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Management principles and practice
Koontz and O’Donnell
Weihrich, Cannice and Koontz, Management, 14th Edition, 2013
Mcgraw hill publication
Mba management theory revision notes by narayana rao k.v.s.s. ,
Professor, nitie
All Core Management Subjects with One Year Revision
Plan
Chapter 1
Management - definition
It is a process of designing and maintaining
environment in which individuals, working together in groups, efficiently
accomplish selected aims.
Effectiveness: Accomplishment of selected aims.
Efficiency: Accomplishment of aims with the least
amount of resources.
Management is the process of designing and maintaining
the environment.
Environment – External and Internal
External – Society, Government, Physical environment,
Customers, Suppliers
Internal – Selected objectives, goals, mission,
technology, equipment, tools, materials, accepted orders, staff, training,
reward systems, recognition and discipline systems, communication systems
The functions of managers
Planning,
Organizing,
Staffing,
Leading and
Controlling
Planning
Planning involves selecting missions and objectives as
well as the actions to achieve them.
Planning involves decision making.
The decisions require commitment of resources – human
and material.
Organizing
Planning identifies and prescribes actions to achieve
the objectives of the organization.
These actions have to be split into tasks that can be
accomplished by equipment and man combinations.
The men have to be grouped and managers have to be
assigned to groups to help the operators with daily plans, training, material
flow, coordination with other groups etc.
Staffing
Staffing involves filling, and keeping filled, the
positions in the organization.
This is done by identifying workforce requirements,
inventorying the people available, and recruiting, selecting, placing,
promoting, appraising, planning the careers of, compensating, and training or
otherwise developing recruits and job holders.
leading
Leading is influencing people so that they will
contribute to organizational and group goals.
Leadership is interpersonal aspect of managing.
Leader needs followers.
People tend to follow those who offer means of
satisfying their own needs, wishes and desires.
Leading involves concepts and processes of motivation,
leadership styles, and communication.
Controlling
Controlling is observing and correcting actions to
make sure that they follow designed processes and measuring and correcting individual
and
organizational performance to ensure that events conform to plans.
Managerial functions at different organizational
levels
All Managers carry out all managerial functions.
Top level managers spend more time on planning and
organizing and direct and control middle mangers.
Middle managers take more active role in staffing and
direct and control supervisors or first level managers.
First level managers spend more time in directing and
controlling the activities of front line employees who actually produce
products or services.
Managerial skills
Conceptual skills (Business Model – Market, Technology
and Financial Returns)
Human skills
Technical skills
Problem solving skills (Solving challenges that appear
periodically by analyzing the problem and synthesizing the solution. The
solution is to be tested and validated).
Management Methods
Management Methods – Management Process
Planning
Organizing
Staffing
Leading
Controlling
Management Methods – business functions
Strategic Management
Marketing Management
Operations Management
Supply Chain Management
Human Resource Management
Financial Management
Information Systems Management
Chapter 4
essentials of planning and managing by
objectives
Missions or Objectives – Objectives or Goals
Strategies – Policies – Procedures – Program
Budget -
Steps in Planning
Management planning tool – management by objectives (mbo)
Objectives
The Nature of Objectives
Hierarchy of Objectives
Multiplicity of Objectives
How to Set Objectives
Quantitative and Qualitative Objectives
Guidelines for Setting Objectives
Evolving Concepts in MBO
Benefits and weaknesses of mbo
Case – Developing Verifiable Case
CHAPTER 5
5. Strategies, policies and planning premises
Developing Strategies
Developing Policies
Role of Planning Premises to Guide Planning
The strategic planning process
Inputs to the organization
Industry Analysis
Enterprise Profile
Orientation, Values and Vision of Executives
Mission (Purpose), Major Objectives, and Strategic
Intent
Present and Future External Environment
Internal Environment
Development of Alternative Strategies
Evaluation and Choice of Strategies
Consistency Testing and Contingency Planning
The tows
matrix: a modern tool for analysis of the situation
Strengths
Weaknesses
External Opportunities SO WO
External Threats ST WT
Tows matrix strategic alternatives
SO – Vigorously pursue the opportunity
WO – Take up measures to reduce weakness
ST – Challenge the threat
WT – Withdraw from the activity
Blue ocean strategy –pursuit of opportunities in
uncontested market
The authors suggested a framework called strategic
canvas.
The portfolio matrix: a tool for allocating resources
Major kinds of strategies and policies
Products or Services
Marketing
Hierarchy of Strategies
1.Corporate
Level
2.Business
Level
3.Functional
Level
Porter Generic Competitive strategies
Cost leadership
Differentiation
Focus
Premising and forecasting
Marketing Research
Forecasting
Insights
Forecasting of Economic, Social, Political/Legal and
Technological Environments
Forecasting with Delphi Technique
CHAPTER 6
6. Decision making
Rationality in Decision Making
Limited, or”Bounded,” Rationality
Development of Alternatives and the Limiting Factor
Heuristics in Decision Making
Evaluation of Alternatives – Quantitative and
Qualitative Factors
Marginal Analysis
Cost Effective Analysis
Three Alternatives Approaches for Decision Making:
Experience, Experimentation, Research and Analysis using Mathematical and
Simulation Models.
Programmed and Nonprogrammed Decisions
Decision Making under Risk and Uncertainty
Creativity – Making People Creative and Harnessing
Their Creativity
Brain Storming – Creative Manager
Invention and innovation
Invention is a technical achievement.
Innovation is a business achievement.
Inventions are done by technical people
Innovations are done by business managers.
For Innovation managers have to understand the needs
of the customers and then use existing technical alternatives to develop a new
solution.
Managers can fund a research and development solution
as a part of innovation project.
CHAPTER 7
7. The Nature of organizing
Henri Fayol said organization involves decisions regarding
material organization and human organization.
Management theory has not developed adequately in
material organization.
Formal Organization
Informal Organization
Organizational Division – The Department
Organizational Levels arise due to Span of Management
Factors Determining an Effective Span
The Process of organizing
reengineering
There will be opportunities of reengineering during the life
of an organization.
Reengineering emphasizes the deep understanding of the
capabilities of a new technology and redesigning the processes of an
organization to make the best use of the new technology.
Organization structure: departmentation
Departmentation by Business Functions or Enterprise Functions
Departmentation by Territory or Geography
Departmentation by Customer Group
Departmentation by Product
Matrix Organization
Strategic Business Units
The virtual organization
Group of people connected through information
technology.
Independent firms of suppliers, customers can also
form virtual network of organizations.
The technological possibilities are exciting, but how
do we manage people we never see? This is a topic that needs development.
The boundaryless organization
Jack Welch, CEO of General Electric stated this idea.
He wanted GE to be boundaryless organization.
It is a global organization.
An idea can generate in any unit of GE.
It can be sold to the global market.
Procedure - departmentation
The aim: Achieving Objectives
Mixing Types of Departmentation: The first level of departmentation can be on one basis and sections within departments
can be organized on a different basis.
CHAPTER 9
9. Line/staff authority, empowerment, and decentraliztion
Authority and Power
Empowerment
Line/Staff Concepts and Functional Authority
Decentralization of Authority: Federal Government –
Different powers by constitution.
Delegation of Authority – Organization by an
individual manager
CHAPTER 10
10. Effective organization and organization culture
Avoid Mistakes in Organizing – Planning Stage
Planning for the ideal
Modification for the Human Factor
Avoid Inflexibility – Make it Flexible
Readjust as needed.
Making staff work effective
Make everybody understand authority relationships.
Make line listen to staff when specialist studies were
done by staff and advice is given.
Keep staff informed of the developments in the
organization.
Require Complete Staff Work: Staff must give a
recommendation that is complete and implentable.
Making staff work acceptable and useful.
Tools of organization
Organization Charts
Avoid conflict in organization through clarification
of roles, authority and reporting relationships.
Position Descriptions
Ensure Understanding of the organization Design by
teaching people – Explain to people the basis and expected benefits (sell the
design).
Informal
organization
Recognize its inevitable formation.
Recognize its benefits to members.
Use it for organization benefit appropriately.
Promoting an appropriate organizational culture
Defining organization culture
Culture is the general pattern of behavior, shared
beliefs and values explicitly declared and assumptions that are not stated but
can be diagnosed which are shared in the members of an organization.
One can observe some common elements of behavior,
common beliefs and values and even common assumptions.
The Influence of the leader on organization culture
What is Value?
It is a fairly permanent belief about what is
appropriate and what is not that guides the actions and behavior of employees
in performing processes to achieve the objectives of the organization.
The values of top managers are accepted by large
number of people and are implemented.
Value driven corporate leaders serve as role models
and transform their employees.
The ideal organization culture created by corporate
leaders can result in managerial functions being carried out in quiet different
ways.
CHAPTER 11
11. Human resource management and selection
Systems approach to HRM
Factors Affecting the Number and Kinds of Managers
Required
The Management Inventory
Policies
Promotion from Within
The Policy of Open Competition
Staffing
Responsibility for Staffing
Selection
Matching Job requirements and Candidate Competence
Job design and job requirements
Skills and personal characteristics needed in managers
Analytical and problem solving abilities
Desire to manage
Communication skills and empathy
Integrity and Honesty
Integrity: The quality of being honest and firm in
moral principles
Honesty: telling the truth, not breaking the law, and
not deceiving others
Past performance as Manager
Selection process
Interviews
Tests
Assessment Centers
Orienting and Socializing New Employees
EIU Survey – Managing in 2020
Areas that have the greatest potential for improving
productivity are:
Managing knowledge.
Providing services and support to customers.
Improving operations and production processes
Developing businesses and strategies
Managing marketing and sales activities
Managing human resources and training
CHAPTER 12
12. Performance appraisal and career strategy
Choosing Appraisal Criteria
Performance in Accomplishing Goals
Performance as Managers
Three Kinds of
Review or Appraisal
1. Comprehensive 2. Progress or periodic 3. Continuous
monitoring
Appraisal process and issues
Self appraisal versus Judging
Subjective versus Objective Evaluation
Assessing Past Performance
Assessing Future Oriented Development Activities
Strengths and Weaknesses of Appraisal against
Verifiable Objectives
Formulating the career strategy
1.Preparation
of a personal profile
2.Development
of long-range personal and professional goals
3.Analysis
of Environment: Threats and opportunities
4.Analysis
of personal strengths and weaknesses
5.Development
of strategic career alternatives
6.Consistency
training and strategic choices
7. Development of Short-range career objectives and
action plans
8. Development of contingency plans
9. Implementation of the career plan
10. Monitoring progress.
11. Write your own biography
CHAPTER 13
13. Managing change through manager and organization
development
Approaches to Manager Development for Current Job,
Next Job and Future Needs of the Organization.
On the Job Training
Planned Progression
Job Rotation
Creation of “Assistant-to” Positions
Temporary Promotions
Committees and Junior Boards
Coaching
Internal and external manager training
Conference Programs
University Management Programs
In-House “Universities”
Readings, Television, Video Instruction, and Online
Education
E-Training
Special Training Programs
Managing change
Techniques for initiating change
Resistance to change
Organizational conflict
Sources of conflict
Managing conflict
Organization development
The organization development process
Learning organization
A learning organization is one that can adapt to
changes in the external environment through continuous through continuous
renewal of its structure and practices.
Case: Jack Welch Leading organizational change at ge
Page 345
CHAPTER 18
18. The System and process of controlling
The Basic Control Process
Establishment of standards
Measurement of performance
Correction of deviations
Critical control points, standards, factors
Every objective and goal is a standard against which
actual or expected performance has to be measured by an organization.
But these 8 categories of standards are important
1.Physical 2.
Cost 3. Capital 4. Revenue
5. Program 6. Intangible 7. Goals 8. Strategic plan
Benchmarking: it is finding best practices of other
companies and using them as base for planning to do better.
Real time information and control
Real time information helps in quick control action
and correction of deviation.
It helps to keep plans on track more closely.
New computer integrated information systems are
providing real time information and thus helping real time control.
Preventive control or feedforward control
If expectation of results can be made, managers can
judge whether current or proposed actions result in planned results.
If the expectation is not as per plans they can change
actions to accomplish plans.
Control of
overall performance – profit center control
Profit and loss control
Return on Investment control
Management Audits
Requirements for effective control
Tailoring controls to plans and positions
Tailoring controls to individual managers
Designing controls to point up exceptions at critical
points
Seeking objectives of controls
Ensuring flexibility of controls
Fitting the control system to the organizational
culture
Achieving economy of controls
Establishing controls that lead to corrective actions
Case: Walmart in America and Around the Globe
Page 483
CHAPTER 19
Control techniques and information technology
The Budget as a Control Device
Zero base budgeting
Traditional Nonbudgetary Control Devices
Time-event network analysis
Gantt charts
Milestone budgeting
PERT
The balanced scorecard
Financial Performance
Customer Assets – Brand Value
Internal Processes – Are they improving providing more
value to customers and becoming more
efficient?
Organizational Learning – Are you able to learn new
things and innovate? – Serve customers through new products and processes
Information technology
Basic Data Capture and Storage
Information Indigestion and Intelligence Services
Managing by the Numbers
The Twitter Phenomena
Opportunities and challenges created by information
technologies
Innovation through analytics
Speech recognition devices
Telecommuting
Computer Networks
The Internet
Intranet and Extranet
Groupware
Freeware
Information Security
The digital economy, e-commerce and M-commerce
The emerging digital economy
M-Commerce and Wireless Communications
Problems as Opportunities in Web Connections
Customer Relationship Management (CRM)
CHAPTER 20
20. Productivity, operations management and total
quality management
Productivity Challenges
Measurement of Productivity of knowledge workers
Production and Operations management
Manufacturing and Service
The Operations Management System
Planning operations
Product decision
Product design
Production system design
Operating the system
Tools and Techniques for improving productivity
Inventory planning and control (Improving Inventory
productivity – Japanese came with zero inventory system)
Just in Time Inventory System – MIT people named it
lean system
Outsourcing
Operations research
Value engineering
Quality circles
Total quality management
Long term commitment to continuous improvement in
quality.
Active participation of all members of the
organization at all levels.
Ongoing data collection, evaluation, feedback and
improvement programs
TQM benefits: greater customer satisfaction, fewer
defects and less waste, increased total productivity, reduced costs and
improved profitability.
Lean Manufacturing
MIT study of Automobile plants across the world showed
that Japanese plants used.
Fewer workers, lower inventories, shorter development
time, fewer suppliers, less production space.
Japanese also had much lower delivery time.
One MIT researcher called Japanese system as lean
system as opposed to buffer stock system which is a bulk system.
Lean system is brought into existence by Japanese
managers by creative use of industrial engineering principles, practices and
objective of decreasing resources use by identifying waste and eliminating
waste.
Computer Aided Techniques to improve productivity
CAD/CAM
Computer aided Design
CNC
Computer Aided Process Planning
Computer Aided Production Planning
Automated Guided Vehicles
Automatic Storage and Retrieval Systems
Integration of the value chain with the managerial
actions
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