MANAGEMENT
Management includes all key managers and the Board of Directors.
Management
Management in all business and organizational activities is the act of getting people together to accomplish desired goals and objectives efficiently and effectively. Management comprises planning, organizing, staffing, leading or directing, and controlling an organization (a group of one or more people or entities) 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.
Because 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 pre-requisite to attempting to manage others.
Management can also refer to the person or people who perform the act(s) of management.
Contents - 1 History
- 2 Nature of managerial work
- 3 Historical development
- 3.1 Early writing
- 3.1.1 Sun Tzu's The Art of War
- 3.1.2 Chanakya's Arthashastra
- 3.1.3 Niccolò Machiavelli's The Prince
- 3.1.4 Adam Smith's The Wealth of Nations
- 3.2 19th century
- 3.3 20th century
- 3.4 21st century
- 4 Topics
- 4.1 Basic functions/Roles
- 4.2 Formation of the business policy
- 4.2.1 Implementation of policies and strategies
- 4.2.2 Policies and strategies in the planning process
- 4.3 Multi-divisional hierarchy
|
History
The verb manage comes from the Italian maneggiare which in turn derives from the Latin manus (hand). The French word mesnagement influenced the development in meaning of the English word management in the 17th and 18th centuries.[1]
Some definitions of management are:
- Organization and coordination of the activities of an enterprise in accordance with certain policies and in achievement of clearly defined objectives. Management is often included as a factor of production along with machines, materials, and money. According to the management guru Peter Drucker (1909–2005), the basic task of a management is twofold: marketing and innovation.
- Directors and managers have the power and responsibility to make decisions to manage an enterprise. As a discipline, management comprises the interlocking functions of formulating corporate policy and organizing, planning, controlling, and directing the firm's resources to achieve the policy's objectives. The size of management can range from one person in a small firm to hundreds or thousands of managers in multinational companies. In large firms the board of directors formulates the policy which is implemented by the chief executive officer.
Theoretical scope
At the beginning, one thinks of management functionally, as the action of measuring a quantity on a regular basis and of adjusting some initial plan; or as the actions taken to reach one's intended goal. This applies even in situations where planning does not take place. From this perspective, Frenchman Henri Fayol(1841 -1925)[2] considers management to consist of six functions:forecasting, planning, organizing, commanding, coordinating, controlling. He was one of the most influential contributors to modern concepts of management. Another way of thinking, Mary Parker Follett (1868–1933), who wrote on the topic in the early twentieth century, defined management as "the art of getting things done through people". She described management as philosophy.
Some people, however, find this definition, while useful, far too narrow. The phrase "management is what managers do" occurs widely, suggesting the difficulty of defining management, the shifting nature of definitions, and the connection of managerial practices with the existence of a managerial cadre or class.
Nature of managerial work
In for-profit work, management has as its primary function the satisfaction of a range of stakeholders. This typically involves making a profit (for the shareholders), creating valued products at a reasonable cost (for customers), and providing rewarding employment opportunities (for employees). In nonprofit management, add the importance of keeping the faith of donors. In most models of management/governance, shareholders vote for the board of directors, and the board then hires senior management. Some organizations have experimented with other methods (such as employee-voting models) of selecting or reviewing managers; but this occurs only very rarely.
Historical development
Difficulties arise in tracing the history of management. Some see it (by definition) as a late modern (in the sense of late modernity) conceptualization. On those terms it cannot have a pre-modern history, only harbingers (such as stewards). Others, however, detect management-like-thought back to Sumerian traders and to the builders of the pyramids of ancient Egypt.
Given the scale of most commercial operations and the lack of mechanized record-keeping and recording before the industrial revolution, it made sense for most owners of enterprises in those times to carry out management functions by and for themselves.
Early writing
While management has been present for millennia, several writers have created a background of works that assisted in modern management theories.
19th century
Classical economists such as Adam Smith (1723–1790) and John Stuart Mill (1806–1873) provided a theoretical background to resource-allocation, production, and pricing issues. About the same time, innovators like Eli Whitney (1765–1825), James Watt (1736–1819), and Matthew Boulton (1728–1809) developed elements of technical production such as standardization, quality-control procedures, cost-accounting, interchangeability of parts, and work-planning. Many of these aspects of management existed in the pre-1861 slave-based sector of the US economy. That environment saw 4 million people, as the contemporary usages had it, "managed" in profitable quasi-mass production.
20th century
By about 1900 one finds managers trying to place their theories on what they regarded as a thoroughly scientific basis (see scientism for perceived limitations of this belief). Examples include Henry R. Towne's Science of management in the 1890s, Frederick Winslow Taylor's The Principles of Scientific Management (1911), Frank and Lillian Gilbreth's Applied motion study (1917), and Henry L. Gantt's charts (1910s). J. Duncan wrote the first college management textbook in 1911. In 1912 Yoichi Ueno introduced Taylorism to Japan and became first management consultant of the "Japanese-management style". His son Ichiro Ueno pioneered Japanese quality assurance. Towards the end of the 20th century, business management came to consist of six separate branches, namely:
- Human resource management
- Operations management or production management
- Strategic management
- Marketing management
- Financial management
- Information technology management responsible for management information systems
21st century
In the 21st century observers find it increasingly difficult to subdivide management into functional categories in this way. More and more processes simultaneously involve several categories. Instead, one tends to think in terms of the various processes, tasks, and objects subject to management.
Branches of management theory also exist relating to nonprofits and to government: such as public administration, public management, and educational management. Further, management programs related to civil-society organizations have also spawned programs in nonprofit management and social entrepreneurship.
Note that many of the assumptions made by management have come under attack from business ethics viewpoints, critical management studies, and anti-corporate activism.
As one consequence, workplace democracy has become both more common, and more advocated, in some places distributing all management functions among the workers, each of whom takes on a portion of the work. However, these models predate any current political issue, and may occur more naturally than does a command hierarchy.
Topics
The photo shows a training meeting with factory workers in a stainless steel ecodesign company from Rio de Janeiro, Brazil. Endomarketing is a part of the management and is very important to motivate the work force
Basic functions/Roles
Management operates through various functions, often classified as planning, organizing, staffing, leading/directing, and controlling/monitoring.
- Planning: Deciding what needs to happen in the future (today, next week, next month, next year, over the next 5 years, etc.) and generating plans for action.
- Organizing: (Implementation) making optimum use of the resources required to enable the successful carrying out of plans.
- Staffing: Job analyzing, recruitment, and hiring individuals for appropriate jobs.
- Leading/Directing: Determining what needs to 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 doesn't take place in an organization, then employees may not contribute to the other functions (which are usually set by top level management).
Formation of the business policy
- The mission of the business is the most obvious purpose—which may be, for example, to make soap.
- The vision of the business reflects its aspirations and specifies its intended direction or future destination.
- The objectives of the business refer to the ends or activity at which a certain task is aimed.
- The business's policy is a guide that stipulates rules, regulations and objectives, and may be used in the managers' decision-making. It must be flexible and easily interpreted and understood by all employees.
- The business's strategy refers to the coordinated plan of action that it is going to take, as well as the resources that it will use, to realize its vision and long-term objectives.
Implementation of policies and strategies:
- All policies and strategies must be discussed with all managerial personnel and staff.
- Managers must understand where and how they can implement their policies and strategies.
- A plan of action must be devised for each department.
- Policies and strategies must be reviewed regularly.
- Contingency plans must be devised in case the environment changes.
- Assessments of progress ought to be carried out regularly by top-level managers.
- A good environment and team spirit is required within the business.
- The missions, objectives, strengths and weaknesses of each department must be analyzed to determine their roles in achieving the business's mission.
- The forecasting method develops a reliable picture of the business's future environment.
- A planning unit must be created to ensure that all plans are consistent and that policies and strategies are aimed at achieving the same mission and objectives.
All policies must be discussed with all managerial personnel and staff that is required in the execution of any departmental policy.
- Organizational change is strategically achieved through the implementation of the eight-step plan of action established by John P. Kotter: Increase urgency, get the vision right, communicate the buy-in, empower action, create short-term wins, don't let up, and make change stick.
Policies and strategies in the planning process
- They give mid- and lower-level managers a good idea of the future plans for each department in an organization.
- A framework is created whereby plans and decisions are made.
- Mid- and lower-level management may add their own plans to the business's strategic ones.
Multi-divisional hierarchy:
The management of a large organization may have about five levels:
- Senior management (or "top management" or "upper management")
- Middle management
- Low-level management, such as supervisors or team-leaders
- Foreman
- Rank and File
Top-level management
- Require an extensive knowledge of management roles and skills.
- They have to be very aware of external factors such as markets.
- Their decisions are generally of a long-term nature
- Their decisions are made using analytic, directive, conceptual and/or behavioral/participative processes
- They are responsible for strategic decisions.
- They have to chalk out the plan and see that plan may be effective in the future.
- They are executive in nature.
Middle management
- Mid-level managers have a specialized understanding of certain managerial tasks.
- They are responsible for carrying out the decisions made by top-level management.
- finance, marketing etc comes under middle level management
Lower management
- This level of management ensures that the decisions and plans taken by the other two are carried out.
- Lower-level managers' decisions are generally short-term ones.
Foreman / lead hand
- They are people who have direct supervision over the working force in office factory, sales field or other workgroup or areas of activity.
Rank and File
- The responsibilities of the persons belonging to this group are even more restricted and more specific than those of the foreman.
Rating factors:
Management is the most important element for a successful operation of a bank. Rating is based on the following factors:
Quality of the monitoring and support of the activities by the board and management and their ability to understand and respond to the risks associated with these activities in the present environment and to plan for the future.
Financial performance of the bank with regards to the other CAMELS ratings:
Development and implementation of written policies, procedures, MIS, risk monitoring system, reporting, safeguarding of documents, contingency plan and compliance with laws and regulations controlled by a compliance officer
· Availability of internal and external audit function
· Concentration or delegation of authority
· Compensations policies, job descriptions
· Response to CBI concerns and recommendations
· Overall performance of the bank and its risk profile
Management rating 1:
Management rating “1” indicates a strong and committed Management showing:
· A thorough understanding of the risks associated with the bank’s activities
· A strong financial performance in all areas
· Appropriate understanding and response to changing economy
· Planning, control, implementation of internal policies
· Appropriate audit function
· No evidence of self-dealing
· Strong cooperation and interaction between the Board of Directors and the management and successful delegation of authority
· Competent and trained staff at all levels
· Management’s reaction to CBI concerns and recommendations
Management rating 2:
Management rating “2” has the general characteristics of “1” but possesses some deficiencies in rating factors that can be easily corrected without regulatory supervision. Careful consideration should be given to the financial condition of the bank.
Management rating 3:
Management rating “3” displays major weaknesses in one or more of the rating factors. It needs regulatory supervision to ensure that management and Board takes corrective actions. Among the problems are:
· Significant insider abuse
· Disregard for regulatory requirements
· Poor assessment of risks and planning
· Inappropriate reactions to economic adversities and corrective actions
· Poor financial performance
· Lack of proper written policies and procedures
Management rating 4:
Management rating “4” indicates major weaknesses in several areas.
Strong regulatory action is needed
Board of Directors should consider replacing or strengthen management due to:
· Insider abuse
· Disregard for regulatory requirements
· Lack of proper policies
· Damaging actions
· Poor financial performance may lead to insolvency
Management rating 5:
Management rating “5” requires immediate and strong supervisory actions:
· Bank displays strong weaknesses in all areas
· Poor financial performance
· Insolvency very likely
· Consider replacing management
· Board of directors to consider receivership
