Unit –II (Process of Management MBA

7/27/2019 Unit II (Process of Management MBA

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UnitII (Process of

Management MBA)Functions of management,Planning process &

techniques,Organizing-Process & OrganisationalStructure,Directing-principle &process,Controlling-

Process & techniques,problem solving & decisionMaking


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Functions

Planning

Organizing

Directing

Staffing &

Controlling


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Introduction

What is the use of running if youre noton the right road?

German Proverb


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What is Planning?

Planning is a search problem that requires to

find an efficient sequence ofactions that

transform a system from a given startingstate 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


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Proper planning accomplishes the following

1. Managing Uncertainty

2. Better Focus

3. Improves Coordination

4. Basis for Control

5. Improves Effectiveness


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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


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The Planning Process

Task 1:

Develop vision,

mission

and Goals

Task 5:

Prepare strategicplan

Task 4:

Developstrategies

Task 2:

Diagnose

opportunities

and threats

Task 3:

Diagnose strengths

and weakness

Task 6:

Prepare tactical

plans

Task 7:

Control and

diagnose results

Task 8:

Continue

planning


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Levels of planning


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Strategic Planning

The four main aspects of strategic

planning that managers can directly

influence include:

Vision and Mission

Goals

Strategies

Resource Allocation


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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.


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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.


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Assignment

An electronic company is facing a problem ofdeclining market share due to increasedcompetition from others new & existing playersin the market. Its competitors are introducing

lower price models for mass consumers who areprice sensitive. For quality conscious consumerscompany is introducing new model with addedfeatures and new technological advancements.

Prepare a model plan for this company. Specifywhich type of plan you are preparing. Identify thelimitations of such plans. How will you removethese limitations?


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Steps involved in this plan

Setting objectives

Adopting a particular course of action

Allocating resources for achieving theobjectives.


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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, reportingrelationships, and communication channels that

link together diverse individuals and groups.


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Principal of organisation

Span of control

Chain of command(Scalar chain)

Hierarchy Authority & responsibility

Delegation

Empowerment


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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 authoritychain 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


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Types of Organizational

Authority Line 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 arecreated to support, assist, and advise the

holders of line authority.

Functional Authority


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Why Have a Structure?

All businesses have to organise

what they do

A clear structure makes it easier to see whichpart of the business does what

There are many waysto structure a business


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Factors Affecting(Determinants)

Organizational Structure

Figure 7.1


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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)


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Ways to Structure a Business

By function: arranging the business according towhat each sectionor department does

By product or activity: organising according tothe different products made

By area: geographical or regional structure


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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 ofdifferent types of business structure?

Combinations Hybrid (different types at different places in an org.)

Matrix (different types at simultaneous at the same placesin an org.)


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Organisation Charts

Hierarchical Structure

Managing Director

Sales DirectorMarketingDirector

Finance Director

A B C D MarketResearch

Strategy PurchasingManager

SalesManager

AccountsManager


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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


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Hierarchy of Authority

Tall

organizations

have many

levels

Flat

organizations

have few levels


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Pros and Cons of Different

Structures

This depends on the business type, size

and structure used

Lets look at a functional structure:

Production Marketing Accounts Personnel IT

Board of Directors

Chief Executive


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Divisional Structure Can Take

Different Forms Product Geographic

Customer group served


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Divisional OrganizationOrganizational structure in which corporate divisionsoperate as autonomous businesses under the larger

corporate umbrella

Food Service

Division

Infant Foods

Division

Condiments

Division

Star-Kist Tuna

Division

Pet Foods

Division

Frozen-Foods

Division

Misc. Products

Division

Division:Department that resembles a separate business in

producing and marketing its own products


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President

VP (Fuels)

VP

(Lubricants & Waxes)

VP

(chemicals)

Marketing

Planning

Supply & distribution

Manufacturing

Departmentalization by Product


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Organisation by

Product/ActivityAdvantages

Clear focus on marketsegment helps meetcustomers needs

Positive competitionbetween divisions

Better control as each

division can act asseparate profit centre

Disadvantages

Duplication of functions

(e.g. different salesforce for each division)

Negative effects of

competition

Lack of central controlover each separate

division


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VP (Sales)

Sales Manager

Western Region

Sales Manager

Southern Region

Sales Manager

Northern Region

Sales Manager

Eastern Region

Departmentalization by Geography

Apple: Geographical Structure


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Apple: Geographical Structure

Apple

Products

Apple

USA

Apple

Europe

Apple

Pacific

CEO

John Sculley

Canada

Australia

Japan

Latin

America

Far

East

EuropeWest

Europe

North

France

South

Europe

Sales

Service and

MarketingTo Regions


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4 - 34

Market Structure

Commercial

Division

Consumer

Division

Government

Division

Corporate

Division

CEO

Central Support Functions


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2007 Prentice Hall, Inc. Allrights reserved.

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Exhibit 102 (contd) Process Departmentalization

+ More efficient flow of work activities

Can only be used with certain types of products


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Organisation by AreaHewlett-Packards Headquarters

Worldwide

AmericasHouston, Texas

Europe, Middle East, AfricaGeneva, Switzerland

Asia PacificHong Kong

Hewlett Packard


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2007 Prentice Hall, Inc. Allrights reserved.

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Exhibit 102 (contd) Customer Departmentalization

+ Customers needs and problems can be met by specialists

- Duplication of functions

- Limited view of organizational goals


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4 - 38

Matrix Structure

CEO

Vice President

Engineering

Vice President

Finance

Vice President

Purchasing

Vice President

Sales and

Marketing

Vice President

Research and

Development

Product A

Manager

Product B

Manager

Product C

Manager

Product D

Manager

Product Team

Two-boss employee


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Matrix, Team and Network


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Project Organizational Structure

FIGURE 3.3

Nike: Another Type of Differentiated Network


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Nike: Another Type of Differentiated Network

(everything outside Nike HQ is outsourced)

NikeHeadquarters

(Broker)

Product

Design

Product

Manufacturing

Accounts

Receivable

Advertising

Product

Distribution


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Functional

Structure

Hybrid StructurePresident

Technology

Vice

President

Financial

Services

Vice Pres.

Human

Resources

Director

Chief

Counsel

ChemicalsVice

President

LubricantsVice

President

FuelsVice

President

ProductStructure


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Directing

It is an inter-personal aspect of

management which deals directly with

influencing, guiding, supervising&

motivating the subordinates. It involves-

Communication

Leadership &

Motivating


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Directing: Principle & Process

Harmony of objectives

Unity of command

Appropriateness of direction technique Democratic leadership Managerial

communication

Follow through Maximum individual contribution


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Directing:techniques

Supervision

Motivation (incentives)

Leadership (Mgt. Vs leader)

Communication (Formal Vs informal)


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Supervision-

Overseeing employees at work

Intelligent utilization of human resources

Motivating employees to peak

performance

Maintenance of good human relationship Morale building

M l & d ti it


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Morale & productivity

Morale & productivity are positively correlated.High productivity results from the fact peopleexperiencing high morale do not skip their duty,are least tardy, take keen interest in their work,

show good team spirit and contribute their bestto the attainment of organisational goals.Thepossible combination of morale & productivity

High morale & high Productivity

Low morale & low Productivity

High morale & low Productivity

Low morale & high Productivity


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High morale is associated with low productivity

when the employees are merely happy & they

are no t proper mo t ivated to do thei r jobs.

High productivity is associated with low moralewhen management uses str ic t supervis ion &

pun ishments against low produc t iv i ty . High

productivity with low morale cannot be sustained

for long since will to work is a very importantfactor which moulds workers attitude towards

the job.


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Motivation is

the set of forces that leadpeople to behave in

particular ways


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The Nature of Motivation

Directionpossible behaviors the individual

could engage in

Efforthow hard the individual will work

Persistencewhether the individual will keeptrying or give up


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Reduction

of Tension

Unsatisfied

Need

The Motivation Process

Drives

Tension

Search

Behavior

Satisfied

Need

Cont


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Cont. Motive- give directions to human behavior. A

motive is an inner state that energizes activates,

or move & directs or channels behavior towardsgoal

Motivating- Implies an activity` engaged into anindividual, by which he or she will channelise the

strong motives in a direction that is satisfactory. Motivation-is a process that starts with aphysiological or psychological deficiency or needthat activates behavior or a drive that is aimed ata goal or incentive.


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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 others7. 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 way12. 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


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What Motivates Me? Results

1, 4, 7, 10, 13 Achievement

2, 5, 8, 11, 14 Power

3, 6, 9, 12, 15 - Affiliation


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Motivating Employees

Individualize rewards

Link rewards to

performance

Check the system for

equity

Dont ignore money


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Kinds of Motivation

FinancialProfit sharing, Co-partnership/stock

option(ESOP), bonus, pay & allowances,

productivity-linked wage incentive, retirement

benefits, perquisites (housing, medical, freeeducation to kids, car allowances)

Non-Financial- status, organizational climate,

career advancement opportunity, job

enrichment, employee recognition, job security,employee participation, employee

empowerment.

Enhancing Motivation


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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 whoshare a particular work schedules.


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Employee Involvement Programs

Job enlargementA 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

L d hi


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Leadership

- The ability to positively influence people andsystems to have a meaningful impact and

achieve results

- Is a process whereby a person inspires agroup of constituents to work together using

appropriate means to achieve common

mission and common goals.


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Core Leadership Skills

Vision

Empowerment Intuition

Self-understanding

Strong Value System

P l Ch t i ti f


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Personal Characteristics of

LeadersPhysical Characteristics

Energy

Physical stamina

Social Background

Education

Mobility

Intelligence and Ability

Judgment,

decisivenessKnowledge

Intelligence, cognitive

ability

Personality

Self-confidence

Honesty & integrity

Enthusiasm

Desire to lead

Independence

Work-related Characteristics

Achievement drive

Drive to excelConscientiousness in pursuit of goals

Persistence against obstacles, tenacity

Social Characteristics

Sociability, interpersonal skills

Cooperativeness

Ability to enlist cooperation

Tact, diplomacy

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).


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Transactional Vs

Transformational Leaders


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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


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Controlling: Process &Techniques

Unit –II (Process of Management MBA

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Transcript of Unit –II (Process of Management MBA