principles of management vitvishwakarmafe.weebly.com/uploads/1/3/2/8/13283707/...and storing the...

1

VIT PUNE

INTRODUCTION TO

PRINCIPLES OF MANAGEMENT

UNIT NO 1DEVELOPMENT OF MANAGEMENT THOUGHT

&ROLE OF A MANAGER

(4 hours)

BY S.G.JOSHI

TECHNICAL ADVISOR & MANAGEMENT CONSULTANT

TA&

MC

This is the Proprietary document of S G Joshi T A & M C

TA&

MC


EVOLUTION OF MANAGEMENT THOUGHT

Introduction:

Before we see how management thought has evolved we must see

how technology evolved and for that we may have to go back in

history.

Not all the way up to the big bang from which the earth was born but

may be up to the stone age and come forward tracing the foot prints

of science and technology on our way.

2

TA&

MC


EVOLUTION OF MANAGEMENT THOUGHTIntroduction:

Technology has always played a major role in creating wealth of

nations and influencing the standards of living and quality of life.

When primitive man used a tree branch to reach the fruit or shaped a

rock to make a spear, he was in a way developing a technology.

It took years of trials and error, creativity and persistence to develop

tools, acquire knowledge to build cities, obtain know how to farm the

land, develop methods to move materials and products and

implement procedures to run Govts. It is through technology he

achieved progress.

Progress of civilization is often identified by the dominant technology

of that era.

Stone age, Bronze age, Iron age, Steam age, Electricity age, Nuclear

age, Electronics age, Space age, Information age, Biotech age can be

given as the sequence of evolution of technology

TA&

MC


Introduction: (continued)

Civilizations were built around the use of innovative technologies.

Civilizations vanished which lagged in technology and innovation, -

Survival of the fittest – Darwin’s law

Ancient Egyptians gained great wealth using technology of farming

and storing the crop. They had the technique of storing corps also –

Egyptian mummies

They used technology to build impressive cities, huge pyramids.

Chinese made pottery, forged armours, built massive wall to preserve

and defend their great civilization. Kings, Pharaohs, emperors and

Sultans used the labour and ingenuity to amass wealth and power.

Axe, Wheel, Bow & Arrow, Sword, Chariot helped communities to

harness natural resources and satisfy human needs. These tools were

also used to defend and attain more wealth – wealth as a resource to

create power.

Technology empowered people both to make wars and then peace

3

TA&

MC



When basic needs for survival were met, artisans developed

handicrafts and products to enrich lives and life styles and traded

them in open market.

System of bartering and simple methods of accounting emerged. So

Every one was a customer of some one and every one was a supplier

to some one. There were no factories. But individuals produced

goods which had the stamp of style of their maker

All products were handmade and simple tools were devised to

improve accuracy and efficiency of products. Innovations occurred

sporadically. This lasted for millennia.

In primitive societies, in agricultural economy, production was

achieved by manual labour.

18th Century saw the steam engine, emergence of Factory system,

mass production, division of labour and national economies turning

from agricultural to industrial

TA&

MC



More wealth was created in industrial economies, by utilizing the

latest developments in technology. They diligently converted

resources to marketable products. More products were available to

the citizens of industrialized countries increasing the quality of life

In the late 19th Century and early 20th Century, science and technology

became increasingly entwined. Scientific discoveries and

methodologies triggered technological break throughs and at the

same time technological devices and know how helped advance

science. This closer linkage created an explosion of technological

developments.

The war efforts during World War I and World War II forced faster

technological developments, in products, manufacturing, quality,

logistics, material handling, operation research, human factors etc.

Technology helped win the war and bring peace.

4

TA&

MC



Technology helped industrialized countries of the West to build very

strong, post war economies and propelled their standards of living to

new heights.

Now the “industrial revolution” has given way to ”digital revolution”

Communication technology, Internet, Genetic engineering, Cloning,

Logistics, Nano technology and a few more, are expected to have

much greater impact on us.

TA&

MC


Now let us see the evolution of production technologies of various era and the products of those era.

5

TA&

MC


EVOLUTION OF PRODUCTION TECHNOLOGY.

In the late 1800s, Frederick Taylor introduced the scientific method, in

to factory administration. His approach led to improved efficiency

through the concept of analyzing and re-designing the work methods.

Standard times, Incentive schemes were introduced to raise

productivity. This ushered in the “Scientific Management” process.

Time, motion and fatigue study was introduced almost at the same time by

Frank and Lillian Gilbreth. They advocated elimination of wasted movements. Gantt introduced charting method for Production control. Combined with Taylor’s methods, they became methods engineering. (Taco)

Henry Ford introduced the “Assembly Line” and specialization of

workers in early 1900s. Concept of economy of scale was born.-

Worker did not go to parts. Parts and tools were provided to him

As the industrial age progressed, diversification of shops and

factories occurred. Many different products were produced in the

same facility requiring scheduling of activities. Inventory control,

Planning, Queuing, Modeling were the disciplines born then.

TA&

MC


Evolution of Production Technology. (continued)

During 1920s and 30s concepts of Statistical Quality Control were

introduced. Schewhart’s control charts were added to that. Quality

Gurus Juran and Deming became active with the “quality theory”

World War II brought the necessity of efficient material handling,

improvements in productivity, wider applications of SQC and

operations research.

Then emerged the digital computers. Simulation of situations was

possible. So complex numerical problems could be solved with better

accuracy and efficiency.

In modern days, due to changes in technology and in the market

place, there are changes in the concepts of assembly line and

economy of scale. Now we talk of flexibility, agility, economy of

scope. (Toyota assembly line with different models in sequence)

Customer Focus- Give him what he wants, when he wants and he will

not pay for your in efficiencies.

6

TA&

MC


Evolution of Production Technology. (continued)

Following period wise list of production technology will give idea about their evolution through centuries.

1880 onwards: Agricultural society, Industrial revolution, scientificmanagement, time studies, division of labour, standardization,mass production, labour unions.

1900 onwards : Organizational concepts, motion study, piece work.1920 onwards : Production control, queuing, wage incentive, inventory

models, planning, SQC.1940 onwards : Tool design, Productivity, Engineering economy, inventory

theory, human factors, material handling, plant lay out.1950 onwards : Computerization, Reliability, Operations Research, Statistical

analysis, Network techniques.

1960 onwards : Automation, System design, Teleprocessing, Information systems, Decision theory, Simulation, System engineering,optimization theory.

1970 onwards : Control theory, Large scale system, Total system design,Social systems, Cybermatics, Behaviour theory, Personalcomputers.

1980 onwards : Management of technology, Technology revolution

TA&

MC


Evolution of Product Technology.

Technology can be associated with products, production service or

marketing.

Product innovations of the last two centuries have had a profound

effect on the world, transforming the way people live and work.

Technologies converted in to products have contributed to growth

and prosperity and improved the overall quality of life for many of the

world’s people.

Following period wise list of products will give idea about evolution of

product technologies through centuries.

1793-1829: Cotton gin, Practical steam boat, steam powered

locomotive for passengers and freight.

1830-1900: Telegraph, improved plough, vulcanized rubber, elevators,

IC engine, Telephone, Phonograph, Radio

1901-1939: Air conditioner, First flight, Ford’s model T, Liquid fuel

rocket, FM radio, Jet engine, Xerography, Helicopter.

7

TA&

MC


Evolution of Product Technology. (continued)

1940- 1949 : Colour TV, General purpose electronics, Digital

Computer, Supersonic flight, Transistor, Instant camera,

Jet airliner

1950- 1969 : Sputnik, NASA, Integrated Circuit, Operable Laser, First

man in space and on moon, Telstar satellite, Composite

material Kevlar, Fiber optics, Apollo XI.

1970 onwards: Microprocessor, Laser printer, MRI Scanner, Space

shuttle, Scanning, Heart transplant, test tube baby,

cloning.

TA&

MC


Importance of Management

A critical element in economic growth of a country

•Brings 4 Ms (elements) MEN, MONEY, MATERIAL &MACHINES

together to create wealth, to improve the level of economic

development substantially.•Poor economic growth of many Asian and African countries, in spite of having resources

•Essential not only in Business organisations, but other types of

organisations, like Educational, Social, Military, Government

Management- Dynamic, life giving element of Organisation

•Coordinating current, planning for future; Arbitrating disputes and

providing leadership; Adopting to existing environment and shaping

the organisation for future changes in environment.

•Quality Control – Quality Assurance- Quality of product- Quality of

organization

•Quality & Performance of Management decides the survival and

success of a business organisation in today’s competitive world

8

TA&

MC


Definitions of Management

Many definitions, but none catches the essence of the vast subject

fully.

Mary Parker Follett: Art of getting things done through people

According to it Managers contribute indirectly and non managers

contribute directly.

Art deals with application of knowledge. But management is not only

application. Manager has to generate and acquire knowledge also.

This means science

Management based only on thumb rules and intuition will not last in

the long run.

George Terry: A process consisting of “Planning”, “Organising”,

“Actuating” and “Controlling” performed to determine and

accomplish the objectives by the use of people and resources.

Planning – Think of actions in advance – actions are based on method

plan logic- These are based on analysis of information systematically

collected

Organising- Coordination (provide) of human and material resources.

Actuating- Directing (communicate. Lead and motivate)

Controlling- Attempts to ensure that there are no deviations to the

norms and plans (establish standards, measure, correct)

TA&

MC


Today’s Management process demands Innovation. This is an added

process into management

Innovation means creating new ideas which may either result in the

development of new products or finding new applications for an

existing product.

In today’s fiercely competitive world innovation has not just remained

a small part of planning process.

Special efforts are needed across the organisation, to create an

innovation enabling atmosphere and to capture the ideas generated

and convert them into new products and services.

Suggestion schemes, Quality Circles, Small group activities, Kaizen in

excellent companies. Examples Toyota-number of suggestions per

employee per year, TVS Kaizen of women employees at home, Sheet

Glass manufacturing- idea 4 years dormant

9

TA&

MC


JUST TO RECAPITULATE WHAT WE DID IN

LAST CLASS

Functions of a modern manager:

Planning – Function performed at all levels Top & Middle

Management and at working or supervisory level

Organising – Providing resources 4M properly Men, Money,

Material, Machines. Gives structure resulting from

work identification & Grouping, Defining and

delegating responsibilities and Authorities and

establishing relationships ie establishing frame work

of processes and linkages

Directing- Communicate plans, Lead from front and motivate

Arouse the desire / passion in the minds of workers or

a fire in the belly to always give their best to the

organisation


TA&

MC


JUST TO RECAPITULATE WHAT WE DID INLAST CLASS

Functions of a modern manager (Continued)

Controlling – Establish standards in all processes, Measure current performance, Take actions to correct performance which does not meet standards

Innovation – Extremely necessary in today’s fiercely competitive world. Innovation is required not only in products but almost anything and everything you do. Taking loan from international money market at Libor+ and return back all FDs

Representation – Representing the organisation before various groups which have a stake in organisation –Govt. officials SP,

Collector, Local MP, MLA, Banks and Financial Institutions,Vendors, Suppliers, income tax, excise, sales tax, factories inspector, pollution control board, Labour Unions local chamber of commerce, CII, FICCI, Industry association, Bureau of Indian standards, Membership of national and international professional bodies. This is all helpful for social networking to further the interests of the company. He has to win their support all the time.


10

TA&

MC


VARIOUS ROLES PLAYED BY MANAGERS


(Interpersonal Role)

Figure Head

Leader

Liaison

(Informational Role)

Monitor

Disseminator

Spokesman

(Decisional Role)

Entrepreneur

Disturbance handler

Resource Allocator

Negotiator

TA&

MC


VARIOUS LEVELS OF MANAGEMENT


ALL MANAGERS DO THE FUNCTIONS OF PLANNING, ORGANISING, DIRECTING, CONTROLLING, INNOVATION AND REPRESENTATIONS

BUT THERE ARE LEVELS – TOP MANAGEMENT

MIDDLE MANAGEMENT

FRONT LINE MANAGEMENT

TIME SPENT BY TOP MANAGEMENT ON LONG TERM PLANNING WILL

BE MORE (10 TO 15 YEARS HENCE)

TIME SPENT BY MIDDLE MANAGEMENT ON SHORT TERM ie 3 TO 5 YEARS ROLL ON PLAN WILL BE MORE

TIME SPENT BY FRONT LINE MANAGEMENT ON DAY TO DAY OR

WEEKLY OR MONTHLY PLAN WILL BE MORE.

11

TA&

MC


MANAGERIAL SKILLS


SKILL IS INDIVIDUAL’S ABILITY TO TRANSLATE KNOWLEDGE IN TO ACTION

THREE MAJOR SKILLS

CONCEPTUAL SKILLS

REQD. FOR DECISION

MAKING

ALLOWS MANAGER TO TAKE A BROAD &

FAR SIGHTED VIEW OF ORGANISATION

TECHNICAL SKILLS

REQD. FOR DECISION MAKING

DOMAIN KNOWLEDGE

HUMAN RELATION SKILL

REQD. FOR LEADING PEOPLE

INTERACT EFFECTIVELY WITH ALL PEOPLE – OWN EMPLOYEES, CONTRACT LABOUR

TA&

MC


MANAGERIAL SKILLS


TECHNICAL AND CONCEPTUAL SKILLS REQUIREMENTS VARY WITH LEVELS. BUT REQUIREMENT OF HUMAN RELATIONS SKILL IS EQUALLY STRONG AT ALL LEVELS OF MANAGEMENT.

Top Mgmt

Middle Mgmt

Supervisory

Conceptual

skills

Human Relation

skills

Technical skills

12

TA&

MC


MANAGEMENT AND ADMINISTRATION


NO UNANIMITY IN EXPERTS OVER MEANING & USE OF TERMS

“MANAGEMENT” AND “ADMINISTRATION”

EXPERTS- SHELDON, SPRIEGAL, MILWARD- ADMINISTRATION INVOLVES THINKING & IT IS HIGHER LEVEL FUNCTION. THEY DETERMINE PLANS, POLICIES, STRATEGIES, OBJECTIVES

MANAGEMENT INVOLVES DOING. IT IS SLIGHTLY LOWER LEVEL FUNCTION. THEY DEPLOY OR EXECUTE THE PLANS, POLICIES, OBJECTIVES

E.F.L.BRECH- MANAGEMENT IS A COMPREHENSIVE GENERIC FUNCTION EMBRACING ALL THE PROCESSES OF PLANNING,

ORGANISING, DIRECTING AND CONTROLLING. SO ADMINISTRATION IS JUST A BRANCH OF MANAGEMENT WHICH ENCOMPASSES TWO FUNCTION NAMELY PLANNING & CONTROL

ACCORDING TO THIS VIEW MANAGEMENT CAN BE DIVIDED IN TWO CATEGORIES

Administrative- slightly upper level Operative- slightly lower level

MANAGEMENT

TA&

MC


MANAGEMENT AND ADMINISTRATION


NO UNANIMITY IN EXPERTS OVER MEANING & USE OF TERMS

“MANAGEMENT” AND “ADMINISTRATION”

PETER DRUCKER – GOVERNANCE OF NON BUSINESS ORGANISATIONS

LIKE GOVERNMENT, ARMY, RELIGIOUS TRUSTS IS

“ADMINISTRATION”

GOVERNANCE OF BUSINESS ENTERPRISES IS

“MANAGEMENT”

IN GOVERNING NON BUSINESS INSTITUTIONS, ECONOMIC CONSIDERATIONS ARE SECONDARY. ARMY WILL NOT BOTHER ABOUT COST. FOR THEM SAFETY OF JAWANS AND NATION WILL BE PRIMARY AND COST WILL BE SECONDARY

A MANAGER OF A BUSINESS ENTERPRISE MUST ALWAYS BASE HIS EACH AND EVERY ACTION AND DECISION ON ECONOMIC CONSEQUENCES

13

TA&

MC


IS MANAGEMENT A PROFESSION?


CHARACTERISTICS OF A PROFESSION.

(1) EXISTANCE OF AN ORGANISED AND SYSTEMATIC KNOWLEDGE

(2) FORMALISED METHODS OF ACQUIRING TRAINING AND EXPERIENCE

(3) EXISTANCE OF AN ASSOCIATION WITH PROFESSIONALISATION AS A GOAL.

(4) EXISTANCE OF AN ETHICAL CODE TO REGULATE THE BEHAVIOUR OF

MEMBERS OF THE PROFESSION

(5) CHARGING OF FEES BASED ON SERVICE BUT WITH DUE REGARD TO THE PRIORITY OF SERVICE OVER THE DESIRE FOR MONEY REWARD

MANAGEMENT DOES NOT POSSESS ALL ABOVE CHARACTERISTICS.

UNLIKE LAW OR MEDICINE MANAGEMENT DOES NOT HAVE FIXED NORMS OF MANAGERIAL BEHAVIOUR.

BUT IT IS POSSIBLE TO ACQUIRE PROFESSIONAL KNOWLEDGE OR TRAINING ON BUSINESS MANAGEMENT IN FAMOUS INSTITUTIONS IN INDIA. SO A TERM “PROFESSIONAL MANAGEMENT” IS IN USE

TA&

MC


FAMILY MANAGEMENT Vs PROFESSIONAL MANAGEMENT


• WE HEAR ARGUMENTS LIKE FAMILY MANAGEMENT SHOULD BE REPLACED BY PROFESSIONAL MANAGEMENT. BUT IF FAMILY MANAGEMENT IS DYNAMIC, WHAT IS WRONG IN PERPETUATING FAMILY DYNASTY?

• A STUDY OF BUSINESSES IN 30 NATIONS IN THE WORLD POINTS OUT THAT 75% OF ALL FIRMS IN THE WORLD ARE FAMILY OWNED. IN SOME

FIRMS FAMILY INFLUENCE IS CONTROLLING THE BUSINESS FOR MORE THAN CENTURIES

• KIKKOMAN CORPORATION JAPAN – WORLD’S LEADING SOYA SAUCE PRODUCER. 17TH GENERATION IS CONTROLLING THE BUSINESS TODAY WHICH WAS STARTED MORE THAN 3 CENTURIES AGO.

• FORD MOTORS OF HENRI FORD, EXXON OF ROCKFELLER, IBM OF WATSON, DU PONT OF DU PONT, TATA COMPANIES OF SIR JAMSHEDJI TATA, BIRLA COMPANIES OF K.K.BIRLA, KIRLOSKAR COMPANIES OF LAXMANRAO KIRLOSKAR.

• GROTH OF CORPORATE SECTOR IN NDIA IS AN INSPIRING SAGA OF

DYNAMISM & TOIL OF SOME BUSINESS FAMILIES AT A TIME WHEN PROFESSIONALISM WAS QUITE UNKNOWN.

14

TA&

MC


FAMILY MANAGEMENT Vs PROFESSIONAL MANAGEMENT


• K.K.BIRLA ONCE SAID

“IF PEOPLE LIKE SIR JAMSHEDJI TATA OR RAIBAHADUR GUJARMAL MODI WERE TO START THEIR BUSINESS CAREER AGAIN, I WOULD ANY

DAY PUT MY LAST RUPEE ON THEM THAN ON THE BEST OF PROFESSIONALS.”

TA&

MC


MANAGEMENT APPROACHES


Early Classical

Scientific

Administrative

Bureaucratic

Neo Classical

Refinement of Classical approaches using Human Relations and Behavioural movement

Modern Approaches

Quantitative

SystemsContingency

15

TA&

MC


EARLY CLASSICAL APPROACHES


SCIENTIFIC APPROACH

Fredrick Taylor – (1856 – 1915) Father of Scientific Management – Time & Motion

Study- Incentive – Piece work – Differential payment – Re organisation of

Supervision ie Planning by Foreman and doing by workers – Scientific

Recruitment and Training – Intimate friendly co operation between Management

and Workers

Motion and Fatigue studies by Mr. and Mrs. Gilbreth – Did by slow motion pictures

study of movements of industrial workers – 17 Basic types of movements in

Industrial work called “Therbligs”

Charting System of Production Control by Gantt.

NO MAN IS AN ENTIRELY “ECONOMIC MAN” AFTER FULFILLING BASIC NEEDS

(WHICH REQUIRE MONEY) HE IS MOTIVATED BY NEEDS OF SECURITY, SOCIAL

STATUS AND OWN EGO SATISFACTION WHICH COMES BECAUSE OF

REWARDS AND RECOGNITION AND APPRECIATION IN PUBLIC

TA&

MC




ADMINISTRATIVE APPROACH

Henri Fayol (1841 – 1925) A French Engineer – Father of Administrative Mgmt.

What we call “management”, he called as “administration” in French text.

Divided all activities of a Business Enterprise in 6 broad disciplines (1) Technical

(2)Commercial (3) Financial (4) Accounting (5) Security (6) Administration

Fayol presented 14 principles of Administration

(a) Division of work – Instead of asking a single manager to perform planning,

organising, Directing, controlling, give to different managers

(b) Authority & Responsibility – Right to give order & power to extract work

(c) Discipline – Obedience to authority – model standing orders

(d) Unity of command – Person reporting to one boss – No confusion

(e) Unity of Direction – Complete identity between individual & company goals

(f) Organisational interest is supreme and always above individual interest

(g) Remuneration – Fair compensation based on work content, cost of living, Company’s capacity to pay and comparable to that in similar industry

16

TA&

MC




ADMINISTRATIVE APPROACH

Fayol’s 14 principles of Administration (Continued)

(h) Centralisation – Depending on size of organisation, type of business activities,management decides degree of centralisation and de centralisation.

(i) Scalar Chain – Organisation chart to indicate proper channels of communication, administrative and functional reporting, Gang planking for swift communication

(J) Order – In today’s words house keeping – 5S – Right place for everything and everything in its proper place

(k) Equity – Fair and just treatment without prejudice, without bias of gender, cast creed, nationality

(l) Stability of tenure – Assurance of job security by management

(m) Initiative – Zeal and energy of employees to be augmented by initiative by encouraging them to plan and execute

(n) Esprit de corps – Team spirit. Avoid policy of divide and rule. Use verbal communication for removing misunderstanding. Differences grow bitter when you try to solve the problems through written communication

TA&

MC




BUREAUCRATIC APPROACH

Max Weber – A German Sociologist – Father of Bureaucratic Approach to Management/ Administration

Leader Oriented

No delegation of management functions

Tradition OrientedTradition Oriented

Mgmt. positions handed down from generations to generations

BureaucraticBureaucratic

Instead of who you are, primary criterion –what you can do

Features of Bureaucratic Administration

(a) Following standard rules, Institutional cult rather than personality cult

(b) Systematic division of work

(c) Principles of Hierarchy followed

(d) Individuals trained to understand and apply rules

(e) Administrative acts decisions, rules must be recorded in writing

(f) Rational Personnel administration

17

TA&

MC


NEO CLASSICAL APPROACHES


THESE ARE CALLED NEO CLASSICAL, BECAUSE THEY DO NOT REJECTCLASSICAL APPROACHES BUT ONLY REFINE AND IMPROVE THEM

HUMAN RELATION MOVEMENT

• Taylor’s scientific and Fayol’s administrative management could not achieve the complete production efficiency and workplace harmony

• A Business Enterprise is not merely a “techno economic” system. But it is also a social system. Hence if management will make efforts to provide social satisfaction to its workers, they will produce more, they will produce efficiently and effectively, meaning they will produce Quality.

• Gallop Surveys, Employee satisfaction surveys, Organisational Climate Surveys are all born out of this thinking

• A worker does not work for money only. Non financial Rewards andRecognitions, like affection and respect of co workers, felicitation by top

management in presence of co workers and society go a long way in boosting the self esteem and morale of the worker.

TA&

MC


NEO CLASSICAL APPROACHES


THESE ARE CALLED NEO CLASSICAL, BECAUSE THEY DO NOT REJECT CLASSICAL APPROACHES BUT ONLY REFINE AND IMPROVE THEM

BEHAVIOURAL APPROACH

• THIS IS A FURTHER IMPROVEMENT ON HUMAN RELATION APPROACH

• DOUGLAS McGregor, ABRAHAM MASLOW ARE THE RELATED BEHAVIOURAL SCIENTISTS.

• THEIR STUDY SUGGESTS :

• DIFFERENT PEOPLE REACT DIFFERENTLY TO THE SAME SITUATION & REACT THE SAME WAY TO DIFFERENT SITUATIONS. NO TWO PEOPLE ARE EXACTLY ALIKE AND THE MANAGER SHOULD TAILOR HIS ATTEMPTS TO INFLUENCE PEOPLE ACCORDING TO THEIR INDIVIDUAL NEEDS

• BEHAVIOURAL APPROACH TO ORGANISATIONAL CONFLICT AND CHANGE IS QUITE PRAGMATIC. IT RECOGNIZES THAT CONFLICT IS INEVITABLE AND SHOULD BE FACED WITH UNDERSTANDING AND DETERMINATION THAT

EVERY ORGANISATIONAL CHANGE INVOLVES TECHNOLOGICAL AND SOCIAL ASPECTS AND THAT IT IS GENERALLY THE SOCIAL ASPECTS OF CHANGE WHICH PEOPLE RESIST.

18

TA&

MC


MODERN APPROACHES


QUANTITATIVE APPROACH

• DEVELOPED BY TEAMS OF “OPERATIONS RESEARCH” SCIENTISTS DURING WORLD WAR II

• TEAMS BUILD MATHEMATICAL MODELS TO SIMULATE THE PROBLEM. THE MODEL SHOWS IN SYMBOLIC TERMS ALL THE RELEVANT FACTORS THAT BEAR ON THE PROBLEM AND HOW THEY ARE INTER RELATED.

• BY CHANGING THE VALUES OF VARIABLES IN THE MODEL AND ANALYSING DIFFERENT EQUATIONS OF THE MODEL, GENERALLY WITH A COMPUTER, TEAM CAN DETERMINE WHAT WILL BE THE EFFECT OF EACH CHANGE.

• AS A RESULT, FINALLY THE “OR” TEAM PRESENTS TO THE MANAGEMENT A RATIONAL BASE FOR MAKING A DISPASSIONATE DECISION BASED ON FACTS AND FIGURES AND NOT MERELY BY THUMB RULE OR INTUITION.

TA&

MC


MODERN APPROACHES


SYSTEMS APPROACH

• IN ACTUAL PRACTICE IT IS DIFFICULT TO KNOW WHICH ASPECT IS MORE USEFUL AND MORE APPROPRIATE IN A GIVEN SITUATION.

• SYSTEMS APPROACH PROVIDES AN INTEGRATED APPROACH TO SOLVING MANAGEMENT PROBLEMS.

• WHAT IS NEEDED IS A BROAD DETAILED CONCEPTUAL FRAME WORK THAT CAN HELP MANAGER DIAGNOSE A PROBLEM AND DECIDE WHICH TOOL OR WHICH COMBINATION OF TOOLS WILL BE MOST USEFUL IN A GIVEN SITUATION.

• THE SYSTEM IS A SET OF INTERDEPENDANT PARTS OR SUB SYSTEMS. IT HAS “TASK” SUB SYSTEM. IT HAS “PEOPLE” SUB SYSTEM. IT HAS “TECHNOLOGY” SUB SYSTEM

• AND CENTRAL TO THESE SUB SYSTEMS IS THE CONCEPT OF “HOLLISM”

19

TA&

MC


MODERN APPROACHES


CONTINGENCY APPROACH

• THERE IS NO ONE BEST WAY OF DOING THINGS UNDER ALL CONDITIONS

• RESULTS OF SAME TECHNIQUE CAN DIFFER WHEN ENVIRONMENT (BOTH INTERNAL AND EXTERNAL TO THE ORGANISATION) DIFFERS.

• SO IT IS UP TO THE MANAGER TO IDENTIFY WHICH TECHNIQUE WILL CONTRIBUTE BETTER IN A GIVEN SITUATION, TO THE ATTAINMENT OF ORGANISATIONAL GOALS.

• HE HAS TO SORT OF DEVELOP A SITUATIONAL SENSITIVITY AND A PRACTICAL SELECTIVITY.

TA&

MC


How managers at various level should function to make an organization great is well described by the EFQM model of Business Excellence

EFQM means

European Foundation of Quality Management

20

TA&

MC


Business Excellence

Enablers

Leadership

Processes

Products &

Services

Key

Results

People

Strategy

Partnerships &

Resources

People Results

Customer Results

Society Results

EFQM EFQM –– 2010 Excellence Model2010 Excellence Model

TA&

MC


Business Excellence

Taking Responsibility for a Sustainable Future

Building Partnerships

Nurturing Creativity & Innovation

Succeeding through People

Achieving Balanced Results

Adding Value for Customers

Leading with Vision, Inspiration & Integrity

Managing by Processes

Visual picture of Fundamental Concepts of Excellence

21

TA&

MC


Business Excellence

FUNDAMENTAL CONCEPTS OF EXCELLENCE

•Achieving Balanced Results

• Adding Value for Customers

• Leading with Vision, Inspiration & Integrity

• Managing by Processes

• Succeeding through People

• Nurturing Creativity & innovation

• Building Partnerships

• Taking Responsibility for a Sustainable Future

TA&

MC


Business Excellence

Criterion 1. LeadershipDefinition:

Excellent organizations have leaders who shape the future and make it

happen, acting as role models for its values and ethics and inspiring

trust at all times. They are flexible, enabling the organization to

anticipate and react in a timely manner to ensure the ongoing success of

the organization.Criterion Parts :

•Leaders develop the mission, vision, values and ethics and act as role

models.•Leaders define, monitor, review and drive the improvement of the organization's management system and performance.

•Leaders engage with external stakeholders.

•Leaders reinforce a culture of Excellence with the organization's people.

•Leaders ensure that the organization is flexible and manages change effectively.

22

TA&

MC


Business Excellence

Criterion 2. Strategy

Definition :Excellent Organizations implement their mission and vision by developing a

stakeholder focused strategy. Policies, plans, objectives, and processes are

developed and deployed to deliver the strategy.

Criterion Parts:

•Strategy is based on understanding the needs and expectations of both stakeholders and external environment.

•Strategy is based on understanding internal performance and capabilities.

•Strategy and supporting policies are developed, reviewed and updated.

•

•Strategy and supporting policies are communicated, implemented and monitored.

TA&

MC


Business Excellence

Criterion 3. People

Definition :

Excellent organizations value their people and create a culture that

allows the mutually beneficial achievement of organizational and

personal goals. They develop the capabilities of their people and

promote fairness and equality. They care for communicate, reward

and recognize, in a way that motivates people, builds commitment

and enables them to use their skills and knowledge for the benefit of

the organization.Criterion Parts :

•People plans support the organization's strategy.

•People’s knowledge and capabilities are developed.

•People are aligned, involved and empowered.

•People communicate effectively throughout the organization.

•People are rewarded, recognised and cared for.

23

TA&

MC


Business Excellence

Criterion 4. Partnerships and ResourcesDefinition:

Excellent organizations plan and manage external partnerships,

suppliers and internal resources in order to support strategy and

policies and the effective operation of processes. They ensure that

they effectively manage their environmental and societal impact.

Criterion Parts :

•Partners and suppliers are managed for sustainable benefit.

•Finances are managed to secure sustained success.

•Buildings, equipment, material and natural resources are managed

in a sustainable way.

•Technology is managed to support the delivery of strategy.

•Information and knowledge are managed to support effective

decision making and to build the organization's capability.

TA&

MC


Business Excellence

Criterion 5. Processes, Products and Services

Definition :

Excellent organizations design, manage and improve processes,

products and services to generate increasing value for customers

and other stakeholders.

Criterion Parts:

•Processes are designed and managed to optimize stakeholder

value.

•Products and Services are developed to create optimum value for

customers.

•Products and Services are effectively promoted and marketed.

•Products and Services are produced, delivered and managed.

•Customer relationships are managed and enhanced.

24

TA&

MC


Business Excellence

Criterion 6. Customer Results

6a. Perceptions

These are the customers' perceptions of the organization.

They may be obtained from a number of sources, including

customer surveys, focus groups, vendor ratings, compliments

and complaints.

These perceptions should give a clear understanding of the

effectiveness, from the customer's perspective, of the

deployment and executing of the organization's customer

strategy and supporting policies and processes

TA&

MC


Business Excellence

Criterion 6. Customer Results

6b. Performance Indicators

These are the internal measures used by the organization in order

to monitor, understand, predict and improve the performance of

the organization and to predict their impact on the perceptions of

its external customers.

These indicators should give clear understanding of the

efficiency and effectiveness of the deployment and execution of

the organization's customer strategy and supporting policies and

processes.

25

TA&

MC


Business Excellence

Criterion 7. People Results

7a. Perceptions

These are the people's perception of the organization. They may

be obtained from a number of sources, including surveys, focus

groups, interviews and structured appraisals.

These perceptions should focus give a clear understanding o the

effectiveness, from the people's perspective of the deployment

and execution of the organization's people strategy and

supporting policies and processes.

TA&

MC


Business Excellence

Criterion 7. People Results




the organization's people and to predict their impact on

perceptions.

These indicators should give a clear understanding of the

efficiency and effectiveness of the human resources strategy and

supporting policies and processes.

26

TA&

MC


Business Excellence

Criterion 8. Society Results

8a. Perceptions

This is society's perception of the organization. This may be

obtained from a number of sources, including surveys, reports,

press articles, public meetings, NGOs, public representatives and

governmental authorities.

These perceptions should give a clear understanding of the

effectiveness, from society's perspective of the deployment and

execution of the organization's societal and environmental

strategy and supporting policies and processes.

TA&

MC


Business Excellence

Criterion 8. Society Results




the organization and to predict the impact on the perceptions of

society.

These indicators should give a clear understanding of the

effectiveness and efficiency of the approaches adopted to

manage the organization's societal and environmental

responsibilities.

27

TA&

MC


Business Excellence

Criterion 9. Key Results

9a. Key Strategic Outcomes

These are the financial and non-financial outcomes which

demonstrate the success of the organization's operational

performance. The set of measures and relevant targets will be

defined and agreed with key stakeholders.

9b. Key Performance Indicators

These are the key financial and non-financial indicators that are

used to measure the organization's operational performance.

They help monitor, understand, predict and improve the

organization's likely key performance outcomes.

TA&

MC


Business Excellence

EFQM MODEL 2010

Key Results

2 Criteria Parts

10 Guidance points

Society Results

2 Criteria Parts

10 Guidance points

People Results

2 Criteria Parts

12 Guidance points

Customer Results

2 Criteria Parts

10 Guidance points

Processes, Products

& Services

5 Criteria Parts

27 Guidance points

Partnerships

& Resources

5 Criteria Parts

28 Guidance points

People

5 Criteria Parts

28 Guidance points

Strategy

4 Criteria Parts

18 Guidance points

Leadership

5 Criteria Parts

28 Guidance points

28

TA&

MC


Business Excellence

.

Thus the model looks to any Businesscomprehensively,

through 9criteria , 32 criteria partsand 171 Guidance points.

Hence it is a great tool to be used for Assessment ofOrganisation’s overall and all round performance

TA&

MC


Managerial Role:

Adam Smith published his famous book “Wealth of Nations” in 1776,

he laid the foundation of the capitalistic economic system of the West.

He introduced many ideas that were used by entrepreneurs,

managers, governments to create wealth. He advanced the concept of

private enterprise, specialization of tasks and mass production.

Frederick Taylor introduced the principle of scientific management for

exercising better managerial control of operations and of work

incentives for boosting worker’s productivity.

Many management Gurus put forth their ideas to boost industrial

efficiency and improve profitability.

Management theories proliferated, each with its own merits and

drawbacks.

29

TA&

MC


Managerial Role: (continued)

•Some of the managerial theories are techniques that are useful in

enhancing the quality and productivity.

•Mgmt. philosophies such as “Theory X” (McGregor), “Theory Y”,

“Theory Z” Management by Objectives (Peter Drucker), Management

by Results, Total Quality Management, Continuous process

improvement, Business process re engineering, re engineering etc.

have been successfully adopted by managers and engineers in their

organizations.

•These tools and techniques have been the focus of manager’s

attention during the past century. They have been applied, with mixed

bag of results. Some are successful but some meet failures The

overall business results guide the changes and modifications needed

in the set theory to effect optimal organizational performance under

such circumstances. So theories come and go. Theories get modified.

But basic thing which remains unchanged is that “Technology and

wise management of Technology create wealth.

TA&

MC


PRODUCTION PLANING

R & D PRODUCT DESIGN

MFG.ENGINEERING

FOUNDRYFABRICATION

RAWMATERIALPURCHASE

PATTERNSHOP

PRODUCT

CASTING

OUTSOURSING COMPONETS

BOUGHTOUTS

PODUCTREALISATIONASSEMBLY

TESTINGSTOCK &DISPATCH

ORDER FORM

C U S T O M E R

DELERS &DISTRIBUTORS

MARKETING

QUALITY CONTROL

QUALITY ASSULANCE

QUALITY MANAGEMENT

TOP MANAGEMENT

ACCOUNT

FINANCE

PEOPLE

HR

UNION

SOCIETYSHARE HOLDER

X Y Z P U M P C O M P A N Y

SUPPLY TO

C U S T O M E R

MAINTENANCEDEPT.

SERVICE PROVIDERS

COLLABORATORTECHNOLOGYPROVIDER

Business Excellence

30

TA&

MC


•If we look into a sizeable manufacturing company,what are the departments working in it, we will find.

•We will take say a pump manufacturing company having a turnover of say 1000 crores per year.

Business Excellence

TA&

MC


•It will have a product design and R & D Department.They will be generally designing pumps and producing their drawings and manufacturing specifications.

•These drawings will be given to various departments.

•They will be given to manufacturing engineering to decide the machining processes for components.

Business Excellence

31

TA&

MC


•They will be given to pattern shop to make patterns for the castings. Pattern shop will require facilities, skilled man power.

•The patterns will be given to foundry for producing castings.

Business Excellence

TA&

MC


•For producing castings, the foundry will need facilities. They will need raw materials and they will need skilled people. Procurement Dept will give them raw materials.

Business Excellence

32

TA&

MC


•The castings will be then given to production dept. They will have machining facilities. They will have skilled man power. In addition to castings they will require other raw materials, outsourced parts, and bought out items. They will produce parts.

Business Excellence

TA&

MC


•All these parts will come together in Assembly shop, where, the parts will be assembled to produce the pump. Assembly shop will need facilities. They will require skilled man power.

Business Excellence

33

TA&

MC


•The pumps thus produced will be tested, by Quality Control Dept. If found OK, they will be passed and they will go to the dealer, who will sell it to the customer.

Business Excellence

TA&

MC


•All such dealers will be managed by marketing division. They will be responsible for getting the orders.The orders will come to Production planning Dept, and they will decide, depending upon the manufacturing Capabilities and delivery periods asked by the customers, what to produce and when.

Business Excellence

34

TA&

MC


•The entire set up will require enough people. It will require enough skilled people. They will be managed by H R Dept.

Business Excellence

TA&

MC


•All this will need money. So Finance Dept has to arrange for money for buying machines and creating facilities. They have to arrange for working capital.

•Accounts Dept has to manage the day to day requirements of money.

Business Excellence

35

TA&

MC


•All this has to be managed by top management and they have to take all important decisions to grow this business.

Business Excellence

TA&

MC


•Quality Control Dept will see that in every manufacturing operation the parts are produced as per specifications and correct product comes out.

•They will work as per QMS which will be managed by Quality Assurance Dept.

Business Excellence

36

TA&

MC


MARKETING

Business Excellence

TA&

MC


What Functions and activities the “Marketing “will be doing in this XYZ Pump Company?

Business Excellence

37

TA&

MC


•Establish Dealer network.

•Establish Service Centres.

•Print Catalogues and Tech-Literature and distribute to dealers.

•Establish policies for dealers.

•Solve interface issues.

•Training of dealers, customers.

•Training of Service Personnel.

•Advertisements – In news papers, radio,TV, Wall Paintings.

•Uniformity in dealer outlets.

•Participation in Exhibitions,Trade Fairs, Kisan Melas, Rural Fairs.

Business Excellence

TA&

MC


•Service Camps.

•Seeking to maintain creativity & innovation in the customer sales & service relationship.

•Establish partnerships with Customers.

•Proactiveness to modify products to suit customers new requirements, Warranty and guarantee.

• Competitiveness.

•Creating brand image.

•Pre-tendering work.

•Participation in tenders.

•Various approvals of Quality.

Business Excellence

38

TA&

MC


•Customer Meets.

•Dealer meets.

•Pricing Strategy.

•Frame work for advice and Support.

•Pricing policy,print price lists, inform discounts.

•Customer satisfaction surveys.

•Finding different applications for the product.

•Forecast for the next 3 years.

•Watch on Competitor’s activities.

•Generation of spares orders.

•Meetings with customers for generation of orders and to know their present and future requirements.

Business Excellence

TA&

MC


•Monitor market shares.

•Lost order analysis.

•Establishing frame work for meeting customer’s day to day contact requirements.

•Establishing frame work for handling customer complaints.

•Establishing logistic partnerships.

•Monitor repeat orders.

•Place orders on factory, for uniform lond.

•Manage right mix of orders on factory for maximizing profits.

•Follow up with factory for getting special deliveries.

Business Excellence

39

TA&

MC


•Meetings with Design, R & D and Engineering for development of new products.

•Create customer centric environment in the factory rather than production centric.

Business Excellence

TA&

MC


PRODUCTION DEPARTMENT

MACHINE SHOP

Business Excellence

40

TA&

MC


What Functions and activities the “Production Dept “ will be doing in this XYZ Pump Company?

Business Excellence

TA&

MC


•To ensure that right machinery is available for meeting the company plans, in terms of quantities and qualities.

•If it is not there, then study, what machines are available in the market and plan to buy them after justifying the investment by pay back period & ROI.

•Establish vendors for machining and other processes, so that after exhausting the in house capacities their facilities can beused.

•Study the layouts of machines for maximizing the output and change if necessary.

Business Excellence

41

TA&

MC


•Design assembly work stations ergonomically and ensure that production is optimized without undue fatigue to the workmen.

•Apply statistical techniques, to keep the production processes under control and see that defectives produced are minimum.

•Give the machines for periodic, preventive and predictive maintenance, so as to keep the machines under best process capability conditions.

•To ensure that the work force works to its full potential and parts & products are produced as per plan.

Business Excellence

TA&

MC


Design, Engineering, R & D

Business Excellence

42

TA&

MC


•Take inputs from marketing.

•Establish design methods.

•Experimentally validate design methods and new designs. Use standardized components.

•Produce drawings of new product – after discussions in CFT.

•Prepare B.O.M put on SAP.

•Design manufacturing specifications.

•Release drawings to manufacturing Engineering pattern shop, procurement Dept.

•Compare performance with competitor’s equivalent model.

•Decide further improvements if necessary.

Business Excellence

TA&

MC


•Study standards for the product.

•Statutory requirements for the product.

•Study various manufacturing processes and know their limitations.

•Based on that improve the product to bring down, the weights of the components, use alternative materials and manufacturing specifications to reduce costs.

•Help marketing in preparing leaflets, technical literature, catalogues.

•Help marketing in training the dealers and service mechanics.

•Write articles in technical journals, present papers in conferences etc. for enhancing the image of the organizations.

Business Excellence

43

TA&

MC


•Represent the organization in BIS, BEE.

•Prepare value propositions for technical projects.

•Solve difficulties at all levels during production.

Business Excellence

TA&

MC


What Functions and activities the “H R“ will be doing in this XYZ Pump Company?

Business Excellence

44

TA&

MC


•Developing the HR policies, strategies and plans, by involving employees and their representatives.

•Aligning the availability of man power to the business plan of the company.

•Establishing a transparent recruitment policy and use it for theright job.

•Do competency mapping of the existing people. Find out the skill sets required for achieving targets. Find out the gaps. Fill those gaps either by training existing people or by recruiting new people.

•Provisions for career development of people.

Business Excellence

TA&

MC


•Policies for fairness and equal opportunities for all.

•Innovative organizational methodologies to improve the way of working. Flexible team working, restructuring supply chain.

•Providing resources and services that meet and exceed legal requirements.

•Time keeper, maintaining disciplines as per standing orders.

•Redressal of grievances.

•Dealing with representatives of Union.

•Dealing with various Govt. authorities like Labour Commissioner, Inspector of factories, Chief of police for law and order.

Business Excellence

45

TA&

MC


•Custodians of company properties, buildings, materials machinery etc. Keep them safe from theft, fire.

•Mentoring and helping people to realize their full potential.

•Designing opportunities for individual learning, team learning and organizational learning.

•Developing people through on job training and work experience.

•Performance appraisals.

•Encouraging people in improvement activities.

•Encouraging people’s involvement.

Business Excellence

TA&

MC


•Identifying communication needs of people. Developing policies for them, strategies and plans for them.

•Establishing top down, bottom up and horizontal communications of channels.

•Providing opportunities to share best practices.

•Monitoring ERE w.r.t turn over.

•Remuneration, Redundancy, Redevelopment, multi skilling.

•Promoting awareness on health, safety, work environment, social responsibilities.

•Setting the levels of benefits like pensions plan health care, child care.

•Rewards and recognitions.

Business Excellence

46

TA&

MC


•As we say we do not want all these functions to operate in vacuum, independent of each other.

•We want them to adopt, systems approach, in the working and work in harmony with all other departments for a common

envisioned destination.

•Various management systems, like

•QMS as per ISO 9001

•EMS as per ISO 14001

and various TQM initiatives are the first few steps in the journey on the path of excellence.

Business Excellence

TA&

MC


THANK YOU

TECHNOLOGY MANAGEMENT

principles of management vitvishwakarmafe.weebly.com/uploads/1/3/2/8/13283707/...and storing the...

Documents