinates.
working.
modifying and improving the classical theory. While classical theories focused more on
structure and physical aspects of the worker and Neo-classical theory gives importance to
human and social aspects of the worker and his relations in the organization.
Company (GEC) between 1927 and 1993 at Chicago with 30,000 workers. The
Hawthron plant was manufacturing telephone system bell. The objective of the
experiment was to find out the behavior and attitude of workers at workplace under
better working conditions. In the company, when management provide the benefits of
medical allowance and pension with recreational facilities. Even thought workers get all
facilities but the productivity was not up to expectation. So, in 1924, the professor Elton
Mayo and his research team investigate the reasons for dissatisfaction of employees and
decrease in productivity.
Four Phase of Hawthrone experiments:
1) Motivation: Employees are not motivated by only money (bonus scheme and
incentive).
easily identified the problem faced by its employees and can easily solve out.
3) Social factors: Social factors are responsible for deciding the level of output.
4) Behavior of workers: workers are not as individual identity but as members of a group
in an organization and they have their own norms and beliefs. Workers behavior
depends upon his mental level and emotions. Workers began to influence their group
5) Relationship: Employees do not like order and command. They preferred to maintain
amicable relationship with their co-workers. They want co-operative attitude from
their superiors.
aspects.
5) Hawthrone experiment did not give any recognition to the forces which are
6) During experiment, Eltone Mayo has assumed that a satisfied employee would be
productive. But the finding was different. There is no link between working condition
and productivity.
1) Chris Argyris- He recommended that worker should be given freedom to make their
own judgments.
Management is one or the other form has existed in every nook and corner of the
world since the dawn of civilization. Modern Management has grown with the growth of
social-economics and scientific institution. Modern view consists that a worker does not
work for only money. They work for their satisfaction and happiness with good living
1) Quantitative Approach
It helps the management for improving their decision making by increasing the
number of alternatives and giving faster decisions on any problem. Management can
easily calculate the risk and benefit of various actions. the characteristic of this
making unit.
form of an equation.
Johan MacDonald
George R. Terry
Andrew Szilagyi
2) System Approach
dependent components that create as a whole unit. The system concept enables us to
see the critical variables and constraints and their interactions with one another.
with one another. Task refers to the nature of jobs and technology used to
single and ownership patterns. People constitute the human and social
with ensuring the stability and efficiency of the system. Adaptation function
synergy. The focus should be on the total system rather than on individual
Von Bertelanffy, Stafford Beer, D. Kutz, R.L. Kahn, R.A. Johnson, Rosenz
Synergy : synergy means thaht the whole is greater than the sun of its parts.
isolation.
Open and closed system : an open system interacts with its environment
whereas a closed system does not. Though all organization interact with the
System boundary : each system has its own boundaries which separate it
Flow : every system has flows of information, materials and energy. These
process within the system (example: the production process and exit the
detect any deviations from plans so that corrective action may be taken.
3) Contingency Approach
recognized as a key to effective management. This approach accepts the dynamics and
situation.
b.) After the analysis of the situation, the managers are expected to prepare
c.) In order to tackle the situation efficiently the validity and applicability of
these tools and techniques is prepared which is appropriate for that specific
e.) Management style and practice should match the requirements of the
situation.
f.) Succes in management depends upon the ability to cope with environmental
1. G.M. Stalker,
2. Joan Woodward,
3. Tom Burns,
4. Paul R. Lawrence,
5. L.W. Lorsch.