Appch+mbo

Principles of Management

1. APPROACHES TO MANAGEMENT

2. APPROACHES TO MANAGEMENT
1)Decision Theory Approach
2)Mathematical Approach
3)Systems Approach
4)McKinsey’s 7-S Approach

3. DECISION THEORY APPROACH
•Manager –Decision maker
•Organisation –Decision making unit.
•Features
–Management is decision making.
–Members of Organisation -decision makers and problem
solvers.
–Decision making -control point in management
–Increasing efficiency -the quality of decision
–MIS, process & techniques of decision making are the subject
matter of study.

4. DECISION THEORY APPROACH
•Contributors
–Simon, Forrester, etc.
•Uses
–Tools for making suitable decisions in organisations.
•Limitation
–Does not take the total view of management
–Decision making -one aspect of management

5. MATHEMATICAL APPROACH
•Management-logical entity
•Actions-Mathematical symbols, Relationships and
measurable data.
•Features
1.Problem Solving mechanism with the help of mathematical
tools and techniques.
2.Problems Expressed in mathematical symbols.
3.Variables in management –quantified.
4.Scope -Decision making, system analysis & some aspect of
human behaviour.
5.Tools -Operations research ,simulation etc.

6. MATHEMATICAL APPROACH Cont..
•Contributors
–Newman, Charles Hitch, etc.
•Uses
–Provided Exactness in management discipline.
•Limitations
–Not a separate school
–Technique in decision making.

7. SYSTEMS APPROACH
•An enterprise
•Man-Made system
•Internal parts
•Achieve established goals
•External parts
•Achieve interplay with its environment
•Manager integrates his available facilities with goal
achievement.
•Uses
–Quick Perception
–Better Planning
•Limitations
–Complicated
–Expensive

8. 8
System
•A set of interconnected elements to
achieve a common objective
•Elements are interrelated and
interdependent
•Composed of sub-systems, which in
turn may be made up of other
subsystems
•The set of elements may be: Input(s),
Process(es), or output(s)

9. 9
•Cybernetic systems –self-regulating, self-
monitoring (feedback and control elements
attached)
•A system cannot exist in vacuum
•It exists and functions in an environment,
separated by its boundary
•Several systems may share the same
environment
•Some systems may be connected by a
shared boundary
•Open system: interacts with its environment,
exchanges inputs and outputs
•Closed systems: do not interact, or exchange
any inputs or outputs with its environment

10. The Boundary of a system classifies it into two parts: closed and open
systems
All living organisms are open system and most non-living systems are closed
systems
Closed System Open System
Closed systems are those that have
no interaction with the environment
They do have interaction with the
environment
They are self contained and self
maintaining
They interact with the environment,
they import and export energy. They
are flexible as they subject to changes
in environment
Generally mechanical -like a
automatic watch
They are affected by the environment
No feed back mechanism
Open systems have a feed back
mechanism, like homeostatis

12. Strategy:the direction and scope of the company over the long term.
Structure:the basic organization of the company, its departments, reporting
lines, areas of expertise and responsibility (and how they inter-relate).
Systems:formal and informal procedures that govern everyday activity,
covering everything from management information systems, through to the
systems at the point of contact with the customer (retail systems, call center
systems, online systems, etc).
THE HARD S’s

13. THE SOFT S’s
Skills:the capabilities and competencies that exist within the company. What
it does best.
Shared values:the values and beliefs of the company. Ultimately they guide
employees towards 'valued' behavior.
Staff:the company's people resources and how they are developed, trained
and motivated.
Style:the leadership approach of top management and the company's overall
operating approach.

14. MANAGEMENT BY OBJECTIVES (MBO)
•MBOisbothaphilosophyandatechniqueofmanagement.
•Itrepresentsarationalandsystematicapproachtomanagementwherein
measurablegoalsaresetupinconsultationwithsubordinatemanagersandthe
contributionofeachindividualisjudgedintermsofsuchgoals.
•MBOisaprocesswhereby:
1.Thesuperiorandthesubordinatemanagersofanenterprisejointlyidentifyits
commongoals,
2.Defineeachindividual’smajorareasofresponsibilityintermsoftheresults
expectedofhim,
3.Usethesemeasuresasguidesforoperationsoftheunitandassessingthe
contributionofeachofitsmembers.

15. FEATURESOFMBO
•Goaloriented:
MBOfocusesattentiononwhatmustbeaccomplished(goals)ratherthanon
howitistobeaccomplished(methods).Itisagoal-orientedratherthanwork-
orientedapproach.
•Participation of Subordinate Managers:
MBO involves participation of subordinate managers in the goal setting process.
It requires all key personnel to contribute maximum to achieve the overall
objectives.
•MBO stresses measurable and verifiable goals in key result areas. It attempts
to blend and balance the goals of all key personnel.

16. •MBO is an overall philosophy of management that allows management to attain
maximum results from available resources. It is not a set of procedures but a way
of thinking about managing.
•MBO has an operational thrust involving linking between organizational goals
and individuals goals.
•MBO is a continuous process of goal setting, periodic appraisals and
modification of goals and performance.
•It sets an evaluative mechanism by which the contribution of each individual can
be measured.
•MBO is a dynamic system which seeks to integrate the company’s need to
achieve its objectives with the manager’s need to contribute and develop himself.

17. StepsinMBOProcess
 PreliminaryGoalsetting
 Setting Subordinates Objectives
 Recycling Objectives
 Action Planning
 Periodic Performance Reviews
 Final Appraisal

18. Organizational Purpose
& Objectives
Planning
Premises
Key Result Areas
Superior’s Objectives
Subordinates
statement of his
objectives
Superiors
recommendation for
subordinates objectives
Subordinates
agreed objective
Matching resources
Subordinates Performance
Performance review and appraisal
Process
of MBO

19. BenefitsofMBO
MotivationandMorale
Improved Planning
Effective Self-control
Objective Appraisal
Co operative decision in Work
Increases Efficiency
Reduction in Cost and Optimum Utilization of Resources

20.  Marketstanding
 Innovation
 Productivity
 Physical and financial resources
 Profitability
 Managerial performance and Development
 Worker performance and attitude
 Public responsibility
Areas for organizational objectives