September 8, 2013

Management Principles and Propositions

Principles of Management - Koontz and O'Donnell

Principles of Planning

Related to Purpose and nature

1. Principle of contribution to objectives
          Every plan has to contribute positively toward the accomplishment of enterprise objectives.

2. Principle of efficiency of plans
          Efficiency is measured by the contribution of the plan to objectives of the enterprise minus the costs and unsought for consequences in formulating and implementing the plan.

3. Principle of primacy of planning
          Planning is the primary prerequisite for all other functions of management. Every action of the manager follows a planning step.

Principles Applicable to Structure of plans

4. Principle of planning premises
          If more people in an organization use common and consistent planning premises, the enterprise planning will be more coordinated.

5. Principle of policy framework
          If more policies, appropriate to the organization, are expressed in clear terms and form and if manages understand them, the plans of the enterprise will be more consistent.

6. Principle of timing
          If plans are structured to provide a network of derivatives plans in sequence, there will be more effectiveness in attainment of enterprise objectives.

Principles Applicable to Process of Planning

7. Principle of alternatives
          Select the plan which is the most effective and the most efficient to the attainment of a desired goal.

8. Principle of limiting factor
          Consider limiting factor in generating alternatives and selection from alternatives.

9. The commitment Principle
          Planning can cover a period over which commitment of resources can be clearly visualized.

10. The flexibility Principle
          Building flexibility in planning is beneficial, but cost of building flexibility needs to be evaluated against the benefits.

11. The Principle of navigational change
          Manager needs to periodically check events of the plan and redraw plans to maintain the move toward a desired goal.

12. Principle of competitive strategies
          In a competitive arena, it is important to choose plans in the light of what competitor will or will not do and navigate based on what competitors are doing or not doing.

Principles of Organizing

Principles in Relation to Purpose

13. Principle of unity of objectives
          An organization structure is effective if it as a whole, and every part of it, make possible accomplishment of individuals in contributing toward the attainment of enterprise objectives.

14. Principle of efficiency
          An organization or organization structure is efficient if it is structured to make possible accomplishment of enterprise objectives by people with minimum unsought consequences or costs.

Principles  Related to the Cause of Organizing

15. Span of management Principle
          There is a limit at each managerial position on the number of persons an individual can effectively manage. But this number is not a fixed number and it will vary in accordance with underlying variables of the situation.

Principles in Developing the Structure of Organization

16. The scalar Principle
          The more clear the line of authority from the ultimate authority for management in an enterprise (CEO)  to every subordinate position, the more effective will be decision making and organization communication at various levels in the organization.

17. Principle of delegation
          Authority is a tool for managing to contribute to enterprise objectives. Hence authority delegated to an individual manager should be adequate to assure his ability to accomplish results expected of him.

18. Principle of responsibility
          The responsibility of the subordinate to his superior for authority received by delegation is absolute, and no superior can escape responsibility for the activities of his subordinate to whom he in turn has delegated authority.

19. Principle of parity of authority and responsibility
The responsibility exacted for actions taken under authority delegated cannot be greater than that implied by the authority delegated, nor should it be less.

20. Principle of unity of command
          The more completely an individual has a reporting relationship to a single superior, the less the problem of conflict in instructions and the greater the feeling of personal responsibility.
21. The authority level Principle
          Maintenance of authority delegation requires that decisions within the authority competence of an individual manager be made by him and not be referred upward in the organization.

Principles in Departmentizing Activities

22. Principle of division of work
        The better an organization structure reflects a classification of the tasks and activities required for achievement of objectives and assists their coordination through creating a system of interrelated roles; and the more these roles are designed to fit the capabilities and motivations of people available to fill them, the more effective and efficient an organization structure will be.

23. Principle of functional definition
        The more a position or a department has clear definition of results expected, activities to be undertaken, organization authority delegated, and authority and informational relationships with other positions, the more adequately individual responsible can contribute toward accomplishing enterprise objectives.
Principle of separation
        If an activity is designed to be a check on the activities of another department, the individual charged with such activity cannot adequately discharge his responsibility if he reports to the department who activity he is expected to evaluate.

Principles in the Process of organizing

24. Principle of balance
    the application of principles or techniques must be balanced in the light of the over-all effectiveness of the structure in meeting enterprise objectives.

25. Principle of flexibility
    The task of managers is to provide for attaining objectives in the face of changing environments. The more provisions are made for building organization flexibility, the more adequately organization structure can fulfill its purpose.

26. Principle of leadership facilitation
    The more an organization structure an authority delegations within it make possible for various managers to design and maintain an environment for performance, the more it will facilitate leadership abilities of managers.

Staffing Principles

Related to the Purpose of Staffing

27. Principle of staffing objectives
    The positions provided by the organization structure must be staffed with personnel able and willing to carry out the assigned functions.

28. Principle of staffing
    The quality of management personnel can be ensured through proper definition of the job and its appraisal in terms of human requirements, evaluation of candidates and incumbents, and appropriate training.

The process of staffing

29. Principle of job definition
    Specifications for the job rest on organization requirements andon provision for incentives to induce effective and efficient performance of the tasks involved.

30. Principle of managerial appraisal
    Performance must be appraised against the management action required by superiors and against the standard of adherence in practice to managerial principles.

31. Principle of open competition in promotion
    Managers should be selected from among the best available candidates for the job, whether they are inside or outside the enterprise.

32.Principle of management development
    The objective of management development is to stengthen existing managers. The most effective means of developing managers is to have the task performed primarily by a manager's superior.
Principle of universal development
    The enterprise can tolerate only those managers who are interested in their continuous development.

Principles of Directing

Related to the Purpose of Directing

33. Principle of harmony of objectives
    Effective directing depends on the extent to which individual objectives in cooperative activity are harmonized with group objectives.

Principles  Applicable to Process of directing

34.Principle of unity of command
    The more completely an individual has a reporting relationship to a single superior, the less the problem of conflict in instructions and the greater the feeling of personal responsibility for results.

35.Principle of direct supervision
    Effective direction requires that management supplement objective methods of supervision with direct personal contact.

36.Principle of supervisory techniques
    Since people, tasks, and organizational environment vary, techniques of supervision will be most effective if appropriately varied.

Principles of Delegation

37. Principle of functional delegation
    The more a position or department has clear definitions of results expected, activities to be undertaken, organization authority delegated, and authority and informational relationships with other positions, the more adequately individuals responsible can contribute toward accomplishing enterprise objectives.

38.Principle of delegation by results expected
    The authority delegated to an individual managers should be adequate to assure his ability to accomplish the results expected of him.
39. Principle of absoluteness of responsibility
    No superior can escape, through delegation, responsibility for the activities of subordinates, for it is he who delegated authority and assigned duties.

40. Principle of parity of authority and responsibility
    The authority delegated has to be consistent with the responsibility assigned to a subordinate.

Principles of Control

Related to the purpose of control

41. Principle of assurance of objective
    The task of control is to assure accomplishment of objectives by detecting potential or actual deviation from plans early enough to permit effective corrective action.

42.Principle of efficiency of controls
    The more control approaches and techniques detect and illuminate the causes of potential or actual deviations from plans with the minimum of costs or other unsought consequences, the more efficient these controls will be.

43.Principle of control responsibility
    The primary responsibility for the exercise of control rests in the manager charged with the execution of plans.
Principle of direct control
    The higher the quality of managers and their subordinates, the less will be the need for indirect controls.
(The principle may termed as principle of reduced controls. A superior can spend less time in control activities if he has more higher quality managers and their subordinates in his department.)

Principles related to Structure of control

44. Principle of reflection of plans
    The more controls are designed to deal with and reflect the specific nature and strucuture of plans, the more effective they will serve the interests of the enterprises and its managers.

45. Principle of organizational suitability
The more controls are designed to reflect the place in the organization structure where responsibility for action lies, the more they will facilitate correction of deviation of events from plans.

46. Principle of individuality of controls
    Controls have to be consistent with the position, operational responsibility, competence, and needs of the individuals who have to interpret the control measures and exercise control.

Process of control

47. Principle of standards
    Effective control requires objective, accurate, and suitable controls.

48. Principle of critical-point control
    Effective control requires attention to those factors critical to appraising performance against an individual plan.

49. The exception Principle
    The more a manager concentrates his control on exceptions, the more efficient will be the results of this control.

50. Principle of flexibility of controls
    If controls are to remain effective despite failure or unforeseen changes in plans, flexibility is required in the design of controls.

Principle of action

51. Principle of Action
    Control is justified only if indicated or experienced deviations from plans are corrected through appropriate planning, organizing, staffing and directing.

Principles of Efficiency - Harrington Emerson

52. Clearly defined ideals.
53. Common sense
54. Competent counsel
55. Discipline
56. The fair deal
57. Reliable, immediate and adequate records
58. Despatching
59. Standards and schedules
60. Standardized conditions
61. Standardized operations
62. Written standard-practice instructions
63. Efficiency-reward

Principles of Organization Behaviour

64. Managers cannot use only one motivation theory. There is a need to combine motivation theories and use them simultaneously as well as appropriately.

65. In personality theory, the "Big Five" personality traits. Conscientiousness, emotional stability, agreeableness, extraversion, and openness to experience have been found to significantly relate to job performance, especially conscientiousness.

66. Attitudes can be changed. Research shows that some of the ways of bringing about attitude changes are providing new information, and persuasion by friends or peers, and co-opting.

66. Managers spend more than three fourths of their time in communicating – exchanging information. Communication is found to make the biggest relative contribution to the effectiveness of managers.

67. How groups are formed? Theodore Newcomb's Balance Theory: According to this theory, persons are attracted to one another on the basis of similar attitudes toward commonly relevant objects and goals. Once the relationship is formed, a balance is maintained between the attraction and the common attitudes. If an imbalance occurs, there is an attempt to restore the balance, and if the balance cannot be restored, the relationship dissolves.

68. A. One's own characteristics affect the characteristics one is likely to see in others.
B.. Persons who evaluate themselves favorably are more likely to be able to see favorable aspects of other people.

69.Vroom's Motivation Model: The strength of motivation to perform a certain act will depend on the algebraic sum of the products of the valences for the outcomes times the expectancies.

70. Taking a more proactive approach, management of organizations can try to eliminate stressors, reduce work-family conflict, and implement employee assistance programs (EAPs).

71. Management is considered to have three major dimensions - technical, conceptual and human. Organizational behavior is a subject that examines behavior of human beings in organizations.

72. Goals with the commitment of the person,  provide a directional nature to his behavior and guide thoughts and actions to the outcomes specified in the goals.

73. When individuals attribute their success to internal rather than external factors, they have higher expectations for future success, report a greater desire for achievement and set higher performance goals.

74. A leader provides more benefits/rewards than burdens/costs for followers.

75. Leadership style can be changed. But it takes time.

76. Accomplishment of  task successful leadership. Effective Leadership accomplishes the task and makes followers happy and contented.

Marketing Principles and Propositions

77. Kotler highlighted the fact that each business function has a potential impact on customer satisfaction. All departments need to think of customer satisfaction and work together to fulfill customer needs and expectations.

78. The marketing staff have to identify the potential market for the likely product (product idea) and must segment the market and select the appropriate target segment and then only product can be finalized for its specific attributes.

79. The CEO is the chief customer officer. He has to demonstrate strong customer focus, convince his top management team to be customer focused individually, then communicate with his employees to show customer commitment.

80. The marketing concept holds that the key to achieving organizational goals consists of being more effective than competitors in integrating marketing activities toward determining and satisfying the needs and wants of target markets.

81. Buyer’s needs, characteristics and decision making process interact with the stimuli created by the environment and marketers and buying decisions are made by the buyers.
Hence marketers have to understand what happens in the buyer’s consciousness between the arrival of outside stimuli and the buyer’s purchase decision.

82. From a consumer analysis point of view, a marketing strategy is a set of stimuli placed in consumers’ environments designed to influence their affect, cognition, and behavior. These stimuli include such things as products, brands, packaging advertisements, coupons, stores, credit cards, price tags, salespeople’s communications, and, in some cases, sounds (music), smells (perfume), and other sensory cues.

83. Determining Competitors’ Objectives
 The company has to make efforts understand what drives each competitor’s behavior. Normal microeconomic assumption is that every firm attempts to maximize their profits. However, in actual practice, companies differ in the weights they put on short-term versus long-term. Hence, each firm pursues a mix of objectives, current profitability, market share growth, cash flow, technological leadership, service leadership etc. with different weights attached to them.

84. Products are made with specific attributes by individual organizations. Hence, marketers  have to focus on a particular group of potential buyers for their product.  This focus is termed as targeting. Market segmentation is the effort to isolate groups of potential buyers having similar preferences for attributes of a product in the total market for the generic product.

85. But the first strategic choice for the leader is to take actions that expand the market for the product in general.  Market leaders make appropriate efforts to increase usage of their industry product. As market expansion is generally profitable to the market leader.

86. Attack by a challenger has a greater probability of success when there customer dissatisfaction with the current leader. There is a gap in the market which the leader is not serving. Challengers have to identify the gap and then develop the product offering for it and then attack that target segment of the market.  (September 7, 2013)

87. Follower companies do not challenge the market leader. But market followers have to know how to hold on current customers and win a fair share of customers in the growing market. The follower firms have a certain advantages for its target market in terms of location, services offered or financing offered.

88. Instead of settling scores,  leaders have to make gestures of reconciliation that heal wounds and involve all to get on with business. Revenge is not justice, it is not strategy either. Anger and blame are unproductive emotions that tie up energy in destroying rather than creating. Those whose main motivation is to settle scores and get payback — to obstruct rather than construct — are on the wrong side of history. Their legacy is not  magnificent building, but rubble. Taking revenge can destroy countries, companies, and relationships. Forgiveness can rebuild them.

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