July 31, 2016

Supply Chain Management Theory - Research Propositions

Understanding the Concept of Elasticity in Supply Chain Relationships:  An Agency Theory Perspective Maryam Zomorrodi  and  Sajad Fayezi 

P.1: Relational governance mechanisms based  on  trust, commitment  and information sharing  significantly influence the relationship elasticity of cooperating parties.
P.2: Contractual  governance mechanisms based  on  risk/reward  sharing  and  relationship­ specific investment significantly influence the relationship elasticity of cooperating parties.

Innovation Generation in Supply Chain Relationships: A Conceptual Model and Research Propositions

Journal of the Academy of Marketing Science.
Volume 32, No. 1, 2004,  pages 61-79.

Proposition 1a:The greater the extent of buyer-seller interaction, the greater the generation of incremental innovations in supply chain relationships
Proposition 1b:The greater the extent of buyer-seller interaction, the greater the generation of radical innovations in supply chain relationships.

Proposition 2a:The greater the IT adoption and integration between the buyer and seller, the greater the impact of interaction on the generation of incremental innovations in supply chain relationships.
Proposition 2b:The greater the IT adoption and integration between the buyer and seller, the lesser the impact of interaction on the generation of radical innovations in supply chain relationships.

Proposition 3a:The greater the asymmetry in input commitment between the buyer and the seller, the lesser the impact of interaction on the generation of incremental innovations in supply chain relationships.

Proposition 3b:The greater the asymmetry in input commitment between the buyer and the seller, the
greater the impact of interaction on the generation of radical innovations in supply chain relationships.

Proposition 4a: The lesser the asymmetry in attitudinal commitment between the buyer and the seller, the greater the impact of interaction on the generation of incremental innovations in supply chain relationships.
Proposition 4b: The lesser the asymmetry in attitudinal commitment between the buyer and the seller, the greater the impact of interaction on the generation of radical innovations in supply chain relationships.

Proposition 5a: The greater the competence trust between the buyer and the seller, the greater the impact of interaction on the generation of incremental innovations in supply chain relationships.
Proposition 5b: The greater the competence trust between the buyer and seller, the greater the impact of interaction on the generation of radical innovations in supply chain relationships.

Proposition 6a: The greater the goodwill trust between the buyer and seller, the greater the impact of interaction on the generation of incremental innovations in supply chain relationships
Proposition 6b: The greater the goodwill trust between the buyer and the seller, the greater the impact of interaction on the generation of radical innovations in supply chain relationships.

Proposition 7a: The greater the tacitness of technology associated with an innovation, the greater the impact of interaction on the generation of incremental innovations in supply chain relationships
Proposition 7b: The greater the tacitness of technology associated with an innovation, the greater the impact of interaction on the generation of radical innovations in supply chain relationships

Proposition 8a:The greater the stability of the final consumer demand, the greater the impact of interaction on the generation of incremental innovations in supply chain relationships.

Proposition 8b:The lesser the stability of final consumer demand, the greater the impact of interaction on the generation of radical innovations in supply chain relationships.

Proposition 9a: The greater the network connections of the buyer and seller within an industry group, the greater the impact of interaction on the generation of incremental innovations in supply chain relationships.
Proposition 9b: The greater the network connections of the buyer and the seller across industry groups, the greater the impact of interaction on the generation of radical innovations in supply chain relationships.

Updated  2 August 2016,  9 Sep 2013

July 29, 2016

Cost Reduction Projects

Some projects can suggest expenditures to improve the efficiency of the machines by adding additional items or by improving certain characteristics of the machine. These projects are cost reduction projects and they need to analyzed using engineering economic analysis.

Industrial engineers are expected to come out with number of cost reduction projects using technologies that claim the cost reduction potential as well as ideas that have cost reduction potential. Lean systems is an idea having cost reduction potential. Lean systems designate certain items as non-value added activities and challenge people to reduce these non-value added activities and reduce cost. Cost of quality or profits of quality system improvement is one such idea. According to it, by redesigning the quality management system, companies can increase profits.

Recommended Reading

PhD Thesis: Towards Conceptual Framework for Strategic Cost Management : The Concept, Objectives and Instruments
565 pages
Chemnitz TEchnical University

IT Cost Optimization - Gartner 2009

Three Steps for Sustainable Cost Reduction
Steel companies set their sights on high performance

Case study: Reducing costs, increasing efficiency for
the Government of Canada
Deloitte entity: Deloitte Canada
Client name: Treasury Board, Government of Canada
Topics: Cost reduction, enterprise service delivery
Country: Canada
Timeframe: August 2011 to March 2012

Development of a Cost Effective Supply Chain
Framework for a Construction Equipment

Updated 1 August 2016, 11 Dec 2011

July 28, 2016

Stephen Covey's Principle-Centered Leadership Model - Summary

Natural laws also called principles operate in the nature whether you discover them or not, and whether you use them or not. If you use, natural laws, and act in their direction you will succeed. If want a result contrary to them and act against them you are bound to fail. This is the essence of Covey's Principle-centered leadership model. It is scientific leadership. Develop science, find out or discover natural laws and develop your leadership method based on it. Find the principles and develop practice based on it.

People have to recognize and live in harmony with such basic principles as fairness, equity, justice, integrity, honesty, and trust.

Stephen Covey proposed a wheel of personal life centered on principles. Principles are at the center of the wheel. This center of principles guides us in four dimensions specified by Covey.

1. Security dimension of a person: It represents sense of worth, identity, emotional anchorage, self-esteem and personal strength.

2. Guidance: It is the direction was one receives and absorbs in life. There is an internal monitor that compares the conduct of a person with the standards and principles that he has accepted and he has to accept. Covey gives the name conscience to it.

3. Wisdom: Wisdom refers to a sage perspective on life. It is a keen understanding of how the various parts and principles apply and relate to each other. The development of wisdom involves observation (discernment), comprehension and judgment.

When people are low on wisdom, their maps are inaccurate, and their actions and thinking are based on distorted and discordant principles. A person with high end wisdom dimension has a good life compass that shows him the true north and all the parts of his behavior and the principles he uses in developing his behavior are properly related to each other. Also as we move from low end to high end in wisdom, there is higher commitment to the ideal (things as they should be) in managing the realities (things as they are). Wisdom also provides the ability to identify pure joy (sat-chidananda) from temporary pleasure.

4. Power: Power is the capacity to act and accomplish something. It also includes the strength and courage. It is also the vital energy to observe or identify choices and to take a decision, that is selection of one of them as the right way. At the low end, we have powerless people. At the high end are visionaries who plan and make things happen which seem to be impossible to many in the existing conditions.

These four dimensions or factors are interdependent. When these four factors are developed in a balanced and harmonious manner, a noble personality emerges. A great leader becomes available to the organization.

While principles are the center of a wheel of relationships and a person develops certain dimensions of his personality based on the principles, the relations are with self, spouse, other family members,, money, possessions, work, pleasure, friend, enemy and church. Many more can be named. It is in these relations that principles and the four great personality dimensions come into behavioral manifestations that give effectiveness and efficiency.

In the case of organizations, the relationships are with owner, customer, employee, supplier, programs, policies, competition, image, technology, and profit. Some more can be added.

Real empowerment comes from educating a person in both principles and practices. Principles are the why to do explanations. Practice is how to do explanation.

The challenge for a leader is to be a light. He should not be judge. He has to be a model, not a critic.

In the words of Stephen Covey, "The Challenge is to be a light, not a judge; to be a model, not a critic."

Principle centered leadership is to be practiced from the inside out on four levels.

1. Personal or self level (leading self)
2. Interpersonal (leading others)
3. Managing task (short term with existing people and processes)
4. Managing an organization  (developing it, recruiting people, training them, building teams, solving problems, compensating them, creating alignment etc. strategy and systems development)

There are certain master principles to be used at each level.

At personal level - trustworthiness

At interpersonal level - trust

At task level management - empowerment

At organizational level management - alignment

Chapter 1  Characteristics of Principles-Centered Leaders

1. They are continually learning.
2. They are service oriented.
3. They radiate positive energy
4. They believe in other people
5. They lead balanced lives.
6. They see life as an adventure.
7. They are synergistic: Principles centered leaders practice the principle of synergy. Synergy is a state in which the whole is more than the sum of the parts. The output from the combination of a synergistic leader and a follower is always more than the individual outputs of the leader and the follower. The leader increases his followers and a follower follows a leader for this benefit. Leader who practice this principle are amazingly productive with  new and creative ways and help their followers to increase their output helping them to work smartly. In team endeavors, these leaders strive to complement the weaknesses of some members with the strengths of some others so that team becomes more productive
8. They exercise for self-renewal: This is the practice of the seventh habit. Sharpen the Saw. In a way, it is restatement of first principle. They are continually learning and practicing to increase their productive capability.

Chapter 2 Seven Habits of Highly Effective People

1. Be Proactive

2. Begin with the End in Mind

3. Put First Things First

4. Think Win - Win

5. Seek First to Understand, Then to be Understood.

6. Synergise

7. Sharpen the Saw

More on the 7 Habits

1. Be Proactive
Proactive people feel control of their life is in their hands.

They feel:  "I am not a product of my culture, my conditioning and the conditions of my life; I am a product of my principles, values, attitudes, beliefs and behavior - and those things I control."

7. Sharpen the Saw
Detailed article on Sharpen the Saw
Sharpen the Saw - The Mental Dimension - Stephen Covey's Explanation

A Poem on Sharpening the Saw and Seven Habits

I keep myself fit by exercising and  eating right
I improve my knowledge I read and write
I help my friends and feel delight
I wish in the world all enjoy without a fight

I live my life according to Covey's principles
I  remember them as important values
I try to understand what is said by others
Covey said that gives victories

Let me recount the effective seven
Be proactive, think of end and begin
Do first thing first and think win win
Understand first, synergize, and sharpen

Poem written by Narayana Rao K.V.S.S. on 1 March 2015

Chapter 3. Three Resolutions

1. To overcome the restraining forces of appetites and passions:

I resolve to exercise self-discipline and self-denial.

2. To overcome the restraining forces of pride and pretension:

I resolve to work on character and competence.

3. To overcome the restraining forces of unbridled aspiration and ambition:

I resolve to dedicate my talents and resources to noble purposes and to provide service to others.

Chapter 4. Primary Greatness

Three Essential Character Traits

Integrity: As we clearly identify our values and proactively organize and execute around our priorities on a daily basis, we keep meaningful promises and commitments.

Maturity: Balance between Courage and Consideration
If a person can express his feelings and convictions with courage balanced with consideration for the feelings and convictions of another person, he is mature.

Abundance Mentality: Our thinking that there is plenty out there for everybody.

Eight ways to enrich marriage and family relationships

1. Retain a long-term perspective.
2. Rescript your marriage and family life.
3. Reconsider your roles.
4. Reset your goals.
5. Realign family systems.
6. Refine three vital skills (time management,
communication, and problem-solving).
7. Regain internal security.
8. Develop a family mission statement.

Making Champions of Your Children

1. Build your children’s self-esteem.
2. Encourage primary greatness.
3. Encourage your children to develop their own interests.
4. Try to create an enjoyable family culture.
5. Plan ahead for family events.
6. Try to set an example of excellence.
7. Teach them to visualize so that they can recognize their own potential.
8. Adopt their friends.
9. Teach your children to have faith, to believe and trust others, and to
affirm, build, bless, and serve others.

Chronic Problems of the Organization

The organization has:

1. No shared vision or values.
2. No strategic path.
3. Poor alignment.
4. Wrong style.
5. Poor skills.
6. Low trust.
7. No self-integrity.

Quality leadership values people. It is rooted in the timeless principles of faith and hope, constancy and consistency, and virtue and truth in human relations.

 Principle-centered leadership “embraces the principles of fairness and kindness and makes better use of the talents of people for increased efficiency, but also leads to quantum leaps in personal and organizational effectiveness” (p. 180).

Leader has to empower the followers and trust them. They in turn empower the leader and trust him.

Updated 29 July 2016, 2 March 2015,

July 27, 2016

Planning - Principle of the strategy and policy framework

Principle of the strategy and policy framework

This principle I saw first in the 14th edition.

The more strategies and policies are clearly understood and implemented in practice, the more consistent and effective will be the framework of enterprise plans.

Ninth Edition principle.

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

Updated  30 July 2016, 11 March 2015,

Planning - 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.

Efficiency is the focus of industrial engineering discipline.

In engineering industries, industrial engineers have to be employed and they are to be given the responsibility to redesign the systems designed by the managers to increase the efficiency. We may notice that industrial engineer will be concentrating on use of engineering knowledge to increase efficiency of engineering systems. But, if efficiency of human resources  is the issue, both industrial engineers and behavioral scientists have a role in analyzing and redesigning systems. Industrial engineers  learn behavioral sciences to employ principles of laws of behavioral science to improve efficiency and productivity  of persons working in man-machine systems. Industrial engineers also learn physiology, anatomy and biomechanics to employ the science developed in these subjects in designing more productive but less fatiguing, less uncomfortable, and less unhealthy human motions.

Updated 30 July 2016,  11 March 2015

July 26, 2016

Resource Based View of the Firm and Importance of Resourcing Function for Entrepreneurs and Managers

Narayana Rao identified resourcing  as an important function of managers and advocated that functions of management are to be listed as Planning, Organizing, Resourcing, Executing and Control.

Resource Based View (RBV) of the firm views a firm as a bundle of resources and resources determine the performance of the firm. Barney (1991) classifies resources as "assets, capabilities, organizational processes, firm attributes, knowledge etc." Resources enable the firm to conceive of and implement strategies that improve its effectiveness and efficiency. Lichtenstein and Brush (2001) identify important resources for entrepreneurial ventures.

The following  book provides a detailed description of resources required  by entrepreneurs and provides a road map to acquire the important resources.

Resourcing the Start-Up Business: Creating Dynamic Entrepreneurial Learning Capabilities

Oswald Jones, Allan Macpherson, Dilani Jayawarna
Routledge, 01-Oct-2013 - Business & Economics - 270 pages

Starting a business successfully requires numerous skills and resources. The alarming rate of failures associated with new ventures suggests that potential entrepreneurs would welcome expert advice at the most vital stage in the life of any business.

The expert author team focus on those resources, skills, capabilities and learning required by any entrepreneur in the process of starting a new business. Specifically, this text aims to:

Introduce and explain those resources (including finance) that are essential to successful business creation
Identify the key skills and capabilities that are required by entrepreneurs
Highlight the ways in which new resources are combined with the entrepreneur’s existing resource base to develop the business effectively
Explore the way entrepreneurs learn in the process of developing their business
Drawing on the most up-to-date and most relevant research, this concise textbook provides students and academics of entrepreneurship with a practical guide to acquiring the appropriate resources in order to start a new firm.

Resourcing new businesses: social networks, bootstrapping and firm performance
Venture Capital: An International Journal of Entrepreneurial Finance
Volume 12, Issue 2, 2010

Strategic Management and Office of Strategy Management

The Office of Strategy Management
Robert S. KaplanDavid P. Norton

In their book Profit from the Core, Chris Zook and James Allen report that between 1988 and 1998, seven out of eight companies in a global sample of 1,854 large corporations failed to achieve profitable growth. These companies could not  deliver 5.5% annual real growth in revenues and earnings while earning their cost of capital. 90% of the companies in the study had developed detailed strategic plans with much higher targets.    

According to the authors, the gap arises from a disconnect in most companies between strategy formulation and strategy execution.

Some organizations established a new unit at the corporate level to oversee all strategy related activities, and the authors term it as office of strategy management (OSM).

The strategic planning function focuses on  the annual strategic planning process but does not take part in seeing that the strategy gets executed. But, effective strategy execution requires communicating corporate strategy; ensuring that enterprise-level plans are translated into the plans of the various units and departments; executing strategic initiatives to deliver on the grand plan; and aligning employees’ competency development plans, and their personal goals and incentives, with strategic objectives. The company’s strategy also has to e  be tested and adapted to stay abreast of the changing competition. The OSM becomes the department for coordinating all these tasks. It designs and implements the processes that make sure that strategy execution gets accomplished in an integrated fashion across the enterprise.

Chrysler started an Office of Strategy Management, a unit employing some 13 full-time people who not only manage the company’s strategy but also assist the business units in developing new products. Chrysler’s new approach to strategy execution has paid dividends. In 2004, despite a weak domestic automobile market, Chrysler successfully launched a series of exciting new cars and generated $1.2 billion in earnings.

A company has to align the strategies of its business units, support functions, and external partners with its broad enterprise strategy. Alignment creates focus and coordination across even the most complex organizations, making it easier to identify and realize synergies. In many companies, unit strategies have only rhetorical links with corporate strategy. OSM will do systematic organizational alignment. OSM organizes strategy review meeting every month.

There are organizations that have achieved significant performance improvements by giving attention to  implementation of strategy. The authors have captured and codified a body of knowledge from these successful organizations that provides guidelines to others organizations to develop a new  professional function focusing on the management of strategy. An office of strategy management that  has responsibility for managing and coordinating all the key strategy management processes can help companies realize the benefits from the body of knowledge of strategic management.

July 23, 2016

Resourcing - A Function of Management

Koontz and O'Donnell outlined Planning, Organizing, Staffing, Directing and Controlling as the five functions of management and explained the process of management of these five functions.

In the place of staffing, using the word resourcing, could be a better description of management function at the current stage.

A plan to achieve something (objective) is to be  converted into an organizational plan that has resources,  facilities and people. The manager has to acquire these resources to set up the organization to implement his plan. Acquisition of human resources is staffing. But normally in modern business, the manager has to acquire money resources or finance. Then he has to  acquire land, buildings, machinery, materials and various other services. Then comes directing and resource allocation.

During control phase, replanning takes place, reorganization can take place, resource adjustment (resource acquisition or disposal) may take place, and redirecting may take place to achieve the goals set forth for a period.

Planning involves choosing a direction and an intermediate destination. It has to be a profitable and a useful endeavor. In the process of planning cost benefit analysis is done.  Organizing follows and the means by which one reaches the chosen destination is defined during this activity of management.

Organizing is a process of

  • determining, grouping and structuring activities
  • creating roles for individuals for effective performance at work
  • allocating necessary authority (over resources) and responsibility for results for each role
  • determining detailed procedures and systems for different problem areas such as coordination, communication, decision-making, motivation, conflict resolution and so on.

The resources required to achieve a goal are to be identified during the organizing step of management. How many operators are required and how many supervisors are required is a function of technology employed in the organization and this decision has to be taken during the process of organization. Resourcing follows the organizing phase in the acquiring of the resources planned in the organizing phase. Organizing this way is just the planning stage. Resourcing is the stage during which all resources planned in the organizing stage are acquired by the manager.

Resource Planning 

Resource planning is an economic decision and entrepreneurs have to use it. It is discussed adequately in economics.

Choice of Inputs by the Firm

Every firm or entrepreneur has to decide how much of each input it should employ: how much labor, capital, land, energy, various materials and services.

The fundamental assumption that economists make in this context is that of cost minimization. Firms are expected to choose their combination of inputs so as to minimize the total cost of production.

Least-cost Rule: To produce a given level of output at the least cost, a firm will hire factors until is has equalized the marginal product per dollar spent on each factor of production. This implies that

Marginal product of labor/price of labor  = Marginal Product of Capital Equipment/Price of capital equipment = ...

Thus the firm will choose a factor combination or resource combination that minimizes the total cost of production.  (Source: http://nraomtr.blogspot.com/2011/12/economic-theory-of-production-and.html  )


Recognition of Role of Resources in Management Process by Various Authors of Principles of Management or Management Process Books

Ernest Dale

Goals and Resources

Once objectives have been set,the planners must decide how far they can proceed toward them in view of the resources available, which include the money on hand, the money that sales will bring, and the funds that may be obtained by borrowing or selling equities. The decision to borrow or sell new stock will, of course, be part of the planning process and will depend on the return expected on the investment.

Finally, the planners must decide on the allocation of the funds to the various company activities and the way in which these funds will be used to generate greater income in the form of sales.  The volume of sales is, in fact, the key factor in all corporate planning.

Ernest Dale, Graduale School of Business, University of Virginia, Management: Theory and Practice, McGraw-Hill Book Company, New York, 1965, p.352, Chapter 22. Planning and Forecasting.

An intersting entry in Wikipedia - Resource Management
In organizational studies, resource management is the efficient and effective deployment for an organization's resources when they are needed. Such resources may include financial resources, inventory, human skills, production resources, or information technology (IT). In the realm of project management, processes, techniques and philosophies as to the best approach for allocating resources have been developed. These include discussions on functional vs. cross-functional resource allocation as well as processes espoused by organizations like the Project Management Institute (PMI) through their Project Management Body of Knowledge (PMBOK) methodology to project management. Resource management is a key element to activity resource estimating and project human resource management. Both are essential components of a comprehensive project management plan to execute and monitor a project successfully
Resourcing and Resouce Planning Departments
Office of Resource Planning, Universit of Regina

A new concept being developed as enterprise architecting clearly brings out the need for organizing material and human organizations and provides a process for developing the both organization. From this organization output, resource requirements will be clearly specified and during the resourcing function, manager has to acquire the resources specified in the organization structure.

Related topics

The Nature and Purpose of Planning
The Nature of Organizing
Resourcing - A Function of Management
Leading - Introduction
Planning and Execution - Theory and Practice
The System and Process of Controlling

Updated  26 July 2016,  1 Feb 2016, 17 Sep 2015, 25 Feb 2014
Updated 17.3.2012
Original knol - http://knol.google.com/k/narayana-rao/resourcing-a-function-of-management/ 2utb2lsm2k7a/ 2345

Details of the Knol

Resourcing - A Function of Management

Narayana Rao


Sajid Khan

All Rights Reserved

Version 14

Last edited: 02 Mar 2010

Exported: 26 Nov 2011

Original URL: http://knol.google.com/k/-/-/2utb2lsm2k7a/2345

July 22, 2016

Summary of Principles - Directing - Leading

14th Edition,  Management: A Global, Innovative, and Entrepreneurial Perspective

Heinz Weihrich, Mark V. Cannice, and Harold Koontz

Major Principles or Guides for Leading

1. Principles of Harmony of Objectives

The more managers can harmonize the personal goals of individuals with the goals of the enterprise, the more effective and efficient the enterprise will be.

2. Principles of Motivation

Since motivation is not a simple matter of cause and effect, the more managers carefully assess a reward structure, look upon it from  a situational and contingency point of view, and integrate it into the entire system of managing, the more effective a motivational program will be.

3. Principle of Leadership

Since people tend to follow who,in their view, offer them a means of satisfying their personal goals, the more managers understand what motivates their subordinates and how these motivators operate, and the more they reflect this understanding in carrying out their managerial actions, the more effective they are likely to be as leaders.

For effective communication, the following principles have to be applied.

4. Principle of Communication Clarity

Communication tends to be clear when it is expressed in a language and transmitted in a way that can be understood by the receiver.

5. Principle of Communication Integrity

The greater the integrity and consistency of written, oral or nonverbal messages, as well as of the moral behavior of the sender, the greater the acceptance of the message by the sender.

6. Principle of Supplemental Use of Informal Organization

Communication tends to be more effective when managers utilize the informal organization to supplement the communication channels of the formal organization

Articles on the Function of Leading

Human Factors and Motivation
Leadership - Koontz and O'Donnell - Review Notes

Supervision - Introduction - Public Administration Point of View
Committes and Group Decision Making - Review Notes

Communication - Koontz and O'Donnell - Review Notes
Summary of Principles - Directing - Leading


Earlier Editions

Related to the Purpose of Directing

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

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.

Principle of direct supervision

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

Principle of supervisory techniques

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

Principles of Delegation

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.

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.

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.

Principle of parity of authority and responsibility

The authority delegated has to be consistent with the responsibility assigned to a subordinate.


Harold Koontz and Cyril O’Donnell, Principles of Management: An Analysis of Managerial Functions, 4th Ed., McGraw-Hill, New York, 1968

Harold Koontz and Cyril O’Donnell, Principles of Management: An Analysis of Managerial Functions, 2nd Ed., McGraw-Hill, New York, 1959

Updated 22 July 2016, 11 December 2011

July 21, 2016

Supervision - Introduction - Public Administration Point of View

In the hierarchical organizations, each level of the organization supervises the one below it and in turn, supervised by the one above it. Supervision is a compound of two words ‘super’ and ‘vision’ meaning superior power of perceiving. It means overseeing or superintending the work of others. It has been defined as “the direction, accompanied by authority, of the work of others.”

Generally, the term supervision is applied to the lower levels of management and direction is applied forhigher levels.

Techniques of Supervision

Millet identified six techniques of supervision. These are as follows:

a) Prior approval of individual projects: Here, the subordinates have to first obtain the prior approval of the supervisor for their initiatives. This approval process involves detailed assessment and provides the scope for changing the general plan and helps in removing misunderstanding and rectifying errors.

b) Promulgation of service standard: The top management is to lay down targets or standards for the operating units to achieve. Subsequently, the top management audits their performance. Services standard, thus, set up norms of administrative output.

c) Work Budget: It is a plan of work over a specified period and is a powerful instrument of control over administration. As a part of work budget, there is financial budget also. The operating units, thus, work within the budgetary allotments and are not free to spend money as and when they like.

d) Approval of personnel: The superior authority appoints the key personnel and subordinate agency or bureau is not completely free to recruit its staff.

e) Reports: It is a standard practice that the operating units should submit an account of their activities to the central office. Such reports may be periodic – weekly, fortnightly, monthly, quarterly, half-yearly or annual. Report may also be special or ad hoc. A good system of reporting conveys is information to the superiors about what is going on. It enables the supervisors to evaluate the performance of their subordinates, to understand the situation faced by them; and above all, to control the operations within the organization.

f) Inspection: Supervisors carry out inspections periodically. In general, the purposes of inspection are
(i) to see that the existing rules, regulations and procedures are observed;
(ii) instructing and guiding the persons working in the organization;
(iii) a sort of performance audit;
(iv) improvement of efficiency.

Work plans, written procedures or manuals, written and oral instructions, staff meetings and
administrative follow-up are some other techniques used by supervisors.

Phases of Supervision:

There are three aspects of a supervisor’s duties. These are:

a) Institutional aspect: Supervisor should have a knowledge of policies, procedures and
practices of the agency and has to ensure that persons reporting to him have knowledge of them and are functioning according to them.

b) Personal aspect: The supervisors have to create an atmosphere in which the subordinates
are self-motivated to work for the attainment of the objectives of the organization. For this the supervisors needs to be a master of human relations.

c) Substantive or Technical: This aspect deals with the way of working. Millet distinguishes between substantive and technical supervision. The first is concerned with the actual work done by an agency while the second deals with the methods by which the work is done. Therefore, technical capability is improved by education and training. This technical capability in turn improves substantive work.

The personal or human relations aspect becomes very important once the basic level of technical competence is achieved by a supervisor. The success of a supervisor, more often than not, depends on his personal relations with employees, taken as individuals.

Qualities of a Supervisor:

Qualities of a Supervisor: Supervision needs knowledge and skill in using it.

Halsey has listed the following six qualities a supervisor should have. These are:
a) Thoroughness
b) Fairness
c) Initiative
d) Tact
e) Enthusiasm
f) Emotional control

Training of Supervisors

The qualities required for good supervision can be developed by education and training. Thus, training programmes have an important role to play in developing supervisors.

The supervisory training programmes should include:

(i) Job Instruction Training: How to instruct others in job methods
(ii) Job Methods Training: Training in the job method to the supervisor.
(iii) Job Relations Theory: Human relations education and training to help develop the ability to deal personally and effectively with the workers or subordinates)


Millet, John D., Management of Public Service, McGraw Hill, New York, 1954


Public Administration Times

Updated  24 July 2016,  24 November 2011

July 15, 2016

Replacement Analysis

Engineering Economics Revision Article Series

Replacement refers to a broad concept embracing the selection of similar but new assets to replace existing assets as well as selection of entirely different ways to perform the function supported by the earlier asset.

Replacement decisions are a choice between the present asset, called defender and currently available alternatives termed as challengers.

Varieties of Replacement Necessity

Replacement due to deterioration

Replacement due to obsolescence

Replacement due to inadequacy

Engineering Economics Replacement Analysis
Lecture Presentation

Industrial Engineering


Engineering Economics, 4th Edition, James L. Riggs, David D. Bedworth, and Sabah U. Randhawa, McGraw Hill, New York, 1996

Online Material

Replacement Analysis - I - Nptel course material

Replacement Analysis - II - Nptel course material

Automobile replacement case studies for engineering economy classes
Engineering Economist, The, Spring 1998 by Hartman, Joseph C


Updated  18 July 2016,  29 November 2011

Originally published in
http://knol.google.com/k/narayana-rao/replacement-analysis/2utb2lsm2k7a/ 254#

July 7, 2016

July - Management Knowledge Revision

July  (Economics, Engineering Economics, & Managerial Ethics)

1st Week  ( 1 to 5 July)

Economic Theory of Production and Production Cost
Economic Analysis of Different Competitive Conditions.

Wages and the Labor Market - Samuelson and Nordhaus 

Capital, Interest and Profits - Review Notes
Markets and Economic Efficiency - Review Notes

Economic Role of Government and Its Expenditure an...
Economic Analysis of Poverty and Equity

Alternative Economic Systems - Review Notes
Theory of Economic Growth

2nd week  ( 8 to 12 July)

International Trade Theory and Issues
Exchange Rates: Markets Regulation and International Financial System

Supply Behavior/Decisions of Firm in Competitive Markets
Introduction to Engineering Economics

Engineering Economy or Engineering Economics: Economic Decision Making by Engineers
Time Value of Money - Time Value of Money Calculations

Cash Flow Estimation for Expenditure Proposals
Required Rate of Return - Cost of Capital  - Required Rate of Return for Investment or Expenditure Proposal..

Depreciation and Other Related Issues
NPV - IRR and Other Summary Project Assessment Measures

3rd week  (15 to 19 July)

Income Expansion Projects
Cost Reduction Projects

Replacement Decisons
Expected Values and Risk of Project Revenues and Costs

Present-Worth Comparisons
Rate-of-Return Calculations

18 July

Equivalent Annual-Worth Comparisons
Replacement Analysis

Replacement Problem - Engineering Economy Analysis...
Machine Selection Problem for an Engineer - Engine...

4th week

Depreciation and Income Tax Considerations
Sensitivity Analysis

Structural Analysis of Alternatives
Engineering Economic Analysis - Subject Update - Recent Case Studies

Business Ethics Revision Starts

Business Ethics – Introduction
Moral Standards and Moral Judgments – Approaches

Business System - Free Markets - Ethics
Ethics in the Market Place and Distribution System

Ethics in the Factory
Ethics in the Supply Chain

To August - Management Knowledge Revision

One Year MBA Knowledge Revision Plan

January  - February  - March  - April  - May   -   June

July  - August     - September  - October  - November  - December

Updated 10 July 2016

July 1, 2016

Good to Great - Jim Collins - Chapter Summaries

Never give up on your dreams. Always improve your competence. Do not stop because of failures. Keep trying in the direction you think will give result.

Good to Great Chapter 2. Level 5 Leadership

The leaders in the organization have to practice Level 5 leadership.

Level 5 leader - Level 4 leader with Professional achievement goal and personal humility behavior.

Level 4 leader- Level 3 leader with a clear and compelling vision who catalyzes commitment of people and vigorously pursues achievement of the vision.

Level 3 leader - A person who has the ability to organize people and resources toward the effective and efficient pursuit of predetermined objectives.

Level 2 individual - Contributing team member.

Level 1 individual - Highly capable individual.

Professional Activities - Personal humility behavior

Commitment to transform - Never boastful
good to great

Unwavering commitment to - Standard performance is demonstrated. Motivation
achieve the long term goal by personal example
despite set backs in between.

Standards are set for greatness - Subordinates are developed to higher performance

Revises implementation plans - Success attributed to the cooperation of all.
based on objective plans. Actual Failure attributed to himself and a personal resolution is stated
results are collected and analyzed to do better management in the future.

Good to Great Chapter 3. First Who... Then What

Organize People First - Involvement in Vision and Strategy Development

When a company has to transform from good to great, first reorganize to put the right people in right jobs. Then involve them in strategy development. Don't develop strategy without taking right people into dialogue and discussion mode.