MANAGEMENT SKILLS A managers job is varied and complex.

Hence, managers need certain skills to perform the functions associated with their jobs. During the early 1970s, Robert K. Kalz identified three kinds of skills for administrators. These are technical, human and conceptual skills. A fourth skill the ability to design solutions was later added to the above mentioned skills. Technical Skills Technical skills refer to the ability of a person to carry out a specific activity. In order to do so, one needs to have knowledge of methods, processes and procedures. Engineers, computer specialists, accountants and employees in manufacturing departments all have the necessary technical skills for their specialized fields. Technical skills are essential for first-level managers. For example, employees at the operational level work with tools, and their supervisors must be able to teach them how to perform the tasks assigned to them using these tools. First-level managers spend much of their time in training subordinates and clarifying doubts in work-related problems. Human Skills Human skills or interpersonal skills refer to the ability of a person to work well with other people in a group. It is the ability to lead, motivate, and communicate with people to accomplish certain objectives. Human skills are of paramount importance in the creation of an environment, in which people feel comfortable and are free to voice their opinions. These skills aid employees during interaction with their supervisors, peers and people outside the work unit such as suppliers, customers and the general public. These skills are important for all levels in the organization. Conceptual Skills Conceptual skills refer to the ability of a person to think and conceptualize abstract situations. It is the ability to understand and coordinate the full range of corporate objectives and activities. These skills are most important at the top management level, as top-level managers have the greatest need to see the big picture, to understand how the various parts of the organization relate to one another and associate the organization with the external environment. Design Skills Design skills refer to the ability of a person to find solutions to problems in ways that would benefit the organization. Top managers should not only recognize a problem but also suggest ways to overcome them. If they only see the problem, they become mere problem watchers, and will prove ineffective. Managers at upper organizational levels should be able to design a rational and feasible solution to the problem by considering the various internal and external factors.

Efficiency: Efficiency means doing things right. It defines the ability to minimize the use of resources in achieving organizational objectives. Effectiveness: Effectiveness means Doing the right thing. The ability to determine appropriate objectives. Management Theory Management Theory consists of certain principles, concepts and techniques which can be applied in different organization. It helps to understand, predict and explain human behavior. Management Principles Management principles serve as guide to thought and action and enable managers to approach various problems systematically Management Technique A technique is a method of achieving the desired goals. It is systematic problems of investigating planning, controlling and supervising which can be applied to management problems. F. W. TAYLORS SCIENTIFIC MANAGEMENT Fredrick Winslow Taylor is called father of scientific management. He joined as a labour at Midvale steel company in U.S.A at 1878. He became chief engineer in the year 1884 in the same company. He published papers on price rate system and shop management. He published a book on the principles of scientific management in 1991. Taylor attempted a more scientific approach to management as well as the problems and the approach was based upon four basic principles. Observation and measurement should be used in the organization. The employees should be scientifically selected and trained. Due to scientific selection and training of employee has the opportunity of earning a high rate of pay. Principles of Scientific Management The following are the features of scientific management. 1. Separation of planning and doing: Taylor suggests the separation of planning from actual doing Taylor says that supervisor should be done the planning The worker only concentrate on doing the work 2. Functional foremanship: Taylor developed a theory called functional foremanship based on specialization of function. In this system eight foreman were involved to direct and control the activities of the workers.

3. Job analysis: Every job that requires minimum movements and less cost and least time is the best way of doing the job. This can be determined by motion, time and fatigue study. (a) Time Study: Time study or work measurement is designed to establish the standard time required to carry out a job under specified conditions. It involves analysis of a job into its constituent elements and recording the time in performing each element. Taylor suggested the use of time study to lay down a fair day's work so as to avoid guesswork and uncertainty in the effort and productivity expected of each worker. (b) Motion Study: It is systematic and critical study of the movements of both the worker and the machine so as to identify and eliminate unnecessary and wasteful movements, and decide on the best way of doing the job. (c) Fatigue Study: Employees are both physical as well as mental fatigue easily. This study indicates the amount and frequency of rest required in completed the job. Taylor suggests a fair days work requiring certain movements and rest periods to complete it. 4. Standardisation The next element of technique is to lay down the predetermined standards regarding the task, materials, equipments, method, time, quality and cost and working conditions standardization helps to simply work, ensure interchangeability to parts to ensure uniformity of operations and facilitate comparisons of efficiency. 5. Scientific selection and training Taylor has suggested that workers should be selected on scientifically A worker should be physically and technically most suitable After selection should be given on the training of workers which makes them more efficient and effective. 6. Financial Incentives Financial incentives can motivate the workers to put in their maximum efforts. According to this scheme a worker who completes the normal work gets wages at higher rate. Who does not complete gets at lower rate. Taylor has suggested that wages should be based on individual performance and not on the position which he occupies. 7. Economy Scientific management enhances profit and economy The economy and profit can be achieved by making the resources more productive as well as by eliminating the wastages. 8. Mental Revolution Scientific management is based on co-operative between management and workers. Co-operation enhances the effective managerial activities. Mutual conflict should be replaced by mutual co-operative which is beneficial to both.

Criticisms of Taylors Scientific Management Taylor was the first person to develop a systematic and scientific study of management. Hence he is known as the father of scientific management. He presented his ideas as a systematic body of thought. His main contribution to management practices included the following aspects.

To emphasize the importance of applying scientific methods of enquiry, observation, experimentation and inferences to the problems of the management. He exhorted against the use of trial and error approach to industrial problems. Stressing the separation of planning of work from its execution so as to enable workers to perform at his best and earn accordingly. Emphasizing the aim of management to the maximum prosperity of the employer along with the maximum welfare of each employee. Laying emphasis on the necessity of a complete mental revolution on the part of the both workmen and management in order to derive the benefits of scientific management through harmony and cooperation rather than individualism and discord.

The primary benefit of scientific management was criticized and proper use of energy ounce of energy. Moreover, specialization and division of labour or work have bought about the second industrial revolution. It has also facilitated professionalization of management. Limitation of Taylors Scientific Management Inspite of its great contributions, the scientific management approach has been criticized for its various limitations as follows: 1. It is mechanistic approach ignoring human element in the organisation - it is concerned with the efficiency of workers in the technical sense emphasizing production only and attaching no importance to the social and psychological need of the workers. In this context it has called unfair and undemocratic. 2. Trade unions have opposed scientific management on the ground that it leads to autocratic management and also raises the workload of workers with a corresponding adverse impact on employment of men. 3. It assumes that workers are inherently lazy and they require strict supervision and exercise of authority by management. It is also its wrong assumption that workers are motivated by material gains, i.e. money only. 4. It has been called by some critics as narrow, impracticable and titled toward exploitation of workers. 5. It is said that this approach is primarily concerned with problems at operating level only and it hardly emphasizes the managerial organization and processes.

6. Some say that there is no one best way of doing a job as pleaded by Taylor, because what is the best way, it shall depend on different circumstances of each case. HENRY FAYOLS CONTRIBUTION Henri Fayol was born in Istanbul in 1841. When he was 19, he began working as an engineer at a large mining company in France. He eventually became the director, at a time when the mining company employed more than 1,000 people. Through the years, Fayol began to develop what he considered to be the 14 most important principles of management. Essentially, these explained how managers should organize and interact with staff. Fayol's "14 Principles" was one of the earliest theories of management to be created, and remains one of the most comprehensive. 14 Management Principles Developed By Henry Fayol 1. Division Of Work: Work should be divided among individuals and groups to ensure that effort and attention are focused on special portions of the task. Fayol presented work specialization as the best way to use the human resources of the organization. 2. Authority: The concepts of Authority and responsibility are closely related. Authority was defined by Fayol as the right to give orders and the power to exact obedience. Responsibility involves being accountable, and is therefore naturally associated with authority. Whoever assumes authority also assumes responsibility. 3. Discipline: A successful organization requires the common effort of workers. Penalties should be applied judiciously to encourage this common effort. 4. Unity Of Command: Workers should receive orders from only one manager. 5. Unity Of Direction: The entire organization should be moving towards a common objective in a common direction. 6. Subordination Of Individual Interests To The General Interests: The interests of one person should not take priority over the interests of the organization as a whole. 7. Remuneration: Many variables, such as cost of living, supply of qualified personnel, general business conditions, and success of the business, should be considered in determining a workers rate of pay. 8. Centralization: Fayol defined centralization as lowering the importance of the subordinate role. Decentralization is increasing the importance. The degree to which centralization or decentralization should be adopted depends on the specific organization in which the manager is working. 9. Scalar Chain: Managers in hierarchies are part of a chain like authority scale. Each manager, from the first line supervisor to the president, possess certain amounts of authority. The President possesses the most authority; the first line supervisor the least. Lower level managers should always keep upper level managers informed of their work activities. The existence of a scalar chain and adherence to it are necessary if the organization is to be successful.

10.Order: For the sake of efficiency and coordination, all materials and people related to a specific kind of work should be treated as equally as possible. 11.Equity: All employees should be treated as equally as possible. 12.Stability Of Tenure Of Personnel: Retaining productive employees should always be a high priority of management. Recruitment and Selection Costs, as well as increased product-reject rates are usually associated with hiring new workers. 13.Initiative: Management should take steps to encourage worker initiative, which is defined as new or additional work activity undertaken through self direction. 14. Espirit de corps: Management should encourage harmony and general good feelings among employees.

DIFFERENCE BETWEEN UNITY OF COMMAND AND UNITY OF DIRECTION Basis Meaning Unity of command It implies that a sub-ordinate should receive orders & instructions from only one boss. It is related to the functioning of personnels. It is necessary for fixing responsibility of each subordinate. It avoids conflicts, confusion & chaos. It leads to better superior sub-ordinate relationship. Unity of direction It means one head, one plan for a group of activities having similar objectives. It is related to the functioning of departments, or organization as a whole. It is necessary for sound organization. It avoids duplication of efforts and wastage of resources. It leads to smooth running of the enterprise.

Nature

Necessity Advantag e Result

Management Approches We can identify atleast two management theory that can grow an importance. (i) The system approach (ii) The contingency approach (i) The System Approach Identifying, understanding and managing interrelated processes as a system contributes to the organization's effectiveness and efficiency in achieving its objectives. Key benefits:
Integration and alignment of the processes that will best achieve the desired

results. Ability to focus effort on the key processes. Providing confidence to interested parties as to the consistency, effectiveness and efficiency of the organization.

Applying the principle of system approach to management typically leads to:

Structuring a system to achieve the organization's objectives in the most

effective and efficient way. Understanding the interdependencies between the processes of the system. Structured approaches that harmonize and integrate processes. Providing a better understanding of the roles and responsibilities necessary for achieving common objectives and thereby reducing cross-functional barriers. Understanding organizational capabilities and establishing resource constraints prior to action. Targeting and defining how specific activities within a system should operate. Some key concepts: Subsystem: While an organization as a whole is a system, the various components or parts within it are called the subsystem. Thus a department is a subsystem of the organization. Closed system: It is a system that does not interact with its environment. A closed system has fixed boundaries; its operation is relatively independent of the environment outside the system. Open system: It is the system that interacts within its environment. Thus an open system is one which constantly comes into contact with the environment. Synergy: Synergy means that departments that interact cooperatively are more productive than they would be if they operated in isolation. (ii) The contingency approach The contingency approach is also called as situational approach. It is developed by managers, consultant and researchers who tried to apply for real life situation. Some management concepts are very effectively in one situation. The same management concept is failed in another situation. Results or solutions differ because situations differ.

In contingency approach theory managers identify which is suitable technique for a particular situation, particular environment of the organization at a specific time. The contingency approach theory is more favour to the modern management theory. Modern management theory suggest the psychological approach to the employees. Importance of Management The importance of management in business is universally accepted. It acts as a driving force in business. Modern business is highly competitive and need efficient and capable management. It is through management that business activities are organized and conducted efficiently and objectives are achieved. The following points will suggest the importance of management 1) Optimum use of resources: management facilities optimum utilization of available human and physical resources, which leads to progress and prosperity of a business enterprise. Even wastage of all types are eliminated or minimized. 2) Competitive strength: Management develops competitive strength in an enterprise. This enables an enterprise to develop and expand its assets and profits. 3) Cordial industrial relations: Management develops cordial industrial relation, ensures better life and welfare to employees and raises their morale through suitable incentives. 4) Motivates employees: It motivates employees to take more interest and initiative in the work assigned and contributes for raising productivity and profitability of the enterprise. 5) New techniques: Management facilities the introduction of new machines and new methods in the conduct of business activities. It also brings useful technologies developments and innovation in the management of business activities. 6) Effective management: Society gets the benefits of efficient management in terms of industrial development, justice to different social groups, consumers satisfaction and welfare and proper discharge of social responsibilities. 7) Expansion of business: Expansion growth and diversification of a business unit are possible through efficient management. It creates good corporate image to a business enterprise. 8) Stability and prosperity: Efficient management brings success stability and prosperity to a business enterprise through cooperation and team spirit among employees. 9) Team spirit: Management develops team spirit and raises overall efficiency of a business enterprise. 10) Effective use of managers: Management ensures effective use of managers so that the benefits of their experience, skills and maturity are available to enterprise. 11) Smooth functioning: Management ensures smooth, orderly and continuous functioning of an enterprise over a long period. It also raises the efficiency, productivity and profitability of an enterprise.

12) Reduces turnover and absenteeism: It reduces Labour turnover and absenteeism and ensures continuity in the business activities and operations. 13) Sound organization: A dynamic and progressive management guarantees development of sound organization, which can face any situation favorable or unfavorable with ease and confidence. Management is not only practiced in organization and business entities but management plays an important role in our daily lives and is practiced by every individual is some or the other way. ELTON MAYOS THEORY (HAWTHORNE EXPERIMENT) Hawthorne Experiment: In 1927, a group of researchers led by Elton Mayo and Fritz Roethlisberger of the Harvard Business School were invited to join in the studies at the Hawthorne Works of Western Electric Company, Chicago. The experiment lasted up to 1932. The Hawthorne Experiments brought out that the productivity of the employees is not the function of only physical conditions of work and money wages paid to them. Productivity of employees depends heavily upon the satisfaction of the employees in their work situation. Mayos idea was that logical factors were far less important than emotional factors in determining productivity efficiency. Furthermore, of all the human factors influencing employee behaviour, the most powerful were those emanating from the workers participation in social groups. Thus, Mayo concluded that work arrangements in addition to meeting the objective requirements of production must at the same time satisfy the employees subjective requirement of social satisfaction at his work place. The Hawthorne experiment consists of four parts. These parts are briefly described below:1. Illumination Experiment. 2. Relay Assembly Test Room Experiment. 3. Interviewing Programme. 4. Bank Wiring Test Room Experiment. 1. Illumination Experiment: This experiment was conducted to establish relationship between output and illumination. When the intensity of light was increased, the output also increased. The output showed an upward trend even when the illumination was gradually brought down to the normal level. Therefore, it was concluded that there is no consistent relationship between output of workers and illumination in the factory. There must be some other factor which affected productivity. 2. Relay Assembly Test Room Experiment: This phase aimed at knowing not only the impact of illumination on production but also other factors like length of the working day, rest hours, and other physical conditions. In this experiment, a small homogeneous work-group of six girls was constituted. These girls were friendly to each other and were asked to work in a very informal atmosphere under the supervision of a researcher. Productivity and morale increased considerably during the period of the experiment. Productivity went on increasing and stabilized at a high level even when all the improvements were taken away and the pre-test conditions were reintroduced. The researchers concluded that socio-psychological factors such as feeling of being important, recognition, attention, participation, cohesive work-group, and non-directive supervision held the key for higher productivity. 3. Mass Interview Programme:

The objective of this programme was to make a systematic study of the employees attitudes which would reveal the meaning which their working situation has for them. The researchers interviewed a large number of workers with regard to their opinions on work, working conditions and supervision. Initially, a direct approach was used whereby interviews asked questions considered important by managers and researchers. The researchers observed that the replies of the workmen were guarded. Therefore, this approach was replaced by an indirect technique, where the interviewer simply listened to what the workmen had to say. The findings confirmed the importance of social factors at work in the total work environment. 4. Bank Wiring Test Room Experiment: This experiment was conducted by Roethlisberger and Dickson with a view to develop a new method of observation and obtaining more exact information about social groups within a company and also finding out the causes which restrict output. The experiment was conducted to study a group of workers under conditions which were as close as possible to normal. This group comprised of 14 workers. After the experiment, the production records of this group were compared with their earlier production records. It was observed that the group evolved its own production norms for each individual worker, which was made lower than those set by the management. Because of this, workers would produce only that much, thereby defeating the incentive system. Those workers who tried to produce more than the group norms were isolated, harassed or punished by the group. The findings of the study are: Each individual was restricting output. The group had its own unofficial standards of performance. Individual output remained fairly constant over a period of time. Informal groups play an important role in the working of an organization. HENRY LAURENCE GANTT Henry Laurence Gantt, (1861 23 November 1919) was an American mechanical engineer and management consultant who is most famous for developing the Gantt chart in the 1910s. These Gantt charts were employed on major infrastructure projects including the Hoover Dam and Interstate highway system and continue to be an important tool in project management. Henry Gantt's legacy to production management is the following: The Gantt chart: Still accepted as an important management tool today, it provides a graphic schedule for the planning and controlling of work, and recording progress towards stages of a project. The chart has a modern variation, Program Evaluation and Review Technique (PERT). Industrial Efficiency: Industrial efficiency can only be produced by the application of scientific analysis to all aspects of the work in progress. The industrial management role is to improve the system by eliminating chance and accidents. The Task And Bonus System: He linked the bonus paid to managers to how well they taught their employees to improve performance. The social responsibility of business: He believed that businesses have obligations to the welfare of the society in which they operate. Gantt charts

There are two basic chart suggested by H.L.Gantt. 1. The planning chart 2. The progress chart 1. The planning chart In planning chart the things to be done are entered in symbols and description of planning under it standard symbols are used. 2. The progress chart The progress chart is used in production control to show cumulative work against time in relation to schedules. The use of Gantt chart makes a definite plan for each project necessary. Frank and Lillian Gilbreth

After Taylor, Frank and Lillian Gilbreth made numerous contributions to the
concept of scientific management. Frank Gilbreth (1868-1924) is considered the father of motion study. Lillian Gilbreth (1878-1972) was associated with the research pertaining to motion studies. Motion study involves finding out the best sequence and minimum number of motions needed to complete a task. Frank and Lillian Gilbreth were mainly involved in exploring new ways for eliminating unnecessary motions and reducing work fatigue.

The Gilbreths devised a classification scheme to label seventeen basic hand

motions such as search, select, position, and hold which they used to study tasks in a number of industries. These 17 motions, which they called therbligs (Gilbreth spelled backward with thet and h transposed), allowed them to analyze the exact elements of a workers hand movements.

Frank Gilbreth also developed the micromotion study. A motion picture

camera and a clock marked off in hundredths of seconds were used to study motions made by workers as they performed their tasks. He is best known for his experiments in reducing the number of motions in bricklaying. By carefully analyzing the bricklayers job, he was able to reduce the motions involved in bricklaying from 18 to 4. Using his approach, workers increased the number of bricks laid per day from 1000 to 2700 (per hour it went up from 120 to 350 bricks) without exerting themselves. MAX WEBER THEORY (Bureaucratic Management) Bureaucratic management, one of the schools of classical management, emphasizes the need for organizations to function on a rational basis. Weber (1864-1920), a contemporary of Fayol, was one of the major contributors to this school of thought. He observed that nepotism (hiring of relatives regardless of their competence) was prevalent in most organizations. Weber felt that nepotism was grossly unjust and hindered the progress of individuals. He therefore identified

the characteristics of an ideal bureaucracy to show how large organizations should be run. The term bureaucracy (derived from the German buro, meaning office) referred to organizations that operated on a rational basis. According to Weber, a bureaucracy is a highly structured, formalized, and impersonal organization. In other words, it is a formal organization structure with a set of rules and regulations. The characteristics of Webers ideal bureaucratic structure are outlined in Table 2.5. These characteristics would exist to a greater degree in ideal organizations and to a lesser degree in other, less perfect organizations. MAJOR CHARACTERISTICS OF WEBERS IDEAL BUREAUCRACY Characteristic Description

The duties and responsibilities of all the employees are clearly defined. Work specialization Jobs are divided into tasks and subtasks. Each employee is given a and division of labor particular task to perform repeatedly so that he acquires expertise in that task. The rules and regulations that are to be followed by employees are well Abstract rules and defined to instill discipline in them and to ensure that they work in a coregulations coordinated manner to achieve the goals of the organization. Impersonality managers Hierarchy organization structure Managers make rational decisions and judgments based purely on facts. of They try to be immune to feelings like affection, enthusiasm, hatred and passion so as to remain unattached and unbiased towards their subordinates. of The activities of employees at each level are monitored by employees at higher levels. Subordinates do not take any decision on their own and always look up to their superiors for approval of their ideas and opinions.

ABRAHAM MASLOWS THEORY

MASLOW'S HIERARCHY OF NEEDS Each of us is motivated by needs. Our most basic needs are inborn, having evolved over tens of thousands of years. Abraham Maslow's Hierarchy of Needs helps to explain how these needs motivate us all. Maslow's Hierarchy of Needs states that we must satisfy each need in turn, starting with the first, which deals with the most obvious needs for survival itself. Only when the lower order needs of physical and emotional well-being are satisfied are we concerned with the higher order needs of influence and personal development. Conversely, if the things that satisfy our lower order needs are swept away, we are no longer concerned about the maintenance of our higher order needs. Maslow's original Hierarchy of Needs model was developed between 1943-1954, and first widely published in Motivation and Personality in 1954. At this time the Hierarchy of Needs model comprised five needs. This original version remains for most people the definitive Hierarchy of Needs. 1. Biological and Physiological needs - air, food, drink, shelter, warmth, sex, sleep, etc. 2. Safety needs - protection from elements, security, order, law, limits, stability, etc. 3. Belongingness and Love needs - work group, family, affection, relationships, etc.

4. Esteem needs - self-esteem, achievement, mastery, independence, status, dominance, prestige, managerial responsibility, etc. 5. Self-Actualization needs - realizing personal potential, self-fulfillment, seeking personal growth and peak experiences.

UNIT 2 PLANNING INTRODUCTION Planning is the process of bridging the gap between where we are and where we want to be in the future. In other words, planning is looking ahead, relating todays events with tomorrows possibilities. It is the process of deciding in advance what to do, how to do, when to do it, and who does what. Proper planning minimizes risk and ensures that resources are efficiently and effectively utilized. DEFINITIONS OF PLANNING In simple words, planning is deciding in advance what action to take, how and when to take a particular action, and who are the people to be involved in it. It involves anticipating the future and consciously choosing the future course of action. According to Peter Drucker, Planning is a continuous process of making present entrepreneurial decisions (risk taking) systematically and with best possible knowledge of their futurity, organizing systematically the efforts needed to carry out these decisions and measuring the result of those decisions against the expectations through an organized systematic feedback. NATURE OF PLANNING Planning is Goal-oriented Planning is an Intellectual or Rational Process Planning is a Primary Function

Planning is All-pervasive Planning is Forward-looking Planning is a Perpetual Process Planning is an Integrated Process Planning Involves Choice

SIGNIFICANCE OF PLANNING In a complex business situation, planning helps managers meet the challenges posed by the environment, while at the same time minimizing the risks associated with them. Planning is a prerequisite not only for achieving success but also for surviving in a complex and competitive world. Planning is very important in all types of organizations. It forces organizations to look ahead and decide their future course of action so as to improve their profitability. Organizations that plan in advance are more likely to succeed than those which fail to plan for the future. Planning is the first step in the management process. It ensures that the employees of an organization carry out their work in a systematic and methodical manner. It also helps coordinate and control various tasks and makes sure that resources are used optimally. Focuses Attention on Objectives Offsets Uncertainty and Risk Provides Sense of Direction Provides Guidelines for Decision-making Increases Organizational Effectiveness Provides Efficiency in Operations Ensures Better Coordination Facilitates Control Encourages Innovation and Creativity Facilitates Delegation

STEPS IN THE PLANNING PROCESS Planning is an endless process. The process is constantly modified to suit changes in environmental conditions and changes in objectives and opportunities for the firm. As organizations differ in terms of their size and complexity, no single planning procedure is applicable to all organizations. However, all planning processes contain some basic steps, which are represented in following figure