Evolution of Management- NeoClassical and Modern Management Theories !!

NEO-CLASSICAL THEORY : 

 1). Human Relations:

Elton Mayo - Founder of Human Relations.
He conducted on experiment on Hawtrone plant of western electric
company and concluded that production efficiency of workers depends upon emotional factors.

Happy & satisfied employees trying to increase production.

2) Behavioral Science Approach:

Main contributors - Maslow, F.Herzberg & D.Mc Gregor.

Application of behavioral science such as psychology, sociology & anthropology to the study of human relationship.
a) Organisation is basically a social system and not just techno - economical system.
b)  Individuals may behave differently under different situations.

c) Attempts should be made to connect organisational goals & human needs.

d) Management must develop social skills in addition to technical skill. Man to man relationship, team spirit & group harmony should be given top preference by management. 

MODERN MANAGEMENT THEORIES:

1) Quantitative Approach:

Main contributors – Taylor, Gilbreths, Gantt, Newman &Joel Dean.

a) Management is concerned with problem solving and it must make use of mathematical tools and techniques for the purpose.

b) The different factors involved in management can be quantified and expressed in the form of equations which can be solved with the help of mathematical tools.

c) Management problems can be described in mathematical models.

d) Operation research, mathematical tools, simulation and model building are the basic methodologies developed by this approach.

2) System Approach:

Main contributors – Johnson, Church man, Kenneth, Boulding & Rosen Zweig.

Related to organisation system is defined as – “An established arrangement of components which leads to accomplish of particular objectives as per plan”.

All organisations are open system.

 

3) Contingency Approach:

Main contributors – John Woodward, Fiedler, Lorsch & Lawrence.

Management is situational & main objective of management is to identify the important variables in the situations.

3 Major parts of overall conceptual frame work for

contingency management

a)  Environment

b)  Management concepts, principles & techniques.

c)  Contingent relationship between (a)&(b) above.

 

Muhammad Yunus - The Father Of Gramin Bank !!

The Grameen Bank is a Nobel Peace Prize-winning microfinance organization and community development bank founded in Bangladesh. It makes small loans (known as microcredit or "grameencredit") to the impoverished without requiring collateral. The name Grameen is derived from the word gram which means "rural" or "village" in the Bengali language.
Micro-credit loans are based on the concept that the poor have skills that are under-utilized, and with incentive, they can earn more money. A group-based credit approach is applied to use peer-pressure within a group to ensure the borrowers follow through and conduct their financial affairs with discipline, ensuring repayment and allowing the borrowers to develop good credit standing. The bank also accepts deposits, provides other services, and runs several development-oriented businesses including fabric, telephone and energy companies. The bank's credit policy to support under-served populations has led to the overwhelming majority (98%) of its borrowers being women.
Grameen Bank originated in 1976, in the work of Professor Muhammad Yunus, Professor at University of Chittagong, who launched a research project to study how to design a credit delivery system to provide banking services to the rural poor. Based on his positive results, in October 1983 the Grameen Bank was authorized by national legislation as an independent bank. In 2006, the bank and its founder, Muhammad Yunus, were jointly awarded the Nobel Peace Prize. In 1998 the Bank's "Low-cost Housing Program" won a World Habitat Award. In 2011, the Bangladesh Government forced Muhammad Yunus to resign from Grameen Bank, saying that at age 72, he was years beyond the legal limit for the position.

 

Application of microcredit:

Grameen Bank is founded on the principle that loans are better than charity to interrupt poverty: they offer people the opportunity to take initiatives in business or agriculture, which provide earnings and enable them to pay off the debt.
The bank is founded on the belief that people have endless potential, and unleashing their creativity and initiative helps them end poverty.Grameen has offered credit to classes of people formerly underserved: the poor, women, illiterate, and unemployed people. Access to credit is based on reasonable terms, such as the group lending system and weekly-installment payments, with reasonably long terms of loans, enabling the poor to build on their existing skills to earn better income in each cycle of loans.
Grameen’s objective has been to promote financial independence among the poor. Yunus encourages all borrowers to become savers, so that their local capital can be converted into new loans to others. Since 1995, Grameen has funded 90 percent of its loans with interest income and deposits collected, aligning the interests of its new borrowers and depositor-shareholders. Grameen converts deposits made in villages into loans for the more needy in the villages.

Village Phone program:

The bank has diversified among different applications of microcredit. In the Village Phone program, women entrepreneurs can start businesses to provide wireless payphone service in rural areas. This program earned the bank the 2004 Petersburg Prize worth EUR 100,000, for its contribution of Technology to Development. In the press release announcing the prize, the Development Gateway Foundation noted that through this program:

Grameen has created a new class of women entrepreneurs who have raised themselves from poverty. Moreover, it has improved the livelihoods of farmers and others who are provided access to critical market information and lifeline communications previously unattainable in some 28,000 villages of Bangladesh. More than 55,000 phones are currently in operation, with more than 80 million people benefiting from access to market information, news from relatives, and more.

Struggling members program:

In 2003, Grameen Bank started a new program, different from its traditional group-based lending, exclusively targeted to the beggars in Bangladesh.This program is focused on distributing small loans to beggars. The loans are completely interest-free, the repayment period can be arbitrarily long, and the borrower is covered under life insurance free of cost. For example, a beggar taking a small loan of around 100 taka (about US $1.50) may pay back only 2.00 taka (about 3.4 US cents) per week.

Honours:

• 1994, Grameen Bank received the Independence Day Award in 1994, which is the highest government award.
• October 13, 2006, the Nobel Committee awarded Grameen Bank and its founder, Muhammad Yunus, the 2006 Nobel Peace Prize "for their efforts to create economic and social development from below."The award announcement also mentions that:

From modest beginnings three decades ago, Yunus has, first and foremost through Grameen Bank, developed micro-credit into an ever more important instrument in the struggle against poverty. Grameen Bank has been a source of ideas and models for the many institutions in the field of micro-credit that have sprung up around the world.
On December 10, 2006, Mosammat Taslima Begum, who used her first 16-euro (20-dollar) loan from the bank in 1992 to buy a goat and subsequently became a successful entrepreneur and one of the elected board members of the bank, accepted the Nobel Prize on behalf of Grameen Bank's investors and borrowers at the prize awarding ceremony held at Oslo City Hall.
Grameen Bank is the only business corporation to have won a Nobel Prize. Professor Ole Danbolt Mjøs, Chairman of the Norwegian Nobel Committee, in his speech said that, by giving the prize to Grameen Bank and Muhammad Yunus, the Norwegian Nobel Committee wanted to encourage attention on achievements of the Muslim world, on the women's perspective, and on the fight against poverty. Citizens of Bangladesh celebrated the prize. Some critics said that the award affirms neoliberalism.

Reward Management !!

Reward management is concerned with the formulation and implementation of strategies and policies that aim to reward people fairly, equitably and consistently in accordance with their value to the organization.

Reward management consists of analysing and controlling employee remuneration and all of the other benefits for the employees. Reward management aims to create and efficiently operate a reward structure for an organisation. Reward structure usually consists of pay policy and practices, salary and payroll administration, total reward, minimum wage, executive pay and team reward.

Objective:

Reward management deals with processes, policies and strategies which are required to guarantee that the contribution of employees to the business is recognized by all means. Objective of reward management is to reward employees fairly, equitably and consistently in correlation to the value of these individuals to the organization. Reward system exists in order to motivate employees to work towards achieving strategic goals which are set by entities. Reward management is not only concerned with pay and employee benefits. It is equally concerned with non-financial rewards such as recognition, training, development and increased job responsibility.

 

Types of rewards:

• Intrinsic motivation
• Extrinsic motivation

Rewards serve many purposes in organization, build a better employment deal, hold on good employees and to reduce turnover.
The principal goal is to increase people willingness to work in one’s company, to enhance their productivity.
Most people assimilate "rewards", with salary raise or bonuses, but this is only one kind of reward, Extrinsic reward. Studies proves that salespeople prefer pay raises because they feel frustrated by their inability to obtain other rewards, but this behavior can be modified by applying a complete reward strategy.
There are two kinds of rewards:

• Extrinsic rewards: concrete rewards that employee receive.
  • Bonuses
  • Salary raise
  • Gifts
  • Promotion
  • Other kinds of tangible rewards
   
  
• Intrinsic rewards: tend to give personal satisfaction to individual
  • Information / feedback
  • Recognition
  • Trust
  • Relationship
  • Empowerment
  • Monogrammed name plaque

Intrinsic rewards makes the employee feel better in the organization, while Extrinsic rewards focus on the performance and activities of the employee in order to attain a certain outcome. The principal difficulty is to find a balance between employees' performance (extrinsic) and happiness (intrinsic).

Motivation theories:

Motivational theories are split into two groups as process and content theories. Content theories endeavor to name and analyze the factors which motivate people to perform better and more efficiently while process theories concentrate on how different types of personal traits interfere and impact the human behavior. Content theories are highly related with extrinsic rewards, things that are concrete like bonuses and will help improve employees' physiological circumstances whereas process theories are concerned with intrinsic rewards, such as recognition and respect, which will help boost employees confidence in the work place and improve job satisfaction.

Job evaluation:

Job evaluation is closely related to reward management. It is important to understand and identify a job's order of importance. Job evaluation is the process which job's are systematically assessed to one another within an organization in order to define the worth and value of the job. This system carries crucial importance for managers to decide which rewards should be handed out by what amount and to whom. Job evaluation provides the basis for grading, pay structure, grading jobs in the structure and managing job and pay relativities.

Meaning and need of Management!!

What do you mean by management?? Why it is required?? 

Management in all business and organizational activities is the act of coordinating the efforts of people 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 effort for the purpose of accomplishing a goal. Resourcing encompasses the deployment and manipulation of human resources, financial resources, technological resources, and natural resources.
Since organizations can be viewed as systems, management can also be defined as human action, including design, to facilitate the production of useful outcomes from a system. This view opens the opportunity to 'manage' oneself, a prerequisite to attempting to manage others.

 

Basic functions:

Management operates through various functions, often classified as planning, organizing, staffing, leading/directing, controlling/monitoring and motivation.

• Planning: Deciding what needs to happen in the future and generating plans for action.
• Organizing: Pattern of relationships among workers, making optimum use of the resources required to enable the successful carrying out of plans.
• Staffing: Job analysis, recruitment and hiring for appropriate jobs.
• Leading/directing: Determining what must be done in a situation and getting people to do it.
• Controlling/monitoring: Checking progress against plans.
• Motivation: Motivation is also a kind of basic function of management, because without motivation, employees cannot work effectively. If motivation does not take place in an organization, then employees may not contribute to the other functions (which are usually set by top-level management).

Basic roles:

• Interpersonal: roles that involve coordination and interaction with employees
• Informational: roles that involve handling, sharing, and analyzing information
• Decisional: roles that require decision-making

Management skills:

• Political: used to build a power base and establish connections
• Conceptual: used to analyze complex situations.
• Interpersonal: used to communicate, motivate, mentor and delegate
• Diagnostic: ability to visualize most appropriate response to a situation
• Technical: Expertise in one's particular functional area.

Levels of management:

Most organizations have three management levels: first-level, middle-level, and top-level managers. These managers are classified in a hierarchy of authority, and perform different tasks. In many organizations, the number of managers in every level resembles a pyramid. Each level is explained below in specifications of their different responsibilities and likely job titles.

 

Top-level managers:

The top consists of the board of directors (including non-executive directors and executive directors), president, vice-president, CEOs and other members of the C-level executives. They are responsible for controlling and overseeing the entire organization. They set a tone at the top and develop strategic plans, company policies, and make decisions on the direction of the business. In addition, top-level managers play a significant role in the mobilization of outside resources and are accountable to the shareholders and general public.
The board may also have certain employees (e.g., internal auditors) report to them or directly hire independent contractors.
Helpful skills of top management vary by the type of organization but typically include a broad understanding competition, world economies, and politics. In addition, the CEO is responsible for executing and determining (within the board's framework) the broad policies of the organization. Executive management accomplishes the day-to-day details, including: instructions for preparation of department budgets, procedures, schedules; appointment of middle level executives such as department managers; coordination of departments; media and governmental relations; and shareholder communication.

Middle-level managers:

It consist of general managers, branch managers and department managers. They are accountable to the top management for their department's function. They devote more time to organizational and directional functions. Their roles can be emphasized as executing organizational plans in conformance with the company's policies and the objectives of the top management, they define and discuss information and policies from top management to lower management, and most importantly they inspire and provide guidance to lower level managers towards better performance. Their functions include:

• Design and implement effective group and inter-group work and information systems.
• Define and monitor group-level performance indicators.
• Diagnose and resolve problems within and among work groups.
• Design and implement reward systems that support cooperative behavior.

First-level managers:

Consist of supervisors, section leads, foremen, etc. They focus on controlling and directing. They usually have the responsibility of assigning employees tasks, guiding and supervising employees on day-to-day activities, ensuring quality and quantity production, making recommendations, suggestions, and up channeling employee problems, etc. First-level managers are role models for employees that provide:

• Basic supervision
• Motivation
• Career planning
• Performance feedback

Structure the organization!!

What exactly is the meaning of organization structure?? what are the various types of structure?? 

An organizational structure consists of activities such as task allocation, coordination and supervision, which are directed towards the achievement of organizational aims. It can also be considered as the viewing glass or perspective through which individuals see their organization and its environment.
Organizations are a variant of clustered entities.
An organization can be structured in many different ways, depending on their objectives. The structure of an organization will determine the modes in which it operates and performs.
Organizational structure allows the expressed allocation of responsibilities for different functions and processes to different entities such as the branch, department, workgroup and individual.
Organizational structure affects organizational action in two big ways. First, it provides the foundation on which standard operating procedures and routines rest. Second, it determines which individuals get to participate in which decision-making processes, and thus to what extent their views shape the organization’s actions. Organizational structures shall be adaptive to process requirements, aiming to optimize the ratio of effort and input to output.

 

Organizational structure types:

1) Pre-bureaucratic structures:

Pre-bureaucratic (entrepreneurial) structures lack standardization of tasks. This structure is most common in smaller organizations and is best used to solve simple tasks. The structure is totally centralized. The strategic leader makes all key decisions and most communication is done by one on one conversations. It is particularly useful for new (entrepreneurial) business as it enables the founder to control growth and development. They are usually based on traditional domination or charismatic domination.

 

2) Functional structure :

Employees within the functional divisions of an organization tend to perform a specialized set of tasks, for instance the engineering department would be staffed only with software engineers. This leads to operational efficiencies within that group. However it could also lead to a lack of communication between the functional groups within an organization, making the organization slow and inflexible.
As a whole, a functional organization is best suited as a producer of standardized goods and services at large volume and low cost. Coordination and specialization of tasks are centralized in a functional structure, which makes producing a limited amount of products or services efficient and predictable. Moreover, efficiencies can further be realized as functional organizations integrate their activities vertically so that products are sold and distributed quickly and at low cost. For instance, a small business could make components used in production of its products instead of buying them.

 

3) Divisional structure :

The divisional structure groups each organizational function into a division. Its's also called product structure. Each division within a divisional structure contains all the necessary resources and functions within it. Divisions can be categorized from different points of view. One might make distinctions on a geographical basis or on product/service basis. Each division may have its own sales, engineering and marketing departments.

 

4) Matrix structure : 

 The matrix structure groups employees by both function and product. This structure can combine the best of both separate structures. A matrix organization frequently uses teams of employees to accomplish work, in order to take advantage of the strengths, as well as make up for the weaknesses, of functional and decentralized forms. An example would be a company that produces two products, "product a" and "product b". Using the matrix structure, this company would organize functions within the company as follows: "product a" sales department, "product a" customer service department, "product a" accounting, "product b" sales department, "product b" customer service department, "product b" accounting department. Matrix structure is amongst the purest of organizational structures, a simple lattice emulating order and regularity demonstrated in nature.

• Weak/Functional Matrix: A project manager with only limited authority is assigned to oversee the cross- functional aspects of the project. The functional managers maintain control over their resources and project areas.
• Balanced/Functional Matrix: A project manager is assigned to oversee the project. Power is shared equally between the project manager and the functional managers. It brings the best aspects of functional and projectized organizations. However, this is the most difficult system to maintain as the sharing of power is a delicate proposition.
• Strong/Project Matrix: A project manager is primarily responsible for the project. Functional managers provide technical expertise and assign resources as needed

 

Management behind crossing the valley..

The situation was that three persons have to cross the valley and reach the other location safely. Let's analyse the situation how did they do that??

 

Persons	First Person	Second Person	Third person
Step
1	Safe	Safe	Safe
2	Half Risky,
3	Full Risky,
4	Half Risky,	Half Risky,
5		Full Risky,
6		Half Risky,	Half Risky,
7			Full Risky,
8			Half Risky,
9	Safe	Safe	Safe

Safe - Both the legs of the person have full support
Half Risky – One leg in the air and the other leg has support
Full risky - Both the legs are in the air without any support
Half risky – One leg is in the air and the other leg has support
Safe - Both the legs have full support

 

Ø   Structuring the Task :

• All roles are equal and there is no differentiation between the responsibilities of any three persons. All three are equally responsible in their contributions for the overall task completion. , the task is designed to be - Easy, Lighter, Clear and Systematic 

Ø   Structuring Team Roles :

• Roles of all three members are similar but not same; and equivalent in terms of total effort & risk. All 3 member Roles have equal distribution of Risky situations (1); Half risky situations (2); No risk situations (2). All roles are designed for equally strong persons and there is no weaker or stronger requirement in any specific role.
• Communication and feedback across the 3 members was instantaneous.
• Interdependence among the 3 members was maximised and made crucial.

The roles are interlocking, with highest levels of interaction among the members, with instantaneous feedback being exchange and without any scope for social loafing.

Ø   Preparation and Execution :

All the three members are systematically trained for all the steps and, while crossing, they communicate and coordinate with each other through a various kinds of sounds and other signals.

Ø  Team Excellence :

Team excellence comes through proper designing of team tasks, correctly assigning team roles, and preparation and execution of the tasks. Thus, excellence is designed by the managers.