Introduction to Management

Definition of Management
1. The process of Planning, Organizing, Leading and Controlling the work of organization members and of using all available organizational resources to reach organizational objective.

2. Management is the process of getting activities completed efficiently and effectively with and through other people. Efficiency is the ability to minimize the use of resources in achieving organizational objectives. Efficiency is doing things right Means = efficiency Effectiveness is the ability to determine appropriate objectives Effectiveness is doing the right things End = Effectiveness

3. Management as an Art of getting things

done. 4. Management as a process. 5. Management as a group of people. 6. Management as a disciplines.

 Management as process of planning, organizing, leading, and controlling the efforts of organization members and other organizational resources to achieve stated organizational goal.

Planning
Defining goals. Establishing Strategy and developing sub plans to coordinate activities

Organizing Leading
Determining what needs to be done how it will be done, and who is to do it.

Controlling Lead to
Monitoring Achieving the Activities Organization to ensure stated purpose that they are accomplished as planned

Directing and Motivating all involved parties and resolving conflict

Management
A

set of activities [including planning, organizing, decision making, leading and controlling] directed at an organization's resources[ human, financial, physical and informational] with the aim of achieving organizational goal in an efficient and effective manner

Objectives of Management
The basic purpose of management of an enterprise is to achieve enterprise goal. To produce and distribute products required by the customers To keep the customer satisfied and delighted with good service and quality product. To build a team of good workers who satisfied and happy. To achieve workers co-operation in the achievement of organizational goals.

To

achieve good relations with the suppliers of raw materials and finance. To use National resources judiciously and avoid wastage of resources. To improve the physical conditions of surrounding where the plant is located.

Nature of Management
Goal oriented Distinct process Integrative force Intangible force Results through others A science and an art System of authority Multi disciplinary subject Universal application

Significance of management
There

is no substitute for management. According to Peter.F. Drucker:Management is the dynamic, life giving element in every business, without it the resources of production remain resources and never become production. Managers act as catalyst to make productive use of various resources for the accomplishment of organizational

Determination of objectives Achievement of objectives Efficient use of resources Co-ordination of human effort Meeting challenges Economic development

Managerial Skills
Technical

skills:-knowledge and proficiency in handling methods process and techniques and specific jobs. Example:engineering, computers, finance and manufacturing Interpersonal skills:- the ability to communicate with understand, and motivate both individuals and group.Example: communicate, motivate, lead and inspire. Conceptual skill:- the managers ability to think in abstract. Diagnostic skills: A managers ability to visualize the most appropriate

1. Interpersonal:-which

involves

dealing

with other people. Figure head:-attending some functions. Leader:- encouraging employees to improve productivity. Liaison:-coordinating activities of two product groups. :-which involve the processing of information. Monitor:- scanning industry reports to stay abreast of developments Disseminator:- sending memos outlining new organizational initiatives.

2. Informational

3. Decisional:- which primarily relate to

making decision. Entrepreneur:developing new ideas for innovation. Disturbance handler: Resolving conflict between two subordinates. Resource allocater:reviewing and revising budget request. Negotiator:- Reaching agreement with a key supplier of labor union.

We are responsible for what we are and what ever we wish ourselves to be, we have the power to make ourselves. If what we are now has been the result of art own past actions, it certainly fallows that what ever we wish to be in future can be produced by our present action; so we have to know how to act.

Evolution of Management theory and thought

An increasingly because of
Technological

sever

competition

innovations an their dissemination in business. Growing technological obsolescence. Increase in capital investment Freedom at National and International market Increasing buyers.

Complexity of managing business also increased due to:

Increasing size of business organization High degree of division of labor and

specialization.

Evolution of Management theories

Late 19th early 20th century:Scientific management (F.W. Taylor) Classical management (H. Fayol) Bureaucracy (M.Weber) 1920s-1930s:Human

relations approach Roethlisberger and Dickson)

(E.

Mayo,

1930s-1960s:Neo-human relations approach (Likert,

Maslow, Herzberg)

1960s-present:Systems theory (R.Ackoff) Contingency theory (J. Woodward) Teams and team building (E. Belbin)

Began in the industrial revolution in the late 19th century as:

Managers of organizations began seeking ways to better satisfy customer needs. Large-scale mechanized manufacturing began to supplanting small-scale craft production in the ways in which goods were produced. Social problems developed in the large groups of workers employed under the factory system. Managers began to focus on increasing the efficiency of the worker-task mix.

Robert owen, Charles Babbage, Henry

Varnum,Henry Robinson towne, Henry metcalfe are collectively remembered to represent Pre-scientific management era of management thought Roberet owen :- Has been referred to as the Father of personnel management. Through out his life, he worked for building up of a spirit of cooperation between the workers and management. He made a provision for reducing working hours, housing facilities and education for workers and their children.

Charles Babbage: British mathematician

at Cambridge university. He is known in management for publishing book in 1832 entitled on the economy of Machinery and manufacturers He perceived that the methods of science and mathematics could be applied to the solution of the problems of the factories

Adam Smith (18th century economist) Observed that firms manufactured pins in one of two different ways:
Craft-styleeach

worker

did

all

steps. Productioneach worker specialized in one step.

Realized that job specialization resulted in

much higher efficiency and productivity

Breaking

down the total job allowed for the division of labor in which workers became very skilled at their specific tasks.

F.W. Taylor and Scientific Management

F.W. Taylor (1856-1915) is known as the "Father of

Scientific Management" Scientific management theory arose in part from the need to increase productivity. In the united state there was short of skilled labors. And the only way to expand productivity was to raise the efficiency of workers. And was nicknamed "Speedy" Taylor for his reputation as an efficiency expert.

management
The movement he started, the "Scientific Management" movement, reached its peak in America during 1900-1930, but it has had lasting effects beyond that. He was a perfectionist, always looking for the "one best way". He hated "soldiering", (Worker soldiering refers to the practice of purposely stalling or slowing down work by the workers.)

Taylor timed the workers' actions with a stopwatch. However, he did not time the entire job; instead, he broke down complex sequences of motions into what he labeled the elementary ones. He then timed the elementary actions as were performed by the workers he considered to be efficient in their movements. Having timed and analyzed the movements, he combined these elementary motions into a new set of complex motions that he insisted should be used by all workers. These calculations determined the piecework rate with bonuses paid for better rates and penalties taken for slower work.

Meaning of Scientific Management scientific management

is the substitution of exact scientific investigations and knowledge for the old individual judgment or opinion. In all matters relating to the work done in the shop

The systematic study of the relationships between people and tasks for the purpose of redesigning the work process for higher efficiency

Aims of Scientific Management

Increased Production:- increase in the rate of production by using standard tools equipment and methods. Quality control: improvement in the quality of the output by inputting quality control techniques and inspection devices. Reduction in cost of production by rational planning and cost control techniques Eliminating of wastes in the use of resources and methods of production. Right men for right work: placement of right person on the right job through scientific selection and training. Incentive wages: payment of wages to workers according to their efficiency.

Fredrick Taylor did most of his work at the

Midvale and Bethlehem steel companies in Pennsylvania. At Midvale Taylor want to improve the way things were done in the plant. At that time there were no clear concepts of worker and management responsibilities No effective work standards existed Workers purposely worked at a slow pace Management decisions were seat of the pants based on hunch and intuition Workers were placed on jobs with little or no concern for matching their abilities and aptitudes with the task they were required to do

Management and workers considered

themselves in continual conflict. Rather than cooperating to their mutual benefit, they perceived their relationship as a Zero-Sum game any gain by one would be at the expense of the other. Taylor sought to create a mental revolution among both the workers and managers by defining clear guidelines for improving production efficiency He defined four principles of management and argued that following these principles would result in the prosperity of both managers and workers.

Management
1. Develop a science for each element of an

individuals work, which replaces the old ruleof-thumb method. 2. Scientifically select and then train, teach and develop the worker (previously workers chose their own work and trained themselves as best they could) 3. Heartily cooperate with the workers so as to ensure that all work is done in accordance with the principles of the science that has been developed. 4. Divide work and responsibility almost equally between management and workers. Management takes over all work for which it is better fitted than the workers (previously,

Most widely cited example of scientific management was Taylor's Pig iron experiment: Workers loaded pigs of iron weighing 92 pounds onto railcars Their daily average output was 12.5 tons Taylor believed that by scientifically analyzing the job to determine the one best way to load pig iron, the output could be increased to between 47 and 48 tones per day By putting the right person on the job with the correct tools and equipment, by having the worker follow his instructions exactly, and by motivating the worker with and economic incentive of a significantly higher daily wage from approximately $1.15 to $1.85 a day, the

Taylor define the One best way for doing

each job. After selecting the right people for the job, train them to do it precisely To motivate workers, he favored incentive wage plans. Taylor achieved consistent improvements in productivity in the range of 200 percent or more.

Features of Scientific Management

1. Separation of planning and doing 2. Specialization: he advocated functional

foremanship In this system eight personals are involved in directing activities or workers. Out of these four persons are concerned with planning 1. Route clerk 2.Instruction card clerk 3. Time and cost clerk 4. Disciplinarian And remaining four persons are concerned with doing aspect of work 1. Speed boss 3. Maintenance foreman

Specialization of foreman and their function planning department

Name of the foreman Functions Route clerk

Determining the routes through which the raw material will pass for this route sheet is prepared Laying down instructions according to which workers are required to perform their jobs phase of work and lays down the schedules of work. He also prepares cost sheet to compute the costs to be incurred for completing the work on hand

Instruction card clerk

Time and cost clerk Determines the standard time for completion of each

Shop disciplinarian He is a guardian of orderliness in the factory.

Maintaining proper discipline in the factory so that production targets may be achieved. Offering immediate solutions to conflicts

Specialization of foreman and their function production department

Name of the foreman Functions Gang boss Speed boss

Making arrangements of machines materials, tools etc. for the jobs Maintaining the planned speed of production, investigating the cause for the delays and removing them Maintenance of the machine and equipments, making poorer arrangements of their oiling, greasing, cleaning and repairs Seeing that the work conforms to the standards of quality laid down by the planning department.

Repair boss

Inspectors

3. Scientific task setting: a fairday work 4. Standardization 5. Work study: technique which are used in the examination of human work in all its context and which lead systematically to the investigation of all factors which affect the efficiency and economy of operation Work study includes the following techniques: Method study: this technique is used to know the best method of doing a particular job. It helps in reducing the distance by materials and bring improvements in handling , inspection etc., Motion study: it is the study of the movements in parts which are involved in doing a job and there by eliminating the wasteful movements and performing only necessary movements and finding out best method of doing a particular job.

Time study: involves the determination of

time a movement takes to complete. The movement which takes minimum time is the best one. This help in fixing the fair work for a period. Fatigue study: shows the amount of frequency of rest required in completing the work after working for few hours workers feel fatigue and cannot work with full capacity. Thus they require rest in between when rest is allowed they start working with full capacity.

6. Scientific selection and training of workers 7. Financial incentives

Benefits of Scientific Management Benefits to Employer: Replacement of traditional rule of thumb method by scientific investigation Proper selection and training of the workers leading to better workforce Establishment of harmonious relationship b\w the workers and the management Standardization of tools equipments, materials and work methods for increasing efficiency Better utilization of various resources and elimination of waste Scientific determination of fairwork a worker can do during a day

To Worker:Detailed instructions and constant guidance for the workers. Opportunity for training and development to increase skills. Incentive wages to the workers for higher production. Better working conditions and tools of work Less fatigue in work because of application of scientific methods. To Society: Better quality products at lower cost to the people Higher standard of living of people through better products Increased productivity in the country Technological development due to scientific

Criticism of Scientific Management

Workers view point: Speeding up of workers Boredom No scope for initiative Unemployment Exploitation of workers Weakening of trade union

Employers viewpoints Expensive process Reorganization Lack of control Impracticable functional foremanship Psychologists viewpoint:Mechanical approach Speeding up of workers Monotony Lack of proper motivation

Henry L Gantt:- He is close associate of Taylor at Midvale and Bethlehem Steel was young engineer. Gantt sought to increase workers efficiency through scientific investigation. He extended some of Taylors original ideas and added few of his own. Gantt devised an incentive system that gave workers a bonus for completing their jobs in less time than allowed standards He also introduced bonus for foreman to be paid for each worker who met the standard, plus an extra bonus if all the workers under foreman made it. Henry Gantt created a graphic chart that could be used by managers as a scheduling device for planning and controlling work. The Gantt Chart showed the relationship between work planned and completed on one axis and time elapsed on the other

Gilbreths:- He has given much emphasis on collaboration on fatigue an motion studies and focused on ways of promoting the individual workers welfare. According to him the ultimate aim of scientific management was to help workers reach their full potential as human beings.

General administrative theorists

Where as scientific management focused

on employees as individuals and their tasks general administrative management theory dealt with total management organization. General management theory was an attempt to develop a much broader theory concerned with administrative management functions and is considered the forerunner of modern organization theory. As with scientific management, there were many contributors to general management theory.

Henry Fayol is French industrialist. He is

treated as real fathers of modern management theory His contributions are generally termed as operational management or administrative management. Fayols contribution were first published in the book form titled as Administration Industrielle at generalein French language in 1916, the book was not made available outside France and was not translated until 1929 Its English translation was published in 1949 only in the united states of America In the earlier periods Fayols contribution could not make much impact on the development of management thought. However after the publication of this book in English, he got reorganization in the field of

Fayol given much importance for analyzing

the problems of managing an organization from top management point of view. He has used the term administration instead of management Fayol carried the management process beyond the basic hierarchical model developed by Taylor. Under Fayols system, the command function continued to operate efficiently and effectively through a series of co-ordination and control methods. He recommended regular meetings of department heads and liaison officers to improve co-ordination of organizational operations

He found that activities of an organisation could be divided into six groups:(1) Technical which involved production.
(2) Commercial which included buying, selling,

and exchange. (3) Financial which increased the search for, and optimum use of, capital. (4) Security which provided protection of property and persons. (5) Accounting which included statistical analysis. (6) Managerial or Administrative which encompassed planning, organization, command, coordination,and control

 Thus Henry Fayol has divided his

approach of studying management into three parts:1. Managerial qualities and training According to Fayol there are 6 types of qualities required by manager: Physical , mental , moral , educational , technical , experience 2.Elements of management 3.General principles of management

Managerial qualities and training

He was the first person to identify the qualities required in a manager. According to his six types of qualities that a manager requires Physical(health and vigor) Mental (ability to understand and learn, judgment) Moral (energy firmness loyalty initiative, and dignity) Educational Technical Experience

1. 2. 3. 4. 5. 6.

Elements of Management
Forecasting
Predicting what will happen in the future. Planning Devising a course of action to meet that expected demand. Organising Mobilising materials and resources by allocating separate tasks to different departments, units and individuals. (Fayols fourteen principles of management) Commanding Providing direction to employees, (leadership and motivation) Co-ordinating Making sure that activities and resources are working well together towards the common goal. Control Monitoring progress to ensure that plans are being carried out properly.

General principles of Management

Management principle is a fundamental

truth and establishes cause-effect relationship thus while giving the management principles he has emphasized two things 1. The list of management principles is not exhaustive but suggestive and has discussed only those principles which he followed on most occasions 2. Principles of management are not rigid but flexible, and capable of adopting to every need

General principles of Management

Division of Labor: allows for job

specialization.

Fayol noted jobs can have too much

specialization leading to poor quality and worker dissatisfaction.

Authority and Responsibility Fayol included both formal and informal authority resulting from special expertise. Unity of Command Employees should have only one boss.

Line of Authority
A clear chain of command from top to bottom of the firm.

Centralization
The degree to which authority rests at the top of the organization.

Unity of Direction
A single plan of action to guide the organization.

Equity
The provision of justice and the fair and

impartial treatment of all employees.

Order
The arrangement of employees where

they will be of the most value to the organization and to provide career opportunities. Right man in right place and right things in its right place.

Initiative
The fostering of creativity and

innovation by encouraging employees to act on their own.

Discipline
Obedient, applied, respectful

employees are necessary for the organization to function.

Remuneration of Personnel An equitable uniform payment system that motivates contributes to organizational success. Stability of Tenure of Personnel
Long-term employment is important

for the development of skills that improve the organizations performance.

Subordination of Individual Interest to

the Common Interest

The interest of the organization takes precedence

over that of the individual employee.

Esprit de corps (unity is strength) shared enthusiasm foster devotion to the common cause (organization).

Bureaucracy Management
Max Weber The father of bureaucratic management He developed a theory of authority structures and described organizational activity based on authority relations. Bureaucracy: A form of organization marked by division of labor, hierarchy rules and regulations and impersonal relationships.

Webers Principles of Bureaucracy

Division of Labor Authority Hierarchy Formal selection Formal rules and regulation Impersonality Career orientation.

Human Resource Approach

The study of management that focuses on

human behaviour. Robert Owen:Scottish Businessman He Repulsed by the harsh practices he saw in factories across Scotland such as Employment of young Children(many under the age of10) Thirteen hour workdays, and miserable working conditions. He proposed an idealistic workplace where work hours would be regulated child labor would be outlawed. Public education would be provided, meals at work would be furnished, and business would be involved in community projects.

Mary parker Follett:A social philosopher Proposed more people-oriented ideas He thought that organizations should be based on group ethic rather that individualism Chester barnard : He saw organization as a social systems that require human cooperation. He believed that organizations were made up of people who have interacting social relationships. The managers role were to communicate and stimulate subordinates to high level of effort. According to him overall organizations success depends on obtaining cooperation

Elton Mayo: Harvard professor. In 1927 the Western Electric engineers asked him and his associates to join the study as consultants. Hawthorne studies:Performed at Western Electric Companys Hawthorne works in Cicero, Originally started in 1924 and eventually expanded and carried up to 1930s Initially devised by Western Electric Industrial engineers to examine the effect of various illumination levels on workers productivity. Control and experimental groups were established. The experimental group was exposed to various lighting intensities while the control group worked under a

The engineers had expected individual

output to be directly related to the intensity of the light. They found that as the level of light was increased in the experimental group, output of both group increased. A productivity decrease was observed in the experimental group only when the level of light was reduced to that of a moonlit night. But they could not explain the results thy had witnessed.

In 1927 the Western Electric engineers

asked Elton Mayo and his associates to join the study as consultants. Numerous experiments in the redesign of jobs, changes in workday and workweek length introduction of rest periods, and individual versus group wage plan, One experiment was designed to evaluate the effect of a group piece work incentive pay system on group productivity The results indicated that the incentive plan had less effect on a workers output than did group pressure and acceptance and the accompanying security therefore concluded to be the key determinants of individual work behaviour

Neo-human relations approach

Uniformly believed in the importance of

employee satisfaction A satisfied worker was believed to be productive worker.

Dale Carnegie:
According to his success was through winning

the cooperation of others He advised that being a success mean:Making others feel important through a sincere appreciation of their efforts Making a good first impression Winning people to your way of thinking by letting other do the talking, being sympathetic, and never telling a man he is wrong Changing people by praising good traits and

Abram Maslow :
was a humanistic psychologist who proposed a theoretical hierarchy of human needs:
General Examples Need Hierarchy Organizational examples

Achievement Self-actualization Status Friendship Stability Food

Challenging job Job title Friends at work Pension Basic salary

Esteem needs Belongingness needs Security need Physiological need

A manager should understand that an

employee may not be satisfied with only a salary and benefits; he or she may also need challenging job opportunities to experience self-growth and satisfaction.

Douglas McGregor: is best know for his

formulation of two sets of assumptions about human nature Theory X Theory Y

Theory X assumption:
People do not like work and try to avoid it People do not like work, so managers

have to control, direct, and threaten employees to get them to work towards organization. responsibility and to want security they have little ambition

People prefer to be directed to avoid

Theory Y assumption:People do not naturally dislike work; work is a natural part of their lives People are internally motivated to reach objectives to which they are committed. People are committed to goals to the degree that they receive personal rewards when they reach their objectives People will both seek and accept responsibility under favorable conditions People have the capacity to be innovative in solving organizational problems. People are bright, but under most organizational conditions their potentials

Theory X best represented the views of

scientific management Theory Y best represented the Human relation approach He believed that theory Y was the best philosophy for all managers.

movement
The quantitative management movement

centres on adapting mathematical models and processes to management situations. There are three major areas: (1) management science or operations management :deals specifically with the development of mathematical models to assist in decision making and problem solving. (2) management information systems:are complex communication systems designed to provide information to managers

Theory
(The Organization and its environment )

The set of forces and conditions that operate beyond an organizations boundaries but affect a managers ability to acquire and utilize resources Internal Environment:- the conditions and forces with in an organization includes, its owners, board of directors, employees etc. External Environment:- Is everything outside on organization that might affect it.

An organizations external environment consists of two layers:The general environment:- The set of broad dimensions and forces in and organizations surroundings that create its overall context. It includes economic, technology and socio cultural, political-legal and international. Task environment:- consists of organizations or group that influence organization. It includes competitors, customers, suppliers, regulators etc.,

General environment: Economic dimension:- the overall health of economic system in which the organizations operates. Inflation, interest rates, unemployment Technology dimension:creates new products, advanced production techniques, and improved methods of managing and communicating strategies that ignore or lag behind competitors in considering technology lead to obsolescence and extinction Social issues and the natural environment management must be aware of how people think and behave
the role of women in the workplace providing benefits for domestic partners of employees protection of the natural environment

Political-legal dimensions:- the government regulation of business and the general relationship b\w business and govt. International dimension:- the extent to which it is affected by business in other countries.

Task environment:Competitors
competitors within an industry must deal with one another organizations must:
identify their competitors analyze how competitors compete react to and anticipate competitors actions

competition is most intense:

where there are many competitors when industry growth is slow when the product or service cannot be differentiated

Suppliers
provide the resources needed for production powerful suppliers can reduce an organizations profits dependence on powerful suppliers is a competitive disadvantage
power of supplier determined by:
availability of other suppliers from whom to buy the number of customers for the suppliers products

switching costs - fixed costs buyers face if they change suppliers

close supplier relationship is the new model for organizations

Customers
purchase the products or services the organization offers final consumers - purchase products in their final form intermediate consumers - buy raw materials or wholesale products before selling them to final consumers customer service - giving customers what they want, the way they want it, the first time

Regulators:a unit that has the potential to control legislate, or otherwise influence the organizations policies and practice

System Approach
A system is an interrelated set of

elements functioning as a whole. By viewing organization as systems, managers can better understand the importance of their environment and the level of interdependency among subsystems with in the organization they must also understand how their divisions affect and are affected by other subsystems with in the organization.

Thinking organization as systems provides us with a variety of important view points on organization:Open system: and organizational system that interacts with its environment Closed system: an organizational system that does not interact with its environment Subsystem: a system within another system Ex: marketing, finance, production Synergy: two or more subsystems working together to produce more than the total of what they might produce working alone Entropy: a normal process leading to system decline. When an organization does no monitor feedback from its environment and make appropriate adjustment

Approach
Managers task is to identify which

technique will in a particular situation, under particular circumstances and at particular time best contribute to the attainment of management goals. Idea that the organizational structures and control systems manager choose depend on are contingent oncharacteristics of the external environment in which the organization operates. Assumes there is no one best way to manage. The environment impacts the firm and managers must be flexible to react to environmental changes.

Contingency Theory of Organizational Design

Mechanistic and Organic Structures

Mechanistic Structure
Authority is centralized at the top. (Theory X) Employees are closely monitored and managed. Can be very efficient in a stable environment.

Organic structure
Authority is decentralized throughout the organization. (Theory Y) Tasks and roles are left ambiguous to encourage employees to react quickly to changing environment.

Dynamic Engagement approach

The view that time and human relationships are forcing management to rethink traditional approaches in the face of constant rapid change Dynamic:- the opposite of static, implies continuous change, growth, and activity; Engagement:- the opposite of detachment, implies intense involvement with others. This approach best expresses the vigorous way todays most successful managers focus on human relationships and quickly adjust to changing conditions over time. New organizational environment Ethics and social responsibility Globalization and management Inventing and Reinventing organizations Culture and multiculturism

Social Responsibility
Since businessmen recognizes that they are managing an economic unit in the society.they have broad obligation to the society. Ex: Matters affecting the public welfare such as employment and availability of goods etc.,

Social Responsibility. An obligation,

beyond that required by the law and economics, for a firm to pursue long term goals that are good for society. Social Responsibility refers to obligation to nurture and develop human values such as motivation, moral cooperation and selfrealization in work.

Owners or shareholders

Workers

Resources Men Money Materials Methods Machines

Management Philosophy Values Beliefs Attitudes Ethics

Management Process Planning Organizing Directing Controlling

Results Production to satisfy customer Fulfillment of the expectation of workers, owners and society

customers

Society& Government

Expansion of an Organizations social responsibility:Social Responsibility

Lesser

Greater

Stage 1 Owners & Management

Stage 2 Employees

Stage 3 Constituent in the specific environment

Stage 4 Broader Society

Stage1:- managers will promote shareholders interest by seeking to maximize profit. Stage 2:- Focus on human resource concern i.e. Motivating employees, good working conditions etc., Stage 3:- Providing high quality products and service, fair price, good supplier relation. Stage 4:- promote social justice preserve the environment support social and cultural activities.

Obligations of Management towards different segment of the society

1. Responsibility towards shareholders: Reasonable dividend Stability and growth Information Trust of shareholders

2. Towards Customers:Customers should be charged a fair and reasonable price Supply of goods and services should be wide spread so that customer do not face any problem in procuring Goods and services should be uniform standard and of reasonable quality Must fallow fair trade practices. It should not mislead the customers by false misleading and exaggerated advertisement.

3. Responsibility towards Creditors, suppliers & others:Create healthy and cooperative inter business relationship b\w different businesses. Must provide accurate and relevant information to creditors and suppliers. 4. Towards Government:Mgmt should be law-abiding citizen Pay tax and other dues fully, timely and honestly It should not corrupt public servants and democratic process

5. Towards Society:Socio-economic objectivity Improvement of local environment Create employment opportunity Efficient use of resources Welfare activities Business morality

Approaches to social responsibility

Lowest Highest

Social obstruction

Social obligation

Social Response

Social contribution

Social Obstruction:- An approach to

social responsibility in which firms do as little as possible to solve social or environmental problems. When they cross the ethical or legal line that separates acceptable from unacceptable practices, their typical response is to deny or cover up their action. Social obligation:- one step removed from social obstruction is social obligation, where by the organization will do everything that is required of it legally but nothing more.

Social Response:- A firm that adopts

social response approach meets its legal and ethical requirements but will also go beyond these requirements in selected cases. Such firms voluntarily agree to participate in social programs. Social contribution:- the highest degree of social responsibility that a firm can exhibit, in which an organization views itself as a citizens in a society and proactively seek opportunity to contribute to society.

Philanthropic Responsibilities Be a good corporate citizen contribute resources to the community improvement

Ethical Responsibilities Be ethical obligation to do what is right, just, and fair, avoid harm Legal Responsibilities Obey the Law Law is societys codification of right and wrong play by the rules of game

Economic Responsibilities Be Profitable the foundation upon which all others rest

Arguments for Social Responsibility:Business creates problems and should therefore help to solve them Corporations are citizens in our society Traditional value Avoidance of government regulations Arguments against Social Responsibility:Contrary to basic functions of business. Business lacks the expertise to manage social programs There is potential for conflict of interest

Managing Social Responsibility:As a major challenge that requires careful planning, decision making, consideration and evaluation. Thus they may accomplish through Formal and Informal dimensions of managing Social Responsibility. Formal Organizational Dimensions:1. Legal compliance:- The extent to which an organization complies with local, state, national and international 2. Ethical compliance :- The extent to which an organization and its members follow basic ethical standard of behaviour 3. Philanthropic Giving:- Awarding funds or gifts to charities or worthy causes

Informal Organizational Dimensions:Organization leadership and culture Whistle Blowing:- the disclosing by an employee illegal or unethical conduct on the part of others with in the organization.

Lobbying:- The use of persons or groups to formally represents a company or group of companies before political bodies to influence legislation.

The Government

The Government influences business through Environmental protection legislation Consumer protection legislation Employee protection legislation Securities legislation The tax codes

Business influences the govt. through Personal contacts and networks Lobbying Political action committees Favors an other influence tactics

Business

Management Philosophy of ITC:- charged with following concern

Concern for their ultimate customers-the customers Concern for their intermediate customersthe trade concern for their supplier-raw material an ancillaries Concern for their employees- their most valued asset Concern for their competitors whom they wish well-healthy competition ultimately benefits the customer.

Objectives\Goals
Important ends towards which

organizational and individual activities are directed. Objectives are state end results and overall objectives need to be supported by sub objectives. Thus objectives form a hierarchy as well as network. Kinds of Objectives:Strategic Goal: A goal set by and for top management of the organisation Tactical Goal: For middle level managers. Operational Goal: Set by and for low level managers of the organisation

Mission: Our mission is to operate a chain of restaurants that will prepare and serve high-quality food on a timely basis and at reasonable prices.

Strategic goals
President and CEO Provide 14%return to investors for at least 10 years Start or purchase new restaurant chain with in 5 years Negotiate new labor contract this year

According to Terry:- Planning is the selection and relating of facts and making and using of assumptions regarding the future in the visualization and formulation of proposed activities believed necessary to achieve desired results According to Koontz ODonnell:planning is an intellectually demanding process it requires the conscious determination of courses of action and the basing of decision on purpose knowledge and considered estimates planning is process of deciding in advance what is to be done, who has to do it, how it is to be done and when it is to be done

planning
1.

2.

3.

4. 5.

Purpose : effective planning system requires a clear understanding of organization's purpose Ex: what are the reasons for organisations existence. Philosophy: philosophy incorporates the fundamental belief to how the organization's purpose is to be achieved, for long term survival and growth a philosophy of ethical conduct must be developed Premise: this involves the strength and weaknesses of the organisation and its knowledge and assumptions about its environment. Policies : are general guidelines or constraints that aid in managerial thinking and action. Plans: represents specific objectives and action statements and guides us step by step as to how reach the objectives and also at what stage the