BBA Professionally-managed Sector Study Material Notes
Table of Contents
BBA Professionally-managed Sector Study Material Notes: Traditionally managed sector Universality of management arguments for universality arguments against university Value of theory value of experience role of management Princples Effective management efficiency different approaches or managerial effectiveness Effective managers objectives questions :
MCom I Semester Methods Performance Evaluation Study Material Notes
Professionally-managed Sector
As against traditionally-managed sector, there are various organisations, both in private sector as well as in public sector, whose management is highly professionalised. There are numerous such companies like Hindustan Lever Limited, ITC Limited, British Oxygen Limited, Infosys Technologies, Wipro, Tata Iron and Steel Company. TELCO, and so on in private sector and Bharat Heavy Electricals Limited, Oil and Natural Gas Commission, Indian Oil Corporation, etc., in public sector. These companies have inducted management graduates at various levels of management, introduced modern concepts of management, set organisational objectives conducive to social needs, and motivated their personnel to achieve high level of professional competence. The number of organisations falling in this category is increasing day by day. In fact, managers in this sector can be compared with their counterparts in Western countries in terms of application of modern management techniques, attitudes towards management practices, and developing management concepts suitable for the country. The main reasons for the professionalization in this sector are as follows:
1 The most important factor contributing to professionalization of Indian management is the international impact. It can be observed that modern management concepts were first introduced by the subsidiaries and associates of multinationals operating in India. However, adoption of such techniques evoked mixed reactions in a corporate sector. While there was considerable admiration for the systems. were many who believed that they were not in tune with Indian context. They questioned the validity of these Western concepts in Indian business and social context. However, since many of these subsidiaries and associates were quite successful in terms of their growth and profitability, it was assumed that the succes was partly at least because of the application of such systems. With the increa size and complexity of business organisations of Indian origin, many of them also adopted the sophisticated management techniques. The sheer necessities of managing large and complex businesses resulted in the re-examination of the traditional way of managing these businesses.
Professionally-managed Sector
2. Professionalisation of management in certain sector has been because of compulsion. For example, the public sector increased manifold during the plan periods. With the failure of the initial attempt of inducting non-professional managers in the public sector enterprises, the government took a decision to induct professional managers in these enterprises with the responsibility of professionalisation of the entire managerial cadre and process. This has paved the way for professionalisation of management in many public sector enterprises. In the same place, when the ownermanagers were not able to manage the organisations because of increasing competition and consequently complexity of management, they yielded way to the professional managers. Over a period, there has been transformation of Indian business. The market has not remained protective and competition-free. The technology has undergone a sea-change. It may be observed that family management is effective in the early stages of economic development. However, once an organisation grows beyond a certain size, changes in the nature of managerial process in it demand that ownership and management should be divorced; that management positions should be held by persons who have professional skills and adequate training.
3. While the above two factors have generated the need for professionalisation, availability of trained and educated professional managers has facilitated the process of professionalisation of management. After the Second Five Year Plan, there has been increasing emphasis on management education. Today, there are many Institutes of Management at Ahmedabad, Kolkata, Bangalore, Lucknow and other places which impart full-time management education. There are many management departments at various universities offering full-time management courses. Besides, there are many institutions and organisations which run short-term management development courses. Prominent among these are: Administrative Staff College of India, Management Development Institute, National Institute of Bank Management. National Productivity Council with local Productivity Councils, All India Management Association with local chapters at about forty places, National Institute for Training in Industrial Engineering (NITIE), etc. These bodies organise management! development programmes of the duration ranging from 2 days to 12 weeks. In addition, many business organisations have also established their management development centres. Prominent among these are: Steel Authority of India, Life Insurance Corporation, most of the commercial banks, Rashtriya Chemicals and Fertilizers Limited in public sector and Tata Iron and Steel Company, TELCO. Hindustan Lever! ITC Limited, etc. in private sector. In fact, development of managers through some form of external exposure is goexposure is given high priority in many organisations. Even mparatively smaller organisations are also sending their managers to Management development programmes. This has resulted in a change in the perspective of old owner-managers. ne above discussion suggests that management in India is marching fast towards essionalisation, though a large part of it is still traditional. However, in the time to the process of professionalisation of management is likely to be faster because of the creasing complexity of managing business which is not possible for traditional management and also because of increasing availability of professionally-trained managers.
Professionally-managed Sector
Universality of Management
Another controversy which exists in management is about the universality of management. As the area of management has increasingly commanded worldwide interest and recognition, the question whether it is a science with universal application has concerned scholars and practitioners alike. Settlement of this controversy is necessary to determine the extent to which managerial knowledge developed in one country can be transmitted to other countries. If it is universal, there is no problem in transferability of management knowledge. However, in its absence, there is serious question on the universal use of management knowledge developed in a country.
The concept of universality of management suggests that transmission of management knowledge may be undertaken:
1 by managers from an industrially-developed country working in developing country:
2. by people from a developing country coming to study and work in industrially advanced country and returning back to their own country, and
3. through training and development programmes for managers in a developing country. Thus, managerial knowledge can be transferred from one person to another person, from one firm to another firm in the same country, and from one country to another country. This transferability of managerial knowledge is meaningful only when it has universal application. However, opinions about the universal applicability of management are not uniform. There are two divergent groups of arguments; one suggests that management is universal and another views that it is not universally applicable. During 1960s, many management scholars undertook research studies to find out the extent to which American management concepts were applicable in other countries, particularly less developed countries. However, they could not arrive at uniform conclusions. Therefore, it is essential to overcome this problem so that Indian managers can take adequate precautions while applying management concepts developed in other countries, mostly in developed countries.
Professionally-managed Sector
Arguments for Universality
Experts subscribing to the concept of universality of management suggest that the basics of management are universal and can be found in all types of organisations situated in any country or culture. For example, Harbinson and Myers, in their study of management in a number of countries of the world, have concluded that there is a logic of industrialisation ardanisation building has its logic too, which rests upon the development of management development which has applicability both to advanced and ma countries in the modern world. 19 While offered as a premise, their study of manage twelve countries supports it. Another study of 3.600 managers in fourteen Haire, Ghiselli, and Porter supports this view. They have found that there was ang degree of similarity in managerial behaviour patterns and many of the variations disco were due to identifiable cultural dimensions 20 Richman has found that the evolving over approach to management utilises the management functions-planning, organisms coordination, control, direction. leadership motivation and staffing which have been essentially the same as long-held American concepts.21 Similarly many other studies also support the view that management fundamentals throughout the world are almost the same, only their applications may differ because of various factors. Thus, management can be treated as a universal phenomenon. Following arguments can be advanced to suggest the view of universality of management:
1 Management as Process. Management as a process is universal. It is argued that management as a process is found in all organised activities irrespective of country, culture, or size. The various elements of management process-planning, organising, staffing, directing, and controlling–are universal for all organisations and as a manager, each one must, at one time or another, carry all these duty characteristics of managers. Only the intensity of a particular element may differ depending on the variables affecting management practices. This is the principle of universality of management. It implies that any theory or principle about a particular managerial function will apply to all managers irrespective of their level in the organisation, culture, or country.
2. Distinction between Management Fundamentals and Techniques. In order to ascertain the universality of management, it is proper to make distinction between management fundamentals and management techniques because it is the specific technique which varies according to the needs of the situation. Management fundamentals are the basic principles and theories while management techniques are the tools for performing managerial functions. Whereas management techniques may differ from country to country, management fundamentals will remain the same. In fact those who claim that management is not universal refer to management philosophy and not the management fundamentals. Gonzalez and McMillan who have found lack of universality of management have emphasised that aspect of management which lacks universality has to do with interpersonal relationships, including those between management and workers, management and suppliers, management and the customers, the community, competition, and government.22 Naturally, all these factors may affect the application of techniques of management rather than principles and theory of management themselves.
3. Distinction between Management Fundamentals and Practices. Universality of management suggests that management fundamentals are the same, only practices differ. This is so because management is both science and art. The most productive art is always based on an understanding of the science underlying it. Thus, science and art are cary. The art of managing or the practice of managing makes use of organised age, that is science. However, its practice is subject to variations under different ations. This may be true even with science also. For example, Koontz and O’Donnell suggest that one would not necessarily expect an automobile designed for use in deserts of jungles to be the same as one planned for high-speed super highways, even though the physical science which underpins both remains the same.”23 Same is the case with management also. While the practice may differ according to the nature of the organisation. the basic fundamentals of management will remain the same.
Professionally-managed Sector
Arguments against Universality
According to this view, management is entirely situational and there is nothing like universal principles of management. Therefore, there is no such way as the right way for a manager to operate or behave. There are only ways that are appropriate for specific tasks of specific enterprises under specific conditions, faced by managers of specific temperaments and styles. Thus, what managers do depends on the circumstances. With the result, we have numerous management principles which can be applied effectively most of the time but they cannot be applied effectively all the time. This happens because of lack of universality of management principles. Thus, management principles which are effective in one country may not be effective in another country. Not only that, even two organisations within the same country may apply different management principles. This has been proved by the research findings too. In 1960s and 70s, various research studies were conducted to test the universality of management and most of these studies have concluded that application of management principles varies in different countries because of differences in characteristics of these countries. Most of these studies have taken limited number of countries for comparison purpose. During 1980s and 90s, Hofstede, a Dutch management scholar, studied the management practices of forty countries and has concluded that not a single management principle has been applied uniformly in all these countries.24
The arguments against the universal application of management principles suggest that there are certain factors which affect the application of a principle or a set of principles of management. These factors are:
1 Cultural characteristics,
2. Management philosophy, and
3. Organisational objectives.
4. Cultural Characteristics. The application of management principles is determined by the culture of a country. Therefore, it can be said that management is culture-bound. Culture is a set of beliefs, attitudes, and values that are shared commonly by the members of the society. Culture affects people’s behaviour significantly and any people-oriented process may be affected by cultural characteristics. Management is a people-oriented process. Therefore, management is affected by the cultural characteristics of the country concerned. Since cultural characteristics of one country differ from others, hence applicability of management principles. Hofstede has concluded that people vary on five dimensions of national culture : Individualism and collectivism, power distance, uncertainty avoidance, masculinity, and time orientation.
5. Individualism and Collectivism. Hofstede has concluded that people differ in terms of individualism and collectivism. Individualism is the extent to which people place value on themselves; they define themselves by referring themselves as singular persons rather than as part of a group or organisation. For them, Individual tasks are more important than relationships. Collectivism is the extent to which people emphasise the good of the group or society. They tend to base their identity on the group or organisation to which they belong. At work, this means that relationships are more important than individuals or tasks; employer-employee links are more like family relationships.
Countries that value individualism are USA, Great Britain, Australia, Canada, Netherlands, and New Zealand. Countries that value collectivism are Japan, Columbia, Pakistan, Singapore, Venezuela, and Philippines. India may be placed near to collectivism.
6. Power Distance. Power distance shows the degree to which people in a country accept that power in organisations is distributed equally or unequally. Power distance is low when there is equal power distribution and it is high when there is unequal power distribution. People of a country with low power distance prefer management practices that allow them freedom of work and self-control. People of a country with high power distance prefer management practices that prescribe the work in a structured form with high degree of supervision and control.
7. Uncertainty Avoidance. Uncertainty avoidance is the degree to which people in a country prefer certainty which is the result of structured situations or uncertainty which is the result of unstructured situations. In many countries, people prefer unambiguity while in many other countries, people can tolerate ambiguity easily.
8. Masculinity. Masculinity includes quantity and quality of life. It indicates the degree to which people of a country are assertive and money-minded. In a country which has masculine culture, people put emphasis on quantity of life and prefer assertiveness and competition for acquisition of money and material goods. In a country having feminine culture, people put emphasis on quality of life and prefer relationships and show sensitivity and concern for the welfare of others.
Professionally-managed Sector
9. Time Orientation Time orientation is the degree to which people of a country put emphasis on future or past and present. Thus, people have either long-term orientation or short-term orientation. In a country having long-term orientation, people look to future and prefer thrift and persistence. They prefer to work on projects having a distant payoff. In a country having short-term orientation, people value past and present and have respect for traditions and social obligations.
The USA has high score on low power distance, individualism, quantity of life, and short-term orientation. It has low score on uncertainty avoidance.25 Since most of the management principles have been developed in the USA, these are applicable in the US context and in those countries that have similar cultural characteristics. In other countries, these principles have limited application. For example, based on research study, Gonzalez and Macmillan conclude, “American management philosophy abroad provides evidence that our uniquely American philosophy of management is not universally applicable but is rather special case. “26 Most of the Asian countries and many other countries have different characteristics, hence different management practices. For example, management practices Principles and Practice of Management
developed by the advanced court that there are certain management may differ from country to com same country. Therefore, the to another country. In developed in the advanced countries if they are universal. An integrated analysis suggests management principles which are universal though their practices rom country to country or from organisation to organisation even within the Therefore, the knowledge of management can be transferred from one country ef country. In fact this has happened. Bulk of management knowledge has been oped in the United States from where other countries have borrowed. The process of anagement transfer has been undertaken in the following ways:
1 Through the use of American literature in the curriculum of management education in various countries;
2. Through training of managerial personnel of developing countries in the United States;
3. Through the consultancy assignment undertaken by management experts from the United States in developing countries; and
4. Through the management practices adopted by multinationals operating in the developing countries.
However, it should not be taken that managers educated in the United States will be effective in all countries but factors limiting the application of management principles should be taken into account. In order to understand the factors affecting management practices, some models have been constructed, prominent among them are the models developed by Farmer and Richman29 and Koontz30. Though there are some differences between the two models, both emphasise the factors and processes affecting differences in management practices. For example, the model of Farmer and Richman has been presented in Figure 1.3.
Professionally-managed Sector
According to this model, there are four basic factors which affect the adoption of management practices in a country or in an organisation. These are educational, sociological, legal-political, and economic, Some other factors which affect the management practices gap in developing countries and because of this management practices in these countries. However, such practices can therefore, there is a need for adopting suitable unless there is a developed body of knowledge of management, developed body of knowledge of management. The development of such a knowledge is a long process. Therefore, the knowledge developed in advanced Les can be imported. However, while importing the knowledge, due consideration has to be given to the factors which affect management practices enumerated above. Local knowledge of management can be classified in three parts: (1) that aspect of knowledge which can be adopted in total, the adoptable: ftn that knowledge which can be adopted w some modifications, the adaptable; and (ii) that aspect of knowledge which is mappa The distinction among these is necessary because only first category of knowledge can be imported as such while some modifications are required in others. Generally, the knowledge which is impersonal is adoptable in total but the knowledge which deals with human factor has to be modified. This modification can be brought about by suitable research, observation, and practice.
Applying Management Theory in Practice
The basic objective of studying management is to gain knowledge about how to manage organisations so as to optimise the achievement of their objectives, and to spread this knowledge, various management theories and principles have been developed. However, a common statement made by managers is, “That is fine in theory, but, in practice, it does not work.” While this is true for the managers at the global level, Indian managers have specific reasons to be dissatisfied with the theories developed in industrially-advanced countries and are followed in Indian context. These managers may be correct in saying so as the theories they have applied might not have worked. This state of affairs is unfortunate since the real world is the ultimate laboratory for the social scientists. If bad theories are created that do not work, the gap between theory and practice is widened. Therefore, it is important to identify the reasons why theories do not work in practice.
Why Theories Fail?
It is true that many theories have failed to produce the desired results in practice: therefore, attempts are on to evolve new theories. However, the reasons for the failure of theories are more important to analyse rather than merely counting the occasions of their failures. If these reasons are understood, managers can improve their skills in choosing and situation, that is, using correct solution for the wrong problem. For example, often, managers me mistakes in applying job enrichment concept (discussed in Motivation chapter). instead of enriching the job to make it more motivating, they may overload it, or may enrich a job that is currently grossly underpaid in relation to market conditions.
Professionally-managed Sector
1 No Consideration given for Systems Effects. One of the most common experiences of managers who try new theories is that while they may solve the original problem, occasionally, new problems are created as a result of the action, and the managers end up thinking they were better off before. This happens because theoretical models tend to neglect the systems effect of introducing change into an organisation. For example, a manager may enhance the status of a group to enhance its productivity. It may work positively for the group but may create problems for the other groups whose status gets reduced in relation to the target group
2. Lack of Specific Applicability of a Theory. Generally, theories are developed using scientific methods on relatively large number of observations. Consequently, theories developed tend to apply to individuals collectively, but not to any one specific person. A manager may attempt to apply a prescriptive statement from a general theory to a specifc situation that does not fit the general requirements of the theory. For example, the theory states that money is not a motivator in general terms. However, it may be a motivator for an individual because of his specific background.
3. Lack of Universal Applicability. A theory. particularly in management and organisational behaviour which are affected by characteristics of human beings which may differ from place to place, lacks universal applicability. Thus, a theory developed in one situation may not be applicable in another situation because variables in two situations may be different. This aspect is important for Indian managers when they apply the theories developed abroad for managing Indian organisations.
4. Wrong Theory. Sometimes, wrong theory may be created. This may happen because of several reasons: (i the environmental conditions under which the theory was created have changed: (ti) incorrect conclusions have been drawn from right data; (iii) correct conclusions have been drawn from poor data; and (iv) researchers have overlooked other significant influences that affect the results. In such a situation, the theory may not work at all. Value of Theory
If we analyse the reasons for failure of theories, we may find that reasons are two-fold: (1) the application of theory is incorrect becuase of lack of proper understanding, or (i9 the theory itself may be faulty and lacks applicability. Therefore, the practitioners have to take into consideration the reasons for failure of the theory and should not ignore the reality by commenting ‘It does not work in practice.’ Fortunately, a lot of concepts and theories developed in the field of management do have applicability, and their understanding is important for effective management practices. How management principles contribute to management practices and enhancing management knowledge has been discussed later in this section.
Professionally-managed Sector
Value of Experience
Theories are important for increasing managerial effectiveness provided these are utilised properly. Proper utilisation of a theory requires that the practitioner has both knowledge experience. As mentioned earlier, management is both science science aspect suggests that theoretical knowledge is necessary: Its akes the organisational processes effective. Its that perfection can be achieved through practice. Therefore, theory and prac an ‘either…or’ situaton; it is a blend of both.
Experience contributes to better way of doing the things because the pracu Weed out the undesirable practices over a period of time and may retain practices. However, this process may take a lot of time on the part of pracutionc distinction between what is desirable or undesirable. If he has knowledge of relevant them ne can do so in much lesser time. Therefore, the knowledge of the theories makes experience meaningful. When the experience is unscientific, we must be cautious of its meaning and value. It is a very old saying that ten years’ experience may only be one years experience ten times, if the experience is not proper.
Experience is a valuable asset if used wisely. Experience allows the comprehension of the theoretical concepts much more easily. Experienced managers are certainly more adept in the application of knowledge but the magnitude of adeptness will depend upon their ability to earn from their experiences. In doing so, a practitioner is just like an academician. Each performs experiments and draws conclusions from their experiences. The major difference lies in the methods and techniques to evaluate the experience. The academician prefers to call the experience as experiment or research and tries to make generalisations based on several such experiments. Thus, in the final analysis, theory and experience are complementary to each other. Just as all experience with no theoretical background is undesirable, the ‘egghead’ approach to management, that is, only theory and no practical experience, is equally inappropriate. Role of Management Principles The principles of management have a tremendous Impact upon the practice of management in increasing the efficiency of an organisation. The need and importance of management principles can be visualised as follows:
Professionally-managed Sector
1 To Increase Efficiency. The established principles of management provide managers guidelines as to how they should work in different situations. These principles increase managerial efficiency. Today, a management graduate, who has acquired the knowledge of management principles, definitely puts better efficiency and effectiveness in the organisation. Though, there is a serious limitation of management principles, that is, these have to be modified according to situations as these deal with human beings of diverse nature, these enable a manager to understand the different situations in a better way and save him from costly trial-and-error method.
2. To Crystallise the Nature of Management. Lack of understanding of management principles makes it difficult to analyse the management Job and to define the exact scope of managerial functions. Thus, individuals cannot be trained effectively form positions. According to Henry Fayol, management principles, rules, methods and are necessary to train and educate future managers. in any subject, certain fundamental principles are developed
Professionally-managed Sector
3. To carry on Researches. If, in any subject, certain fundamental principles defined, these become the basis for future researches. In the the scope and limitations defined, these become the bas absence of these principles, researches become difficult too much to say that the most important index of the cannot be expanded. It is scarcely too much to say that the state of its systematic theory. This includes the character of conceptual scheme in use in the field, the kinds and degrees of logical integration aferent elements which make it up, and the ways in which it is actually used in cal research. The recent emphasis on management researches has increased the quantum of knowledge in this field.
4. To Attain Social Obiectives. Management itself is part of the society and it takes the inputs from the society and gives the output to the society. Thus, the standard of the Society depends upon the quality of the management. If the management is efficient, the resources of the society are better utilised thereby giving more satisfaction to the society and improving the quality of life of people. In this context, management principles play an important role.
Thus, the understanding of management principles enables managers to take a more realistic view of organisational problems and their solutions. Management deals with people in the organisation, and the structure and behaviour of the atom are far less complex than the structure and behaviour of groups of people. To direct the human behaviour for objective achievement, some principles are certainly required. Development of management principles would definitely have an impact on the cultural level of society by increasing efficiency in the use of human as well as material resources. However, managers, while putting management principles into practice, should check their validity and applicability before their use.
Professionally-managed Sector
Effective Management
During the last few decades, the topic of effective management, popularly known as managerial effectiveness, has received considerable attention. Discussion pertaining to managerial effectiveness, particularly, its definitional, conceptual, and methodological issues have generated great amount of diversity among various management scholars. Each group of scholars has its own views on the criteria that should be used to measure effectiveness of managers. With the result managerial effectiveness is defined in different ways, and no unanimity is found in different approaches. Various terms like effectiveness, efficiency, productivity, goal-achieving, etc. are used interchangeably. The inconsistency in the various terms is obvious. This inconsistency arises because of discrepant conception of managerial effectiveness. These approaches are judgemental and open to question. Two terms which are used quite closely and even interchangeably are effectiveness and efficiency, though both these terms have different meanings as discussed below.
Professionally-managed Sector
EFFECTIVENESS AND EFFICIENCY
Often a confusion arises between effectiveness and efficiency as both these terms are used to indicate the result of an action but in different forms. For example, Barnard has viewed that:
Thus, effectiveness is related to goal which is externally focused. Efficiency is used in engineering way and it refers to the relationship between input and output. This denotes how much input has been used to produce certain amount of output. It is not necessary that both go together always. For example, Barnard says that, “When unsought consequences are trivial, or insignificant, effective action is efficient; when unsought consequences are not trivial, effective action may be inefficient.” There may be three types of situations:
1 An organisation may be efficient but may not be effective.
2. An organization may be effective but may not be efficient.
3. An organisation may be both efficient and effective.
Professionally-managed Sector
In the first situation, the organisation may be efficient but it may not be effective because efficiency refers to internal conversion processes whereas effectiveness reflects external phenomenon. For example, the organisation may be low-cost producing (efficient) but it may fail to realise matching price for its products. The result is that the organisation is incurring loss (ineffective) in spite of it being efficient. This happens when the product is in the declining stage of its life cycle.
In the second situation, an organisation may be effective at a point of time without being efficient. It may not be efficient but because of the external environment (particularly market situations), it may earn profit and show effectiveness. For example, in Indian business scenario, many inefficient organisations in some industries like mini steel, mini cement, Soya extraction industries, made huge profit but later on, when the situation changed, these organisations became extinct.
In the third situation, an organisation may be efficient and effective both at the same time. Many types of organisations may fall under this category, and this is the situation which is required for the long-term survival of organisations. It is in this situation that people tend to use efficiency and effectiveness interchangeably. Same is the case with a manager too.
Professionally-managed Sector
DIFFERENT APPROACHES OF MANAGERIAL EFFECTIVENESS
A part from the above conceptual problem. there is another problem in conceptualising managerial effectiveness which is in the form of using different approaches for measuring managerial effectiveness. These approaches are describing a manager, that is, what types of qualities he has: his behaviour and his results. These three approaches are adopted becaues these three factors of a manager contribute to organisational effectiveness, that is, how the organisation is functioning. These three factors can be understood by understanding variables that make a person or organisation effective. These variables are causal variables, intervening variables, and end-result variables. Causal variables are those factors which influence the course of development within a person or organisation and its result or accomplishment. In the case of a person, causal variables are his personality. perception, learning, attitudes, values, emotional stability, motivation, skills, and other factors which shape his behaviour. Sometimes, his effectiveness is defined in terms of the degree to which he possesses these factors. Intervening variables are those factors which are reflected as internal state of a person, that is, his behaviour. Intervening variables are caused by causal variables. It implies that if we want to change a person’s behaviour, we have to change his causal variables. End-result variables are those factors in which a person’s results are measured. Causal variables are affected by intervening variables. We can deduce from the above discussion that these three groups of variables are interrelated. Therefore, managerial effectiveness is defined as goal-achieving behaviour, that is, if this behaviour of a manager is effective, his effectiveness is like to be high. For example, Guion states that “effectiveness of an executive lies largely in meeting major organisational goals the coordinated efforts of his organisation, in part, at least, these efforts depend a kind of influence the executive has upon those whose work behaviour touches…The cutive’s own behaviour contributes to the achievement of organisational goals only by s influence on the perceptions, attitudes, and motives of other people in the organisation and on their subsequent behaviour.
Professionally-managed Sector
EFFECTIVE MANAGER
There will be managerial effectiveness if a person himself is an effective manager. As effective manager is one who is positive in his personality, that is, what type of person he is, his managerial process, and the results of his managerial process although all these are interdependent.
The Person. The basic question in this context is: what types of persons are most likely to become effective managers and what types of persons are likely to fail ? Based on the analysis of various personal characteristics which shape the behaviour of a person, it has been concluded that those who have high score on certain personal characteristics are likely to be more effective managers than those who have low score on these characteristics. Table 1.4 presents these characteristics.
The Process. Managerial effectiveness depends on the managerial process involved in managing the affairs of an organisation. In this category, there is a long list because management is situational. It implies that a managerial process which is effective in one situation may not be so effective in another situation which is different from the previous situation. However, some generalisations can be made about the managerial process which may be effective in most of the situations.
Luthans et al. have studied 450 managers to identify what these managers do in managing their organisations. What they found was that all these managers were engaged in the four managerial activities:
1 Traditional management: decision making, planning, and controlling.
2. Communication: exchanging routine information and processing paperwork.
3. Human resource management: motivating, disciplining, managing conflict, staffing, and training
4. Networking: socialising, politicing (engaging in organisational politics), and interacting with outsiders
Professionally-managed Sector
Average managers spent 32 per cent of their time in traditional management, 29 per cent in communication, 20 per cent in human resource, management, and 19 per cent in networking. However, the amount of time and effort, managers spent on those four activities varied a great deal among different categories of managers as shown in Table performance and satisfaction amount of their time in comm against this, successful m organisation) spent the me human resource man management and human on and commitment of their employees) spent the maximum ume in communication while the least amount of time in networking. As . Successful managers (defined in terms of speed of promotion within their Lun) spent the maximum amount of their time in networking and the least me resource management. Effective managers spent average time in traditional S ent and human resource management. It may be mentioned here that organizational politics is a common phenomenon in all types of organizations whether it is
A with business organizations or other organizations. With the result, sometimes, promotion is managed rather than achieved to be successful in career though without being effective.
Besides this study, some management scholars have proposed behaviors that are relevant for managerial effectiveness. For example, Campbell et al. have viewed that effective managers adopt the following behaviors in managing the oranisations:37
1 They manage people instead of work.
2. They plan and organize effectively.
3. They set goal realistically.
4. They derive decision by group consensus but accept responsibility for them.
5. They delegate frequently and effectively.
6. They rely on others for help in solving problems.
7. They communicate effectively.
8. They are stimulus to action.
9. They coordinate effectively.
10. They co-operate with others.
11. They show consistent and dependable behaviour.
12. They win gracefully.
13. They express hostility tactfully.
Professionally-managed Sector
The Result. Effective managers and effective managing will lead to good things, that is, the achievement of goals for which they are working in the organisation. Thus, effective managers tend to show more efficiency, better productivity, and developing commitment among their employees.
However, it is not necessary that managerial effectiveness will result in organisational effectiveness in all situations because managerial effectiveness is one of the causal variables in organisational effectiveness. Therefore, it alone cannot result into organisational effectiveness. Organisational effectivness depends on a variety of external and internal factors. External factors are in the form of environmental factors that affect an organisation’s operations. Among the internal factors, again, there many factors. McKinsey 7-S framework, an important model, provides internal variables that affect an organisation’s effectiveness. Consultants at McKinsey & Company, a consulting firm of the USA, have identified seven factors: strategy, structure, systems, staff, skills, styles, and shared values for organisational effectiveness as presented in Figure .
Professionally-managed Sector
The various components of McKinsey’s 7-S Framework are as follows:
1 Strategy: means to achieve organisational purpose.
2. Structure: basic framework to designate responsibilities and functions.
3. Systems: management tools for planning, decision making, communication, and control
4. Staff: human resources of the organisation.
5. Skills: organizational and individual capabilities.
6. Styles: how managers lead and motivate.
7. Shared values: values, objectives, goals which the organization pursues.
All these factors are interrelated and interdependent which implies that no single factor should be considered in isolation. We can deduce from the above discussion that only staff, skills, and styles are directly related to managers while all the above factors along with external factors affect organisational effectiveness.
Professionally-managed Sector
KEY CONCEPTS FOR REVIEW
Administration Cultural characteristics Effective management Effective manager Effectiveness Efficiency Management as art Management as culture bound Management as profession
Management as science Management philosophy Management theory in practice Managerial effectiveness McKinsey 7-S framework Nature of management Professional approach Role of management principles Universality of management
