Functions of Management

10 October 2016

This seminar would not have been possible without the assistance of a number of eminent persons. First of all I thank God almighty for blessing this venture and finish successfully. I express my sincere thanks to Head of the Department, MBA Narayanaguru College Of Engineering,Chennai for his encouragement and support for the successful completion for this seminar. I also express my sincere gratitude to my guide, for the kind assistance, supervision, encouragement and constructive criticism, which gave me constant support amidst of her busy schedule throughout my seminar work.

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I also express my wholehearted gratitude to all my classmates who have co-operated and supported for doing this seminar. I also thank my family members for their loving support. I extend my sincere thanks and gratitude once again to all those who helped me to make this undertaking a success. INTRODUCTION Management is a universal phenomenon. It is a very popular and widely used term. All organizations – business, political, cultural or social are involved in management because it is the management which helps and directs the various efforts towards a definite purpose.

According to Harold Koontz, “Management is an art of getting things done through and with the people in formally organized groups. It is an art of creating an environment in which people can perform and individuals and can co-operate towards attainment of group goals”. According to F. W. Taylor, “Management is an art of knowing what to do, when to do and see that it is done in the best and cheapest way”. Management is a purposive activity. It is something that directs group efforts towards the attainment of certain pre – determined goals.

It is the process of working with and through others to effectively achieve the goals of the organization, by efficiently using limited resources in the changing world. Of course, these goals may vary from one enterprise to another. E. g. : For one enterprise it may be launching of new products by conducting market surveys and for other it may be profit maximization by minimizing cost. Management is often included as a factor of production along with‚ machines, materials, and money. According to the management guru Peter Drucker (1909-2005), the basic task of management includes both marketing and innovation.

Practice of modern management originates from the 16th century study of low-efficiency and failures of certain enterprises, conducted by the English statesman Sir Thomas More (1478-1535). Management consists of the interlocking functions of creating corporate policy and organizing, planning, controlling, and directing an organization’sresources in order to achieve the objectives of that policy Management in all business and organizational activities is the act of getting people together to accomplish desired goals and objectives using available resources efficiently and effectively.

Management comprises planning, organizing, staffing, leading or directing, and controlling an organization (a group of one or more people or entities) or effort for the purpose of accomplishing a goal. Resourcing encompasses the deployment and manipulation of human resources, financial resources, technological resources and natural resources. One of the first persons to sit down and try to work out what managers do (and what they should do) was a Frenchman called Henri Fayol.

Fayol was a mining engineer who became the managing director of an ailing coal mining firm and turned it into a highly successful coal and steel business. All this took place between 1888 and 1918, when he retired. In 1916, after many years of thinking about the job of the manager, he published a small book called General and Industrial Management. Henry Fayol was years ahead of his time in linking strategy and organizational theory and in emphasizing the need for management development and the qualities of leadership.

Igor Ansoff, in Corporate Strategy (1965) said that Fayol ‘anticipated imaginatively and soundly most of the more recent analyses of modern business practice,’ although Peter Drucker in his great compendium Management: Tasks, Responsibilities and Practice (1973), criticized the application of Fayol’s functional approach to larger and more complex organizations than the one he knew and managed. Oddly enough, it was years before a translation appeared in English, even though it contains a great deal of wisdom and sense.

Henri Fayol, the father of the school of Systematic Management, was motivated to create a theoretical foundation for a managerial educational program based on his experience as a successful managing director of a mining company. In his day, managers had no formal training and he observed that the increasing complexity of organisations would require more professional management. Fayol’s legacy is his generic Principles of Management.

Of Fayol’s six generic activities for industrial undertakings (technical, commercial, financial, security, accounting, managerial), the most important were The Five Functions of Management that focused on the key relationships between personnel and its management. The Five Functions are: 1. Planning drawing up plans of actions that combine unity, continuity, flexibility and precision given the organisation’s resources, type and significance of work and future trends. Creating a plan of action is the most difficult of the five tasks and requires the active participation of the entire organisation.

Planning must be coordinated on different levels and with different time horizons; 2. Organising providing capital, personnel and raw materials for the day-to-day running of the business, and building a structure to match the work. Organisational structure depends entirely on the number of employees. An increase in the number of functions expands the organisation horizontally and promotes additional layers of supervision; 3. Commanding optimising return from all employees in the interest of the entire enterprise. Successful managers have personal integrity, communicate clearly and base their judgments on regular audits.

Their thorough knowledge of personnel creates unity, energy, initiative and loyalty and eliminates incompetence; 4. Coordinating unifying and harmonizing activities and efforts to maintain the balance between the activities of the organisation as in sales to production and procurement to production. Fayol recommended weekly conferences for department heads to solve problems of common interest; 5. Controlling identifying weaknesses and errors by controlling feedback, and conforming activities with plans, policies and instructions.

Fayol’s management process went further than Taylor’s basic hierarchical model by allowing command functions to operate efficiently and effectively through co-ordination and control methods. For Fayol, the managing director overlooked a living organism that requires liaison officers and joint committees. The first and last functions—planning and control—are immediately recognizable from the analysis that has just been carried out, and indeed there tends to be less argument generally about these two functions than about others.

Organizing is, of course, similar to planning in that it is concerned with preparation for some future events. But whereas planning is the more glamorous activity of deciding on the overall future direction of the business, organization is that tough, demanding business of putting together the elements in such a way that the overall plans succeed. Command is seen as the function that actually makes things happen. It is really derived from military practice, and no doubt in Fayol’s time all employees in organizations responded to command.

The very word suggests ‘ordering about’ and has been the subject of a great deal of debate and argument. Fayol did not really intend it to be taken in a very narrow sense, but rather in the sense of making sure that things get done—the actual operations of the organization. As a result, all kinds of substitute words have been used in its place—like ‘direction’ and (horribly) ‘actuating’. The fifth function of management in Fayol’s view is that of co-ordination. It is concerned with harmony, with making sure that all the bits work together, and, like an orchestra under its conductor, play the same tune.

This is the only function that does not seem easily to stand on its own and will be found to be part of planning, of organizing, of control, and the key to successful operations themselves. An organization, therefore, begins with a strategic plan or definition of goals, progresses to a structure to put that plan into action, is carried forward by controlled activity between manager and workforce, has the work of its disparate departments harmonized by coordinated management and, finally, is subject to checks on the efficiency of its working, preferably by the ndependent ‘staff’ departments separate from the functional departments. The five functions of management have been adequately discussed, but there are two other aspects of management that Fayol mentioned that must be looked at separately. Fayol believed that a manager obtained the best performance from his workforce by leadership qualities, by his knowledge of the business and his workers, and by the ability to instill sense of mission. Qualities needed in a manger: • Physical: healthy, vigorous; Mental: ability to understand and learn, judgment, mental vigor, adaptability; • Moral: firmness, acceptance of responsibility, initiative, loyalty, tact; • General Education: good general knowledge; • Special Knowledge: for the work; • Experience Fayol also stressed on the importance of managerial training, ‘steady, methodical training of all employees at all levels’, and made the point that a manager should not ignore his responsibility for his own training. Fayol’s 14 principles derive from the circumstance that Fayol felt that management was not well defined.

In his striving to change this circumstance he suggested “some generalized teaching of management” to be a main part of every curriculum at places of higher education and even beginning in “primary schools” . Fayol’s dedication to this idea is demonstrated by the fact that after retirement he went on to not just write books about management ideas, but more importantly, he found the Centre For Administrative Studies (CAS) in 1917 in Paris . The CAS mainly functioned as a centre of discussion between professionals from a large variety of professions, in order to further the knowledge and understanding of management principles.

Discussion is what Fayol had in mind, when he presented his 14 principles . In Fayol’s own words: “Are they [the principles] to have a place in the management code which is to be built up? General discussion will show”. In the following I will discuss each of his principles under the aspect of a comparison with examples, historic or modern, and in relation to other theoreticians of management, in order to examine how Fayol’s principles hold up as “management code” today. Following are the fourteen principles of management developed by the Henry Fayol:

Division Of Work The idea of division of work, or as Adam Smith called it “division of labour”, in 1776 probably goes back to the beginning of work itself. Fayol recognizes this in considering specialization as part of “the natural order” comparing it to the organs of the body . “The object of division of work is to produce more and better work with the same effort”, Fayol describes. This very objective has not been altered in today’s labor. In a sense this principle is the fundamental feature of modern economy, allowing for the largest increases of productivity.

Peter F. Drucker informs us, that the 20th century has seen a rate of 3% productivity increase per year, hence productivity has risen 50 fold since the time of Frederick Taylor, who acted as a catalyst in the development of division of work . An example of this fact can come from early industrialization, namely the Ford motor company , where Taylor’s system of a scientific approach was applied. Taylor was interested in skill development by means of standardization and functional specialization .

One worker would assemble the dashboard, another would assemble the wheels, and yet another would paint the exterior. The effects of this are well known and lead to Ford becoming not just the predominant car maker but also the inventor of the conveyer-belt production system- revolutionizing many industries. However, one could argue that extremes of division of work could lead to undesired effects. Division of labor can ultimately reduce productivity and increase costs to produce units. Several reasons as causes for reduction in productivity can be thought of.

For example, productivity can suffer when workers become bored with the constant repetition of a task. Additionally, productivity can be affected when workers lose pride in their work because they are not producing an entire product they can identify as their own work. Douglas M. McGregor for instance cautions that “people, deprived of opportunities to satisfy at work the needs which are now important to them, behave…with indolence, passivity,…lack of responsibility,…unreasonable demands for economic benefits” .

This circumstance was probably well recognized by Fayol, when he states that the “division of work has its limits which experience and a sense of proportion teach us may not be exceeded” According to Henry Fayol under division of work, “The worker always on the same post, the manager always concerned with the same matters, acquire an ability, sureness and accuracy which increases their output. In other words, division of work means specialization. According to this principle, a person is not capable of doing all types of work.

Each job and work should be assigned to the specialist of his job. Division of work promotes efficiency because it permits an organizational member to work in a limited area reducing the scope of his responsibility. Fayol wanted the division of work not only at factory but at management levels also. 2. Authority and Responsibility Authority and responsibility go together or co-existing. Both authority and responsible are the two sides of a coin. In this way, if anybody is made responsible for any job, he should also have the concerned authority.

Fayol’s principle of management in this regard is that an efficient manager makes best possible use of his authority and does not escape from the responsibility. In other awards when the authority is exercised the responsibility. In other awards when the authority is exercised the responsibility is automatically generated. The division of an enterprise into distinct departments, each independent of the others but subject to a common authority, has diverse causes such as the great growth of business, or a diversity of operations demanding very different capabilities or the physical separation of the various activities.

Whatever the cause for which this division into departments exists, one must, under the penalty of duality of command, make sure that each service and each function is clearly defined and delimited. These departments, functions and powers, created arbitrarily, generally have no independent existence; one could always constitute them differently and they can be changed. But as soon as they have been instituted they must be defined and delimited very clearly. If not, certain parts will be neglected or forgotten while other parts will be handled by several authorities at once.

Much vigilance is necessary to avoid these twin perils. The definition of departments and functions carries with it, naturally, the specifications of rights, duties and responsibilities for each. Each must know to whom and for what he gives orders, to whom and for what he must obey. On the other hand, each person in authority at every hierarchical level must always be familiar with what is going on in all areas under him. The means that can be used to carry out this responsibility are: direct supervision, control, meetings, reports and a good accounting system. 3. Discipline

The Dictionary Larousse defines this as follows: “A group of unspoken rules or of written rules intended to ensure good order and regularity in a company or an assembly. ’’ This definition seems to me to be exact. Here we are not faced with the principle but an essential rule contingent or dependent on the goal, the constitution, the personalities and so on. These rules, which are as numerous as they are varied, have almost exclusively as their goal the achievement of Unity of Command and its corollaries. The rights, duties, responsibilities, and the place of each person must be determined and specified.

Good rules greatly facilitate the progress of events. But whatever the value of these rules might be, their effectiveness and discipline itself will always depend on much tact, much skill and the conduct of the leaders. According to Henry Fayol discipline means sincerity about the work and enterprise, carrying out orders and instructions of superiors and to have faith in the policies and programmes of the business enterprise, in other sense, discipline in terms of obedience, application, energy and respect to superior. However, Fayol does not advocate warming, fines, suspension and dismissals of worker for maintaining discipline.

These punishments are rarely awarded. A well disciplined working force is essential for improving the quality and quantity of the production. 4. Unity of Command As an enterprise grows, there comes a time when the leader can no longer provide personal direction to every employee: he therefore appoints intermediaries to transmit directives and to supervise their execution. As the enterprise grows even further, the leader cannot even direct these first level intermediaries and he is obliged to create others to transmit his directives to the first and thus a hierarchy is formed.

Its origin is therefore independent of “Unity of Command’’: it results from a limitation of personal abilities. But the principles of “Unity of Command’’ requires that the Leader pass through these intermediaries to reach the lower-level employees; departure from these regular channels provokes duality. Such is the “Hierarchical transmission of orders’’ which is commonly known as the Hierarchical Principle. The results of ignoring this principle are ruffled feelings; discontent, discouragement and conflict, just like the result of ignoring the fundamental principle.

Nevertheless, infractions are fairly frequent though sometimes caused by good intentions: for example, perhaps there is an agent at the third level who, finding that the normal channels are too long, gives orders directly to a first-level employee (X1), without passing through X2; meanwhile someone at the fourth level (X4) believing that he hasn’t been understood, or for some other reason, gives direct orders to X2, resulting in a duality of command and the inevitable consequences; discontent, confusion of responsibilities and the work is held up.

In practice one constantly has to compromise respect for the hierarchical channel with the need for timely response. A subordinate should take order from only one boss and he should be responsible and accountable to him. Further he claimed that if the unit of command is violated, authority is undermined, disciplined in danger, order disturbed and stability threatened. The violation of this principle will face some serious consequences. In this way, the principle of unity of command provides the enterprise disciplined, stable and orderly existence.

It creates harmonious relationship between officers and subordinates, congenial atmosphere of work. It is one of the Fayol’s important essential principle of management. 5. Unity of Direction Fayol summarizes this principle with the words: “one head and one plan for a group” . Hence, this point is naturally closely connected to the unity of command principle. Again Sloan and GM can serve as an example. Sloan introduced a wide variety of metrics in order to measure the performance of departments and the firms that were part of the GM concern. His attitude is ummarized in his words: “We have such control over this ship [the GM corporation] that we know exactly where we are at all times” . Or as Fayol said: “Unity of direction is provided for by sound organization of the body corporate…” . That means first one must know where to take the company and subsequently constantly assure that the plan is still on track. The success story of GM under Sloan exemplifies the validity of this principleFayol advocates “One head and one plan” which means that group efforts on a particular plan be led and directed by a single person.

This enables effective co-ordination of individual efforts and energy. This fulfils the principles of unity of command and brings uniformity in the work of same nature. In this way the principle of direction create dedication to purpose and loyalty. It emphasizes the attainment of common goal under one head. 6. Subordination of individual interests to general interests The interest of the business enterprise ought to come before the interests of the praise individual workers. In other words, principle of management state that employees should surrender their personnel interest before the general interest of the enterprise.

Sometimes the employees due to this ignorance, selfishness, laziness, carelessness and emotional pleasure overlook the interest of the organisation. This attitude proves to be very harmful to the enterprise. An organization is much bigger than the individual it constitutes therefore interest of the undertaking should prevail in all circumstances. As far as possible, reconciliation should be achieved between individual and group interests. But in case of conflict, individual must sacrifice for bigger interests. In order to achieve this attitude, it is essential that – Employees should be honest & sincere. Proper & regular supervision of work. – Reconciliation of mutual differences and clashes by mutual agreement. For example, for change of location of plant, for change of profit sharing ratio, etc. 7. Fair Remuneration to employees According to Fayol wage-rates and method of their payment should be fair, proper and satisfactory. Both employees and ex-employers should agree to it. Logical and appropriate wage-rate and methods of their payment reduces tension and differences between workers and management, create harmonious relationship and a pleasing atmosphere of work.

Further Fayol recommends that residential facilities be provided including arrangement of electricity, water and facilities. 8. Centralization and Decentralization The command exercised by the higher authority and which, be it direct or through successive levels in the organization, reaches all parts of the organization, and the responses which return in the reverse sense, either directly or through the levels, to the central authority, constitute what one has rightly called “Centralization. ’’ It is not an arbitrary institution nor is it optional. It is an inevitable consequence, enforced, in fact, by Unity of Command.

Centralization can be practiced in greatly different ways: the field can be left open for individual initiative, or it can be completely stifled. One finds examples ranging from a rigid structure with only passive obedience, to a vibrant organism where freedom of action spreads out with the most perfect subordination. One leader, having great ability and a great influence can, without inconveniencing a small business, handle all matters, make his own decisions and impose a passive obedience: as the enterprise grows, such a leader will become inadequate and his method will be deplored.

Another leader will give a lot of authority to his subordinates, but what happens if these subordinates are only mediocre? It is therefore a matter of degree: one must consider the importance of various circumstances, the special difficulties which they cause, their extent, the distance which separates the various parts of the business and so on: one must also take account of the value of the employees. Only consideration of the circumstances can decide the respective balance between power and initiative, which it may be convenient to give to all employees.

At the same time, it seems certain to me, the matter of subordinating being separate, that one must give all employees the largest amount of freedom of action and initiative possible. The strength of the leaders is augmented through the strength brought by lower-level employees and therefore they must be developed to the maximum extent possible. Let us not forget, in passing, that personal satisfaction and self-respect are often stronger than self-interest when it comes to stimulating individual initiative. The great problem of centralization and decentralization can therefore be summarized s follows: compulsory centralization with the greatest possible individual initiative. As for the amount of authority and initiative to be given to each person, each case must be considered separately, it is the eternal question of degree, which is the great and continuing preoccupation of the administrator. Whether one buys or sells, builds or demolishes, recruits or dismisses, punishes or rewards, in a word acts or refrains from action, the line to follow is never clearly defined: one must select from various alternatives. Neither principles nor rules can abolish arbitrary decisions.

There should be one central point in the organisation which exercises overall direction and control of all the parts. But the degree of centralization of authority should vary according to the needs of situation. According to Fayol there should be centralization in small units and proper decentralization in big organisation. Further, Fayol does not favor centralization or decentralization of authorities but suggests that these should be proper and effective adjustment between centralization and decentralization in order to achieve maximum objectives of the business.

The choice between centralization and decentralization be made after taking into consideration the nature of work and the efficiency, experience and decision-making capacity of the executives. 9. Scalar Chain The scalar chain is a chain of supervisors from the highest to the lowest rank. It should be short-circuited. An employee should feel the necessity to contact his superior through the scalar chain. The authority and responsibility is communicated through this scalar chain. Fayol defines scalar chain as “the chain of superiors ranging from the ultimate authority to the lowest rank. The flow of information between management and workers is a must. Business opportunities must be immediately avoided of. so we must make direct contact with the concerned employee. Business problems need immediate solution, so we cannot always depend on the established scalar chain. It requires that direct contact should be established. Every orders, instructions, messages, requests, explanation etc. has to pass through Scalar chain. But, for the sake of convenience & urgency, this path can be cut shirt and this short cut is known as Gang Plank.

A Gang Plank is a temporary arrangement between two different In the figure given, if D has to communicate with G he will first send the communication upwards with the help of C, B to A and then downwards with the help of E and F to G which will take quite some time and by that time, it may not be worth therefore a gang plank has been developed between the two. Gang Plank clarifies that management principles are not rigid rather they are very flexible. They can be moulded and modified as per the requirements of situations 10. Order:

According to Fayol there should be proper, systematic and orderly arrangement of physical and social factors, such as land, raw materials, tools and equipments and employees respectively. As per view, there should be safe, appropriate and specific place for every article and every place to be used effectively for a particular activity and commodity. In other words, principles that every piece of land and every article should be used properly, economically and in the best possible way. Selection and appointment of the most suitable person to every job. There should be specific place for every one and every one should have specific place.

This principle also stresses scientific selection and appointment of employees on every job. One knows the formula for material order:“a place for everything and everything in its place. ’’ At the same time should there not be a specified place for everything and someone designated to put everything in that place? Unity of Command indirectly deals with this matter by imposing delimitation of departments and of the authorities, which are responsible for them. Every act of the enterprise and everything belonging to it must have its respondent, that is to say, someone who is responsible for it.

It is order in deeds and with things: it is the means of avoiding waste of material and time and for avoiding conflicts. Thus, Unity of Command appears with its retinue of secondary principles as an important and fundamental natural law, and this impression is only strengthened as one studies the point further. No one denies its importance; many people are vaguely aware of it but its value is only really appreciated by a few and if one considers that as with every good rule of housekeeping it gets in the way of imaginative solutions, one can explain why it is violated so often.

Numerous infractions occur, such as orders which arrive at their destination without having followed the hierarchical route, such as the encroachment by one department upon another, such as the stopping or disarray of the administrative mechanism due to the absence of the leader, and so on. At least five times out of ten it is errors of this type, which upset the business. 11. Equity “Equity and equality of treatment are aspirations to be taken into account in dealing with employees”, Fayol says.

Clearly, this standard is not easily achieved, however, today’s work environment is arguably more equipped to tackle this issue than previous generations of corporations. One indication for this claim is to be found in the fact that most companies have appointed officials who deal with complaints of employees against the management, for instance the so-called ombudsman . However, this system is naturally not fool proof and private organizations attempt to draw attention to the victims of mistreatment.

One example is an organization taking care of claims of victims of mobbing within the company Novartis . While the problem still persists, Fayol’s principle is being recognized by corporations and enhanced by the public opinion and most importantly the lawmakers . Several nations, e. g. Germany, Sweden and others, intend to tackle the problem of unequal treatment by passing laws that intend to establish a juridical basis for people who fell victim of inequality. The principle of equality should be followed and applicable at every level of management.

There should not be any discrimination as regards caste, sex and religion. An effective management always accords sympathetic and human treatment. The management should be kind, honest and impartial with the employees. In other words, kindness and justice should be exercised by management in dealing with their subordinates. This will create loyalty and devotion among the employees. Thus, workers should be treated at par at every level. Equity means combination of fairness, kindness & justice. The employees should be treated with kindness & equity if devotion is expected of them.

It implies that managers should be fair and impartial while dealing with the subordinates. They should give similar treatment to people of similar position. They should not discriminate with respect to age, caste, sex, religion, relation etc. Equity is essential to create and maintain cordial relations between the managers and sub-ordinate. But equity does not mean total absence of harshness. Fayol was of opinion that, “at times force and harshness might become necessary for the sake of equity”. 12. Stability of use of personnel

It is Fayol’s opinion that it is better to have a “mediocre manager who stays” than “outstanding mangers who merely come and go” . Fayol does not only apply this idea to management though, he also points to negative effects of a lack of stability when it comes to employees. While this point might be debatable to some extend it is clear that stability contributes to better planning possibilities. It also allows for a psychologically beneficial state of mind of the employees, hence certainly improving efficiency and the willingness to perform well for the corporation’s good.

Apparently however, this rule of requirement has not sunken in generally. This is demonstrated by the fact that most countries have passed employee protection regulations when it comes to the reasons why people can be laid off. Internationally the International Labor Organization, a section of the United Nations, watches over various aspects of employment and also deals with unfair dismissals of employees . While from an employee perspective the protection laws make sense, employers may occasionally view this issue differently.

In fact, it is easy to find web-blogs with advice how to fire workers without ensuing lawsuit and some influential individuals, for instance Chandrajit Banerjee, head of the Confederation of the Indian Industry , demands it to become easier to hire and fire in India . Maybe a way out of this dilemma and back to following Fayol’s principle can derive from an example Henry Chesbrough gave when discussing differences in culture between the USA and Japan . Chesbrough describes how little loyalty US-employees exhibit compared to the Japanese counterparts.

He also analyses the reason as stemming from the fact that Japanese firms have a tighter relation to their employees. He for example points to a better social security system, like pension plans, in Japan. The spill-over effect that endangers US American companies to loose important innovative advantages by losing skilled employees to other companies is thereby contained in Japan. This example shows that stability of tenure is not only important but connected to social and cultural factors management must take into account if they want to maximize their productive capacity. It also shows, that this principle is a two-way street.

While stability is important for the employee it is just as important for the employer. One would think that this leads to both parties pulling in the same direction. But as we can see from the above example, it requires a change of mind in some instances to establish an environment of trust and mutual care. Principle of stability is linked with long tenure of personnel in the organisation. This means production being a team work, an efficient management always builds a team of good workers. If the members of the team go on changing the entire process of production will be disturbed.

It is always in the interest of the enterprise that its trusted, experienced and trained employees do not leave the organisation. Stability of job creates a sense of belongingness among workers who with this feeling are encouraged to improve the quality and quantity of work. Fayol emphasized that employees should not be moved frequently from one job position to another i. e. the period of service in a job should be fixed. Therefore employees should be appointed after keeping in view principles of recruitment & selection but once they are appointed their services should be served. According to Fayol. Time is required for an employee to get used to a new work & succeed to doing it well but if he is removed before that he will not be able to render worthwhile services”. As a result, the time, effort and money spent on training the worker will go waste. Stability of job creates team spirit and a sense of belongingness among workers which ultimately increase the quality as well as quantity of work. 13. Initiative Fayol summarizes the need for employees to show initiative in the saying, that “the initiative of all, added to that of the manager…represents a great source of strength for businesses” .

He suggests to management to “inspire and maintain everyone’s initiative”. Some modernly run companies have come to find their special ways in order to ensure employee satisfaction, and, concomitantly their initiative. One example is again Google and their policy of “20% time” . This policy implies that employees get a large part of their time to invest in projects of their choosing. While these projects are not necessarily connected to their immediate work tasks experience has shown, that they often built the basis for spin-off ideas that benefit the firm.

Others, like 3M and various Biotech and Pharmaceutical companies have followed suit, and it is said that 3M has developed the post-it notes as a spin-off of an idea conceived during a personal project period . As a Google employee put it: “the 20 percent policy is as important to attracting and retaining employees as it is to sparking fresh ideas”. Business professor Robert Fulmer at Pepperdine University adds: “Paradoxically, letting go of employees through independent projects can mean getting more from them.

It’s a way to get people to go beyond what’s expected of them”. Apparently, with the right strategies a company can increase employee participation and initiative by given the “inspiration” Fayol requested from the management. Workers should be encouraged to take initiative in the work assigned to them. It means eagerness to initiate actions without being asked to do so. Fayol advised that management should provide opportunity to its employees to suggest ideas, experiences& new method of work. It helps in developing an atmosphere of trust and understanding.

People then enjoy working in the organization because it adds to their zeal and energy. To suggest improvement in formulation & implementation of place. They can be encouraged with the help of monetary & non-monetary incentives. Under this principle, the successful management provides an opportunity to its employees to suggest their new ideas, experiences and more convenient methods of work. The employees, who has been working on the specific job since long discover now, better alternative approach and technique of work.

It will be more useful, if initiative to do so is provided to employees. In simple, to ensure success, plans should be well formulated before they are implemented. 14. Espirit De’ Corps (can be achieved through unity of command) It refers to team spirit i. e. harmony in the work groups and mutual understanding among the members. Spirit De’ Corps inspires workers to work harder. Fayol cautioned the managers against dividing the employees into competing groups because it might damage the moral of the workers and interest of the undertaking in the long run.

To inculcate Espirit De’ Corps following steps should be undertaken – There should be proper co-ordination of work at all levels Subordinates should be encouraged to develop informal relations among themselves. Efforts should be made to create enthusiasm and keenness among subordinates so that they can work to the maximum ability. Efficient employees should be rewarded and those who are not up to the mark should be given a chance to improve their performance. Subordinates should be made conscious of that whatever they are doing is of great importance to the business & society.

He also cautioned against the more use of Britain communication to the subordinates i. e. face to face communication should be developed. The managers should infuse team spirit & belongingness. There should be no place for misunderstanding. People then enjoy working in the organization & offer their best towards the organization. In order to achieve the best possible results, individual and group effort are to be effectively integrated and coordinated. Production is a team work for which the whole-hearted support and co-operation of the members at all levels is required.

Everyone should sacrifice his personal interest and contribute his best energies to achieve the best results. it refers to the spirit of loyalty, faithfulness on the part of the members of the group which can be achieved by strong motivating recognition and importance of the members for their valuable contribution, effective coordination, informal mutual social relationship between members of the group and positive and constructive approach of the management towards workers’ welfare SEMINAR 3 MANAGEMENT LEVELS

Managers are organizational members who are responsible for the work performance of other organizational members. Managers have formal authority to use organizational resources and to make decisions. In organizations, there are typically three levels of management: top-level, middle-level, and first-level. These three main levels of managers form a hierarchy, in which they are ranked in order of importance. In most organizations, the number of managers at each level is such that the hierarchy resembles a pyramid, with many more first-level managers, fewer middle managers, and the fewest managers at the top level.

Each of these management levels is described below in terms of their possible job titles and their primary responsibilities and the paths taken to hold these positions. Additionally, there are differences across the management levels as to what types of management tasks each does and the roles that they take in their jobs. Finally, there are a number of changes that are occurring in many organizations that are changing the management hierarchies in them, such as the increasing use of teams, the prevalence of outsourcing, and the flattening of organizational structures. Top-Level Managers

Top-level managers, or top managers, are also called senior management or executives. These individuals are at the top one or two levels in an organization, and hold titles such as: Chief Executive Officer (CEO), Chief Financial Officer (CFO), Chief Operational Officer (COO), Chief Information Officer (CIO), Chairperson of the Board, President, Vice president, Corporate head. Often, a set of these managers will constitute the top management team, which is composed of the CEO, the COO, and other department heads. Top-level managers make decisions affecting the entirety of the firm.

Top managers do not direct the day-to-day activities of the firm; rather, they set goals for the organization and direct the company to achieve them. Top managers are ultimately responsible for the performance of the organization, and often, these managers have very visible jobs. Top managers in most organizations have a great deal of managerial experience and have moved up through the ranks of management within the company or in another firm. An exception to this is a top manager who is also an entrepreneur; such an individual may start a small company and manage it until it grows enough to support several levels of management.

Many top managers possess an advanced degree, such as a Masters in Business Administration, but such a degree is not required. Some CEOs are hired in from other top management positions in other companies. Conversely, they may be promoted from within and groomed for top management with management development activities, coaching, and mentoring. They may be tagged for promotion through succession planning, which identifies high potential managers. Middle-Level Managers Middle-level managers, or middle managers, are those in the levels below top managers.

Middle managers’ job titles include: General manager, Plant manager, Regional manager, and Divisional manager. Middle-level managers are responsible for carrying out the goals set by top management. They do so by setting goals for their departments and other business units. Middle managers can motivate and assist first-line managers to achieve business objectives. Middle managers may also communicate upward, by offering suggestions and feedback to top managers. Because middle managers are more involved in the day-to-day workings of a company, they may provide valuable information to top managers to help improve the organization’s bottom line.

Jobs in middle management vary widely in terms of responsibility and salary. Depending on the size of the company and the number of middle-level managers in the firm, middle managers may supervise only a small group of employees, or they may manage very large groups, such as an entire business location. Middle managers may be employees who were promoted from first-level manager positions within the organization, or they may have been hired from outside the firm. Some middle managers may have aspirations to hold positions in top management in the future.

First-Level Managers First-level managers are also called first-line managers or supervisors. These managers have job titles such as: Office manager, Shift supervisor, Department manager, Foreperson, Crew leader, Store manager. First-line managers are responsible for the daily management of line workershe employees who actually produce the product or offer the service. There are first-line managers in every work unit in the organization. Although first-level managers typically do not set goals for the organization, they have a very strong influence on the company.

These are the managers that most employees interact with on a daily basis, and if the managers perform poorly, employees may also perform poorly, may lack motivation, or may leave the company. In the past, most first-line managers were employees who were promoted from line positions (such as production or clerical jobs). Rarely did these employees have formal education beyond the high school level. However, many first-line managers are now graduates of a trade school, or have a two-year associates or a four-year bachelor’s degree from college.

Management Levels And The Four Managerial Functions Managers at different levels of the organization engage in different amounts of time on the four managerial functions of planning, organizing, leading, and controlling. Planning is choosing appropriate organizational goals and the correct directions to achieve those goals. Organizing involves determining the tasks and the relationships that allow employees to work together to achieve the planned goals. With leading, managers motivate and coordinate employees to work together to achieve organizational goals.

When controlling, managers monitor and measure the degree to which the organization has reached its goals. The degree to which top, middle, and supervisory managers perform each of these functions is presented in Exhibit 1. Note that top managers do considerably more planning, organizing, and controlling than do managers at any other level. However, they do much less leading. Most of the leading is done by first-line managers. The amount of planning, organizing, and controlling decreases down the hierarchy of management; leading increases as you move down the hierarchy of management.

Time Spent on Management Functions at Different Management Levels  Several defining characteristics demarcate management skills and differentiate them from other kinds of managerial characteristics and practices. First, management skills are behavioral. They are not personality attributes or stylistic tendencies. Management skills consist of identifiable sets of actions that individuals perform and that lead to certain outcomes. Skills can be observed by others, unlike attributes that are purely mental or are embedded in personality.

Whereas people with different styles and personalities may apply the skills differently, there are, nevertheless, a core set of observable attributes in effective skill performance that are common across a range of individual differences. Second, management skills are controllable. The performance of these behaviors is under the control of the individual. Unlike organizational practices such as “selectively hiring,” or cognitive activities such as “transcending fear,” skills can be consciously demonstrated, practiced, improved, or restrained by individuals themselves.

Skills may certainly engage other people and require cognitive work, but they are behaviors that people can control themselves. Third, management skills are developable. Performance can improve. Unlike IQ or certain personality or temperament attributes that remain relatively constant throughout life, individuals can improvement their competency in skill performance through practice and feedback. Individuals can progress from less competence to more competence in management skills, and that outcome is the primary objective of this book. Fourth, management skills are interrelated and overlapping.

It is difficult to demonstrate just one skill in isolation from others. Skills are not simplistic, repetitive behaviors, but they are integrated sets of complex responses. Effective managers, in particular, must rely on combinations of skills to achieve desired results. For example, in order to effectively motivate others, skills such as supportive communication, influence, empowerment, and self-awareness may be required. Effective managers, in other words, develop a constellation of skills that overlap and support one another and that allow flexibility in managing diverse situations.

Fifth, management skills are sometimes contradictory or paradoxical. For example, the core management skills are neither all soft and humanistic in orientation nor all hard-driving and directive. They are oriented neither toward teamwork and interpersonal relations exclusively nor toward individualism and technical entrepreneurship exclusively. A variety of skills are typical of the most effective managers, and some of them appear incompatible. Regardless of organizational level, all managers must have five critical skills: technical skill, interpersonal skill, conceptual skill, diagnostic skill, and political skill. Technical Skill.

Technical skill involves understanding and demonstrating proficiency in a particular workplace activity. Technical skills are things such as using a computer word processing program, creating a budget, operating a piece of machinery, or preparing a presentation. The technical skills used will differ in each level of management. First-level managers may engage in the actual operations of the organization; they need to have an understanding of how production and service occur in the organization in order to direct and evaluate line employees. Additionally, first-line managers need skill in scheduling workers and preparing budgets.

Middle managers use more technical skills related to planning and organizing, and top managers need to have skill to understand the complex financial workings of the organization. Interpersonal Skill. Interpersonal skill involves human relations, or the manager’s ability to interact effectively with organizational members. Communication is a critical part of interpersonal skill, and an inability to communicate effectively can prevent career progression for managers. Managers who have excellent technical skill, but poor interpersonal skill are unlikely to succeed in their jobs.

This skill is critical at all levels of management. Conceptual Skill. Conceptual skill is a manager’s ability to see the organization as a whole, as a complete entity. It involves understanding how organizational units work together and how the organization fits into its competitive environment. Conceptual skill is crucial for top managers, whose ability to see “the big picture” can have major repercussions on the success of the business. However, conceptual skill is still necessary for middle and supervisory managers, who must use this skill to envision, for example, how work units and teams are best organized.

Diagnostic Skill. Diagnostic skill is used to investigate problems, decide on a remedy, and implement a solution. Diagnostic skill involves other skillsechnical, interpersonal, conceptual, and politic. For instance, to determine the root of a problem, a manager may need to speak with many organizational members or understand a variety of informational documents. The difference in the use of diagnostic skill acr0oss the three levels of management is primarily due to the types of problems that must be addressed at each level.

For example, first-level managers may deal primarily with issues of motivation and discipline, such as determining why a particular employee’s performance is flagging and how to improve it. Middle managers are likely to deal with issues related to larger work units, such as a plant or sales office. For instance, a middle-level manager may have to diagnose why sales in a retail location have dipped. Top managers diagnose organization-wide problems, and may address issues such as strategic position, the possibility of outsourcing tasks, or opportunities for overseas expansion of a business.

Political Skill. Political skill involves obtaining power and preventing other employees from taking away one’s power. Managers use power to achieve organizational objectives, and this skill can often reach goals with less effort than others who lack political skill. Much like the other skills described, political skill cannot stand alone as a manager’s skill; in particular, though, using political skill without appropriate levels of other skills can lead to promoting a manager’s own career rather than reaching organizational goals.

Managers at all levels require political skill; managers must avoid others taking control that they should have in their work positions. Top managers may find that they need higher levels of political skill in order to successfully operate in their environments. CONCLUSION * Management has been identified as the systematic body of knowledge based on general principles,concepts,theories and techniques which are variable in terms of business practice. These are embodied in the managerial functions of planning,organising,planning,controlling and directing which form the job of a manager. * In the organisation there are 3 levels called top level,middle level and lower level management ,each one having important role in smooth running of the organisation. * The lack of management skills will lead to poor decision making.

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