Introduction to Principles of Business Administration and 12 Schools of Thoughts

1. Dr. Shijji

2.  Traditional Approach
 “Managing men tactfully”
 Modern Approach
 Creating a conducive environment
 People work together
 Group Goals

3. “Management is the art of getting things done through and with people in formally
organized groups. It is the art of creating an environment in which people can
perform efficiently and effectively towards the attainment of group goals”
Harold Koontz and Cyrill ‘O Donnell

4.  As a process
 As an Activity
 As a Discipline
 As a System
 As a Hierarchy of Authority
 As an Invisible force
 As a Group Of Individuals
 As a Social Process
 As an Economic Resource
 Contingency Approach of Management
 Quantitative Approach to Management
 Management as a Profession

14. This is a modern management view/ theory
This approach is also known as “Situational
Theory”
Stresses that correctness of a marginal practice is
contingent on how it fits the particular

15.  Management is entirely situational.
 Management has to use the measures and techniques as per the
situation from time to time
 Management should match its approach as per the requirements of
the situation
 The policies and practices used should be suitable to environ mental
changes
 The success of management depends on its ability to cope up with
the environment

16. Contingency theory is beneficial to organizations because of the potential for
learning from specific situations and using these lessons to influence future
management of the same or similar situations. The ability to adapt to external
pressures and changes is also an advantage.

17.  Fred Fiedler, an organizational psychologist who taught at the University of Illinois.
 Fiedler developed the Contingency Theory of Leadership, which suggested that a leader’s
effectiveness depends on the interaction between their leadership style and the situation.
 According to this theory, leadership styles can be characterized by the Least Preferred
Co-Worker (LPC) scale, which Fiedler believed to be fixed and unchanging.

18.  To put it simply, Fiedler determined that a leader’s ability to succeed rests on two
factors:
• Natural leadership style
• Rationale Oriented
• Task Oriented
• Situational favorableness
• Leader-member relations
• Task structure
• Position power

19.  Since Fiedler thought leadership styles are relatively stable, he believed the
effectiveness of management was determined by situational favorableness, which
consists of three factors2
• Leader-member relations: The amount of trust and confidence that team members
have in their leader. More trustworthy leaders have more influence, so they are in a
more favorable position.
• Task structure: Is the task clear and structured, or vague and confusing? Unstructured
tasks are unfavorable.
• Leader’s position power: How much power a leader has to direct the group, as
indicated by providing rewards or punishments. Having more power is more favorable.

20. Imagine you’ve just been hired as a co-manager of a startup tech company. The team of
12 has been working together for a little over a year. You were brought on by the
existing manager to help improve the company’s strategy.
• Leader-member relations : As a new manager brought into an already tight-knit team,
there’s bound to be some friction and distrust.
• Task structure : The company is still considered a startup, and you were hired to help
establish some structure. At this point, everyone helps out with everything.
• Leader power position : There’s another manager with more authority who could veto
your decisions, especially as they pertain to the team.
What kind of style will suit this situation ??

21. Developed in 1960s

22. Lets Identify your style of management of being a leader

23.  The quantitative approach applies
 statistics,
 optimization models,
 information models,
 computer simulations, and
 other quantitative techniques
to the management process

24.  The primary branches of quantitative management include:
 Management Science
 Operations Management
 Management Information Systems
 Total Quality Management

25.  Quantitative Management
Techniques
 Theory of Probability,
 Sampling Analysis,
 Correlation / Regression Analysis,
 Time Series Analysis,
 Ratio Analysis,
 Variance Analysis,
 Statistical Quality Control,
 Linear Programming,
 Game Theory,
 Network Analysis,
 Break-Even Analysis,
 Waiting Line or Queuing Theory,
 Cash-Benefit Analysis, etc.

26.  This branch of management theory focuses on
 the development of mathematical and statistical models
 as a simplified representation of a system, process, or relationship
 as models, formulas, and equations.

27.  Operations management is a field of management focusing on
 efficiency,
 effectiveness, and
 producing or organizational systems, processes, and functions used in the manufacture
of goods or provision of services.
It focuses on the operation and control of the production process (such as the use of
resources) that transforms resources into finished goods and services.
It also looks at the extent to which the functional processes satisfy the needs and wants of
the consumer.

28.  Total Quality Management (TQM) is a
management theory developed
following WWII during the
reconstruction of Japan.
 The best-known proponent of this
school of management was W. Edwards
Deming.
 Customer Focus
 Value Improvement
 Employee Empowerment
 Synergy of Teams
 Final Product Quality
 Preventing rather than detecting defects
 Universal quality responsibility
 Continuous Improvement
 Statistical measurement
 Process Focused
 Constant refinement and learning
 Training and Learning
 Accurate Measurement

29.  There are four phases of total quality management:
 Planning Phase: Employees discover the problems in regular operations and their
root causes. Employees conduct comprehensive research and collect relevant data.
The objective is to identify potential solutions to their problems.
 Doing Phase: Employees develop and execute strategies and plan to address
identified problems.
 Checking Phase: Data is collected to analyze performance to validate the
effectiveness of the processes and measure the outcome.
 Acting Phase: Outcomes are documents and employees begin addressing resulting
challenges.

30.  Lean management is an approach to management focusing on maximizing
customer value while reducing process waste without compromising quality. This
is done through incremental improvement.
 The principles of lean management include:
 Value Identification - Focus on the customer’s point of view.
 Value Mapping - Eliminate all of the unnecessary steps in the value delivery process.
 Operational Mapping - Focus on sequencing value-providing activities.
 Value Pull - Identify the point at which customers pull value from the process.
 Efficiency - Continue to seek increased efficiency with less waste.

31.  Information systems allow for more efficient creation, management, and
communication of information across the organization as well as in the outside
environment. The information allows for more efficient management decision-
making by providing information in a more timely manner and in a more useful
format.

32. Benefits include:
• It establishes relationships amongst quantifiable
variables of decision-making situations and
facilitates disciplined thinking.
• Mathematical models help to derive precise and
accurate results by analyzing complex statistical
data.
• It is useful in areas of planning and control where
data is available in quantitative terms. Decisions are
based on data and logic rather than intuition and
judgment.
• Computer-based Statistical packages are available
which facilitate the analysis of qualitative data also
(dummy variables are used to analyze the non-
quantifiable data).
Negatives include:
• Mathematical models cannot fully account for
individual behaviors and attitudes.
• The time needed to develop competence in
quantitative techniques may delay the development
of other managerial skills.
• Mathematical models typically require a set of
assumptions that may not be realistic in an industrial
setting.
• Among the different functions of management, its use
is limited in organizing, staffing and directing. It
applies more in planning and control functions.
• It does not eliminate risk but only attempts to reduce
it.
• It assumes that all the variables affecting the problem
can be quantified in numerical terms which is not
always true.
• Decisions are often based on the availability of
limited information.

33. Why Management is known as a process?
Management is a process that brings scarce human and material resources together and
motivates people to achieve common organizational goals. It is not a one-time act but an
ongoing progression of complementary activities.
In simple words, a management process is a well-defined system of setting goals, planning,
and controlling any action’s execution. It constitutes a set of interrelated operations or
functions necessary to accomplish desired organizational objectives.

34. 1. Management is Highly Aspirational
2. Management is Omnipresent
3. Management is an Ongoing Process
4. Management is Abstract
5. Management is Social in Nature
6. Management is Versatile
7. Management is Conditional
8. Management is a Team Effort
9. Management is an Administrative
Function

35.  Management is a process because it performs a series of functions in a sequence.
At the basic level, management is a regimen that comprises five standard
functions. These functions are part of a body of practices and theories that educate
on becoming an efficient manager. The functions of the management process help
managers focus their efforts to ensure beneficial results.
 The conventional process of management includes the following 5 steps
1. planning,
2. organizing,
3. staffing,
4. Directing/leading and
5. controlling.

37.  Luther Gulick, Fayol's successor, further defined 7 functions of management or
POSDCORB—
1. planning,
2. organizing,
3. staffing,
4. directing,
5. coordinating,
6. reporting and
7. budgeting

38. 1. Planning
 This essentially refers to establishing a broad sketch of the work to be completed and the
procedures incorporated to implement them.
 Planning is the first and most important step in POSDCORB as it sets the overall
structure of the process with activities and timelines.
2. Organizing
 Organizing involves formally classifying, defining, and synchronizing the various sub-
processes or subdivisions of the work to be done.
 It makes sure that the activities and timelines in the first step of planning are refined
and organized further so that the right people can be staffed to execute these tasks.
3. Staffing
 This involves recruiting and selecting the right candidates for the job and facilitating
their orientation and training while maintaining a favorable work environment.

39. 4. Directing
 This entails decision-making and delegating structured instructions and orders to
execute them.
 Directing is an important step in the POSDCORB cycle as it makes thing happen by
giving clear objectives to teams and individuals.
5. Coordinating
 This basically refers to orchestrating and interlinking the various components of the
work.
6. Reporting
 Reporting involves regularly updating the superior about the progress or the work-
related activities. The information dissemination can be through records or inspection.
7. Budgeting
 Budgeting involves all the activities that under Auditing, Accounting, Fiscal Planning,
and Control.

40. Example of POSDCORB
 Consider a multinational starting an exercise involving a good number of employees in
the workforce. As per POSDCORB, the planning stage would be doing thorough
research about the number of people needed, team size, work type, etc.
 Organizing and staffing stages would be the HR department making a list of people
i.e. supervisors and subordinates who would execute this role.
 Once this is done, as per POSDCORB directing would be giving instructions and
ensuring implementation of the plan as per the requirement. To ensure better two-way
communication, coordinating plays a pivotal role.
 Once all this is done, the different ways of reporting are done which ensures
accountability and responsibility of the team.
 Finally, the budget to be allocated is studied. In this way, POSDCORB can be used for
better management.