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Personality and Attitudes

Personality and attitudes represent important micro, cognitively oriented variables in the study of organizational behavior. Personality - Introduction Personality represents the "whole person" concept. It includes perception, learning, motivation, and more. According to this definition, people's external appearance and traits, their inner awareness of self, and their person-situation interaction make up their personalities. In personality theory, different approaches have been tried. The historically important ones include trait theory (observable patterns of behavior that recur frequently), Freud's psychoanalytic or psychodynamic theory (in which personality is shaped by unconscious determinants of behavior), and Carl Rogers and Abraham Maslow's humanistic theory (Every person strives to realize one's potential). Although the nature versus nurture debate in shaping personality continues, the findings of twin studies of the importance that heredity may play in personality and recent breakthroughs in neuropsychology that points to the importance of the brain in personality have led most psychologists to recognize both nature and nurture. However, the nurture side still dominates. In personality theory, the study of relatively fixed predispositions has resurfaced in the form of the "Big Five" personality traits. Conscientiousness, emotional stability, agreeableness, extraversion, and openness to experience have been found to significantly relate to job performance, especially conscientiousness. In addition, the Myers-Briggs Type Indicator (MBTI) remains a popular tool for personal and career development. Whereas the Big Five is based on research, the MBTI is based on the historically important Carl Jung theory of personality types and mental processes. Both the Big Five and MBTI if carefully interpreted and used can make a contribution to the understanding and application of organizational behavior. Personality and Related Concepts   Luthans has taken the position that personality will mean how people affect others and how they understand and view themselves, as well as their pattern of inner and outer measurable traits and their person-situation interaction behavior.   Self-Variables The self of a person is a unique product of many interacting parts andmay be thought of as the personality viewed by a person within. People's understanding regarding themselves is called self-concept in personality theory. Self-esteem, multiple intellgences, emotion, optimism and efficacy are important self-variables and have application in organizational behavior. Self-Esteem   Self-esteem includes people's self perceived competence and self-image. Is high self esteem good for organization's performance. Kreitner and Kinicki concluded that high self esteem can be good thing only when it is nurtured and channeled in constructive and ethical ways. Otherwise, it can become antisocial and destructive. So behavior managers have a role to play in getting the appropriate performance from high self-esteem individuals. An elaboration of self esteem in organizational context has emerged. It is called organization-based self esteem (OBSE). It is defined as the self-perceived value that individuals have of themselves as organization members acting within an organization context. Self esteem is a global trait, meaning it is present interactions of an individual in a similar way. The Big Five Personality Traits Researchers have identified 171 personality traits on which persons can be ranked or measured. This 171 trait list was prepared after sufficient effort in reducing the number of traits by identifying similar traits and combining them. From these 171 traits, five core personality traits called the five factor model was found to be of value for use in organizational situations. These five traits are:     Conscientiousness     Emotional stability     Agreeableness     Extraversion     Openness to experience To get a high score on these parameters the person must have the following characteristics or behavior. To get a high score on conscientiousness, the person has to be dependable, hardworking, organized, self-disciplined, persistent and responsible. To get a high score on emotional stability, the person has to be normally calm, secure, happy and unworried. To get a high score on agreeableness, the person has to be cooperative, warm, caring, good-natured, courteous and trusting. To get a high score on openness to experience, the person has to be curious, flexible, creative, imaginative, artistically sensitive, open to other cultures and open to intellectual discussions. Myers- Briggs Type Indicator (MBTI) In the 1940s, Katharine Briggs and  Isable Briggs-Myers developed a personality test to measure their preferences on four pairs of traits proposed earlier by Carl Jung in the 1920s. These four traits are extraversion-introversion, sensing-intuiting, thinking-feeling, and judging-perceiving. Extraversion and introversion are related to feeling energetic and comfortable. Extraverts are more energetic in groups. Introverts are more energetic and productive alone. Sensing and intuiting are related to collecting information for solving a problem. People who prefer sensing look into the specifics of situation, want concrete evidence and facts, go into details and are practical persons. People who prefer intuition look into possibilities, are satisfied with general description of the situation, use abstract and theoretical ideas. Thinking and feeling are related to evaluation of alternatives for decision making. People who prefer thinking are analytical, they follow a set of rules, use their head or brain and are more inclined to judge based on the evidence. Persons who prefer feeling, are more subjective, take circumstances into account and are not so rule bound, they use heart in preference to brain and may show mercy (or vindictiveness in negative manner). Judging and perceiving are related to the orientation of a person to the outside world. Persons who show the traits of judging are organized, structured, time oriented and decisive people.Persons who show traits of perceiving are seen more as flexible persons who explore things spontaneously and are open ended with behavior. Socialization Nurture is socialization. Every new born child is nurtured or socialized by his parents, relatives, neighbors,  friends, teachers, religious priests, his superiors, subordinates etc. Personality development is influenced by socialization. Application of Various Personality Theories and Concepts in Organization Behavior Theory Self-esteem is an important variable. If a person has low self-esteem and not confident about his thinking ability, he likely to fear decision making and may not be able to assert himself in interpersonal relations. Research has shown that employees with high self esteem feel unique, competent, secure,  and empowered. Socialization Schein has advocated that organizations must have socialization process. The socialization process helps in changing attitudes, values and behaviors. It ensures continuity and consistency of behavior of various persons of the organization. It will facilitate adjustment to new jobs, work groups and new practices. The early period of socialization of new recruits is a critical period. The important activities related to socialization process of an organization include: 1. Relevant training 2. Timely and consistent feedback 3. Initial work under good supervisors 4. A orientation program 5. Socialization in high morale work groups. 6. Challenging jobs in the early part of career. Deliberate and well designed socialization programs do have tremendous potential impact on the personality development of members of an organization within the organization (personality development after they have joined the organization). Attitude An attitude can be defined as a persistent tendency to feel and behave in a particular way toward some object. Attitudes are a complex cognitive variables that have three basic characteristics: they are directed toward an object about which a person has feelings, and beliefs,  they persist unless changed in some way; and they range along a continuum from positive to negative.  Attitudes have three components: emotional (feelings), informational, and behavioral. Behavior can be observed, but the feelings and belief which give rise to the behavior cannot be observed. Attitudes, being persistent often help employees adapt to their work environment by providing a way of interpreting things or happenings in the environment. There are four functions that attitudes have in this process: (1) they help people adjust to their environment, (2) they help people defend their self-image, (3) they provide people with a basis for expressing their values, and (4) they help supply standards and frames of reference that allow people to organize and explain the world around them. Changing Attitudes Attitudes can be changed. Bit it is sometimes difficult to change attitudes. There are two important barriers.  One reason is prior commitments. A second is insufficient information on the part of the person having an attitude to be changed. Research shows that some of the ways of bringing about attitude changes are providing new information, and persuasion by friends or peers, and co-opting. Fear also helps in changing attitudes. There are some instances, where or when an individual may be in stage of forming attitude or belief. Organizations can provide appropriate information and create appropriate situation to develop desirable attitudes at that point of time. Personality traits or dispositions, such as positive affectivity (PA) and negative affectivity (NA), are important antecedents to attitudes about one's job. Traditionally the most important attitude studied and given concern in the real world is job satisfaction. Job Satisfaction This attitude is defined as a pleasurable or positive emotional state resulting from the appraisal of one's job or job experience. More simply stated, it an attitude toward the job. Does the person has a positive attitude or negative attitude toward job.  A number of factors influence job satisfaction. Job satisfaction is a combination of attitudes towards factors related to a job.Some of the major ones are the work itself, pay, promotions, supervision, the work group, and working conditions. There are a number of outcomes of job satisfaction. For example, There is relationship between satisfaction and job performace.  Although the relationship with performance was thought to be relatively weak (0.17), recent research is showing a much stronger relationship. Low job satisfaction tends to lead to both turnover and absenteeism, whereas high job satisfaction often results in fewer on-the-job accidents and work grievances, less time needed to learn new job-related tasks, and less stress. Efforts to Increase Job Satisfaction A job satisfaction has positive impact on many desirable outcomes of the organizations, management can take some steps to increase job satisfaction. Some of the specific guidelines mentioned by Luthans: Make jobs more fun, Ensuring fairness, Get the right fit, Design jobs to make them more exciting and satisfying. Organizational Commitment Attitude Closely related to job satisfaction is the organizational commitment attitude. It traditionally refers to the employees' loyalty to the organization. An an attitude, organizational commitment is defined as (1) a strong desire to remain a member of a particular organization; (2) a willingness to exert high levels of effort on behalf of the organization; and (3) a definite belief in, and acceptance of, the values and goals of the organization. Organizational commitment is determined by a number of personal, organizational, and nonorganizational variables. Now commitment is generally conceived as having three components: Affective (emotional attachment), Continuance (costs of leaving): willingness to stay in the organization due to costs of leaving.  Normative (obligation to stay): The person feels it obligatory to stay in the organization.  Like job satisfaction, the organizational commitment attitude is very complex (composed of number of attitudes towards various factors in the organization) and has mixed results with respect to desired outcomes of the organization. But in general, it is thought to have a somewhat stronger relationship with organizational outcomes such as performance, absenteeism, and turnover. Like satisfaction, organizational commitment can be enhanced. Organizational Citizenship Behaviors (OCBs)  Organ defines this concept as "individual behavior that is discretionary, not directly or explicitly recognized by the formal reward syste, and that in the aggregate promotes the effective functioning of the organization." The OCBs can be a personality level concept. The extra-role, prosocial/organizational citizenship behaviors (OCBs) involve predispositional traits to be cooperative and conscientious. OCBs include  a variety of behaviors, and the major ones are  altruism, conscientiousness, civic virtue, sportsmanship, and courtesy. In an organization perceived as a just organization, more employee display OCBs. Although there is still some criticism of the conceptualization and research of OCBs, there is growing evidence that OCBs positively relate to individual, group, and organizational performance.   References  Fred Luthans, Organizational Behavior,  McGraw-Hill, 10th Edition, 2005 (Main Text for Revision Articles) Related article  http://nraombakc.blogspot.com/2012/01/personality-theories-and-assessment.html Originally posted in Knol ( Knol number 161)

Budget, Budgeting and Budgetary Control

Budget

A budget is a formal quantitative expression of management plans.

Budgets can be made by managers at any level including a single person managing a machine or operating a machine. In the context of business, budget may have revunue, expenses and profits, all in a single statement. But one can think of a budget for revenues alone, budget for expenses alone.

Master Budget

Master budget for a big organization summarizes the goals of all subunits of an organization - either business divisions if the company is organized along divisional lines or managerial functions if the company is organized along functional lines.

The master budget consists of expected or projected income statement, balance sheet, and a cash flow statement, along with supporting schedules.

Benefits of Budgeting or Imperative for Budgeting

The advocates of budgeting state that the process of preparing budget forces executives to become better managers. Budgeting schedule of a company puts planning where it belongs - in the forefront of every manager's mind. It also forces him to review his performance in the last period and identify good practices that enhanced performance and issues that contributed negatively to performance.

The formal budgeting system has the following major benefits.

1. Budgeting due to its formal time table or schedule compels managers to think ahead apart from taking care of their current activities.

2. Budgeting, due to its approval and authorization  by the superiors, provides definite expectations that are the best framework for judging subsequent performance.

3. Budgeting helps in coordinating the various departements of the organization. The budget harmonizes the goals (objectives) of the individual departments into the organization wide goals (objectives).

Budgetary control at department level is encouraging department level personnel to plan their operations for the forth coming period. Both outputs and inputs are to be planned. If possible outputs and inputs are converted into revenues and costs.

The accounting system of the company will prepare the actual revenues and costs generated at the end of the period as well as during the period. The department managers have to responsibility to carry out the day to day activities to achieve the best possible results with their plan/budget as the guiding document.

Budgets can be made flexible so that cost estimates are in relation to the output produced.

Variance analysis can be done to pin point the variables that changed during the period and their effect on actual results.

Budgetary control system facilitates participation of department managers as well as senior level managers in explicitly planning for the future. The plan can be optimized with various optimization techniques.

These techniques include linear programming (for product mix problems), transportation (for planning transport of finished goods) and assignment (assigning machines for jobs or operators for jobs) and other operations research techniques. A formal budgeting system can question the department managers on whether they have applied the optimization techniques or not and where necessary advise them to use those techniques and provide specialist support in cases where necessary.

References

Horngren, Charles, T., Gary L. Sundem, and William O. Stratton, Introduction to Management Accounting, 13th Ed., Prentice Hall, 1999.

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 Knol no. 62

Planning - A Management Process

Principles of Planning (Koontz and O'Donnel)

Related to Purpose and Nature

Principle of contribution to objectives
          Every plan has to contribute positively toward the accomplishment of enterprise objectives.

Principle of efficiency of plans
          Efficiency is measured by the contribution of the plan to objectives of the enterprise minus the costs and unsought for consequences in formulating and implementing the plan.

Principle of primacy of planning
          Planning is the primary prerequisite for all other functions of management. Every action of the manager follows a planning step.

Principles Applicable to Structure of plans

Principle of planning premises
          If more people in an organization use common and consistent planning premises, the enterprise planning will be more coordinated.

Principle of policy framework
          If more policies, appropriate to the organization, are expressed in clear terms and form and if manages understand them, the plans of the enterprise will be more consistent.

Principle of timing

          If plans are structured to provide a network of derivatives plans in sequence, there will be more effectiveness in attainment of enterprise objectives.

Principles in Applicable to Process of Planning

Principle of alternatives
          Select the plan which is the most effective and the most efficient to the attainment of a desired goal.

Principle of limiting factor
          Consider limiting factor in generating alternatives and selection from alternatives.

The commitment Principle
          Planning can cover a period over which commitment of resources can be clearly visualized.

The Flexibility Principle
          Building flexibility in planning is beneficial, but cost of building flexibility needs to be evaluated against the benefits.

The Principle of navigational change
          Manager needs to periodically check events of the plan and redraw plans to maintain the move toward a desired goal.

Principle of competitive strategies
          In a competitive arena, it is important to choose plans in the light of what competitor will or will not do and navigate based on what competitors are doing or not doing.


 Detailed Discussion of Planning by Koontz and O'Donnell

Koontz and O'Donnell discussed the managerial function of planning in six chapters in the fourth edition of their text. The chapters are:

The nature and purpose of planning
Objectives
Planning premises
Decision making
Policy making
Planning in action

The Nature and Purpose of Planning

Every manager has to select objectives for his enterprise, department, section, unit or group. Based on the objectives he has to set goals for a specific period and make plans that contain ways of reaching the set goals. Planning in general is explained as generating alternatives and selection of the most suitable alternatives from among them for solving a problem. The problem in this context has positive connotation also. How to achieve growth is a problem which has a positive implication only.

Therefore planning is deciding in advance what to do, how to do it, when to do it, and who is to it.

Types of Plans

Objectives

Objectives are the ends toward which the activity of an organization is aimed.

Goals

Goals represent the rate at which objectives of an organization are achieved. Goals quantify the objective with a time frame. For example, if a country has the objective of switching to unconventional sources of energy, the goals could specified as so many gigawatts of energy by end of year 2012. 

Values

Grand strategies

According to R.N. Anthony strategies result from the processes  of deciding "on objectives of the organization", "on changes in these objectives", "on the resources used to attain these objectives", and "on policies that are to govern the acquisition, use, and disposition of these resources." The main meaning and usefulness of grand strategies are to describe a type of planning program of a broad nature which gives over-all direction to the other and more detailed programs of an enterprise.

The emphasis in grand strategies is on the pattern of basic objectives of the organization and goals and the major policies and plans for achieving them.

The purpose of grand strategy of an enterprise is to determine and communicate, through a system of major objectives and policies, a picture of what kind of enterprise is envisioned. A framework is given in the grand strategy which is a useful plan to guide company thinking.

Koontz and O'Donnell give the opinion that strategy is not a new type of plan actually. It is a program. But the concept of strategy is practically very useful and its importance in guiding detailed planning justify its separation as a different type of plan.

Competitive strategies

Competition exists where two or more persons strive for the same goals under conditions in which not all can gain from them. Competitive strategy is a plan made in the light of the plans of a competitor. The plans are made either with an estimate of plans or competitor or plan is a reaction to the strategic move of competitor either announced or executved.  To estimate the competitor's plans, a manager has to put himself in his competitor's place and develop a set of plans for his competitor, using the knowledge has regarding the objectives and the circumstances in which the competitor is operating. No doubt some industrial espionage will be tried to get an understanding of competitor's plans.

Policies

Policies are general statements which guide or channel thinking in decision making of subordinates. Policies delimit an area within which a decision is to be made and assure that the decision will be consistent with and contribute to objectives. Policies tend to predecide issues, and avoid repeated analysis. Polices are based on analysis and once pronounced avoid repeated analysis

Procedures

Procedures are plans and they establish a method of handling activities. They specify a chronological sequence of required actions.

Rules

A rule is the simplest type of plan. A rule requires that a specific and definite action be taken or not taken with respect to a situation.

Programs

A program is a complex of policies, procedures, rules, task assignments assembled to carry out a given course of action. A program is supported by necessary capital and operating budgets.

Budgets

A budget is a plan. It is a statement of expected results expressed in numerical terms.

Objectives  

Objectives are referred to some authors with different terms. Purposes, missions, goals or targets are the terms used to refer to objectives. Mission is usually used in military enterprises and occasionally in churches and government. "Goals" and "targets' often carry the notation of specific quantitative end. Sometimes the end can be qualitative also. Koontz and O'Donnel used the chapter on objectives to discuss all the various types of terms used in relation to objectives.

Social objectives

It is interesting to note that the discussion of objectives is started with the section social objectives.The obectives of a private enterprise have to be in harmony with the ends for which a society is organized. Whenever the actions and objectives of a private enterprise are thought be against the objectives of the society, legal action is initiated to regulate it or suppress it.

United States has a statement of nation purpose set forth in the Declaration of Independence. The preamble of the Constitution of USA states:

We the people of the United States, in order to form a more perfect union, establish justice, insure domestic tranquility, provide for common defense, promote the general welfare, and secure the blessings of liberty to ourselves and our posterity, do ordain and establish this Constitution for the United States of America.

All subordinate enterprises in USA, be it a school, church, hospital, government agency or business firm should have objectives which are harmonious with and supportive to national objectives.

Enterprise Objectives

The plural form is used to stress the fact that enterprises have mutliple objectives. Drucker asserted that there are eight areas in which objectives of performance and results have to set by all enterprises. They are: Market Standing, Innovation, Productivity, Physical and Financial Resources, Profitability, Manager Performance and Development, Worker Performance and Development, and Public Responsibility.

For each area or function that company identifies as necessary for survival there has to be ojective.

Principles to be followed in setting objectives

1. Objectives have to be practically achievable. The organization must be able to do some thing to achieve each objective that it has set.

2. The objectives have to support the enterprise purpose, its contribution to the customer.

3. If long range objectives and short range objectives are specified, there must be integral relationship between them.

4. At various points of time prioritization among objectives may be required.

5. Objectives have to be specific and actionable and verifiable

6. Objectives have to planned. There are the result of planning process or activity.

7. Objectives have to be communicated to those charged with building plans to meet them. 

Reference

Principles of Management – Koontz and O’Donnell

Related Knols

Principles of Management – Koontz and O’Donnell

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Originally posted on Knol (Knol no. 456)
http://knol.google.com/k/planning-a-management-process

Principles of Efficiency - Harrington Emerson

Harrington Emerson contributed to the systems efficiency focus of industrial engineering. His book Twelve Principles of Efficiency was classic.

He discussed efficiency design of organization through 12 principles:

1. Clearly defined ideals.
2. Common sense
3. Competent counsel
4. Discipline
5. The fair deal
6. Reliable, immediate and adequate records
7. Despatching
8. Standards and schedules
9. Standardized conditions
10. Standardized operations
11. Written standard-practice instructions
12. Efficiency-reward

Standards and standardization as a basis for efficiency was strongly advocated by him. Nearly two hundred companies adopted various features of the Emerson Efficiency system, which included production routing procedures, standardized working conditions and tasks, time and motion studies, and a bonus plan which raised workers' wages in accordance with greater efficiency and productivity [Guide].

Harrington Emerson (1853-1931) was one of America's pioneers in industrial engineering and management and organizational theory. His major contributions were to install his management methods at many industrial firms and to promote the ideas of scientific management and efficiency to a mass audience [Guide].

After a successful tenure as a general manager of a small Pennsylvania glass factory in 1900, Emerson resolved to take up efficiency engineering as a profession. Through meetings of the American Society of Mechanical Engineers, he became personally acquainted with the pioneering work of Frederick W. Taylor, the founder of scientific management, ans assimilated much of the methodology for standardizing work and remunerating workers in accordance with productivity.

Between 1907 and 1910, the Emerson Company  consulted over 200 corporations, submitting reports for which they were paid twenty-five million dollars. Emerson efficiency methods were applied to department stores, hospitals, colleges, and municipal governments. Between 1911 and 1920 Emerson's firm averaged annual earnings of over $100,000.00.

To distinguish his methods from those of Taylor, Emerson published three books: Efficiency as a Basis for Operation and Wages (1909); The Twelve Principles of Efficiency (1912); and Colonel Schoonmaker and the Pittsburgh and Lake Erie Railroad (1913).

The 1910 Eastern Freight Case brought much wider public attention to Emerson's ideas.  Emerson served as Louis D. Brandeis's star witness in the appeal of major eastern trunk railroads to the Interstate Commerce Commission for a rate increase. Emerson testified that the railroads wasted one million dollars daily by not applying efficiency methods. His brief against the railroads won wide acclaim and marked the growth in public awareness of scientific management.  Emerson became known as the "High Priest of Efficiency." He spoke more frequently about his effficiency ideas to businessmen, civil organizations, and management and engineering students. In 1912, Emerson helped to found the New York Efficiency Society which promoted and disseminated the ideals of reform through scientific management. Emerson joined  other progressive engineers in founding the Society of Industrial Engineers in 1917.

Through the decade of the 1920s, Emerson publicized the potential for promoting efficiency on a global scale. He was one of eighteen prominent engineers chosen by Secretary of Commerce Herbert Hoover in 1921 to serve on a committee investigating the elimination of waste in industry.

Emerson documents are available in Pennsylvania State University Library. http://www.libraries.psu.edu/speccolls/FindingAids/emerson.frame.html for reference.

Sources:

Guide, http://www.libraries.psu.edu/speccolls/FindingAids/emerson.frame.html

Access the books by Emerson from Archive.org

The Twelve Principles of Efficiency (1912)

http://www.archive.org/details/twelveprinciples00emerrich

http://books.google.co.in/books?id=-g833nzU9AAC

Efficiency as a Basis for Operation and Wages

http://www.archive.org/details/efficiencyasbasi00emeruoft

Quotations by Harrington Emerson

"The twentieth century dawns with as yet unaccomplished task of conservation, of eliminating wastes-wanton and wicked wastes of all kinds, wastes that make our civic governments a by-word, our destruction of natural resources a world scandal, our complacent industrial efficiency a peculiarly national disgrace, of all nations, we Americans ought to know better."
[  The Twelve Principles of Efficiency (1912) P.9]

"Efficiency like hygiene is a state, an ideal not a method" P.23

Strenuousness and efficiency are not only not the same, but are antagonistic. To be strenuous is to put forth greater effort; to be efficient it to put forth less effort.  (P.39)

"He did not know that efficiency reward  ought to be preceded by the careful, systematic, and expert application of  eleven other principles, of which "Wages" is a minor element of one."  P.41

Accounting in all its phases is a minor division of one of the twelve efficiency principles, trustworthy, immediate and adequate records. P.43

An efficiency engineer ought similarly to act as funnel, being equipped to gather from all available sources whatever is of operating value for the organization he is advising. P.54

If all the ideals animating all the  organization from top to bottom could be lined so as to pull in the same straight line, the resultant would  be a very powerful effort. P.60

The railway line between st. Petersburg and Moscow cost $337,000 a mile for a distance of 400 miles. In Finland similar line was made for $23,000 a mile P. 65 (Sentence rewritten)

The ideas of one company are that its customers shall be treated with absolute fairness, that its employees shall be of higher skill and be better paid than those of neighboring competitors, that they shall have permanence of employment.P.84

There are only a dozen shops in the United States in which any scientific standards of man and machine efficiency exist. P.111

The legal counselor does not, cannot know all the laws and proper legal formalities in every state, and he therefore employs junior and often senior counsel. Similarly a counselor as to efficiency, would not pretend to be expert as to all efficiency, but it would be his duty to be in touch both as to men and scientific reports with all that was latest and best and make it all available for his employer whether individual or corporation. P.129

There is nothing men will not attempt when great enterprises hold out the promise of great rewards. - Livy

Out of eighteen items of operating costs, as distinguished from selling costs, only one is directly influenced by the worker, that is time-quality of the work. P.355

Efficiency reward is not a money payment, this is only one of its myriad forms. Men have been willing to die for a smile.  P.365-66

The ideal that inspires the formulation of the principles of efficiency is elimination of waste, of wastes of all kinds resulting finally in wastes of the collective soul. P.371

The ideal that inspires the formulation of the principles of efficiency is elimination of waste, of wastes of all kinds resulting finally in wastes of the collective soul. P.371

The ideals of United States Steel Corporation

The ideals of the corporation seem to have been
(1) Law abidence
(2) Rational publicity
(3) Steady prices at a high level
(4) maximum tonnage
(5) Permanence for its own business by the purchase of large ore and coal reserves
(6) Rapid improvement of the properties so as to make them worth the capitalized value
(7) Maintenance of a high level of wages
(8) Identification of the worker with the profits of his work, thus increasing his interesting in his occupation.
P.383

Does the Steel Corporation know as to every detail what ought to be as well as it knows what has been? P.391


Efficiency in Printing and Packaging Processes A Webinar - 2 Parts
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The Process of Management

Management - Definition

Weihrich and Koontz defined Management and explained it as follows in the tenth edition of their book Management: A Global Perspective (p.4).

"Management is the process of designing and maintaining an environment in which individuals, working together in groups, effectively and  efficiently,  accomplish selected aims." This definition needs to be expanded:

1. As managers, people carry out the managerial functions of planning, organizing, staffing, leading, and controlling.
2. Management applies to any kind of organization.
3. It applies to managers at all organizational levels.
4. The aim of all managers is the same: to create a surplus.
5. Managing is concerned with productivity; this implies effectiveness and effciency.

Definition suggested by Narayana Rao

Management of an organization is the process of establishing objectives and goals of the organization periodically, designing the work system and the organization structure, and maintaining an environment in which individuals, working together in groups, accomplish their aims and objectives and goals of the organization effectively and efficiently (Narayana Rao). (3rd December 2008, Version 1 of this article)

The above definition was a modification of the definition given by Koontz and O'Donnell.

The definition implies the following.

(i) Management is a process.
(ii) Management applies to every kind of organization, government, profit making, or nonprofit making.
(iii) It applies to managers at all levels in the organization.
(iv) Management is concerned with effectiveness and efficiency.  Effectiveness is producing the product or service the customer wants in business context with the required functional benefits and product attributes at the price he is willing to pay. Efficiency is minimization of resources to produce the saleable output.

Functions of Management or Process of Management

Koontz and O'Donnell classified the functions of management or process of management into PLANNING, ORGANIZING, STAFFING, LEADING AND CONTROLLING.

Management is an art and it is doing things in the light of realities of a situation. The organized knowledge underlying this practice is referred to as science and this body of knowledge can be expressed through principles of management. This is the thought of Koontz and O'Donnell. Principles are identified for each function of management.

Planning

Every manager has to select objectives for his enterprise, department, section, unit or group. Based on the objectives he has to set goals for a specific period and make plans that contain ways of reaching the set goals. Planning in general is explained as generating alternatives and selection of the most suitable alternatives from among them for solving a problem. The problem in this context has positive connotation also. How to achieve growth is a problem which has a positive implication only.

Therefore planning is deciding in advance what to do, how to do it, when to do it, and who is to it. Planning bridges the gap from where we aer to where we want to be in a desired future.

Planning involved decision making. It is selecting the courses of action that a company or other enterprise, and every department of it, will follow.

Types of Plans

Objectives

Objectives are the ends toward which the activity of an organization is aimed.

Goals

Goals represent the rate at which objectives of an organization are achieved. Goals quantify the objective with a time frame. For example, if a country has the objective of switching to unconventional sources of energy, the goals could specified as so many gigawatts of energy by end of year 2012. 

  

 Grand strategies

According to R.N. Anthony strategies result from the processes  of deciding "on objectives of the organization", "on changes in these objectives", "on the resources used to attain these objectives", and "on policies that are to govern the acquisition, use, and disposition of these resources." The main meaning and usefulness of grand strategies are to describe a type of planning program of a broad nature which gives over-all direction to the other and more detailed programs of an enterprise.

The emphasis in grand strategies is on the pattern of basic objectives of the organization and goals and the major policies and plans for achieving them.

The purpose of grand strategy of an enterprise is to determine and communicate, through a system of major objectives and policies, a picture of what kind of enterprise is envisioned. A framework is given in the grand strategy which is a useful plan to guide company thinking.

Koontz and O'Donnell give the opinion that strategy is not a new type of plan actually. It is a program. But the concept of strategy is practically very useful and its importance in guiding detailed planning justify its separation as a different type of plan.

Competitive strategies

Competition exists where two or more persons strive for the same goals under conditions in which not all can gain from them. Competitive strategy is a plan made in the light of the plans of a competitor. The plans are made either with an estimate of plans or competitor or plan is a reaction to the strategic move of competitor either announced or executved.  To estimate the competitor's plans, a manager has to put himself in his competitor's place and develop a set of plans for his competitor, using the knowledge has regarding the objectives and the circumstances in which the competitor is operating. No doubt some industrial espionage will be tried to get an understanding of competitor's plans.

Policies

Policies are general statements which guide or channel thinking in decision making of subordinates. Policies delimit an area within which a decision is to be made and assure that the decision will be consistent with and contribute to objectives. Policies tend to predecide issues, and avoid repeated analysis. Polices are based on analysis and once pronounced avoid repeated analysis

Procedures

Procedures are plans and they establish a method of handling activities. They specify a chronological sequence of required actions.

Rules

A rule is the simplest type of plan. A rule requires that a specific and definite action be taken or not taken with respect to a situation.

Programs

A program is a complex of policies, procedures, rules, task assignments assembled to carry out a given course of action. A program is supported by necessary capital and operating budgets.

Budgets

A budget is a plan. It is a statement of expected results expressed in numerical terms

Organizing

Organizing is the grouping of activities necessary to attain the objectives, the assignment of each grouping to a manager with authority necessary to supervise it,and the provision for coordination horitzonally and vertically in the enterprise structure.

Formal Organization and Informal Organization

Formal organization means the intentional structure of roles specified through  a formal organization structure chart.

Informal organization is any joint personal activity without conscious joint purpose, even though contributing to joint results (Chester Barnard).

Important concepts in organizing

1. Principles of span of control

2. Departmentation: By numbers, by time (shifts), by function, by territory, br product, by customer segment, by maketing channels, by process (in manufacturing).

3. LIne and staff relationships

4. Delegation

Staffing

The managerial function of staffing is defined a filling positions in the organization structure through identifying work force requirements, inventorying the people available, recruitment, selection, placement, promotion, appraisal, compensation, and training of people.

Leading

The managerial function of leading is defined as the process of influencing people so that they will strive willingly and enthusiastically toward the achievement of organizational goals.

Important Concepts

Behavioral model of man

Motivation

Maslow's hierarchy of needs

McCleland's needs

Vroom's Expectancy Theory of Motivation

Reinforcement theory

Job enlargement

Job enrichment

Leadership

Styles of leadership

Managerial grid

Situation leadership or contingency theory of leadership

Communication

Controlling

The managerial function of controlling is the measurement and correction of performance in order to make sure that enterprise objectives and plans devised to attain them are accomplished.

Control of overall performance


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Waiting Line Management - Review Notes

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Job Design and Work Measurement - Review Notes

Job Design Techniques

An operations manager uses job design techniques to structure work to meet the physical and behavioral needs of the employee. Organization management principles are used to come out with various jobs in an organization. Industrial engineering techniques like motion study, work station design and ergonomics help in developing the most efficient method at a point time. Work measurement methods are used to determine the standard time for performing a given task. . Work performance standards are important to the workplace so accomplished can be measured and evaluated.  Also, standard time estimates permit better planning and costing and provide a basis for compensating the work force and even providing incentives.

Trends in production job design include quality and maintenance of the equipment as part of the worker's job. Today many workers are cross-trained to perform multiskilled jobs and total quality programs are important for all employees. Team approaches, informating, use of temporary workers, automation, and organizational commitment are other key issues in job design decisions.

Behavioral considerations in job design include how specialized a job will be. Specialization has unique advantages and disadvantages. At the other extreme from specialization are the concepts of job enlargement and job enrichment. Sociotechnical systems of the interaction between technology and the work group influence job design as do ergonomic or physical consideration.

Work methods determine how the work should be accomplished in organizations. Methods efficiency engineering or method study is the classical IE tool for this purpose. Inspection methods and maintenance methods can be also be analyzed using methods study. Work methods can be established for an overall productive system, a worker alone, a worker interacting with equipment, and a worker interacting with other individuals. When individual workers are considered, motion study becomes the technique.

Work measurement and standards exist to set time standards for a job. A basic technique used in work measurement is the stop watch time study. Now comprehensive predetermined motion time systems are available to set standards based on process plans.  Time studies can be done for production jobs or for nursing jobs. Work sampling is a work measurement technique using samples instead of full time time study.

Another issue in job design is the financial incentive plan. These plans determine how workers should be compensated for their differences in production output over long periods of time. Persons who are consistently producing more output for number of days expect more compensation. In preparing a financial incentive plan, management must consider individual, group, and organization wide rewards.

Topics covered in the Note

Job Design Decisions
Job Design Defined

Behavioral Considerations in Job Design
Degree of Labor Specialization
Specialization of Labor Defined
Job Enrichment
Job Enrichment Defined
Sociotechnical Systems
Sociotechnical Systems Defined

Physical Considerations in Job Design
Work Physiology Defined
Ergonomics Defined

Work Methods
A Production Process
Workers at a Fixed Workplace
Workers Interacting with Equipment
Workers Interacting with Other Workers

Work Measurements and Standards
Work Measurement Techniques
Work Measurement Defined
Work Sampling Compared to Time Study
Time Study Defined
Predetermined Motion Time Data Systems Defined
Elemental Data Defined
Normal Time Defined
Standard Time Defined
Work Sampling Defined

Financial Incentive Plans
Basic Compensation Systems
Individual and Small-Group Incentive Plans
Organizationwide Plans

Conclusion
Case: Jeans Therapy—Levi's Factory Workers Are Assigned to Teams, and Morale Takes A Hit

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