management & managment rocess

7/29/2019 Management & Managment Rocess

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FUNCTIONS OF MANAGEMENT

Share Management has been described as a social process involving responsibility

for economical and effective planning & regulation of operation of an enterprise in

the fulfillment of given purposes. It is a dynamic process consisting of various

elements and activities. These activities are different from operative functions like

marketing, finance, purchase etc. Rather these activities are common to each and

every manger irrespective of his level or status.

Different experts have classified functions of management. According to George &

Jerry, There are four fundamental functions of management i.e. planning,

organizing, actuating and controlling. According to Henry Fayol, To manage is

to forecast and plan, to organize, to command, & to control. Whereas Luther

Gullick has given a keyword POSDCORB where P stands for Planning, O for

Organizing, S for Staffing, D for Directing, Co for Co-ordination, R for reporting

& B for Budgeting. But the most widely accepted are functions of management

given by KOONTZ and ODONNEL i.e. Planning, Organizing, Staffing, Directing

and Controlling.

For theoretical purposes, it may be convenient to separate the function of

management but practically these functions are overlapping in nature i.e. they are

highly inseparable. Each function blends into the other & each affects the

performance of others.


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PLANNING

It is the basic function of management. It deals with chalking out a future course of

action & deciding in advance the most appropriate course of actions for

achievement of pre-determined goals. According to KOONTZ, Planning is

deciding in advance - what to do, when to do & how to do. It bridges the gap from

where we are & where we want to be. A plan is a fut ure course of actions. It is an

exercise in problem solving & decision making. Planning is determination of

courses of action to achieve desired goals. Thus, planning is a systematic thinking

about ways & means for accomplishment of pre-determined goals. Planning is

necessary to ensure proper utilization of human & non-human resources. It is allpervasive, it is an intellectual activity and it also helps in avoiding confusion,

uncertainties, risks, wastages etc.


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ORGANIZING

It is the process of bringing together physical, financial and human resources and

developing productive relationship amongst them for achievement of

organizational goals. According to Henry Fayol, To organize a business is to

provide it with everything useful or its functioning i.e. raw material, tools, capital

and personnels. To organize a business involves determining & providing human

and non-human resources to the organizational structure. Organizing as a process

involves:

Identification of activities.

Classification of grouping of activities.

Assignment of duties.

Delegation of authority and creation of responsibility.

Coordinating authority and responsibility relationships.


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STAFFING

It is the function of manning the organization structure and keeping it manned.

Staffing has assumed greater importance in the recent years due to advancement of

technology, increase in size of business, complexity of human behavior etc. The

main purpose o staffing is to put right man on right job i.e. square pegs in square

holes and round pegs in round holes. According to Kootz & ODonell,

Managerial function of staffing involves manning the organization structure

through proper and effective selection, appraisal & development of personnel to

fill the roles designed un the structure. Staffing involves:

Manpower Planning (estimating man power in terms of searching, choosethe person and giving the right place).

Recruitment, selection & placement. Training & development. Remuneration. Performance appraisal. Promotions & transfer.


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DIRECTING

It is that part of managerial function which actuates the organizational methods to

work efficiently for achievement of organizational purposes. It is considered life-

spark of the enterprise which sets it in motion the action of people because

planning, organizing and staffing are the mere preparations for doing the work.

Direction is that inert-personnel aspect of management which deals directly with

influencing, guiding, supervising, motivating sub-ordinate for the achievement of

organizational goals. Direction has following elements:

1. Supervision2. Motivation3. Leadership4. Communication Supervision- implies overseeing the work of subordinates by their superiors.

It is the act of watching & directing work & workers.

Motivation- means inspiring, stimulating or encouraging the sub-ordinateswith zeal to work. Positive, negative, monetary, non-monetary incentives

may be used for this purpose.

Leadership- may be defined as a process by which manager guides andinfluences the work of subordinates in desired direction.

Communications- is the process of passing information, experience, opinionetc from one person to another. It is a bridge of understanding.


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CONTROLLING

It implies measurement of accomplishment against the standards and correction of

deviation if any to ensure achievement of organizational goals. The purpose of

controlling is to ensure that everything occurs in conformities with the standards.

An efficient system of control helps to predict deviations before they actually

occur. According to Theo Haimann, Controlling is the process of checking

whether or not proper progress is being made towards the objectives and goals and

acting if necessary, to correct any deviation. According to Koontz & ODonell

Controlling is the measurement & correction of performance activities of

subordinates in order to make sure that the enterprise objectives and plans desiredto obtain them as being accomplished. Therefore controlling has following steps:

Establishment of standard performance. Measurement of actual performance. Comparison of actual performance with the standards and finding out

deviation if any. Corrective action.


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HISTORY

The verb manage comes from the Italian maneggiare (to handle especially

tools), which in turn derives from the Latin manus (hand). The Frenchword mesnagement(latermnagement) influenced the development in meaning of

the English word managementin the 17th and 18th centuries.[1]

Some definitions of management are:

Organization and coordination of the activities of an enterprise in accordancewith certain policies and in achievement of clearly defined objectives.

Management is often included as a factor of production along with machines,

materials and money. According to the management guru Peter Drucker(1909

2005), the basic task of a management is twofold: marketing and innovation.

Directors and managers have the power and responsibility to make decisions tomanage an enterprise when given the authority by the shareholders. As a

discipline, management comprises the interlocking functions of formulating

corporate policy and organizing, planning, controlling, and directing the firm's

resources to achieve the policy's objectives. The size of management can range

from one person in a small firm to hundreds or thousands of managers in

multinational companies. In large firms the board of directors formulates the

policy which is implemented by the chief executive officer.
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THEORETICAL SCOPE

At the beginning, one thinks of management functionally, as the action of

measuring a quantity on a regular basis and of adjusting some initial plan; or as the

actions taken to reach one's intended goal. This applies even in situations where

planning does not take place. From this perspective, Henri Fayol (1841

1925)[2]considers management to consist of six functions: forecasting, planning,

organizing, commanding, coordinating and controlling. He was one of the most

influential contributors to modern concepts of management.

Another way of thinking, Mary Parker Follett (18681933), who wrote on the topic

in the early twentieth century, defined management as "the art of getting things

done through people". She described management as philosophy.[3]

Some people, however, find this definition useful but far too narrow. The phrase

"management is what managers do" occurs widely, suggesting the difficulty of

defining management, the shifting nature of definitions and the connection of

managerial practices with the existence of a managerial cadre orclass.

One habit of thought regards management as equivalent to "business

administration" and thus excludes management in places outsidecommerce, as for

example in charities and in the public sector. More realistically, however, every

organization must manage its work, people, processes, technology, etc. in order to

maximize its effectiveness. Nonetheless, many people refer to university

departments which teach management as "business schools." Some institutions

(such as the Harvard Business School) use that name while others (such as

the Yale School of Management) employ the more inclusive term "management."

English speakers may also use the term "management" or "the management" as a

collective word describing the managers of an organization,
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BASIC FUNCTIONS

Management operates through various functions, often classified as planning,

organizing, staffing, leading/directing, controlling/monitoring and motivation.

Planning: Deciding what needs to happen in the future (today, next week, nextmonth, next year, over the next five years, etc.) and generating plans for action.

Organizing: (Implementation) making optimum use of the resources requiredto enable the successful carrying out of plans.

Staffing: Job analysis, recruitment and hiring for appropriate jobs.

Leading/directing: Determining what needs to be done in a situation andgetting people to do it.

Controlling/monitoring: Checking progress against plans. Motivation: Motivation is also a kind of basic function of management,

because without motivation, employees cannot work effectively. If motivation

does not take place in an organization, then employees may not contribute to

the other functions (which are usually set by top-level management).


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BASIC ROLES

Interpersonal: roles that involve coordination and interaction with employees.

Informational: roles that involve handling, sharing, and analyzing information. Decisional: roles that require decision-making. Management skills

Political: used to build a power base and establish connections. Conceptual: used to analyze complex situations. Interpersonal: used to communicate, motivate, mentor and delegate. Diagnostic: the ability to visualise most appropriate response to a situation .Formation of the business policy

The mission of the business is the most obvious purposewhich may be, forexample, to make soap.

The vision of the business reflects its aspirations and specifies its intended

direction or future destination. The objectives of the business refers to the ends or activity at which a certain

task is aimed.

The business's policy is a guide that stipulates rules, regulations and objectives,and may be used in the managers' decision-making. It must be flexible and

easily interpreted and understood by all employees.

The business's strategy refers to the coordinated plan of action that it is going totake, as well as the resources that it will use, to realize its vision and long-term

objectives. It is a guideline to managers, stipulating how they ought to allocate

and utilize the factors of production to the business's advantage. Initially, it

could help the managers decide on what type of business they want to form.


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IMPLEMENTATION OF POLICIES AND STRATEGIES

All policies and strategies must be discussed with all managerial personnel and

staff. Managers must understand where and how they can implement their policies

and strategies.

A plan of action must be devised for each department. Policies and strategies must be reviewed regularly. Contingency plans must be devised in case the environment changes. Assessments of progress ought to be carried out regularly by top-level

managers.

A good environment and team spirit is required within the business. The missions, objectives, strengths and weaknesses of each department must be

analysed to determine their roles in achieving the business's mission.

The forecasting method develops a reliable picture of the business's futureenvironment.

A planning unit must be created to ensure that all plans are consistent and thatpolicies and strategies are aimed at achieving the same mission and objectives.

All policies must be discussed with all managerial personnel and staff that is

required in the execution of any departmental policy.

Organizational change is strategically achieved through the implementation ofthe eight-step plan of action established by John P. Kotter: Increase urgency,

get the vision right, communicate the buy-in, empower action, create short-term

wins, don't let up, and make change stick.
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LEVELS OF MANAGEMENT

In organizations, there are generally three different levels of managers: first-level

managers, middle-level managers, and top-level managers. These levels of

managers are classified in a hierarchy of importance and authority, and are also

arranged by the different types of management tasks that each role does. In many

organizations, the number of managers in every level resembles a pyramid, in

which the first-level has many more managers than middle-level and top-level

managers, respectively. Each management level is explained below in

specifications of their different responsibilities and likely job titles.[10]

Top-level managers

Typically consist of board of directors, president, vice-president, chief executive

officers, etc. These individuals are mainly responsible for controlling and

overseeing all the departments in the organization. They develop goals, strategic

plans, and policies for the company, as well as make many decisions on the

direction of the business. In addition, top-level managers play a significant role in

the mobilization of outside resources and are for the most part responsible for the

shareholders and general public.

According to Lawrence S. Kleiman, the following skills are needed at the top

managerial level.[11]

Broadening their understanding of how factors such as competition, worldeconomies, politics, and social trends influence the effectiveness of the

organization.
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Middle-level managers

These personnel typically consist of general managers, branch managers and

department managers. These individuals are mainly responsible to the top

management for the functioning of their department. They devote more time to

organizational and directional functions. Their roles can be emphasized as

executing plans of the organization in conformance with the company's policies

and the objectives of the top management, they define and discuss information and

policies from top management to lower management, and most importantly they

inspire and provide guidance to lower level managers towards better performance.

Some of their functions are as follows:

Designing and implementing effective group and intergroup work andinformation systems.

Defining and monitoring group-level performance indicators. Diagnosing and resolving problems within and among work groups. Designing and implementing reward systems that support cooperative behavior.First-level managers

Typically consist of supervisors, section officers, foreman, etc. These individuals

focus more on the controlling and direction of management functions. For instance,

they assign tasks and jobs to employees, guide and supervise employees on day-to-

day activities, look after the quantity and quality of the production of the company,

make recommendations, suggestions, and communicate employee problems to the

higher level above, etc. In this level, managers are the "image builders" of the

company considering they are the only ones who have direct contact with

employees.

Basic supervision.


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Motivation. Career planning. Performance feedback.


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The concept of MBO is closely connected with the concept of planning. The

process of planning implies the existence of objectives and is used as a

tool/technique for achieving the objectives. Modern managements are rightly

described as 'Management by Objectives' (MBO). This MBO concept was

popularized by Peter Drucker. It suggests that objectives should not be imposed on

subordinates but should be decided collectively by a concerned with the

management. This gives popular support to them and the achievement of such

objectives becomes easy and quick

Management by Objectives (MBO) is the most widely accepted philosophy of

management today. It is a demanding and rewarding style of management. It

concentrates attention on the accomplishment of objectives through participation of

all concerned persons, i.e., through team spirit. MBO is based on the assumption

that people perform better when they know what is expected of them and can relate

their personal goals to organizational objectives. Superior subordinate

participation, joint goal setting and support and encouragement from superior to

subordinates are the basic features of MBO. It is a result-oriented philosophy and

offers many advantages such as employee motivation, high morale, effective and

purposeful leadership and clear objectives before all concerned per-sons.

MBO is a participative and democratic style of management. Here, ample a scope

is given to subordinates and is given higher status and positive/participative role. In

short, MBO is both a philosophy and approach to management. MBO concept is

different from MBC (Management by Control) and is also superior in many

respects. According to the classical theory of management, top management is

concerned with objectives setting, directing and coordinating the efforts of middle

level managers and lower level staff. However, achievement of organizational

objectives is possible not by giving orders and instructions but by securing


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cooperation and participation of all persons. For this, they should be associated

with the management process. This is possible in the case of MBO and hence

MBO is different from MBC and also superior to MBC.

MBO is an approach (to planning) that helps to overcome these barriers. MBO

involves the establishment of goals by managers and their subordinates acting

together, specifying responsibilities and assigning authority for achieving the goals

and finally constant monitoring of performance. The genesis of MBO is attributed

to Peter Drucker who has explained it in his book 'The Practice of Management'.


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DEFINITIONS OF MANAGEMENT BY OBJECTIVES

According to George Odiome, MBO is "a process whereby superior and

subordinate managers of an Organisation jointly define its common goals, defineeach individual's major areas of responsibility in terms Of results expected of him

and use these measures as guides for operating the unit and assessing the

contribution of each of its members."

According to John Humble, MBO is "a dynamic system which seeks to integrate

the company's needs to clarify and achieve its profits and growth goals with the

manager's need to contribute and develop himself. It is a demanding and rewarding

style of managing a business."


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MANAGEMENT BY OBJECTIVES (MBO)

For many people working in modern business environments, it's hard to remember

a time when non-managerial employees weren't involved with, and interested in,

corporate strategy and goals. We are regularly reminded about the corporate

mission statement, we have strategy meetings where the "big picture" is revealed to

us, and we are invited to participate in some decisions. And we're aware of how

our day-to-day activities contribute to these corporate goals.

This type of managing hasn't been around forever: It's an approach

called Management by Objectives; a system that seeks to align employees' goals

with the goals of the organization. This ensures that everyone is clear about what

they should be doing, and how that is beneficial to the whole organization. It's

quite easy to see why this type of managing makes sensewhen the parts work inunison the whole works smoothly too. And by focusing on what you're trying to

achieve, you can quickly discriminate between tasks that must be completed, and

those that are just a waste of valuable time.


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BACKGROUND

Management by Objectives was introduced by Peter Drucker in the 1950s and

written about in his 1954 book, The Practice of Management. It gained a great deal

of attention and was widely adopted until the 1990s when it seemed to fade into

obscurity.

Partly, the idea may have become a victim of its own success: It became so much a

part of the way business is conducted that it no longer may have seemed

remarkable, or even worthy of comment. And partly it evolved into the idea of

theBalanced Scorecard, which provided a more sophisticated framework for

doing essentially the same thing.
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FIVE STEPS OF MANAGEMENT BY OBJECTIVES

the five-step process for MBO shown in figure 1, below. Each stage has particular

challenges that need to be addressed for the whole system to work effectively.


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THESE STEPS ARE EXPLAINED BELOW:

1. Set or Review Organizational Objectives

MBO starts with clearly defined strategic organizational objectives (see our article

onMission and Vision Statementsfor more on this.) If the organization isn't clear

where it's going, no one working there will be either.

2. Cascading Objectives Down to Employees

To support the mission, the organization needs to set clear goals and objectives,

which then need to cascade down from one organizational level to the next until

they reach the everyone.

To make MBO goal and objective setting more effective, Drucker used the

SMART acronym to set goals that were attainable and to which people felt

accountable. He said that goals and objectives must be:

Specific

Measurable

Agreed (relating to the participative management principle)

Realistic

Time related

Notice the "A" in SMART is "agreed." This is sometimes referred to as

"achievable" but, with MBO, agreement about the goals is a critical element: It's

not enough for the goals and objectives to be set at the top and then handed down.

They must flow, or trickle, down through various stages of agreement. The only

goal that is going to be met is one that is agreed on. How much easier is it to get
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buy in when the person responsible for achieving the goal had a hand in

developing it?

For each objective, you need to establish clear targets and performance standards.

It's by using these that you can monitor progress throughout the organization.

These are also important for communicating results, and for evaluating the

suitability of the goals that have been set.

3. Encourage Participation in Goal Setting

Everyone needs to understand how their personal goals fit with the objectives of

the organization. This is best done when goals and objectives at each level are

shared and discussed, so that everyone understands "why" things are being done,

and then sets their own goals to align with these.

This increases people's ownership of their objectives. Rather than blindly following

orders, managers, supervisors, and employees in an MBO system know what needs

to be done and thus don't need to be ordered around. By pushing decision-making

and responsibility down through the organization, you motivate people to solve the

problems they face intelligently and give them the information they need to adapt

flexibly to changing circumstances.

Through a participative process, every person in the organization will set his or her

own goals, which support the overall objectives of the team, which support the

objectives of the department, which support the objectives of the business unit, and

which support the objectives of the organization.

In an MBO system, employees are more self-directed than boss-directed. If you

expect this type of independent performance from employees, you have to give

them the tools they need.


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Once you have established what it is that someone is accountable for, you must

provide the information and resources needed to achieve results. You must also

create a mechanism for monitoring progress towards the goals agreed.

4. Monitor Progress

Because the goals and objectives are SMART, they are measurable. They don't

measure themselves though, so you have to create a monitoring system that signals

when things are off track. This monitoring system has to be timely enough so that

issues can be dealt with before they threaten goal achievement. With the cascade

effect, no goal is set in isolation, so not meeting targets in one area will affect

targets everywhere.

On the other hand, it is essential that you ensure that the goals are not driving

adverse behavior because they have not been designed correctly. For instance, a

call centre goal of finishing all calls within seven minutes might be useful in

encouraging the staff to handle each call briskly, and not spend unnecessary time

chatting. However, it might be that customers' calls were becoming more complex,

perhaps because of a faulty new product, and call centre operators were

terminating the call after 6 minutes 59 seconds in order to meet their target, leaving

customers to call back, frustrated. In this situation, the monitoring process should

pick up the shift in the goal environment and change the goal appropriately.

Set up a specific plan for monitoring goal performance (once a year, combined

with a performance review is not sufficient!) Badly-implemented MBO tends to

stress the goal setting without the goal monitoring. Here is where you take control

of performance and demand accountability.

Think about all the goals you have set and didn't achieve. Having good intentions

isn't enough, you need a clear path marked by accountability checkpoints. Each

goal should have mini-goals and a method for keeping on top of each one.


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5. Evaluate and Reward Performance

MBO is designed to improve performance at all levels of the organization. To

ensure this happens, you need to put a comprehensive evaluation system in place.

As goals have been defined in a specific, measurable and time-based way, the

evaluation aspect of MBO is relatively straightforward. Employees are evaluated

on their performance with respect to goal achievement (allowing appropriately for

changes in the environment.) All that is left to do is to tie goal achievement to

reward, and perhaps compensation, and provide the appropriate feedback.

Employees should be given feedback on their own goals as well as the

organization's goals. Make sure you remember the participative principle: When

you present organization-wide results you have another opportunity to link

individual groups' performances to corporate performance. Ultimately this is what

MBO is all about and why, when done right, it can spur organization-wide

performance and productivity.

When you reward goal achievers you send a clear message to everyone that goal

attainment is valued and that the MBO process is not just an exercise but an

essential aspect of performance appraisal. The importance of fair and accurate

assessment of performance highlights why setting measurable goals and clear

performance indicators are essential to the MBO system.

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