Unit II (Process of Management MBA)

Functions of management,Planning process & techniques,Organizing-Process & Organisational Structure,Directing-principle &process,ControllingProcess & techniques,problem solving & decision Making

Functions
Planning Organizing Directing Staffing & Controlling

Introduction
What is the use of running if youre not on the right road?
German Proverb

What is Planning?
Planning is a search problem that requires to find an efficient sequence of actions that transform a system from a given starting state to the goal state Planning is the starting point of the management process Predetermines what the business proposes to accomplish and how it intends realizing its goals

Proper planning accomplishes the following

1. Managing Uncertainty 2. Better Focus 3. Improves Coordination

4. Basis for Control

5. Improves Effectiveness

The Planning Process

Planning may be seen as the identification and formulation of the objectives of a business (Goal Setting) Determining Planning Premises Analyzing the data (Identifying Alternatives) Evaluation & Selection Implementation & Review

The Planning Process

Task 2: Diagnose opportunities and threats Task 4: Develop strategies Task 3: Diagnose strengths and weakness Task 5: Prepare strategic plan

Task 1: Develop vision, mission and Goals

Task 8: Continue planning

Task 7: Control and diagnose results

Task 6: Prepare tactical plans

Levels of planning

Strategic Planning
The four main aspects of strategic planning that managers can directly influence include:
Vision and Mission Goals Strategies Resource Allocation

Types of Planning (cont.)

Tactical planning involves making concrete decisions regarding what to do, who will do it, and how to do itwith a normal time horizon of a year or less.

Operational Goals and Plans

Operational Goals: the specific results expected of small units, workgroups, and individuals. Operational Plans: developed at the lower levels of an organization to specify actions required to achieve operational goals and to support tactical plans.

Assignment
An electronic company is facing a problem of declining market share due to increased competition from others new & existing players in the market. Its competitors are introducing lower price models for mass consumers who are price sensitive. For quality conscious consumers company is introducing new model with added features and new technological advancements. Prepare a model plan for this company. Specify which type of plan you are preparing. Identify the limitations of such plans. How will you remove these limitations?

Steps involved in this plan

Setting objectives Adopting a particular course of action Allocating resources for achieving the objectives.

Organizing and organization structure

Organizing
The process of arranging people and other

resources to work together to accomplish a goal.

Organization structure
The system of tasks, workflows, reporting relationships, and communication channels that link together diverse individuals and groups.

Principal of organisation
Span of control Chain of command(Scalar chain) Hierarchy Authority & responsibility Delegation Empowerment

Business Organisation
Authority the right to make decisions and carry out tasks Span of control the number of people a superior is responsible for Chain of Command the relationship between different levels of authority in the business the superior-subordinate authority chain that extends from the top of the organization to the lowest echelon Hierarchy shows the line management in the business and who has specific responsibilities Delegation authority to carry out actions passed from superior to subordinate Empowerment giving responsibilities to people at all levels of the business to make decisions

 Line authority

Types of Organizational Authority

The position authority (given and defined by the organization) that entitles a manager to direct the work of operative employees.

Staff authority
Positions that have some authority (e.g., organization policy enforcement) but that are created to support, assist, and advise the holders of line authority.

Functional Authority

Why Have a Structure?

All businesses have to organise what they do A clear structure makes it easier to see which part of the business does what There are many ways to structure a business

Factors Affecting(Determinants) Organizational Structure

Figure 7.1

Creation of Departments
Basis for grouping job positions into departments and departments into the total organization. Internal Operations Oriented Functional Network (Virtual) Output Oriented Divisional Product Geographic Customer Team (Cluster)

Ways to Structure a Business

By function: arranging the business according to what each section or department does By product or activity: organising according to the different products made By area: geographical or regional structure

Ways to Structure a Business

By customer: where different customer groups have different needs By process: where products have to go through stages as they are made What are the advantages/disadvantages of different types of business structure?
Combinations Hybrid (different types at different places in an org.) Matrix (different types at simultaneous at the same places in an org.)

Organisation Charts
Hierarchical Structure

Managing Director

Sales Director

Marketing Director

Finance Director

Market Research

Strategy Purchasing Sales Manager Manager

Accounts Manager

Tall and Flat Organizations

Tall structures have many levels of authority and narrow spans of control Flat structures have fewer levels and wide spans of control

Hierarchy of Authority
Tall organizations have many levels Flat organizations have few levels

Pros and Cons of Different Structures

This depends on the business type, size and structure used Lets look at a functional structure:
Chief Executive Board of Directors

Production

Marketing

Accounts

Personnel

IT

Divisional Structure Can Take Different Forms

Product Geographic Customer group served

Divisional Organization
Organizational structure in which corporate divisions operate as autonomous businesses under the larger corporate umbrella

Food Service Division Star-Kist Tuna Division

Infant Foods Division

Condiments Division Misc. Products Division

Pet Foods Division

Frozen-Foods Division

Division: Department that resembles a separate business in producing and marketing its own products

Departmentalization by Product

President VP (Fuels) VP (Lubricants & Waxes) Marketing Planning Supply & distribution Manufacturing VP (chemicals)

Organisation by Product/Activity
Advantages Clear focus on market segment helps meet customers needs Positive competition between divisions Better control as each division can act as separate profit centre Disadvantages Duplication of functions (e.g. different sales force for each division) Negative effects of competition Lack of central control over each separate division

Departmentalization by Geography

VP (Sales) Sales Manager Western Region

Sales Manager Sales Manager Southern Region Northern Region

Sales Manager Eastern Region

Apple: Geographical Structure

CEO John Sculley

Apple Products

Apple USA

Apple Europe
Europe West Europe North

Apple Pacific

Canada

Sales Service and Marketing To Regions

Australia

France

Japan

South Europe

Latin America Far East

Market Structure

CEO

Central Support Functions

Commercial Division

Consumer Division

Government Division

Corporate Division

4-

34

Exhibit 102 (contd)

Process Departmentalization

+ More efficient flow of work activities Can only be used with certain types of products

2007 Prentice Hall, Inc. All rights reserved.

1035

Organisation by Area
Hewlett-Packards Headquarters Worldwide
Hewlett Packard

Americas Houston, Texas

Europe, Middle East, Africa Geneva, Switzerland

Asia Pacific Hong Kong

Exhibit 102 (contd)

Customer Departmentalization

+ Customers needs and problems can be met by specialists - Duplication of functions

- Limited view of organizational goals

2007 Prentice Hall, Inc. All rights reserved.

1037

CEO

Matrix Structure
Vice President Engineering Vice President Sales and Marketing Vice President Finance Vice President Research and Development Vice President Purchasing

Product A Manager

Product B Manager

Product Team

Product C Manager

Product D Manager

Two-boss employee

4-

38

Matrix, Team and Network

Project Organizational Structure

FIGURE 3.3

Nike: Another Type of Differentiated Network (everything outside Nike HQ is outsourced)

Product Distribution

Product Design

Nike Headquarters (Broker)

Advertising
Accounts Receivable

Product Manufacturing

Hybrid Structure
President

Functional Structure

Chief Counsel

Human Resources Director

Technology Vice President

Financial Services Vice Pres.

Product Structure

Fuels Vice President

Lubricants Vice President

Chemicals Vice President

Directing
It is an inter-personal aspect of management which deals directly with influencing, guiding, supervising& motivating the subordinates. It involves Communication Leadership & Motivating

Directing: Principle & Process

Harmony of objectives Unity of command Appropriateness of direction technique Democratic leadership Managerial communication Follow through Maximum individual contribution

Directing:techniques
Supervision Motivation (incentives) Leadership (Mgt. Vs leader) Communication (Formal Vs informal)

SupervisionOverseeing employees at work Intelligent utilization of human resources Motivating employees to peak performance Maintenance of good human relationship Morale building

Morale & productivity

Morale & productivity are positively correlated .High productivity results from the fact people experiencing high morale do not skip their duty, are least tardy, take keen interest in their work, show good team spirit and contribute their best to the attainment of organisational goals.The possible combination of morale & productivity High morale & high Productivity Low morale & low Productivity High morale & low Productivity Low morale & high Productivity

 High morale is associated with low productivity when the employees are merely happy & they are not proper motivated to do their jobs. High productivity is associated with low morale when management uses strict supervision & punishments against low productivity. High productivity with low morale cannot be sustained for long since will to work is a very important factor which moulds workers attitude towards the job.

Motivation is
the set of forces that lead people to behave in particular ways

The Nature of Motivation

Directionpossible behaviors the individual could engage in Efforthow hard the individual will work Persistencewhether the individual will keep trying or give up

The Motivation Process

Unsatisfied Need
Drives Tension

Search Behavior Reduction of Tension

Satisfied Need

Cont.
Motive- give directions to human behavior. A motive is an inner state that energizes activates, or move & directs or channels behavior towards goal Motivating- Implies an activity` engaged into an individual, by which he or she will channelise the strong motives in a direction that is satisfactory. Motivation-is a process that starts with a physiological or psychological deficiency or need that activates behavior or a drive that is aimed at a goal or incentive.

What Motivates You?

1. I try very hard to improve on my past performance at work. 2. I enjoy competition and winning. 3. I often find myself talking to those around me about nonwork matters 4. I enjoy a diffficult challenge 5. I enjoy being in charge 6. I want to be liked by others 7. I want to know how I am progressing as I complete tasks 8. I confront people who do things I disagree with 9. I tend to build close relationships with co-workers 10. I enjoy setting and achieving realistic goals 11. I enjoy influencing other people to get my way 12. I enjoy belonging to groups and organizations 13. I enoy the satisfaction of completing a difficult task 14. I often work to gain more control over the events around me 15. I enjoy working with others more than working alone

What Motivates Me? Results

1, 4, 7, 10, 13 Achievement 2, 5, 8, 11, 14 Power 3, 6, 9, 12, 15 - Affiliation

Suggestions for Motivating Employees

Individualize rewards Link rewards to performance Check the system for equity Dont ignore money

Kinds of Motivation
Financial Profit sharing, Co-partnership/stock option(ESOP), bonus, pay & allowances, productivity-linked wage incentive, retirement benefits, perquisites (housing, medical, free education to kids, car allowances) Non-Financial- status, organizational climate, career advancement opportunity, job enrichment, employee recognition, job security, employee participation, employee empowerment.

Enhancing Motivation
Job enrichment programs Designed to increase the job satisfaction of employees by increase their autonomy. Flexible work schedule (flextime) Compressed work weeks that compress the work load into fewer days per week. Job sharing by two or more persons who share a particular work schedules.

Employee Involvement Programs

Job enlargement A program to expand (enlarge) the jobs assigned to employees Job enrichment Increasing the variety of job tasks and the autonomy of employees Job rotation Allowing employees to periodically rotate (switch) their job assignment

Leadership
- The ability to positively influence people and
systems to have a meaningful impact and achieve results - Is a process whereby a person inspires a group of constituents to work together using appropriate means to achieve common mission and common goals.

Core Leadership Skills

Vision Empowerment Intuition Self-understanding Strong Value System

Personal Characteristics of Leaders

Physical Characteristics Personality Self-confidence Energy Honesty & integrity Physical stamina Enthusiasm Desire to lead Social Background Independence Education Mobility Intelligence and Ability Judgment, decisiveness Knowledge Intelligence, cognitive ability Social Characteristics Sociability, interpersonal skills Cooperativeness Ability to enlist cooperation Tact, diplomacy

Work-related Characteristics Achievement drive Drive to excel Conscientiousness in pursuit of goals Persistence against obstacles, tenacity

Source: Adapted from Bernard M. Bass, Stogdills Handbook of Leadership, rev. Ed. (New York: Free Press, 1981), 75 -76. This adaptation appeared in R. Albanese and D. D. Van Fleet, Organizational Behavior: A managerial Viewpoint (Hinsdale, III.: The Dryden Press, 1983).

Transactional Vs Transformational Leaders

Transformational Vs Transactional
Transformational leaders
Focus on the potential relationship between the leader and the followers Engage the full person of the follower Tap the motives of the followers

Transactional leaders
Focus on exchanges between leaders and followers Emphasize exchanging one thing for another

Controlling: Process &Techniques