Management Principles & Practice

Semester I

Guruvayurappan Institute of Management

Who is a manager? Why a manger is required? Where do you find managers? What are their roles? What do they do? What are the benefits/challenges of a manager? Who is a successful manager? What is management? How does he manage?
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Who is a manager?
Manager is one who manages!!!!!!!!! Manages what???
Organisation People Resources Activities

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Who is a manager?

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Manager can be old or young

Suhas Gopinath: Founder, CEO and President of Globals, Inc

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What is an organisation?
People come together in a community in order to attain certain objectives which they cant achieve individually. They come together and form organisation. An organisation is a systematic arrangement of people brought together to accomplish some specific purpose.
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Organisation
Systematic arrangement

People

Purpose
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Managerial Roles
Interpersonal
Figurehead Liaison Leader

Informational
Monitor Disseminator Spokesman

Decisional
Entrepreneur Disturbance handler Resource allocator Negotiator
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Rewards
Creates work environment in which organisational members can work to the best of their reality Have opportunities to think creatively and use imagination Help others find meaning & fulfilment in work Support, coach, nurture others Work with a variety of people Receive recognition and status in organisation & community Play a role in influencing organisational outcomes Receive appropriate compensation in form of salaries, bonuses, stock options

Challenges
Do hard work Have to deal with a variety of personalities Often have to make do with limited resources Motivate workers in chaotic and uncertain situations Successfully blend knowledge, skills, ambitions and experiences of a diverse work group Success depends on others work performance

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Ten facts of managerial work

Managers work long work Managers are busy A managers work is fragmented; episodes are brief The managers job is varied. Managers are Homebodies. The managers work is primarily oral. Managers use a lot of contacts. Managers are not reflective planners. Information is the basic ingredient of the managers work. Managers dont know how they spend their time.
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Managers lose their right to do many things

Lose your temper. Be one of the gang. Bring your personal problems to work. Vent your frustrations and express your opinion at work. Resist change. Pass the buck on tough assignments. Get even with your adversaries. Put your self-interests first. Ask others to do what you wouldnt do. Expect to be immediately recognised and rewarded for doing a good job.
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How can one be a successful manager?

Unfortunately there is no sure fire formula!!!! But three general preconditions for achieving lasting success are Ability Motivation to manage Opportunity

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Managerial ability
Leadership Oral communication and presentation skills Written communication Planning and organising Information gathering and problem analysis Decision making Delegation and control Self objectivity ( being aware of ones strengths and limitations) Disposition to a willingness and desire to lead others in new direction
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Managerial ability

Conceptual skills
Top level managers

Human skills
Middle level managers

First level supervisors

Technical skills

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6 managerial qualities by Henry Fayol

1. Physical health 2. Mental ability to understand & learn 3. Moral ability consisting of energy, firmness, loyalty, tact & dignity 4. Education comprising general acquaintance with matters not belonging exclusively to the function performed 5. Technical ability 6. Experience arising from the work
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Motivation to manage
Favorable attitude toward those in positions of authority, such as superiors Desire to engage in games or sports competition with peers Desire to engage in occupation and work related competition with peers Desire to assert oneself and take charge Desire to exercise power and authority over others Desire to behave in a distinct way, which includes standing out from the crowd Sense of responsibility in carrying out the routine duties associated with managerial work
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Learning to manage
From job assignments(50%), Relationships(30%), Formal training(20%) Its like learning to ride a bicycle!!!
Making a big mistake Being overstretched by a difficult assignment Feeling threatened Being stuck in a dilemma Suffering an injustice at work Losing out to someone else Being personally attacked
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 Modern mans aims & aspirations call for unprecedented cooperative effort. Our capacity to rebuild the slums, to eliminate pollution, to give individuals an opportunity for self expression, to raise the standard of living, and to achieve our many other social and personal objectives rests on joint activity.
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The job of management is to make such cooperative endeavors function properly. Managers are needed to convert disorganised resources of men, machine and money into a useful enterprise.

Managers conceive of the services an enterprise can render, mobilize the required means of production, coordinate activities both within the enterprise and with the outside world, and inspire people associated with the enterprise to work toward common objectives.
MANAGERS ARE THE ACTIVATING ELEMENT
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What is Management?
Management is the process of working with and through others to achieve organisational objectives in a changing environment

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Key aspects of the management process

Changing environment
Getting the most out of limited resources Achieving organisational objectives
Working with and through others Balancing effectiveness and efficiency

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 Management is a social process A manager fails because of

Problems with interpersonal relationships Failure to meet business objectives Failure to build and lead a team Inability to change and adapt during a transition

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How does he manage?

The process of management include
Planning Organising Leading Controlling

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Planning

Defining goals, establishing strategy and developing plans to coordinate activities

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Organising
Determining what tasks are to be done, who is to do them, how the tasks are to be grouped, who reports to whom and where decision are to be made

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Leading
Motivating employees, direct the activities of others, select the effective communication channel and resolve conflicts

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Controlling

Monitoring performance, comparing it with goals, correcting any significant deviations.

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Time Spent in Carrying Out Managerial Functions

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 Aim of all managers is the same i.e., to create a SURPLUS

It is the duty of all managers to design and create an environment in which people can accomplish group goals with the least amount of time, money, materials and personal dissatisfaction.
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Micro and macro Environmental factors

Economic Global Public Pressure Groups Suppliers

Natural

The Organisation
Customers

Socio cultural

Demographic

Competitors

Political/ Legal

Technological

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Global forces
Death of distance Rapid growth of world trade & investment Outsourcing Rising economic power of Asian countries More & more MNCs Growth of global brands Increasing conflicts Cross border mergers and acquisitions
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Demographic environment
Size & growth rate of population Age distribution & ethnic mix Education levels Household patterns Geographical distribution of population

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Economic environment
National income Savings Investment Inflation rate Monetary &fiscal policies International transactions

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Natural environment
Availability of materials, water, energy Pollution levels Climate changes Ozone depletion

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Technological environment
Accelerating pace of change Opportunities for innovation R&D budgets Increased regulation

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Political-legal environment
Legislations regulating business Growth of special interest groups

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Social-cultural environment
Society shapes our beliefs, values and norms. Each society has its own core beliefs and values These values change over time

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 The only certainty today is change and nobody likes to change. Customer service, teamwork, speed and flexibility are the orders of the day. Quality must be the driving force to success. Without lifelong learning, there can be no true economic success for individuals and organisation alike.
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CSR & Business Ethics

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Corporate Social Responsibility (CSR)

Social responsibility is the personal obligation of everyone as he acts in his own interest to assure that the right and legitimate interests of all others are not impinged.

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 The manner in which an organisation carries out its own business. The welfare activity that it takes upon itself as an additional function.

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Responsibility to share holders

Primary business is to stay in business Safeguard the capital and provide reasonable dividend Uphold the image of the company

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Responsibility to employees
Payment of fair wages Best possible working condition Welfare facilities Training and development Proper system for accomplishment and promotion Proper recognition, appreciation & encouragement Efficient grievance handling system
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Responsibility to consumers
Reduce price Improve quality Smoothen the distribution system Provide after sales service Ensure that the product does not have any adverse effect Provide adequate information regarding the product Avoid misleading the customers Redress grievances Understand customer needs & satisfy their needs

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Responsibility to the community

Prevent environmental pollution & preserve ecological balance Rehabilitating the population displaced by the operation of the business Assisting in overall development of the locality Conserve scarce resources & develop alternatives Improve efficiency of the business Contribute to R&D Promotion of small industries Making contributions to furthering the social causes like population control, poverty eradication, education etc. Contributing to national efforts
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Arguments for social responsibility

Public needs have changed leading to changed expectations Improvement of society benefits both society and business Leads to lesser government regulation & intervention Problems can become profits Creates a favorable public image Business can solve problems Business has resources to handle social issues
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Of the worlds 100 largest economic entities in 2009, 44 are corporations. If you look at the top 150 economic entities, the proportion of corporations rises to 59%. The largest in 2009, Wal-Mart Stores, had revenues exceeding the respective GDPs of 174 countries including Sweden, Saudi Arabia and Venezuela and employed over 2 million people, more than the entire population of Qatar. If it was a country, it would be the 22nd largest in the world. Shell has bigger revenues than the combined GDPs of Pakistan and Bangladesh, the sixth and seventh most populous nations in the world, together home to 350 million people. Sinopec, Chinas leading energy and chemical company, is bigger than Singapore. The insurer AXA is bigger than Nigeria. Even with the troubles of the automotive industry, Ford is bigger than New Zealand. Together, the 44 companies in our top 100 list generated revenues of US$ 6.4 trillion in 2009, equivalent to over 11% of global GDP. These combined revenues are larger than the combined economies of 155 countries, that is, all the countries in the world except the largest 40 in terms of GDP. The contribution of the companies in our top 100 to global employment falls far short of their economic clout. Together, they employed over 13.5 million people in 2009, just 0.4% of the worlds economically active population. However, this still exceeds by over a million people the combined total populations of Switzerland and Singapore.

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Arguments against social responsibility

Social involvement may reduce economic efficiency It involves excess cost Involvement will increase the power of business Managerial training is for economic activity and not for social activity Disagreement among groups with different views will cause friction
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Bhopal Gas Leakage

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British Petroleum Oil Spillage

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Coca Cola at Plachimada

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How to write reference

Books Francis Cherunilam, Business Environment, Himalaya Publishing House, 2006 Journals Keki Mistry, Making dishonesty accountable, The Smart Manager, May-June 2011 Website http://www.itcportal.com/itc-business/agribusiness/e-choupal.aspx

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Scenario1
You are working as an Area Manager in a large multinational. Your performance has been exceptionally good. You ask for a raise. Your boss says the companys rigid budget wont allow any further merit raises for the time being. Instead the boss suggests that the company wont look too closely at your expense accounts for a while. Whether you will take this as authorization to pad your expense account on the grounds that you are simply getting the same money through a different route, or will you not take this roundabout raise.
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Scenario 2
You are the branch manager of a firm. One of your subordinate Mr. Ram is the best worker you are having in your office. One day you realise that Mr. Ram had got this job by claiming to have a college degree, although actually he never graduated. Whether you will dismiss him for submitting a fraudulent resume or overlook the false claim because he has otherwise proved to be an honorable worker and making an issue of the degree might ruin his career?
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Scenario 3
One day you discover that your best friend in office regularly makes about Rs. 2000 worth of personal long distance calls from an office telephone. Whether you will report this to your manager or disregard the incident on the grounds that many people make personal calls at the office?

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Scenario 4
You discover that the chemical plant you works is creating a slightly more water pollution in a nearby lake than is legally permitted. Revealing the problem will bring considerable unfavorable publicity to the company and create a scare in the community. Solving the problem will cost the company Rs. 20 lakhs, which you know the management is not ready to invest. It is unlikely that outsiders will discover the problem. The violation poses no danger whatever to people. At most, it will endanger a small number of fish. Will you reveal the problem despite the cost to the company or disregard it?
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Business Ethics
Ethics a system of moral principles, a sense of right or wrong, good or bad, the motives and consequences Business ethics relate to the behaviour of businessman in a business situation. Business ethical behaviour is conduct that is just and fair over and above the various rules and regulations
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 Human values are the core of ethical behaviour. These values are derived basically from religion, culture and law.

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Importance of ethics
Basically man desires to be ethical Ethical values create credibility among the public and employees Ethics help make better decisions Law cannot protect society, ethics can.

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Ensuring ethics
Top management commitment Code of ethics Ethics committee Ethics hotlines- whistle blowers Training programs

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Ethical code of conduct

Do not deceive or cheat customers by selling substandard or defective products, under measurement or other means Do not resort to hoarding, black-marketing or profiteering Do not destroy or distort competition Make accurate business records available Pay taxes promptly Do not form cartel agreements Refrain from secret kickbacks Ensure payment of fair wages
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Five ethical standards

Act in the way you would expect others to act towards you Act in a way that results in the greatest good for the greatest number Act in such a way that the action you take would be a universal law Take actions that a panel of professional colleagues would view as proper Ask would I feel comfortable explaining to national TV audience why I took this action
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Tatas Code of Conduct

For the company

To supply goods and services of the highest quality to ensure the total satisfaction of customers To engage only in activities beneficial to the national interest of the country they operate in To be fully transparent in accounting and financial reporting standards To fully strive for the establishment and support of a competitive open market economy and to abhor business or favours To neither give nor take any illegal payment, remuneration gift, donation, or comparable benefit to obtain business or favours To comply with all regulations regarding the preservation of the environment To be a good corporate citizen and to actively assist in the improvement of the quality of life of the community with the objective of making it self reliant. These social activities are regarded as an integral part of their business plans and not as an optional part To cooperate and share physical, human and management resources with other Tata companies so long as this does not adversely affect its business interests and shareholder value

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Tatas Code of Conduct

For the Employees
Conduct themselves professionally with professionalism, honesty, integrity as well as high moral and ethical standards and to be fair and transparent and to be seen so by third parties Not derive any benefit from any information about the company or group which constitutes inside information Report to the management any actual or possible violation of the code or an event that the employee become aware of that could affect the business or reputation of the employees company or any other Tata company Permits employees to pursue an active role in civic or political affairs as long as it does not affect the business or interests of the company or the group

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