Posts Tagged: "Management Concepts"

Difference Between Authority and Power

Posted by admin on December 6, 2012 in Management Concepts / No Comments

Authority may be defined as the right to guide and direct the actions of others and to secure from them responses which are appropriate to the attainment of the goals of the organization. According to Barnard, ”Authority is the character of communication(order) in a formal organization by virtue of which it is accepted by a contributor to, or member of the organization as generating the action he contributes, that is, as governing or determining what he does or is not to do so far as the organization is concerned.”

Power refers to the ability or capacity to influence the behavior or attitudes of other individuals. A manager’s power may be considered as his ability to cause subordinates to do what the manager wishes them to do. Power is an important means to enforce obedience to the rules, regulations and decisions of the organization. Power may be derived on personal or institutional bases. The use of power may affect the behavior of people in the desired manner.…

Team Development Life Cycle

Posted by admin on December 5, 2012 in Management Principles / No Comments

When a number of individuals begin to work at interdependent jobs, they often pass through several stages as they learn to work together as a team. These stages are: forming, storming, norming, performing, and adjourning as shown below:

Though these are not followed rigidly, they do represent a broad pattern that may be observed and predicted in many settings across team’s time together. These stages are the result of a variety of questions and issues that team members face such as “who will be members of the team?” “Who will perform what functions?” “Who will contribute what?” “What rules will be followed?” “How can conflicts among members be resolved?” and so on.

These typical stages of life cycle of a team are described below:

Forming: At the first stage of the life cycle, team members get introduced to each other if they have not interacted earlier. They share personal information, start to accept others, and begin to turn their attention to the group tasks.

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Process of Team Building

Posted by admin on December 5, 2012 in Management Principles / No Comments

Team-building attempts to improve effectiveness of the team by having team members to concentrate on:

Setting goals and priorities for the team.
Analyzing how team’s goals and priorities are linked to those of the organization.
Analyzing how the work is performed.
Analyzing how the team is working, and
Analyzing the relationships among the members who are performing the job.

Various steps of team-building process are not one-shot action, rather, they are repetitive and cyclical.

1. Problem-sensing: There are a number of ways in which problems of a team can be obtained. Often the team itself defines which aspects of team-building it wishes to work on. This problem can better be identified in terms of what is hindering group effectiveness. At this stage, generally most of the members come forward with their arguments as to what the real problems are. The view may be quite different ranging from the organizational problem, group problems to even personal problem. In problem identification, the emphasis should be on consensus.…

Building Effective Teams

Posted by admin on December 4, 2012 in Management Concepts / No Comments

An effective team is one which contributes to the achievement of organizational objectives by performing the task assigned to it and providing satisfaction to its members. Team effectiveness depends on the complementarity of team members, other factors remaining the same. From this statement, it appears that there are many factors in an effective team. These factors are skills and role clarity, supportive environment, super-ordinate goals and team rewards. Let us see how these factors make a team effective.

Skills and Role Clarity: For an effective team, two things are required from its members; skills which are complementary to the team requirement and understanding of one’s own role as well as roles of other members. While skills are relevant for job performance, understanding of roles helps members to meet the requirement of one another thereby solving the problems which the team faces. Thus, team members may tend to contribute positively to the teamwork. Even if one member lacks behind, he may tend to affect others because of chain reaction just like a rotten apple injures its companions.

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Standard Costing as a Control Mechanism

Posted by admin on November 16, 2012 in Management Concepts / No Comments

Standard costing is technique of cost planning and control, based on scientific analysis of elements of cost in terms of standard input / output norms and standard rates / price per unit of input. The following process is involved in setting and practicing standard cost.

Establish standard cost, component-wise, for each output
Measure the actual cost, component-wise, for each output
Their comparison with the actual costs and the measurement of variances.
The location of responsibility for the variances and the corrective action to be taken.
The analysis of variances for ascertaining the reasons for the same.

Establishment of a Standard Costing System

The installation of Standard Costing System in a manufacturing concern involves the following steps:

Standardization of Functions: All activities should be standardized and the technical processes of operations should also be susceptible to planning.
Establishment of Cost Center
Classification of Accounts: The different accounts can be codified and different symbol may be used to facilitate speedy collection, analysis and reporting.

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Attributes of Sound Performance Measurement System

Posted by admin on November 15, 2012 in Management Concepts / No Comments

Multinational Enterprises need to measure performance of all its organizational participants/elements and subsidiaries. Efficacy of organizational control depends on efficient measurement of performance. A right selection of a range of performance measures which are appropriate to a particular company/context is needed. This selection ought to be made in the light of the company’s strategic intentions which will have been formed to suit the competitive environment in which it operates and the kind of business that it is.

There are at least three major attributes expected of any good performance measurement mechanics. These are: Reliability, Validity and Objectivity. Each characteristic is examined in detail.

1. Reliability

Reliability of a measurement mechanism refers to the dependability or consistency of the measures provided by it. It refers to “the accuracy of the data in the sense of their stability, repeatability, or precision” There are two ways of looking at dependability. One is comparability of measures provided by different parts of the same test. Second is comparability of measures provided by the test on different occasions.…