NATURE OF ORGANIZATION & MANAGEMENT
UNIT 1
Lav Nigam
Nature Of Organization
What
is an organization?
An organization is a collection of people who work together and coordinate their actions to achieve a wide var iety iety of goals
Nature Of Organization Formal & Informal Organization: Formal or ganization
char acter ized by intentional structur e of Roles & Responsibilities coor dinated towar ds achievement of common goals.
Informal or ganization is char acter ized by group of people within the or ganization having common values, inter ests & desir es. Eg the var ious clubs in or ganizations, employees meeting together dur ing tea & lunch time. Informal or ganization plays an impor tant role in the structur e. Principles Of Organization:
Division of Labor Unity
Of Command
Author ity & Responsibility Span Of Control
formal
Nature Of Organization Division Of Labor: Br eaking
down of jobs into simple & r epetitive tasks. Individual specialize in par t of job. Eg: Assembly line production.
Advantages: 1.
Eff icient use of diver sity of skilled / unskilled labor
2.
Repetition improves performance skill.
3.
4.
No time wasted in putting away tools & equipments while changing jobs. Tr aining for specialization is mor e eff icient from per spective.
or ganization¶s
Disadvantages:
Leads to bor edom, f atigue, str ess, low productivity, poor quality, absenteeism & high tur nover .
To over come this, employees wer e given var iety of activities. Techniques like Job Enlar gement & Job Enr ichment ar e pr actised.
Nature Of Organization Unity Of Command: No member of or ganization should r epor t to mor e than one super ior . This is to ensur e that conf licting demands & pr ior ities ar e not r eceived by the e mployee. Moder n or ganizations have employees r epor ting to mor e than one super ior , eg in matr ix or ganization structur e. Authority & Responsibility: Author ity is the r ight inher ent in a manager to give or der s & be obeyed. Requir ed to coor dinate activities in an or ganization. Can b e delegated to subor dinates for proper functioning & eff icient performance. Responsibility comes with author ity. Two types
of r esponsibility:
1.
Oper ating Responsibility ± can be delegated to subor dinate
2.
Ultimate r esponsibility
± cannot be delegated. Remains with the manager who is accountable for the actions & omissions of his subor dinates.
Nature Of Organization Span
Of Control:
Ref er s to the number of people the manager controls. Diff icult to determine the optimum number . Narrow span leads to many hier ar chies and a tall or ganization structur e. W ide span will r esult in f ew hier ar chies and a wider structur e. Scalar
principle: Author ity & r esponsibility should f low in a clear unbroken line from top to bottom.
Departmentalization: Br eaking down activities into specialized groups. Pur pose is to specialize activities, simplif y task of manager s & maintain control. Massie suggegsts following cr iter ion for depar tmentalization:
Group
simple activities together based on likeness of per sons, qualif ications, or common pur pose (medical etc) Activity may be grouped with other activities with which it is used ( saf ety & p roduction). Functions to
be assigned to executives
most
inter ested
Nature Of Organization Departmentalization: (contd)
Activities t o be grouped to encour age competition among depar tments or avoid fr iction amongst depar tments. When diff iculty in making def inite distinctions in two activities, group them together . Functions r equir ing
close coor dination should be grouped
together . Span
Of Management:
No ideal number for the management span. Davis identif ied two spans: (1) Oper ative span of lower level manager s & (2) Executive span of middle & top management. Suggested that oper ative span should be around 30 and executive span not mor e than 6. Today, focus is on identif ying f actor s that eff ective.
make
span mor e
Nature Of Organization Forms Of Business Organizations: Private Enterprise:
Sole / Propr ietar y / Tr ader Par tner ship Company ± Pr ivate Co or Public Co.
Co-operative Sector Enterprise:
Co-oper ative Society Co-oper ative Stor e
Public
Sector
Enterprise:
Gover nment
depar tments
Gover nment
Companies
Statutor y Cor por ation Statutor y
Boar d
Or Commissions
SAMPLE ORGANIZATION STRUCTURE
Nature Of Management Definition: ³ Eff ective & Eff icient integration &
coordination of resources to achieve the desired objectives´ .
Thus, management is a p rocess by which manager s cr eate a climate so that employee achieves both per sonal & or ganizational growth. This implies:
Process by which per sonal & or ganizational goals achieved Process implies planning, or ganizing, staff ing, leading & controlling ± functions of management Management process inf luenced by environment ± exter nal & inter nal Manager s act as f acilitator s for achievement of goals.
Nature Of Management Goals
Of Management:
Ultimate
aim of any business or ganization is to make prof it. Desir able aim is to cr eate a sur plus. Achieved by c r eating & maintaining an environment in which individuals can achieve common or ganizational goals by spending minimum amount of time, money, mater ial & achieve maximum per sonal satisf action.
Thus, goal is task r elated & maintenance r elated (maintaining per sonal satisf action). Another per spective of goal is to incr ease productivity. Productivity = Output / Inp ut Productivity also implies eff ectiveness & e ff iciency. Eff ectiveness gauged by attainment of objectives. Eff iciency gauged by attainment of objectives with r esour ces.
minimum
Management concer ned with not only achieving objectives but achieving them eff iciently.
Nature Of Management Functions Of A Manager: An individual who plans, or ganizes, staff s, leads & controls r esour ces eff ectively & eff iciently to attain or ganizational goals. Planning: Futur istic per spective. Setting goals to meet the or ganization objectives. Involves for ecasting, identif ying thr eats & oppor tunities in exter nal environment, str engths & weakness in inter nal environment, setting objectives & taking decision on cour se of action to be taken to achieve the objectives. Determines wher e we ar e & wher e we would want to be. How to br idge the gap. Manager plans to identif y the most appropr iate cour se meet the futur e conditions.
of action to
Cor por ate Planning depar tment formulates str ategic plan of or ganization ± long term objectives, str ategy, product / ser vices. Subsequently, oper ational plan, delegate author ity & r esponsibility to var ious units.
Nature Of Management Organizing: Grouping of activities, allocating author ity among member s so that they can achieve the or ganization goals. Function cr eates or ganization structur e, delegation of author ity, cr eates hier ar chy. Goals of or ganization determine type of structur e. Ex: Star t-up r equir e simple structur e, manuf actur ing or ganization r equir e classical or ganization, gover nment depar tment r equir e bur eaucr atic or ganization. Staffing:
Involves manning & keeping the diff er ent positions manned in the or ganization structur e. Achieved by identi f ying the skills r equir ed, r ecruiting, selecting, appr aising, tr aining and developing or ganization per sonnel.
Leading: Most i mpor tant function of the manager . Inf luence the subor dinates to dir ect effor ts towar ds achievement of or ganization goal ± motivate and maintain an eff ective system of communication. Manager should under stand the needs of subor dinates & help them in satisf ying them and coor dinating them with or ganizational objectives.
Nature Of Management Controlling: Ensur e that the acti ons of the subor dinates ar e as per plan & lead towar ds the or ganization goal. Involves setting of standar ds of performance at str ategic point, leading, motivating, super vising employees , measur ing actual performance (monitor ing & r eviewing activities of super visor ) & taking corr ective action wher e ever r equir ed. Manager ial function performed at all levels ± CEO to super visor in all or ganizations ± small, lar ge or ganization, hospital, manuf actur ing, ser vice, NGO etc. Top level manager s spend mor e time in planning & Fir st
or ganizing.
level manager (super visor ) spend mor e time in leading.
Top level manager function at the macro-level (or ganization), lower level manager oper ate at micro-level (individual & work group).
Nature Of Management Time Distribution Of Manager Top-Level Managers
Middle-Level Managers
Lower Level Managers
Planning
y t i Planning v i t c A
Organizing
Organizing
Planning Organizing
Leading Controlling
Leading
Leading
Time Distribution Of Managerial Function
Controlling
Controlling
Nature Of Management Types Of Manager: Hierarchy: 1.
2.
3.
First Level Manager: Lowest level of manager ial hier ar chy. Super visor , for eman, junior manager . Super vise & dir ect nonmanager ial employees. Middle Manager: Can be of mor e than one level. Manage & dir ect f ir st level manager s & other oper ating employees. Major activity involve implementing policies of or ganization. Top Manager: Responsible for over all management of or ganization. Set l ong term goals for or ganization by studying & for ecasting the exter nal environment.
Functional: Like Production, Marketing, Sales, HR etc. r esponsible for one functional ar ea. Gener al
Manager r esponsible for all the activities of the or ganization.
Nature Of Management Management Skills: Katz identif ied 3 basic skills: technical, human & conceptual. Technical Skill: Ability to use tools, procedur es, techniques & knowledge of specialized skills. Ex: Accountants, engineer s & doctor s. Human Skill: Ability to work with, under stand and motivate other employees as individual & groups. Conceptual Skill: Ability to see the or ganization as a whole, to r ecognize signif icant elements in a situation, and to under stand the r elationship among the elements. Cognitive ability to coor dinate & integr ate all the activities of the or ganization. All s kills ar e r equir ed at any level. Technical s kills at lower levels, conceptual skills at higher level and Human skill ar e impor tant at all levels.
Nature Of Management
Top-Level Managers
Middle-Level Managers
Lower Level Managers
Technical
Conceptual
Human
Technical
Technical
Management Skills
Human
Conceptual
Human
Conceptual
Nature Of Management Roles Of Manager: Position that is acted by an individual in an or ganization. Manager plays sever al formal & informal roles. Informal role not pr escr ibed by or ganization. Same per son may have one role in one situation & another role in another situation. Mintzber g proposed thr ee types of roles: 1.
Inter per sonal Role
2.
Informational Role
3.
Decisional
Role
Nature Of Management Formal Authority
Interpersonal Roles
FigureHead Leader Liaison
Informational Roles
Monitor Disseminator Spokesperson
Decisional Roles
Entrepreneur Disturbance Resource Allocato r Negotiator
Mintzberg's Managerial Role
Nature Of Management Interpersonal Role: Ar ises dir ectly from Formal author ity.
Figurehead: Cer emonial role. Pr esident / Marketing manager gr eets visitor s / clients. Sales manager goes for lunch with clients. Leader: Encour age subor dinates to achieve or ganization objectives. Achieved by hir ing, tr aining, motivating employees & coor dinating individual needs with that of or ganization. Liaison: Inter acting with outside or ganization like supplier s, gover nment off icials, business associates etc.
Informational Role: Giving & Receiving Information.
Monitor: Scan environment for information. Disseminator: Give some information dir ectly to subor dinates. Spokesperson: or ganization.
Send information to people outside the
Nature Of Management Decision Maker:
Entrepreneur: Initiates development of pro ject & arr ange the r esour ces. Disturbance Handler: Acts as c r isis manager r eacting to problems & pr essur es of the situation. Resource Allocator: depar tment.
Decides
who gets what in his
Negotiator: Negotiates with his s ubor dinates.
Another study by Luthans (Real Manager s Study ± 1988), manager ial activities noticed by tr ained obser ver s. Four management 1.
2.
activities obser ved:
Communication ± Exchanging information, handling paper work, mails (29%). Traditional Management ± Planning, decision making, controlling (32%)
for
Nature Of Management
Networ king ± Inter acting with politicking (19%).
outsider s,
socializing /
Human Resource Management ± Motivating / Reinfor cing, Disciplining / punishing, Managing conf lict, Staff ing, Tr aining / Development (20%).
Resear ch also indicated that networking was an impor tant activity for manager ¶s success. But it did not contr ibute to the manager ¶s eff ectiveness. Human Resour ces management had a strong r elationship to eff ectiveness.
Nature Of Management Management Challenges: Moder n business functions in a complex & intr icate environment due to: 1.
Liber alization of Indian economy opening entr y of global market. Resulted in new oppor tunities for growth & expansion , incr eased thr eat of competition. Sur vival in the highly competitive industr y a r eal challenge.
Globalization:
Phenomenon by which markets and production in diff er ent countr y ar e becoming incr easingly inter dependent due to dynamics of tr ade in goods & ser vices & f low of capital & technology. Entr y of MNC¶s in India (Honda, For d, McDonald etc). Indian companies went global (Infosys, Aditya Bir la etc). Indian companies linked to global market. Had to follow r egulations imposed by WTO, ISO, E U norms. Challenge for or ganizations to r e-invent themselves to meet global competition.
1.
Nature Of Management Knowledge
Management: Process of discover ing & har nessing an or ganization¶s intellectual r esour ces. Process of cr eating, captur ing, shar ing & using knowledge. Knowledge manager s identif y these human assets & help them gener ate new ideas, har ness these ideas into successful innovations. Or ganization that f ails to develop a fr amework for utilization will not have a long term competitive advantage. Biggest challenge is managing intellectual capital.
Internet: Management inf luenced by growth of communication f acilities. Vir tual teams br eaking geogr aphical boundar ies, management must happen via the web. Inte r net helps manager s keep in touch with par tner s, supplier s & customer s. Provides a challenge for identif ying oppor tunities & exploilting them quickly & mor e eff ectively than the c ompetitor .
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