The first post in this blog posted on 23 November 2011. The blog was started to transfer my articles on Google Knol platform to this blog as Google has announced the closure of the Knol platform.
MANAGEMENT THEORY REVIEW - Articles on Management Subjects for Knowledge Revision and Updating by Management Executives ---by Dr. Narayana Rao, Professor (Retd.), NITIE - IIM Mumbai --- 4.55+ MILLION Page Views--- Global Top Blog for Management Theory---Management for Effectiveness, Efficiency and Excellence.
July 2, 2021
Capital, Interest and Profits - Review Notes
Economics Concepts, Theories and Practices for Managers
Capital
Capital consists of those durable produced goods that are in turn used as productive inputs for further production.
There are three major categories of capital goods: structures (factories), equipment (machine tools) and inventories(goods on the shelfs of retails stores).
Investing in capital goods involves indirect or roundabout production. An item to catch fish can be made by spending time which can be used to catch fish with hands. There is an opportunity cost here. But investment of time or the opportunity cost is made in a capital good because it allows more consumption in the future than the opportunity cost.
Interest
The rate of return on capital is the annual net income (rentals less expenses) per dollar of invested capital.
In a world free or risk, inflation and monopoly, the competitive rate of return on capital would be equal to the market interest rate. In a world of different risk for different assets, return on capital is the sum of market interest rate plus risk premium. Market interest rate for zero risk assets is a benchmark. The presence of risk indicates that return on capital is not constant every period. If fluctuates and from past data, an expected return and variability of return can be established.
Profit
Profits are defined as the difference between total revenues and total costs.
From the total revenue all expenses (wages, salaries, rents, materials, interest, excise taxes, and the rest are deducted. The residual amount is termed as profit. The profits go the enterpreneur.
1. Profits are implicit returns
If the enterpreneur does not charge the business for his labor, his capital and land and profit will be an implicit return to his factors of production.
2. Profits as a reward for risk taking
If the revenues of the business are charged with the implicit returns - what remains is a reward for risk taking.
3. Profit as monopoly returns
References
Paul Samuelson and William D. Nordhaus, Economics, 13th Edition, McGraw-Hill, 1989
Knols - 237 profit
Updated on 3 July 2021
First pub 11 Dec 2011 Transferred from Knol to this blog.
Soft Power - Hard Power
Jan 24, 2020
Why And How To Increase Your Soft Power
Introduction to ‘Soft Power’
Brian Leggett is Emeritus Professor in the Department of Managing People in Organizations. His areas of interest include the use of persuasion (rhetoric) and dialectic in the management process; the practical application of persuasion and dialectic in management situations; and the connection between leadership and communication.
Joseph S. Nye, Jr., is former Assistant Secretary of Defense and Dean of Harvard University's John F. Kennedy School of Government. He is author of Soft Power: The Means to Success in World Politics.
Hard power is ability to give money for doing something or not doing something or to punish for doing something or not doing something.
Soft power is the emotional appeal. The doer does it willingly because he is attracted by the communication and behavior of the other person.
Many things in a large organization are outside the leader’s span of control. Your power is greater if you can get others to buy in to your values and vision
.
Joseph Nye identifies the following components of soft power, hard power and smart power, a combination of the two.
1. Policy Vision - attractive to followers - effective (balance ideals & capabilities)
2. Communications - persuasive words, symbols, example - persuasive to near and distant followers
3. Emotional IQ - ability to manage relationships and “charisma” - emotional self-awareness and control
1. Organizational Capacity - manage reward and information systems - inner and outer circles (institutions & bureaucracies)
2. Political Skill (narrow) -ability to bully, buy and bargain - ability to build and maintain coalitions
1. Contextual IQ - understand evolving environment (broad political skills) - capitalize on trends (“create luck”) -adjust style to context and followers’ needs
References
http://www.hks.harvard.edu/netgov/files/talks/docs/11_06_06_seminar_Nye_HP_SP_Leadership.pdf
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_______________
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Hard power is ability to give money for doing something or not doing something or to punish for doing something or not doing something.
Soft power is the emotional appeal. The doer does it willingly because he is attracted by the communication and behavior of the other person.
Many things in a large organization are outside the leader’s span of control. Your power is greater if you can get others to buy in to your values and vision
.
Joseph Nye identifies the following components of soft power, hard power and smart power, a combination of the two.
Soft Power ( inspirational)
1. Policy Vision - attractive to followers - effective (balance ideals & capabilities)
2. Communications - persuasive words, symbols, example - persuasive to near and distant followers
3. Emotional IQ - ability to manage relationships and “charisma” - emotional self-awareness and control
Hard Power (transactional)
1. Organizational Capacity - manage reward and information systems - inner and outer circles (institutions & bureaucracies)
2. Political Skill (narrow) -ability to bully, buy and bargain - ability to build and maintain coalitions
Smart Power (combined resources)
1. Contextual IQ - understand evolving environment (broad political skills) - capitalize on trends (“create luck”) -adjust style to context and followers’ needs
References
http://www.hks.harvard.edu/netgov/files/talks/docs/11_06_06_seminar_Nye_HP_SP_Leadership.pdf
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_______________ _______________
Originally published - http://knol.google.com/k/narayana-rao/soft-power-hard-power/2utb2lsm2k7a/541#
The Benefits of Soft Power
8.2.2004
https://hbswk.hbs.edu/archive/the-benefits-of-soft-power
HBR Article
https://hbr.org/2008/11/smart-power
Soft power crucial for leadership success
Post on: Sep 1, 2013
https://www.director.co.uk/16801-2-soft-power-crucial-business-performance/
https://www.atlantis-press.com/article/125924922.pdf
Updated on 3 July 2021
Published on 23 November 2011 - First day of starting this blog.
The National Association of Manufacturers’ Manufacturing Leadership Council
https://www.manufacturingleadershipcouncil.com/about-mlc/
https://www.manufacturingleadershipcouncil.com/news-insights/
Manufacturing Planning and Control for Supply Chain Management: The CPIM Reference, Second Edition - 2018
F. Robert Jacobs, William L. Berry, D. Clay Whybark, Thomas E. Vollmann
McGraw-Hill Education
Table of Contents
Dedication
About the Authors
Preface
Acknowledgments
1 Manufacturing Planning and Control
2 Enterprise Resource Planning (ERP)
3 Demand Management
4 Forecasting
5 Sales and Operations Planning
6 Advanced Sales and Operations Planning
7 Master Production Scheduling
8 Material Requirements Planning
9 Advanced MRP
10 Capacity Planning and Management
11 Production Activity Control
12 Capacity Management
13 Just-in-Time
14 Distribution Requirements Planning
15 Supply Chain Logistics
16 Order Point Inventory Control Methods
17 Strategy and MPC System Design
A Answers to APICS/CPIM Certification Questions
B Areas of the Standard Normal Distribution and Service Function Values
https://www.researchgate.net/publication/349207512_Manufacturing_Control_in_Job_Shop_Environments_with_Reinforcement_Learning
June 29, 2021
Top 10 Management Theory Blogs
30 June 2021
Search term - "Management Theory" Blog - on 30 June 2021
Organization and Management Theory: Home
omtweb.org
omtweb.org
https://www.mindtools.com/
-----------------------------------
28 June 2020
Global Number One Blog for the search term -Management Theory Blog - on 28 June 2020
Management Theory Review
nraomtr.blogspot.com
Top Blogs (28 June 2020)
https://getsling.com/blog/management-theories/
Management Theories - Vskills Blog
https://www.vskills.in/certification/blog/management-theories/
https://www.workzone.com/blog/management-styles/
https://blog.hubspot.com/marketing
sweetmanager.blogspot.com
Organization and Management Theory: Home
omtweb.org
https://www.globalnxt.edu.my/gnxt/corporate-education/the-executive-blog.html
https://www.lucidchart.com/blog/category/business
Strategic Management Blog: From Theory to Practice
https://www.lblstrategies.com/resources/strategic-management-blog-from-theory-to-practice/
New addition 8 Nov 2020: https://omt.aom.org/omt/browse/blogs
24 February 2019
Global Number One Blog for the search term "Management Theory Blog" on 24 February 2019
Management Theory Review by Dr. K.V.S.S. Narayana Raohttp://nraomtr.blogspot.com/
New blogs added in October 2016
http://www.information-management.com/blogs/
https://www.entrepreneur.com/topic/management
http://www.management-issues.com/
https://www.cips.org/supply-management/
Perspectives on Management and Governance
http://www.gordonpearson.co.uk/
Mark Woeppell on Management and Execution
http://pinnacle-strategies.com/blog/
Management Adventures by Dr. Jose D. Lepervanche, Professor Supervision and Management, Florida State College at Jacksonville, Kent Campus
http://www.managementadventures.org/
Human Resources Management
http://practicehrm.blogspot.com/
Organizational Design, Development and Change
http://organisationaldesign.wordpress.com/
Research
Supply Chain Management Research
http://scmresearch.org/
Practice oriented
Strategic Leadership Institute Website
http://strategicleaders.wordpress.com/
Updated 28 June 2020, 25 February 2019, 29 October 2011
June 24, 2021
Psychology Evaluation of Scientific Management by Lilian Gilbreth - 1914
Lesson 28 of Industrial Engineering ONLINE Course - IE Concepts Module - Contribution of Taylor, Gilbreth, Emerson, Maynard, Barnes, Shigeo Shingo.
Lilian Gilbreth evaluated scientific management from the view point of Psychology in the book "THE PSYCHOLOGY OF MANAGEMENT."
Important points made in the book are presented below.
CHAPTER I
DESCRIPTION AND GENERAL OUTLINE OF THE PSYCHOLOGY OF MANAGEMENT
Definition of Psychology of Management - Importance of the Subject - Purpose of this Book
Definition of Management. - Possible Psychological Studies of Management - Plan of Psychological Study Here Used - Conclusions to be Reached
Definition of Psychology of Management.
The Psychology of Management, as here used, means, the effect of the mind that is directing work upon that work which is directed, and the effect of this undirected and directed work upon the mind of the worker.
Psychology, in the popular phrase, is " the study of the mind."
It was not recognized that every man going out into the world needs all the knowledge that he can get as to the working of the human mind in order not only to give but to receive information with the least waste and expenditure of energy, nor was it recognized that in the industrial, as well as the academic world, almost every man is a teacher.
With the advent of "Scientific Management," and its demonstration that the best management is founded on laws that have been determined, and can be taught, the study of management in the class room as well as on the work became possible and actual.
By Scientific Management, it has demonstrated that the emphasis in successful management lies on the man, not on the work; that efficiency is best secured by placing the emphasis on the man,and modifying the equipment, materials and methods to make the most of the man. It has, further, recognized that the man's mind is a controlling factor in his efficiency, and has, by teaching, enabled the man to make the most of his powers. In order to understand this teaching element that is such a large part of management, a knowledge of psychology is imperative; and this study of psychology, as it applies to the work of the manager or the man aged, is exactly what the " psychology of management " is.
The psychology of, that is, the mind's place in management is only one part, element or variable of management; one of numerous, almost numberless, variables.
Purpose of This Book. It is scarcely necessary to mention that this book can hope to do little more than arouse an interest in the subject and point the way to the detailed books where such an interest can be more deeply aroused and more fully satisfied.
Definition of Management.
To discuss this subject more in detailFirst: What is " Management "?
" Management," as defined by the Century Dictionary, is " the art of managing by direction or
regulation."
Successful management of the old type was an art based on no measurement. Scientific Management
is an art based upon a science, upon laws deducted from measurement. Management continues to be what it has always been, the art of directing activity.
Psychological Interest of the Terms.
Psychology could ask no more interesting subject than a study of the mental processes that lie back of many of these terms. It is most unfortunate for the obtaining of clearness, that new terms were not invented for the new ideas. There is, however, an excellent reason for using the old terms. By their use it is emphasized that the new thought is a logical out growth of the old, and experience has proved that this close relationship to established ideas is a powerful argument for the new science; but such terms as "task," "foreman," "speed boss," "piece-rate" and " bonus," as used in the science of management, suffer from misunderstanding caused by old and now false associations. Furthermore, in order to compare old and new interpretations of the ideas of management, the older terms of management should have their traditional meanings only. The two sets of meanings are a source of endless confusion, unwarranted prejudice, and worse. This is well recognized by the authorities on Management.
Plan of Psychological Study Used Here.
It has, therefore, seemed best to base the discussion that is to follow upon arbitrary divisions of scientific management, that is1. To enumerate the underlying principles on which scientific management rests.
2. To show in how far the other two types of management vary from Scientific Management.
3. To discuss the psychological aspect of each principle.
Underlying Ideas and Divisions of Scientific Management.
These underlying ideas are grouped under nine divisions, as follows :
1. Individuality.
2. Functionalization.
3. Measurement.
4. Analysis and Synthesis.
5. Standardization.
6. Records and Programmes.
7. Teaching.
8. Incentives.
9. Welfare.
Conclusions to be Reached. These conclusions will include the following:
Psychology Evaluation of Scientific Management by Lilian Gilbreth - 1914
1. "Scientific Management" is a science.
2. It alone, of the Three Types of Management, is a science.
3. Contrary to a widespread belief that Scientific Management kills individuality, it is built on the basic principle of recognition of the individual, not only as an economic unit but also as a personality, with all the idiosyncrasies that distinguish a person.
4. Scientific Management fosters individuality by functionalizing work.
5. Measurement, in Scientific Management, is of ultimate units of subdivision.
7. Standardization under Scientific Management applies to all elements.
8. The accurate records of Scientific Management make accurate programmes possible of fulfillment.
9. Through the teaching of Scientific Management, the management is unified and made self-perpetuating.
10. The method of teaching of Scientific Management is a distinct and valuable contribution to Education.
11. Incentives under Scientific Management not only stimulate but benefit the worker.
12. It is for the ultimate as well as immediate welfare of the worker to work under Scientific Management.
13. Scientific Management is applicable to all fields of activity, and to mental as well as physical
work.
14. Scientific Management is applicable to self-management as well as to managing others.
15. It teaches men to cooperate with the management as well as to manage.
16. It is a device capable of use by all.
17. The psychological element of Scientific Management is the most important element.
18. Because Scientific Management is psychologically right it is the ultimate form of management.
19. This psychological study of Scientific Management emphasizes especially the teaching features.
20. Scientific Management simultaneously
a. increases output and wages and lowers costs.
b. eliminates waste.
c. turns unskilled labor into skilled.
d. provides a system of self-perpetuating welfare.
e. reduces the cost of living.
f. bridges the gap between the college trained and the apprenticeship trained worker.
g. forces capital and labor to cooperate and to promote industrial peace.
5. Standardization.
What is a standard?
Three phrases or dictionary meanings, the standard is a " unit of reference," "is a basis of comparison," and "it is a model" describe its usage in management, and are particularly emphasized by the use of the standard in Scientific Management.
I personally highlight first that it is a model. A standard is a model way of working presented.
Updated on 25 June 2021
13 June 2020, 6 October 2019
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