MGT101:

• Principle


  A fundamental truth that establishes cause and effect relationship between two or more variables under given situation. They serve as a guide to thought & actions.
• Management principles


  Statements of fundamental truth based on logic which provide guidelines for managerial decision making and actions
• How management principles are derived

  • On the basis of observation and analysis i.e. practical experience of managers
  • By conducting experimental studies
• Henri Fayol's 14 Principles of Management


  • Division of work
  • Authority & responsibility
  • Discipline
  • Unity of command
  • Unity of direction
  • Subordination of individual interests to the general interests
  • Remuneration
  • Centralization
  • Scalar chain
  • Order
  • Equity
  • Stability of tenure of personnel
  • Initiative
  • Espirit de corps
• Division of work


  Work should be divided among individuals and groups to ensure that effort and attention are focused on special portions of the task
• Authority


  The right to give orders and the power to exact obedience
• Responsibility


  Being accountable, and is therefore naturally associated with authority. Whoever assumes authority also assumes responsibility.
• Discipline


  • A successful organization requires the common effort of workers
  • Penalties should be applied judiciously to encourage this common effort
• Unity of command


  Workers should receive orders from only one manager
• Unity of direction


  The entire organization should be moving towards a common objective in a common direction
• Subordination of individual interests to the general interests

  The interests of one person should not take priority over the interests of the organization as a whole
• Remuneration


  Many variables, such as cost of living, supply of qualified personnel, general business conditions, and success of the business, should be considered in determining a worker's rate of pay
• Centralization


  Lowering the importance of the subordinate role
• Decentralization


  Increasing the importance of the subordinate role
• Scalar chain


  Managers in hierarchies are part of a chain like authority scale. Each manager, from the first line supervisor to the president, possess certain amounts of authority. Lower level managers should always keep upper level managers informed of their work activities.
• Order


  For the sake of efficiency and coordination, all materials and people related to a specific kind of work should be treated as equally as possible
• Equity


  All employees should be treated as equally as possible
• Stability of tenure of personnel

  Retaining productive employees should always be a high priority of management. Recruitment and Selection Costs, as well as increased product-reject rates are usually associated with hiring new workers.
• Initiative


  Management should take steps to encourage worker initiative, which is defined as new or additional work activity undertaken through self direction
• Espirit de corps


  Management should encourage harmony and general good feelings among employees
• Henri Fayol is the FATHER OF MODERN OPERATIONAL MANAGEMENT THEORY
• External environment


  Everything outside an organization's boundaries that might affect it. The uncontrollable environment.
• Internal environment


  The conditions and forces within an organization. The controllable environment.
• Dimensions of the general environment

  • Economic
  • Technical
  • Socio-cultural
• Elements of the organizational environment

  • Public pressure groups
  • Suppliers
  • Customers
  • Government
  • Labor unions
  • Competitors
• Additional dimensions of the environment

  • Political-Legal
  • International
• Elements of the task environment

  • Competitors
  • Customers
  • Suppliers
  • Regulators
• Additional elements of the task environment

  • Interest groups
  • Strategic partners
• Elements of the internal environment

  • Owners
  • Board of directors
  • Employees
  • Physical work environment
• Organizational culture


  The set of values, beliefs, behaviors, customs, and attitudes that helps the members of the organization understand what it stands for, how it does things, and what it considers important
• Organizational culture


  • It determines the "feel" of the organization
  • Its starting point is often the founder
• Managing organizational culture


  1. Understand the current culture

  2. Decide if it should be maintained or changed

  3. Walk a fine line between maintaining an effective culture and changing a dysfunctional one
• Competitive forces


  • Threat of new competitive entrants
  • Competitive rivalry
  • Threat of substitute products
  • The power of buyers
  • The power of suppliers
• Examples of environmental turbulence

  • Terrorist attacks
  • Workplace violence
  • Computer viruses
• How organizations respond to their environments

  • Information management
  • Social responsibility
  • Strategic responses
  • Direct influence
  • Organization design and flexibility
  • Mergers, takeovers, acquisitions, alliances
• Approaches to organizational effectiveness

  • Systems resources approach
  • Internal processes approach
  • Goal approach
  • Strategic constituencies