PRINCIPLES OF MANAGEMENT ANNAMALAI UNIVERSITY MBA ASSIGNMENT 2020 ANSWERS
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- 1.1PRINCIPLES OF MANAGEMENT
Q1. Management is said to have universal application. How do you justify the
Universality of Management? Give examples to illustrate your arguments.
Managing is necessary whenever one needs to get things done.
It may be called the practice of consciously and continually shaping organizations.
Every organization has people who are assigned the responsibility of serving the organization to achieve its goals.
Management is a universal phenomenon in the sense that it is a common and essential element in all enterprises. Every group effort requires setting objectives, making plans, handling people, co-coordinating and controlling activities, achieving goals and evaluating performance directed towards organizational goals.
These activities relate to the utilization of 4 types of inputs or resources from the environment—human, monetary, physical, and informational.
Human resources include managerial talent, labor, and so forth. Monetary resources are the financial capital the organization uses to finance both ongoing and long-term operations.
Physical resources include raw materials, office and production facilities, and equipment. Information resources are data and other kinds of information utilized by the organization.
The job of the manager is to combine and coordinate these resources to achieve the organization’s goals.
If we see our society closely, we will found management practices are being used everywhere, our praying place, social parties, transport system, schools and.
The concept of universality of management has several implications.
- First, managerial skills are transferable from one person to another.
- Secondly, management skills can be transferred from one organization to another.
- Thirdly, managerial skills can be important and exported from one country to another.
- Fourthly, this principle of universality serves as the basis of a general theory of management -a set of common principles.
Some experts support the universality of management on the group that whatever the situation and whatever the level of management, the management function is common.
Any manager must, one time or the other, perform the same managerial functions.
A set of common principles or a general theory of management underlies all organizations F.W. Taylor said that the fundamental principles of scientific management apply to all human activities from our simplest individual acts to work of our great corporations.
According to Koontz and O’Donnell,” Management fundamentals have universal application in every kind of enterprise and at every level of the enterprise.”
According to Foyal,” Acting in their managerial capacity, president, college deans, bishops, and head of government agencies, all do the same things.”
But, on the other hand, many other experts oppose the universality of management.
According to Peter Drucker “The skills, the competence, the experience of management cannot, as such, be transferred and applied to the organization and running of other institutions. A career in management is, by itself, not preparation for major political office or leadership in the armed force, the church or a university.”
According to C.Mc Millan and R.W. Gonzalez,” Management philosophy is culture-bound and it is not universally applicable. External forces affect management philosophy.”
Similarly, in a study of 3600 managers in fourteen countries, it was found that variations in managerial behavior patterns were due to identifiable cultural differences.
Management is required in all organizations.
The managerial function of planning, organizing, staffing, directing and controlling are found in any enterprise.
According to Koontz and O’ Donell,” as a manager, each must at one time or another, carry out all the duties characteristic of managers. This is the principle of universality of the managerial function.”
The concept of universality implies that management and activities are transferable from one organization to another.
This mainly happens in the case of military people who often join the industry after retirement. There is, of course, an instance where such transfers have not been successful.
At last, no doubt, management is universals because its basic function is acceptable to all and applicable anywhere.
For example, my father makes a plan, my teacher makes a plan, a captain of a sports team makes a plan, a businessman makes a plan, an entrepreneur makes a plan, a professional (doctor, chartered accountant.etc) makes a plan, and even you and I make plans.
All of the above use other managerial functions as planning time to time to achieve their desired goals.
Now, it is clear that the functions and principles of management are universal, but according to the nature, size and another background of organizations, their application will differ according to circumstances.
So, no doubt that management is universal. But the practice of it is different in situations, positions, society.
There has been and still is considerable controversy about the universality of management process and functions. The area of management has a worldwide command and acceptability. Scholars have different views about whether management knowledge is applicable everywhere or not. If are the management knowledge has universal approach then it can be communicated through persons going from one country to another, persons from developing countries going to developed countries and going back after learning management principles or by organising management development programmes in developing countries.
Some scholars opine that management principles and processes have universal application. They feel that managerial principles can be applied in all types of business organisations and in every country. There are different views of management thinkers about universality of management. Authors like Henry Fayol, Taylor, James Lundy, Louis Allen, Dalton F. Mc Farland and Koontz and O’ Donnell are of the view that management has universal application. But there are others who do not subscribe to the view of universality of management. They include Joan Woodward, Ernest Dale, Peter Drucker, W. Oberg.
The fundamental functions of management like planning, organising, staffing, leading and controlling are basic and are performed by every manager in all organisations. The management process is similar among managers. In the words of Fayol, “There is a universal science of management applicable alike to commerce, industry, politics, religion, war or philanthropy.
It is argued that different countries have different cultures and varying levels of economic development. Culture consists of attitudes, beliefs and values of a society. There are differences in personality traits and educational, social, political and economic standards are also different. Since management is people oriented there is always a possibility that application of management principles will be affected by these factors. When the ground rules under which a manager operates are different in different cultures then common strategies of management will not be possible.
The objectives of an enterprise determine the type of management required. Different enterprises have different objectives so these managerial needs are linked to these objectives. According to Peter Drucker, the skills, the competence, and the experience of management cannot as such be transferred and applied to every type of institution. Only analytical and administrative types of skills and abilities can be transferred. Thus, management principles cannot be applied universally.
There are differences in philosophies of different organisations. Philosophies refer to those general concepts and integrated attitudes that are basic to an enterprise. Managers operate with a specific philosophy in a particular enterprise. This philosophy can be different even in same type of enterprises. These philosophies require different kinds of managerial techniques. Earnest Dale says, “No individual could be a good manager in religious, academic, military and business institutions of both communist and democratic countries, because the philosophies that underlie each, are very different and one person could not encompass so much.”
Since philosophies exert different influences on managerial working there cannot be any principles which can have universal application. Common laws, principles and concepts tend to be true in all managerial problems. Management principles can be applied in all types of organised human endeavours. In the words of F.W. Taylor, “The fundamental principles of scientific management are applicable to all kinds of human activities from our simplest individual acts to the work of our great corporations.”
Some people do not distinguish between management fundamentals and techniques. They oppose universality of management on the basis of techniques of management. Management techniques are the tools for performing managerial functions. Management techniques can differ from person to person, organisation to organisation or from country to country but basic principles and theories remain the same.
Management skills and principles are transferable from one person to another, from one organisation to another, from one country to another. When skills and principles can be transferred then it has universal applicability. Managers can be developed through education and training. This knowledge can be acquired by any one and anywhere so it is not related to particular caste, creed or country. All this is possible only if management is universal in nature.
Some experts feel that management principles and knowledge do not have universal application due to cross- cultural differences. They are also of the view that same management skills cannot be applied in all situations and fields and the skills are not transferable.
Peter Drucker is of the view that, “the skill, the competence, the experience of management cannot, as such be transferred and applied to the organisation and running of other institutions. A career in management is, by itself, not a preparation for major political office or for leadership in armed forces, the church or a university.” There is a difference in objectives of the organisations. Business organisations exist to maximise profitability whereas social organisations like clubs, educational institutions have social service as the objective. Different organisations with separate objectives will have to be managed differently.
There is a feeling that same person may not prove to be a good administrator in different organisations. The management of a business enterprise, a church, a hospital, a military academy may riot be the same because of their different philosophies. Even in the same category, the philosophy of enterprises may be different. One enterprise may aim to go for quick profits while the other may aim at long-term returns. The philosophies will exert different influences on productivity, organisation structure, pattern of communication, delegation of authority etc.
Some authors are of the opinion that cultural backgrounds of managers do have an influence on their working. Gonzale and Mc Millan concluded in their study that ‘management philosophy is culture- bound.’ They were also of the opinion that external environmental forces affect the management philosophy. W. Oberg also came to the conclusion that the applicability of management principles is limited to a particular culture.
The managers from traditional, religious and cultural bias societies will not have that scientific temperament which the managers from liberal social background may have. The differences in cultural backgrounds also limit the universality of management.
A Critical analysis of the above arguments brings out that every type of organization require management. Managerial functions like planning, organizing, staffing and controlling are to be performed in all types of organizations. The objectives of enterprises may differ but the type of situations to be dealt with by them are the same? Managers shift from one enterprise to another because they have general managerial skills and principles of management work are similar. It is obvious that principles, concepts and skills are universal, only practices change. It can be concluded that basic principles and functions of management are universal in nature. These can be applied in every type of organisation and in every country.
Q2. “The importance of strategic planning is now fully realized by the Indian
corporate sector than before”- Discuss
Strategic planning means planning for making and implementing strategies to achieve organisational goals. It starts by asking oneself simple questions like : What are we doing, should we continue to do it or change our product line or the way of working, what is the impact of social, political, technological and other environmental factors on our operations, are we prepared to accept these changes etc.
Strategic planning helps in knowing where we are and where we want to go so that environmental threats and opportunities can be exploited, given the strengths and weaknesses of the organisation. Strategic planning is “a thorough self-examination regarding the goals and means of their accomplishment so that the enterprise is given both direction and cohesion.”
It is “a process through which managers formulate and implement strategies geared to optimising strategic goal achievement, given available environmental and internal conditions.” Strategic planning is planning for long periods of time for effective and efficient attainment of organisational goals. Strategic planning is based on extensive environmental scanning. It is a projection into environmental threats and opportunities and an effort to match them with organisational strengths and weaknesses.
Strategic planning is done to comprehend, anticipate and absorb environmental vagaries. It is a continuous process. Every time business organisations want to increase the growth rate or change their operations, desire for better management information system, co-ordinate activities of different departments, remove complacency from organisations; they make strategic plans.
It aims at long-term planning, keeping in view the environmental opportunities. It helps organisations analyse their strengths and weaknesses and adapt to the environment. Managers should be farsighted to make strategic planning meaningful.
Strategic planning guides members towards organisational goals. It unifies organisational activities and efforts towards the long-term goals. It guides members to become what they want to become and do what they want to do. It focuses on specific goals making it clear for members to know the direction towards which they have to move. Earning profits is less meaningful than earning a growth rate of 10% per year.
Paying high dividends is less meaningful than paying dividends at the rate of 40%. Meeting society’s needs is less meaningful than providing free education to school children of a specific community. Allocation of resources and attempts to meet the goals is facilitated through clear specifications in strategic planning. It makes the objectives operational and provides right direction to organisational activities.
In the world of globalisation, firms which have competitive advantage (capacity to deal with competitive forces) have better sales and financial performance. This is possible if they foresee the future. Future can be predicted through strategic planning. It enables managers to anticipate problems before they arise and solve them before they become worse.
Strategic planning provides information to assess risk and frame strategies to minimise risk and invest in safe business opportunities. Chances of making mistakes and choosing wrong objectives and strategies, thus, get reduced.
Risk is inherent in every business and failure to anticipate risk through strategic planning is almost sure to lead the business to failure unless otherwise proved by chance. Lack of strategy, framing wrong strategies or ineffective implementation of strategy cannot be afforded by business enterprises operating in the dynamic, changing and risky environment.
The time gap between investment decisions and income generation from those investments is called gestation period. During this period, changes in technological or political forces can affect implementation of decisions and plans may, therefore, fail. Strategic planning discounts future and enables managers to face the threats and opportunities. Huge capital investments in projects is followed by expected financial returns.
Strategic planning involves managers at top levels. They are not only committed to objectives and strategies but also think of new ideas for implementation of strategies. This promotes motivation and innovation. It also provides motivation to people at lower levels when they know their efforts are contributing towards organisational goals.
Satisfied workforce is the strength of the organisation. It saves huge costs on reducing absenteeism, labour turnover, role conflicts etc. It promotes discipline in the organisation and enhances human resource effectiveness and also organisational effectiveness.
Strategic planning makes best use of resources to achieve maximum output. Resources are scarce and strategic planning helps in their use in the areas where they are required most.
General Robert E. Wood remarks, “Business is like war in one respect. If its grand strategy is correct, any number of tactical errors can be made and yet the enterprise proves successful.” Effective allocation of resources, scientific thinking, effective organisation structure, coordination and integration of functional activities and effective system of control, all contribute to successful strategic planning.
Strategic planning requires lot of knowledge, training and experience. Managers should have high conceptual skills and abilities to make strategic plans. If they do not have the knowledge and skill to prepare strategic plans, the desired results will not be achieved. It will also result in huge financial losses for the organisation. This limitation can be overcome by training managers to make strategic plans.
If business units at different levels (corporate level, business level and functional level) are not coordinated, it can create problems for effective implementation of strategic plans.
In order to avoid developing risky objectives and strategies which they will not be able to achieve, managers may land up framing sub-optimal goals and plans. Sometimes, short-term commitments also defer making long-term strategies.
Strategic planning requires huge amount of time, money and energy. Managers may be constrained by these considerations in making effective strategic plans. These limitations are by and large, conceptual and can be overcome through rational, systematic and scientific planning. Researchers have proved that companies which make strategic plans outperform those which do not do so.
Strategic planning means planning for strategies and implementing them to achieve organisational goals. It starts by asking oneself simple questions like- What are we doing? Should we continue to do it or change our product line or the way of working? What is the impact of social, political, technological and other environmental factors on our operations? Are we prepared to accept these changes etc.?
Planning is something we do in advance of taking action; that is, it is anticipatory decision making. It is a process of deciding what to do and how to do it before action is required.
Strategic planning can be defined as a managerial process of developing and maintaining a viable fit between organization’s objectives, skills and resources and its changing environment.
The company’s strategic plan is the starting point for planning. It serves as a guide to the development of sound sub-plans to accomplish the organizational objectives. The aim of strategic planning is to help a company select and organize its businesses in a way that would keep the company healthy in spite of unexpected changes in the environment. It purports to shape or reshape the company’s businesses and products so that they yield target profits and growth.
An interesting question that can come to the mind is that – how the conventional long range planning gave way to the strategic planning. Before the early 1970s, managers who made long-range plans generally assumed that plans for the future were merely extensions of what the organization had done in the past.
However, environmental shocks during the 1970s and 1980s, such as energy crises, deregulation of many industries, accelerating technological change, and increasing global competition undermined this approach to long-range planning.
These changes in the “rules of the game” forced managers’ develop a systematic approach to analyzing the environment, assessing their organization’s strengths and weaknesses, and identifying opportunities where the organization could have a competitive advantage. As a result the value of strategic planning began to be recognized.
Strategic planning is the process of determining a company’s long-term goals and then identifying the best approach for achieving those goals.
Strategic planning is an organization’s process of defining its strategy or direction and making decisions on allocating its resources to pursue this strategy, including its capital and people.
Strategic planning is a process to determine or re-assess the vision, mission and goals of an organization and then map out objective (measurable) ways to accomplish the identified goals.
Strategic planning is systematic, formally documented process for deciding what are the handfuls of key decisions that an organisation, viewed as a corporate whole must get right in order to thrive over the next few years.
Strategic planning is a continuous and systematic process where people make decisions about intended future outcomes, how outcomes are to be accomplished, and how success is measured and evaluated.
Strategic planning is the method by which a community continuously creates arti-factual systems to serve extraordinary purpose.
Strategic planning is systematic process of determining goals to be achieved in the foreseeable future. It consists of – (i) Management’s fundamental assumptions about the future economic, technological, and competitive environments. (ii) Setting of goals to be achieved within a specified timeframe. (iii) Performance of SWOT analysis. (iv) Selecting main and alternative strategies to achieve the goals. (v) Formulating, implementing, and monitoring the operational or tactical plans to achieve interim objectives.
Strategic planning is a coordinated and systematic process for developing a plan for the overall course or direction of the endeavour in order to optimizing the future potential.
Strategic planning is a business process that many companies employ to identify critical success factors that set the course for future growth and profits.
In terms of organizations and strategic planning, an environmental scan involves considering the factors that will influence the direction and goals of an organization. And, it includes consideration of both present and future factors that might affect the organization, since; we’re planning for the future, not just the present.
For example, an environmental scan might project that in the next ten years, the number of people (potential customers) between the ages of 18-24 will increase from 30% to 40%. That’s important information if we want to decide what kind of new products we might consider introducing into the marketplace.
Strategic planning is important to an organization because it provides a sense of direction and outlines measurable goals. Strategic planning is a tool that is useful for guiding day-to-day decisions and also for evaluating progress and changing approaches when moving forward. In order to make the most of strategic planning, your company should give careful thought to the strategic objectives it outlines, and then back up these goals with realistic, thoroughly researched, quantifiable benchmarks for evaluating results.
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