MODERN MANAGEMENT THEORIES AND PRACTICES

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MODERN MANAGEMENT THEORIES AND
PRACTICES
By
Dr. Yasin Olum
Lecturer
Department of Political Science and Public Administration
Makerere University
MODERN MANAGEMENT THEORIES AND PRACTICES: A CRITICAL
OVERVIEW
Introduction
Managing is one of the most important human activities. From the time human
beings began forming social organizations to accomplish aims and objectives
they could not accomplish as individuals, managing has been essential to ensure
the coordination of individual efforts. As society continuously relied on group
effort, and as many organized groups have become large, the task of managers
has been increasing in importance and complexity. Henceforth, managerial
theory has become crucial in the way managers manage complex organizations.
The central thesis of this paper is that although some managers in different parts
of the world could have achieved managerial success without having basic
theoretical knowledge in management, it has to be unequivocally emphasized
that those managers who have mixed management theory in their day-to-day
practice, have had better chances of managing their organizations more
efficiently and effectively to achieve both individual and organizational
objectives. Therefore, managers of contemporary organizations ought to
appreciate the important role they play in their respective organizations if they
are to achieve set goals. Secondly, there is need to promote excellence among all
persons in organizations, especially among managers themselves.
To address these concerns, the paper will proceed along the following spectrum:
management will be defined for purposes of conceptual clarity; management
objectives, functions, goals, and essentiality, will be highlighted; the importance
of managerial skills and the organizational hierarchy will be sketched; the
importance of women in the organizational hierarchy will be emphasized;
reasons for studying management theory will be enumerated; the different
management theories, the core of the paper, will be discussed at length; the
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significance of management as a practice will be contextualized; and ‘the way
forward’ in form of a conclusion will be offered.
Definition of Management Management is the art, or science, of achieving goals through people. Since
managers also supervise, management can be interpreted to mean literally
“looking over” – i.e., making sure people do what they are supposed to do.
Managers are, therefore, expected to ensure greater productivity or, using the
current jargon, ‘continuous improvement’.
More broadly, management is the process of designing and maintaining an
environment in which individuals, working together in groups, efficiently
accomplish selected aims (Koontz and Weihrich 1990, p. 4). In its expanded form,
this basic definition means several things. First, as managers, people carry out
the managerial functions of planning, organizing, staffing, leading, and
controlling. Second, management applies to any kind of organization. Third,
management applies to managers at all organizational levels. Fourth, the aim of
all managers is the same – to create surplus. Finally, managing is concerned with
productivity – this implies effectiveness and efficiency.
Thus, management refers to the development of bureaucracy that derives its
importance from the need for strategic planning, co-ordination, directing and
controlling of large and complex decision-making process. Essentially, therefore,
management entails the acquisition of managerial competence, and effectiveness
in the following key areas: problem solving, administration, human resource
management, and organizational leadership.
First and foremost, management is about solving problems that keep emerging
all the time in the course of an organization struggling to achieve its goals and
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objectives. Problem solving should be accompanied by problem identification,
analysis and the implementation of remedies to managerial problems. Second,
administration involves following laid down procedures (although procedures
or rules should not be seen as ends in themselves) for the execution, control,
communication, delegation and crisis management. Third, human resource
management should be based on strategic integration of human resource,
assessment of workers, and exchange of ideas between shareholders and
workers. Finally, organizational leadership should be developed along lines of
interpersonal relationship, teamwork, self-motivation to perform, emotional
strength and maturity to handle situations, personal integrity, and general
management skills.
Management Objectives, Functions, Goals, and Essentiality
Management Objectives
There are basically three management objectives. One objective is ensuring
organizational goals and targets are met – with least cost and minimum waste.
The second objective is looking after health and welfare, and safety of staff. The
third objective is protecting the machinery and resources of the organization,
including the human resources.
Management Functions
To understand management, it is imperative that we break it down into five
managerial functions, namely; planning, organizing, staffing, leading, and
controlling.
Planning involves selecting missions and objectives and the actions to achieve
them. It requires decision-making – i.e., choosing future courses of action from
among alternatives. Plans range from overall purposes and objectives to the most
detailed actions to be taken. No real plan exists until a decision – a commitment
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of human and material resources – has been made. In other words, before a
decision is made, all that exists is planning study, analysis, or a proposal; there is
no real plan.
People working together in groups to achieve some goal must have roles to play.
Generally, these roles have to be defined and structured by someone who wants
to make sure that people contribute in a specific way to group effort. Organizing,
therefore, is that part of management that involves establishing an intentional
structure of roles for people to fill in an organization. Intentional in that all tasks
necessary to accomplish goals are assigned and assigned to people who can do
them best. Indeed, the purpose of an organizational structure is to help in
creating an environment for human performance. However, designing an
organizational structure is not an easy managerial task because many problems
are encountered in making structures fit situations, including both defining the
kind of jobs that must be done and finding the people to do them.
Staffing involves filling, and keeping filled, the positions in the organization
structure. This is done by identifying work-force requirements; inventorying the
people available; and recruiting, selecting, placing, promoting, appraising,
planning the careers of, compensating, and training or otherwise developing
both candidates and current jobholders to accomplish their tasks effectively and
efficiently.
Leading is the influencing of people so that they will contribute to organization
and group goals; it has to do predominantly with the interpersonal aspect of
managing. Most important problems to managers arise from people – their
desires and attitudes, their behavior as individuals and in groups. Hence,
effective managers need to be effective leaders. Leading involves motivation,
leadership styles and approaches and communication.
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Controlling, for example, budget for expense, is the measuring and correcting of
activities of subordinates to ensure that events conform to plans. It measures
performance against goals and plans, shows where negative deviations exist,
and, by putting in motion actions to correct deviations, helps ensure
accomplishment of plans. Although planning must precede controlling, plans are
not self-achieving. Plans guide managers in the use of resources to accomplish
specific goals; then activities are checked to determine whether they conform to
the plans. Compelling events to conform to plans means locating the persons
who are responsible for results that differ from planned action and then taking
the necessary steps to improve performance. Thus, controlling what people do
controls organizational outcomes.
Finally, coordination is the essence of manager-ship for achieving harmony
among individual efforts toward the accomplishment of group goals. Each of the
managerial functions discussed earlier on is an exercise contributing to
coordination. Because individuals often interpret similar interests in different
ways, and their efforts toward mutual goals do not automatically mesh with the
efforts of others, it, thus, becomes the central task of the manager to reconcile
differences in approach, timing, effort, or interest, and to harmonize individual
goals to contribute to organizational goals.
Although these management functions concern the internal environment for
performance within an organization, managers must operate in the external
environment of an organization as well. Clearly, managers cannot perform their
tasks well unless they have an understanding of, and are responsive to, the many
elements of the external environment – economic, technological, social, political,
and ethical factors – that affect their areas of operation.
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Goals of All Managers
First and foremost, the logical and publicly desirable aim of all managers in all
kinds of organizations, whether business or non-business, should be a surplus.
Thus, managers must establish an environment in which people can accomplish
group goals with the least amount of time, money, materials, and personal
dissatisfaction or in which they can achieve as much as possible of a desired goal
with available resources. In a non-business enterprise such as units of a business
(such as an accounting department) that are not responsible for total business
profits, managers still have goals and should strive to accomplish them with the
minimum of resources or to accomplish as much as possible with available
resources. A manager who achieves such an aim is said to be a strategic manager.
The second goal or aim of all managers is that they must be productive. Indeed,
government, and the private sector recognize the urgent need for productivity
improvement. Productivity improvement is about effectively performing the
basic managerial and non-managerial activities. Simply defined, productivity is
about the output-input ratio within a time period with due consideration for
equality.
Lastly, productivity implies effectiveness and efficiency in individual and
organizational performance. Effectiveness is the achievement of objectives.
Efficiency is the achievement of the ends with the least amount of resources.
Managers cannot know whether they are productive unless they first know their
goals and those of the organization.
The :Essentiality of Management in Any Organization
Managers are charged with the responsibility of taking actions that will make it
possible for individuals to make their best contributions to group objectives.
Thus, management applies to small and large organizations, to profit and not-
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for-profit enterprises, to manufacturing as well as service industries. However, a
given situation may differ considerably among various levels in an organization
or various types of enterprises. The scope of authority held may vary and the
types of problems dealt with may be considerably different. All managers obtain
results by establishing an environment for effective group endeavor.
In addition, all managers carry out managerial functions. However, the time
spent for each function may differ. Thus, top-level managers spend more time on
planning and organizing than do lower-level managers. Leading, on the other
hand, takes a great deal of time for first-line supervisors. The difference in the
amount of time spent on controlling varies only slightly for managers at various
levels.
The manager is, therefore, the dynamic, life-giving element in every business.
Without the leadership of the manager, resources of production remain mere
resources and never become production. In a competitive economy, the quality
and performance of the managers determine the success of a business; indeed,
they determine its survival.
Furthermore, today, we no longer talk of “capital” and “labor”, but we talk of
“management” and “labor”. While the “responsibilities of capital” and the
“rights of capital” have disappeared from our vocabulary, today we hear of the
“responsibilities of management” or “prerogatives of management”.
Thus, the emergence of management as an essential, a distinct and a leading
institution is a pivotal event in social history. Management is likely to remain a
basic and dominant institution as long as human civilization itself survives.
Management, which is the organ of society specifically charged with making
resources productive, that is, with the responsibility for organized economic
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advance, reflects the basic spirit of the modern age. In fact, because management
is indispensable, this explains why it grew so fast and with so little opposition.
Hence, the developed and developing worlds have an immense stake in the
competence, skill and responsibility of management.
Managerial Skills and the Organizational Hierarchy
Mangers require four main kinds of skills, namely: technical, human, conceptual
and design. What do each of these skills mean?
Technical skill is knowledge of and proficiency in activities involving methods,
processes, and procedures. Thus, it involves working with tools and specific
techniques.
Human skill is the ability to work with people; it is cooperative effort; it is
teamwork; it is the creation of an environment in which people feel secure and
free to express their opinions.
Conceptual skill is the ability to serve the “big picture”. It is also about
recognizing significant elements in a situation, and to understand the
relationships among the elements.
Design skill is the ability to solve problems in ways that will benefit the
enterprise. To be effective, particularly at upper organizational levels, managers
must be able to do more than see a problem. In addition, they must have the skill
of a good design engineer in working out a practical solution to a problem.
Managers must also have that valuable skill of being able to design a workable
solution to the problem in the light of the realities they face. It has, however, got
to be mentioned that the relative importance of these skills may differ at various
levels in the organization hierarchy.
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For purposes of elaboration, technical skills are of greatest importance at the
supervisory level and less at the middle-management level, human skills in the
frequent interactions with subordinates at all levels, conceptual skills not critical
for lower-level supervisors but gain in importance at the middle-management
level. At the top management level, conceptual and design abilities and human
skills are especially valuable, but there is relatively little need for technical
abilities. The assumption, especially in large companies, that chief executives can
utilize the technical abilities of their subordinates. In smaller firms, however,
technical experience may still be quite important.
Women in the Organizational Hierarchy
In recent times, women have made significant progress in obtaining responsible
positions in organizations. Among the reasons for this development are laws
governing fair employment practices, changing societal attitudes toward women
in the workplace, and the desire of companies to project a favorable image by
placing qualified women in managerial positions.
However, in some organizations, women have difficulties in making it to the top.
Besides historical reasons, discrimination has been one of the main reasons why
women do not make it to the top.
Why Study Management Theory?
Theories are perspectives with which people make sense of their world
experiences (Stoner et. al. 1995, pp. 31-2). Theory is a systematic grouping of
interdependent concepts (mental images of anything formed by generalization
from particulars) and principles (are generalizations or hypotheses that are tested
for accuracy and appear to be true to reflect or explain reality) that give a
framework to, or tie together, a significant area of knowledge. Scattered data are
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not information unless the observer has knowledge of the theory that will
explain relationships. Theory is “in its lowest form a classification, a set of pigeon
holes, a filing cabinet in which fact can accumulate. Nothing is more lost than a
loose fact”(Homans 1958, p. 5).
However, the variety of approaches to management analysis, the welter of
research, and the number of differing views have resulted in much confusion as
to what management is, what management theory and science is, and how
managerial events should be analyzed. This is why some scholars have called
this situation “the management theory jungle”(Koontz 1961, pp. 174-188; 1962, p.
24; 1980, pp. 175-187). Since that time, the vegetation in this jungle has changed
somewhat, new approaches have developed, and older approaches have taken
some new meanings with some new words attached to them, but the
developments of management science and theory still have the characteristics of
a jungle.
There is a body of opinion that says that management theory evolved during and
after Second World War; it has only been studied in-depth since then. The
industrial revolution that brought in mass production, specialization, seeing
people as critical resource, all intensified management as a critical area of
discourse.
Principles in management are fundamental truths, explaining relationships
between two or more sets of variables, usually an independent variable and a
dependent variable. Principles may be descriptive or predictive, and not
prescriptive. That is, they describe how one variable relates to another – what
will happen when these variables interact.
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managers who apply theory to managing must usually blend principles with
realities. Once managers know about theory, they will have the capacity to
forestall future problems that may occur in the enterprise.
At this point it is worth distinguishing management theory from management
techniques. Contrary to the theory we have discussed above, techniques are
essentially ways of doing things; methods of accomplishing a given result. In all
fields of practice, including management, they are important. Techniques
normally reflect theory and are a means of helping managers undertake activities
most effectively.
In the field of management, then, the role of theory is to provide a means of
classifying significant and pertinent management knowledge. For example, in
the area of designing an effective organization structure, there are several
principles that are interrelated and that have a predictive value for managers.
The theory of management is grouped into the five functions of management.
In sum, there are basically three main reasons why we have to study
management theory. First, theories provide a stable focus for understanding
what we experience. A theory provides criteria for what is relevant. Second,
theories enable us to communicate efficiently and thus move into more and more
complex relationships with other people. Third, theories make it possible –
indeed, challenge us – to keep learning about our world. By definition, theories
have boundaries.
Management Theories
Contemporary theories of management tend to account for and help interpret the
rapidly changing nature of today’s organizational environments. This paper will
deal with several important management theories which are broadly classified as
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follows: The Scientific Management School comprising the works of Frederick W.
Taylor and Lillian Gilbreth’s motion study, among others; the Classical
Organizational Theory School comprising the works of Henri Fayol’s views on
administration, and Max Weber’s idealized bureaucracy, among others;
Behavioral School comprising the work of Elton Mayo and his associates; the
Management Science School which I discuss at the end of this section; and Recent
Developments in Management Theory comprising works such as Systems
Approach, Situational or Contingency theory, Chaos theory, and Team Building
approach. For lack of time and space, this discussion will provide a general
description of some of the scholars in each of these management theories and the
successes that they achieved.
Scientific Management School
The first management theory is what is popularly referred to as Frederick
Taylor’s Scientific Management. Frederick Taylor started the era of modern
management. In the late nineteenth and early twentieth centuries, he was
decrying the “awkward, inefficient, or ill-directed movements of men” as
national loss. Taylor consistently sought to overthrow management “by rule of
thumb” and replace it with actual timed observations leading to “the one best”
practice. He also advocated the systematic training of workers in “the one best
practice” rather than allowing them personal discretion in their tasks. He further
believed that the workload would be evenly shared between the workers and
management with management performing the science and instruction and the
workers performing the labor, each group doing “the work for which it was best
suited”.
Taylor’s strongest positive legacy was the concept of breaking a complex task
down into a number of subtasks, and optimizing the performance of the
subtasks; hence, his stop-watch measured time trials. However, many critics,
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both historical and contemporary, have pointed out that Taylor’s theories tend to
“dehumanize” the workers.
Nevertheless, Taylor’s postulations were strongly influenced by his
social/historical period (1856-1917) during the Industrial Revolution; it was a
period of autocratic management that saw Taylor turning to “science”(hence, his
principles of scientific management) as a solution to the inefficiencies and
injustices of the period. It has to be stated that scientific management met with
significant success among which included: the science of cutting metal, coal
shovel design that he produced at Bethlehem Steel Works (reducing the workers
needed to shovel from 500 to 140), worker incentive schemes, a piece rate system
for shop management, and organizational influences in the development of the
fields of industrial engineering, personnel, and quality control.
It has to be acknowledged that from an economic standpoint, Taylorism was an
extreme success. Application of his methods yielded significant improvements in
productivity. For example, improvements such as his shovel work at Bethlehem
Works, which reduced the workers needed to shovel from 500 to 140.
Henceforth, Taylor proposed four great underlying principles of management.
First, there is need to develop a ‘science of work’ to replace old rule-of-thumb
methods: pay and other rewards linked to achievement of ‘optimum goals’ –
measures of work performance and output; failure to achieve these would in
contrast result in loss of earnings. Second, workers to be ‘scientifically’ selected
and developed: training each to be ‘first-class’ at some specific task. Three, the
‘science of work’ to be brought together with scientifically selected and trained
people to achieve the best results. Finally, work and responsibility to be divided
equally between workers and management cooperating together in close
interdependence.
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Alongside Taylor’s postulates is Gilbreth’s motion study. The ultimate result of
this study led to the centrality of efficiency in organizations. Gilbreth was
particularly interested in how he could reduce the unnecessary motions resulting
from bricklaying at a construction site; he succeeded in reducing the motions
from 18 to 4. He then proposed that each worker should be involved in doing his
or her own work, prepare for the next higher level, and training their successors.
Classical Organizational Theory School
In this category of management theory are the works of Max Weber’s
bureaucratic theory and Henri Fayol’s administrative theory. Weber postulated
that western civilization was shifting from “wertrational” (or value oriented)
thinking, affective action (action derived from emotions), and traditional action
(action derived from past precedent) to “zweckational” (or technocratic)
thinking. He believed that civilization was changing to seek technically optimal
results at the expense of emotional or humanistic content.
Weber then developed a set of principles for an “ideal” bureaucracy as follows:
fixed and official jurisdictional areas, a firmly ordered hierarchy of super and
subordination, management based on written records, thorough and expert
training, official activity taking priority over other activities and that
management of a given organization follows stable, knowable rules. The
bureaucracy was envisioned as a large machine for attaining its goals in the most
efficient manner possible.
However, Weber was cautious of bureaucracy when he observed that the more
fully realized, the more bureaucracy “depersonalizes” itself – i.e., the more
completely it succeeds in achieving the exclusion of love, hatred, and every
purely personal, especially irrational and incalculable, feeling from execution of
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official tasks. Hence, Weber predicted a completely impersonal organization
with little human level interaction between its members.
Henri Fayol’s administrative theory mainly focuses on the personal duties of
management at a much more granular level. In other words, his work is more
directed at the management layer. Fayol believed that management had five
principle roles: to forecast and plan, to organize, to command, to co-ordinate,
and to control. Forecasting and planning was the act of anticipating the future
and acting accordingly. Organization was the development of the institution’s
resources, both material and human. Commanding was keeping the institution’s
actions and processes running. Co-ordination was the alignment and
harmonization of the group’s efforts. Finally, control meant that the above
activities were performed in accordance with appropriate rules and procedures.
Fayol developed fourteen principles of administration to go along with
management’s five primary roles. These principles are: specialization/division of
labor, authority with responsibility, discipline, unity of command, unity of
direction, subordination of individual interest to the general interest,
remuneration of staff, centralization, scalar chain/line of authority, order, equity,
stability of tenure, initiative, and esprit de corps. Fayol clearly believed personal
effort and team dynamics were part of an “ideal” organization.
Fayol’s five principle roles (Plan, Organize, Command, Co-ordinate, and
Control) of management are still actively practiced today. The concept of giving
appropriate authority with responsibility is also widely commented on and is
well practiced. Unfortunately, his principles of “unity of command” and “unity
of direction” are consistently violated in “matrix management”, the structure of
choice for many of today’s companies.
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Behavioral School
The key scholar under this category is Elton Mayo. The origin of behavioralism is
the human relations movement that was a result of the Hawthorne Works
Experiment carried out at the Western Electric Company, in the United States of
America that started in the early 1920s (1927-32). Elton Mayo and his associates’
experiments disproved Taylor’s beliefs that science dictated that the highest
productivity was found in ‘the one best way’ and that way could be obtained by
controlled experiment. The Hawthorne studies attempted to determine the
effects of lighting on worker productivity. When these experiments showed no
clear correlation between light level and productivity the experiments then
started looking at other factors. These factors that were considered when Mayo
was working with a group of women included rest breaks, no rest breaks, no free
meals, more hours in the work-day/work-week or fewer hours in the workday/
work-week. With each of these changes, productivity went up. When the
women were put back to their original hours and conditions, they set a
productivity record.
These experiments proved five things. First, work satisfaction and hence
performance is basically not economic – depends more on working conditions
and attitudes - communications, positive management response and
encouragement, working environment. Second, it rejected Taylorism and its
emphasis on employee self-interest and the claimed over-riding incentive of
monetary rewards. Third, large-scale experiments involving over 20,000
employees showed highly positive responses to, for example, improvements in
working environments (e.g., improved lighting, new welfare/rest facilities), and
expressions of thanks and encouragement as opposed to coercion from managers
and supervisors. Fourth, the influence of the peer group is very high – hence, the
importance of informal groups within the workplace. Finally, it denounced
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‘rabble hypotheses’ that society is a horde of unorganized individuals (acting) in
a manner calculated to secure his or her self-preservation or self-interest.
These results showed that the group dynamics and social makeup of an
organization were an extremely important force either for or against higher
productivity. This outcome caused the call for greater participation for the
workers, greater trust and openness in the working environment, and a greater
attention to teams and groups in the work place. Finally, while Taylor’s impacts
were the establishment of the industrial engineering, quality control and
personnel departments, the human relations movement’s greatest impact came
in what the organization’s leadership and personnel department were doing. The
seemingly new concepts of “group dynamics”, “teamwork”, and organizational
“social systems”, all stem from Mayo’s work in the mid-1920s.
Recent Developments in Management Theory
Under this category of theory are the Systems Approach, Situational or
Contingency theory, Chaos theory, and Team Building theory.
The systems theory has had a significant effect on management science and
understanding organizations. A system is a collection of part unified to
accomplish an overall goal. If one part of the system is removed, the nature of the
system is changed as well. A system can be looked at as having inputs (e.g.,
resources such as raw materials, money, technologies, people), processes (e.g.,
planning, organizing, motivating, and controlling), outputs (products or
services) and outcomes (e.g., enhanced quality of life or productivity for
customers/clients, productivity). Systems share feedback among each of these
four aspects of the system.
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The Systems Theory may seem quite basic. Yet, decades of management training
and practices in the workplace have not followed this theory. Only recently, with
tremendous changes facing organizations and how they operate, have educators
and managers come to face this new way of looking at things. The effect of
systems theory in management is that it helps managers to look at the
organization more broadly. It has also enabled managers to interpret patterns
and events in the workplace – i.e., by enabling managers to recognize the various
parts of the organization, and, in particular, the interrelations of the parts.
The situational or contingency theory asserts that when managers make a
decision, they must take into account all aspects of the current situation and act
on those aspects that are key to the situation at hand. Basically, it is the approach
that “it depends”. For example, if one is leading troops in Iraq, an autocratic style
is probably best. If one is leading a hospital or University, a more participative
and facilitative leadership style is probably best.
The Chaos theory is advocated by Tom Peters (1942). As chaotic and random as
global events seem today, they are equally chaotic in organizations. Yet for many
decades, managers have acted on the basis that organizational events can always
be controlled. Thus, a new theory, known as chaos theory, has emerged to
recognize that events are rarely controlled. Chaos theorists suggest that systems
naturally go to more complexity, and as they do so, they become more volatile
and must, therefore, expend more energy to maintain that complexity. As they
expend more energy, they seek more structure to maintain stability. This trend
continues until the system splits, combines with another complex system or falls
apart entirely. It will need an effective manager for the latter worst scenario not
to happen.
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The last management theory is the Team Building approach or theory. This
theory emphasizes quality circles, best practices, and continuous improvement. It
is a theory that mainly hinges on reliance on teamwork. It also emphasizes
flattening of management pyramid, and reducing the levels of hierarchy. Finally,
it is all about consensus management – i.e., involving more people at all levels in
decision-making.
Other Management Theories
In this category are the works of Edward W. Deming and Douglas McGregor.
Edward Deming is the founder of modern quality management and is regarded
by the Japanese as the key influence in their postwar economic miracle. He
postulated several assumptions: create constancy of purpose for continual
improvement of products and service; adopt the new philosophy created in
Japan; cease dependence on mass inspection; build quality along with price;
improve constantly and forever every process planning, production, and service;
institute modern methods of training on-the-job for including management;
adopt and institute leadership aimed at helping people to do a better job; drive
out fear, encourage effective two-way communication; breakdown barriers
between departments and staff areas; eliminate exhortations for the workforce –
they only create adversarial relationships; eliminate quotas and numerical
targets; remove barriers to pride of workmanship, including annual appraisals
and Management by Objectives; encourage education and self-improvement for
everyone; and define top management’s permanent commitment to everimproving
quality and productivity and their obligation to implement all these
principles.
Douglas McGregor (1906-1964) postulated management ideas as contained in
“Theory X” and “Theory Y”. Using human behavior research, he noted that the
way an organization runs depends on the beliefs of its managers.
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“Theory X” gives a negative view of human behavior and management that he
considered to have dominated management theory from Fayol onwards –
especially Taylorism. It also assumes that most people are basically immature,
need direction and control, and are incapable of taking responsibility. They are
viewed as lazy, dislike work and need a mixture of financial inducements and
threat of loss of their job to make them work (‘carrot and stick’ mentality).
“Theory Y”, the opposite of “Theory X”, argues that people want to fulfill
themselves by seeking self-respect, self-development, and self-fulfillment at
work as in life in general. The six basic assumptions for ‘Theory Y’ are: work is as
natural as play or rest – the average human being does not inherently dislike
work, whether work is a source of pleasure or a punishment (to be avoided)
depends on nature of the work and its management. Second, effort at work need
not depend on threat of punishment – if committed to objectives then selfdirection
and self-control rather than external controls. Third, commitment to
objectives is a function of the rewards associated with their achievement.
Satisfaction of ego and self-actualization needs can be directed towards the
objectives of the organization. Fourth, the average human being learns, under
proper conditions, not only to accept but to seek responsibility. Fifth, high
degrees of imagination, ingenuity and creativity are not restricted to a narrow
group but are widely distributed in the population. Lastly, under the conditions
of modern industrial life, the intellectual potentials of the average human being
are being only partly utilized.
There is, however, one theory or approach, the quantitative approach that is
hardly used and known by managers. It emerges from operations research and
management science. It is a mathematical and statistical solution to problems
using optimization models, and computer simulations. It is most effective
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management decision-making rather than managerial behavior. The
management theories that have been discussed, important as they are, have to be
translated in practice by managers. To this discussion I now turn.
Management as Practice
Managing, like all other practices – whether medicine, music composition,
engineering, accountancy, or even baseball – is an art; it is know-how. It is doing
things in the light of the realities of a situation.
Yet managers can work better by using the organized knowledge about
management. It is this knowledge that constitutes science. However, the science
underlying managing is fairly crude and inexact. This is true because the many
variables with which managers deal are extremely complex. Nevertheless, such
management knowledge can certainly improve managerial practice. Managers
who attempt to manage without management science must put their trust to
luck, intuition, or what they did in the past.
In managing, as in any other field, unless practitioners are to learn by trial and
error, there is no place they can turn for meaningful guidance other than the
accumulated knowledge underlying their practice; this accumulated knowledge
is theory.
For practical purposes, all managers must develop three sets of skills, namely;
conceptual, technical, and human (see Fleet and Perterson 1994, p. 25).
Conceptual skills allow the manager to develop relationships between factors
that other people may not see. Managers who have well-developed conceptual
skills are able to apply different management theories to the same situation. For a
manager to be technical, it implies that he or she should act professionally.
Professionalism demands that the manager performs his or her duties within
22
established procedures, rules and regulations. Any behavior that compromises
the manager’s professional etiquette is certainly bound to interfere adversely
with the organization’s productivity. Lastly, a manager should be able to see
members of the organization as human beings who have needs and
psychological feelings and emotions. These needs and feelings must be positively
harnessed for the good of the organization; motivation of the employees,
therefore, becomes a critical factor in increasing productivity.
Conclusion
In conclusion, it has to be restated that management is the process of designing
and maintaining an environment for the purpose of efficiently accomplishing
selected aims. Managers carry out the functions of planning, organizing, staffing,
leading, and controlling. Managing is an essential activity at all organizational
levels.
However, the managerial skills required vary with organizational levels.
Although women have made progress in obtaining responsible positions, they
still have a long way to go. The goal of all managers is to create a surplus and to
be productive by achieving a favorable output-input ration within a specific time
period with due consideration for quality. Productivity implies effectiveness
(achieving of objectives) and efficiency (using the least amount of resources).
Managing as practice is art; organized knowledge about management is science.
The development of management theory involves the development of concepts,
principles, and techniques. There are many theories about management, and
each contributes something to our knowledge of what managers do. Each
approach or theory has its own characteristics and advantages as well as
limitations. The operational, or management process, approach draws on each
“school” and systematically integrates them.
23
Finally, the organization is an open system that operates within and interacts
with the environment. The systems approach to management includes inputs
from the external environment and from claimants, the transformation process,
the communication system, external factors, outputs, and a way to reenergize the
system. No doubt, a manager who makes serious attempts to translate theory
into reality is bound to increase productivity more than a manager who chooses
to use the ‘fire brigade’ or trial and error approach.
24
BIBLIOGRAPHY
Homans G. C. (1958) The Human Group (New York: Harcout, Brace and World).
Fleet David D. Van and Peterson Tim O. (1994) Contemporary Management
(Houghton Mifflin Company), Third Edition.
Koontz Harold (1961) “The Management Theory Jungle”, in Journal of the
Academy of Management, December.
Koontz Harold (1962) “Making Sense of Management Theory”, in Harvard
Business Review, July-August.
Koontz Harold (1980) “The Management Theory Revisited”, in Academy of
Management Review, April.
Koontz Harold and Weihrich Heinz (1990) Essentials of Management, Fifth
Edition, McGraw-Hill.
Stoner James A. F., Freeman R. Edward, and Gilbert, Jr. Daniel R. (2003)
Management (New Delhi: Prentice-Hall of India), Sixth Edition.

OSI- Models

Expert Reference Series of White Papers










The OSI Model:

Understanding the

Seven Layers of

Computer Networks












1-800-COURSES www.globalknowledge.com

The OSI Model: Understanding the

Seven Layers of Computer Networks

Paul Simoneau, Global Knowledge Course Director, Network+, CCNA, CTP



Introduction

The Open Systems Interconnection (OSI) model is a reference tool for understanding data communications between any two networked systems. It divides the communications processes into seven layers. Each layer both performs specific functions to support the layers above it and offers services to the layers below it. The three lowest layers focus on passing traffic through the network to an end system. The top four layers come into play in the end system to complete the process.

This white paper will provide you with an understanding of each of the seven layers, including their functions and their relationships to each other. This will provide you with an overview of the network process, which can then act as a framework for understanding the details of computer networking.

Since the discussion of networking often includes talk of “extra layers”, this paper will address these unofficial layers as well.

Finally, this paper will draw comparisons between the theoretical OSI model and the functional TCP/IP model. Although TCP/IP has been used for network communications before the adoption of the OSI model, it supports the same functions and features in a differently layered arrangement.

An Overview of the OSI Model


























Copyright ©2006 Global Knowledge Training LLC. All rights reserved. Page 2

A networking model offers a generic means to separate computer networking functions into multiple layers. Each of these layers relies on the layers below it to provide supporting capabilities and performs support to the layers above it. Such a model of layered functionality is also called a “protocol stack” or “protocol suite”.

Protocols, or rules, can do their work in either hardware or software or, as with most protocol stacks, in a com-bination of the two. The nature of these stacks is that the lower layers do their work in hardware or firmware (software that runs on specific hardware chips) while the higher layers work in software.

The Open System Interconnection model is a seven-layer structure that specifies the requirements for commu-nications between two computers. The ISO (International Organization for Standardization) standard 7498-1 defined this model. This model allows all network elements to operate together, no matter who created the protocols and what computer vendor supports them.

The main benefits of the OSI model include the following:

• Helps users understand the big picture of networking

• Helps users understand how hardware and software elements function together

• Makes troubleshooting easier by separating networks into manageable pieces

• Defines terms that networking professionals can use to compare basic functional relationships on differ-ent networks
• Helps users understand new technologies as they are developed

• Aids in interpreting vendor explanations of product functionality

Layer 1 – The Physical Layer






















The physical layer of the OSI model defines connector and interface specifications, as well as the medium (cable) requirements. Electrical, mechanical, functional, and procedural specifications are provided for sending a bit stream on a computer network.








Copyright ©2006 Global Knowledge Training LLC. All rights reserved. Page 3

Components of the physical layer include:

• Cabling system components

• Adapters that connect media to physical interfaces

• Connector design and pin assignments

• Hub, repeater, and patch panel specifications

• Wireless system components

• Parallel SCSI (Small Computer System Interface)

• Network Interface Card (NIC)

In a LAN environment, Category 5e UTP (Unshielded Twisted Pair) cable is generally used for the physical layer for individual device connections. Fiber optic cabling is often used for the physical layer in a vertical or riser backbone link. The IEEE, EIA/TIA, ANSI, and other similar standards bodies developed standards for this layer.

Note: The Physical Layer of the OSI model is only part of a LAN (Local Area Network).

Layer 2 – The Data Link Layer






















Layer 2 of the OSI model provides the following functions:

• Allows a device to access the network to send and receive messages

• Offers a physical address so a device’s data can be sent on the network

• Works with a device’s networking software when sending and receiving messages

• Provides error-detection capability

Common networking components that function at layer 2 include:

• Network interface cards

• Ethernet and Token Ring switches

• Bridges

NICs have a layer 2 or MAC address. A switch uses this address to filter and forward traffic, helping relieve congestion and collisions on a network segment.




Copyright ©2006 Global Knowledge Training LLC. All rights reserved. Page 4

Bridges and switches function in a similar fashion; however, bridging is normally a software program on a CPU, while switches use Application-Specific Integrated Circuits (ASICs) to perform the task in dedicated hardware, which is much faster.

Layer 3 – The Network Layer






















Layer 3, the network layer of the OSI model, provides an end-to-end logical addressing system so that a packet of data can be routed across several layer 2 networks (Ethernet, Token Ring, Frame Relay, etc.). Note that net-work layer addresses can also be referred to as logical addresses.

Initially, software manufacturers, such as Novell, developed proprietary layer 3 addressing. However, the net-working industry has evolved to the point that it requires a common layer 3 addressing system. The Internet Protocol (IP) addresses make networks easier to both set up and connect with one another. The Internet uses IP addressing to provide connectivity to millions of networks around the world.

To make it easier to manage the network and control the flow of packets, many organizations separate their network layer addressing into smaller parts known as subnets. Routers use the network or subnet portion of the IP addressing to route traffic between different networks. Each router must be configured specifically for the networks or subnets that will be connected to its interfaces.

Routers communicate with one another using routing protocols, such as Routing Information Protocol (RIP) and Open version of Shortest Path First (OSPF), to learn of other networks that are present and to calculate the best way to reach each network based on a variety of criteria (such as the path with the fewest routers). Routers and other networked systems make these routing decisions at the network layer.

When passing packets between different networks, it may become necessary to adjust their outbound size to one that is compatible with the layer 2 protocol that is being used. The network layer accomplishes this via a process known as fragmentation. A router’s network layer is usually responsible for doing the fragmentation. All reassembly of fragmented packets happens at the network layer of the final destination system.






Copyright ©2006 Global Knowledge Training LLC. All rights reserved. Page 5

Two of the additional functions of the network layer are diagnostics and the reporting of logical variations in normal network operation. While the network layer diagnostics may be initiated by any networked system, the system discovering the variation reports it to the original sender of the packet that is found to be outside nor-mal network operation.

The variation reporting exception is content validation calculations. If the calculation done by the receiving sys-tem does not match the value sent by the originating system, the receiver discards the related packet with no report to the sender. Retransmission is left to a higher layer’s protocol.

Some basic security functionality can also be set up by filtering traffic using layer 3 addressing on routers or other similar devices.

Layer 4 – The Transport Layer












Layer 4, the transport layer of the OSI model, offers end-to-end communication between end devices through a network. Depending on the application, the transport layer either offers reliable, connection-oriented or con-nectionless, best-effort communications.

Some of the functions offered by the transport layer include:

• Application identification

• Client-side entity identification

• Confirmation that the entire message arrived intact

• Segmentation of data for network transport

• Control of data flow to prevent memory overruns

• Establishment and maintenance of both ends of virtual circuits

• Transmission-error detection

• Realignment of segmented data in the correct order on the receiving side

• Multiplexing or sharing of multiple sessions over a single physical link

The most common transport layer protocols are the connection-oriented TCP Transmission Control Protocol (TCP) and the connectionless UDP User Datagram Protocol (UDP).













Copyright ©2006 Global Knowledge Training LLC. All rights reserved. Page 6

Layer 5 – The Session Layer






















Layer 5, the session layer, provides various services, including tracking the number of bytes that each end of the session has acknowledged receiving from the other end of the session. This session layer allows applica-tions functioning on devices to establish, manage, and terminate a dialog through a network. Session layer functionality includes:

• Virtual connection between application entities

• Synchronization of data flow

• Creation of dialog units

• Connection parameter negotiations

• Partitioning of services into functional groups

• Acknowledgements of data received during a session

• Retransmission of data if it is not received by a device

Layer 6 – The Presentation Layer























Copyright ©2006 Global Knowledge Training LLC. All rights reserved. Page 7

Layer 6, the presentation layer, is responsible for how an application formats the data to be sent out onto the network. The presentation layer basically allows an application to read (or understand) the message. Examples of presentation layer functionality include:

• Encryption and decryption of a message for security

• Compression and expansion of a message so that it travels efficiently

• Graphics formatting

• Content translation

• System-specific translation

Layer 7 – The Application Layer


















Layer 7, the application layer, provides an interface for the end user operating a device connected to a net-work. This layer is what the user sees, in terms of loading an application (such as Web browser or e-mail); that is, this application layer is the data the user views while using these applications.

Examples of application layer functionality include:

• Support for file transfers

• Ability to print on a network

• Electronic mail

• Electronic messaging

• Browsing the World Wide Web

Layers 8, 9, and 10

Whether a designed to be a humorous extension or a secret technician code, layers 8, 9, and 10 are not offi-cially part of the OSI model. They refer to the non-technical aspects of computer networking that often inter-fere with the smooth design and operation of the network.

Layer 8 is usually considered the “office politics” layer. In most organizations, there is at least one group who is favored, at least temporarily, by management and receives “special” treatment. When it comes to network-ing, this may mean that this group always has the latest and/or fastest equipment and highest speed network links.







Copyright ©2006 Global Knowledge Training LLC. All rights reserved. Page 8

Layer 9 is generally referred to as the “blinders” layer. This layer applies to organizational managers who have already decided, usually with little or no current information, to dictate a previously successful network plan. They may say things such as:

“It worked in my last company, so we will use it here.”

“Everybody says this is the right solution.”

“I read in an airline magazine that this was the best way to do it so that is what we will do.”

What these managers seem to forget is that they are paying a highly qualified staff to provide them with use-ful information. These managers bypass planning in order to make a quick decision.

Layer 10, the “user” layer, is in every organization. But users are much more than a layer. While they are one of the reasons the network exists, users can also be a big part of the need for troubleshooting. This is especial-ly true when the users have computers at home and have decided to “help” the network administrator or manager by making changes to the network without consulting the network staff. Equally challenging is the user who “didn’t do anything” when the network segment in his/her immediate vicinity suddenly stopped working. In these cases, the layer 10 identification coincides with layer 10 troubles (and the “ID10T” label some technicians have used).

TCP/IP Model Overview

























The OSI model describes computer networking in seven layers. While there have been implementations of net-working protocol that use those seven layers, most networks today use TCP/IP. But, networking professionals continue to describe networking functions in relation to the OSI layer that performs those tasks.






Copyright ©2006 Global Knowledge Training LLC. All rights reserved. Page 9

The TCP/IP model uses four layers to perform the functions of the seven-layer OSI model.

The network access layer is functionally equal to a combination of OSI physical and data link layers (1 and 2). The Internet layer performs the same functions as the OSI network layer (3).

Things get a bit more complicated at the host-to-host layer of the TCP/IP model. If the host-to-host protocol is TCP, the matching functionality is found in the OSI transport and session layers (4 and 5). Using UDP equates to the functions of only the transport layer of the OSI model.

The TCP/IP process layer, when used with TCP, provides the functions of the OSI model’s presentation and application layers (6 and 7). When the TCP/IP transport layer protocol is UDP, the process layer’s functions are equivalent to OSI session, presentation, and application layers (5, 6, and 7).

Equipment at the Layers


























Some of the layers use equipment to support the identified functions. Hub related activity is “Layer One”. The naming of some devices designates the functional layer such as “Layer Two Switch” or “Layer Three Switch”. Router functions focus on “Layer Three”. User workstations and servers are often identified with “Layer Seven”.

Summary

The most identified benefit of the OSI model is that it organizes thinking about networks and give novices, journeymen, and masters a common, computer networking language. Human communication, discussions, and collaboration can use this language to remove ambiguity and clarify intent.







Copyright ©2006 Global Knowledge Training LLC. All rights reserved. Page 10

Learn More

Learn more about how you can improve productivity, enhance efficiency, and sharpen your competitive edge. Check out the following Global Knowledge courses:

Understanding Networking Fundamentals TCP/IP Networking

Network+ Boot Camp

For more information or to register, visit www.globalknowledge.com or call 1-800-COURSES to speak with a sales representative.

Our courses and enhanced, hands-on labs offer practical skills and tips that you can immediately put to use. Our expert instructors draw upon their experiences to help you understand key concepts and how to apply them to your specific work situation. Choose from our more than 700 courses, delivered through Classrooms, e-Learning, and On-site sessions, to meet your IT and management training needs.

About the Author

Paul Simoneau has over 37 years of experience in working with multiple aspects of computers and data com-munications. He is the founder and president of NeuroLink, Ltd., an international coaching and education com-pany specializing in professional development. NeuroLink’s client list includes Cisco, AT&T, Lucent, Citibank, Quest Communications, Hewlett-Packard, Sprint, Verizon, all branches of the US Armed Forces, and many others.

He is also a senior instructor and course director with Global Knowledge, the blended solutions training com-pany. In that role, he has authored and managed two highly successful courses—Hands-on Internetworking with TCP/IP and Network Management Essentials. Both courses are offered world-wide in Classroom, Virtual Classroom, and Self-directed formats. In support of these and other courses, he actively participates in Global Knowledge’s e-mentoring programs.

His is author of the books Hands-On TCP/IP and SNMP Network Management.



























Copyright ©2006 Global Knowledge Training LLC. All rights reserved. Page 11

Business

Business
A businss is a legally recognized enterprise or organized activity that obtains, creates or manufactures products or services and then sells them to customers on a continuing basis. Running a business requires leadership and includes management of finances, personnel, procurement, manufacturing, marketing and sales. This is true for a large corporation, as well as a one-person operation.
If you are an entrepreneur, business owner or manager, you need to know how to run your organization effectively to expand or grow the business. The purpose of these lessons is to give you a start at improving your business skills.
After completing the lessons, you should be able to operate your business in a way that you will have greater profits, reduced costs, and a competitive advantage, such that you can become a champion in your field. If you have any questions,
Definitions of Basic Business Terms
If you are involved in business, there are various words and terms used in business that you should understand. The following list defines major business terms. The list is by no means comprehensive, but it gives a good background on what certain words mean in business. It is worthwhile to understand the terms used, when studying business.
Questions you may have include:
• What are the basic terms?
• What do they mean?
• How are they used?
Basic terms
A business is an enterprise or entity that provides products or services to customers. Business is doing commercially viable and profitable work. Commerce is buying and selling products or services.
A business: A legally recognized organization or organized effort that operates with the objective of earning a profit from the sale of goods or services
Alliance: Close association of groups or businesses
Business: The activity in which you participate in order to earn money (i.e. "I'm in the computer business.")
Client: A regular customer that receives your professional services
Commerce: The buying and selling of goods
Company: Usually considered a business that has employees.
Contract: A formal agreement to do work for pay
Consultant: A person hired to give advice to business management
Contractor: One who agrees to do perform a service or deliver a product for a fee
Customer: The person or company that purchases and pays for product or service; note that the customer may not be the user of the product; also note that some companies think in terms of internal and external customers
Delivery: When the product is delivered to the customer or the job is completed
e-Commerce: Buying and selling done over the Internet
Employee: A person working for a company
Enterprise: An industrious, systematic activity, especially when directed toward profit; A business organization
Firm: A commercial partnership of two or more people, especially when unincorporated
Internal customer: The person or department within a company that provides you or your area with money in exchange for delivery of products or services
Marketing: The commercial functions involved in transferring goods from producer to consumer
Product: Something produced; goods
Proposal: A formal document given to customer that outlines proposed work to be done by the business
ROI: Return-on-investment; how much money a business gets from a capital investment that is intended to improve profits
Service: Work done for others; changing the state of a product, which is then delivered; for example, cleaning a dirty floor results in "delivering" a clean floor to the customer
Supplier: The person or company that provides goods or services needed to do your job
User: The person or company that uses a purchased product or service; could also be called the consumer
Basic Steps in Starting a Business
by Ron Kurtus (3 October 2004)
A business is an organized activity to sell a product or service to various customers on a regular basis. To start a business enterprise, you first need a good idea and a plan of action. Then you must implement your plan by gaining financing, getting the product or service to sell, finding prospects, selling and making the exchange.
Questions you may have about this are:
• What is the criteria for being in business?
• How do you get a good idea?
• How do you implement your plan of action?
Criteria for a business
The criteria for being in business is that you provide a product and/or service on a regular basis to a number of customers.
Selling on regular basis
A person selling a car or other property is involved in a business activity, but since it is a one-time operation, it is not considered a business enterprise. If the selling is done on a fairly regular basis, it can then be classified as a business.
Selling to more than one person
With providing services in exchange for money, a person usually does it on a regular basis. For example, a boy who mows lawns during the summer in his neighborhood is in business. On the other hand, if the boy is mowing the lawn of only one neighbor, he is no longer in business. Instead, he has a job.
Idea
Every new business starts with a great idea. Usually, the entrepreneur is motivated by wanting to run his or her own business and making a lot of money. There may be other personal motivations such as self-expression or wanting to make a difference in society.
Typically, the entrepreneur hears about something in an area of interest and skill that triggers the idea of a product or service that would be in demand.
Henry Ford saw others making cars and felt he could do it better and cheaper. Steve Jobs saw some of the new personal computers and got the idea of making his own version of user-friendly computer. Michael Dell saw how personal computers were being made and thought it would be a good business to get into.
Plan of action
The next phase in starting a business is to develop a plan of action. In many cases--especially when substantial funding is required--a formal business plan is written. But there are many businesses that start with informal plans that may change as the situation requires.
Next the plan is implemented.
Funding
Some entrepreneurs get funding to begin their businesses from their own savings. Others may present their business plan to venture capitalists to get seed money.
Get product or service
The product may be purchased or built. The entrepreneur may make him- or herself or hire others to make the product.
The service may be done by the entrepreneur or people may be hired to perform the service.
Get prospects
Marketing efforts are required to find prospective buyers and make them aware that the product or service is available, as well as the benefits and advantages of the goods.
It is necessary to meet with the prospects to demonstrate the product and convince them to buy.
Make exchange
Once the customer is convinced and a price is negotiated, you make the exchange. You deliver the product or service and they pay for it.
Repeat process
Some of the profits will pay for more products and marketing efforts, resulting in more demonstrations and sales. The business is up and running.

Measuring Your Business
by Ron Kurtus (revised 9 August 2000)
To improve your business, you must be able to truly verify that improvement. Some companies have a large amount of business but yet show diminishing profits. Others have such a great profit margin that they are pricing themselves out of business. What is needed is a good means of measurement. As quality guru W. Edwards Deming once said, "What you measure, you improve."
When to measure
Measuring how your business is doing should be made both before and after any improvement program. Obviously, the exact same measurement method and conditions should be used in both cases.
Do not assume the present company performance metrics are valid. Often they are skewed or overlook not-so-obvious areas for improvement.
Broad metrics
First look at very broad metrics for your business, such as cost and customer satisfaction.
Cost
How much does your product cost you? This includes the cost to make or purchase the product plus sales, delivery, service and repair costs. These are hard figures that are caused by many factors that can be improved.
Often companies do not include the cost to service and repair their products in the overall cost. Of course your profit is what the customer pays less your overall cost.
Customer satisfaction
How satisfied is the customer with the product? Will the customer buy from you again? Does the customer refer your company or business to others, giving you word-of-mouth advertising?
This measurement is often a soft metric, depending on opinions and surveys. Often the truth is difficult to determine. The amount of advertising necessary to get in business is an indirect measure of customer satisfaction in many cases.
Ask your customers if they are happy with your products and services. Find out where customers heard about you. Keep track of how much business is repeat business, as opposed to new business.
Specific metrics
Within the broad metrics there are more specific metrics that can be taken. These will point to areas where improvements can be made.
Costs from suppliers
The cost of goods from suppliers should be measured. Comparison of the prices for goods versus key items should be made:
• Timeliness - do you deliver when promised?
• Turnaround time to deliver goods
• Reliability of supplier to deliver
• Reliability and quality of product
• Percentage of rejected or unacceptable product
Cost of workers
Workers are essentially internal suppliers. A similar list of metrics apply to them:
• Timeliness
• How fast do they work?
• How reliable is the worker?
• What is the quality of his product?
• How must time and material does he waste?
Cost of process
The same metrics that apply to your suppliers apply to your business with respect to your customers. Much of this has to do with your internal processes and how you run your business.
Organizing Your Business
by Ron Kurtus (revised 14 February 2000)
A first step in improving your business is to make sure it is well organized. It is surprising how many businesses have been careless about this step. Some such companies may be mildly successful, but they could be even more profitable if they paid attention to the basics of organization.
Questions you may have about this are:
Starting point
Whether you are starting a new company or improving an existing one, it is important to have a business mission, concept, and vision.
You need to define the purpose or mission of your business. Much of this has to do with the motivations of the leadership. Then you must have a business concept, model, or terrific idea of some product or service that will sell. Finally, in order to improve, you must have a vision or goal of where you want to end up.
Organization methods
Once you have established or re-defined the groundwork for your business, you can use various methods and standards to improve the operation and organization of your business.
ISO 9000 standards
A very good way to organize the way your business operates is by following the ISO 9000 standards. You do not necessarily have to become certified in ISO 9000, but you can still use the standards as a guide in how to effectively operate your business.
(Details are explained in later lessons in: Organize Your Business with ISO 9000.)
Re-engineering
Re-engineering has been a management fad in recent years. Unfortunately, it has been misapplied and used as a way to eliminate workers. A business or company that has been in existence for a while usually has an operation structure in place. It may be necessary to drastically alter that structure and re-organize and become more effective.
Benefits
Organizing is a form of planning. It has been shown that setting a good structure can make any organization more effective and efficient.
Good organization results in reducing losses due to duplicate work or unclear objectives. All personnel do better work, because they know what they should be doing and what their place is in the scheme of things.
A well-run company is in a stronger position in the competitive marketplace. Not only are profits higher, but repeat business is enhanced.

Total Quality Management (TQM)

Total Quality Management (TQM)
Total Quality Management (TQM) is a combination of quality and management tools aimed at increasing business and reducing losses due to wasteful practices. An important part of TQM is its a philosophy toward continually improving your business and products.
A number of quality initiatives have arrived since TQM started in the 1980s. The most recent is the Six Sigma program, which is quite similar to TQM. We follow the Kurtusian philosophy of TQM that was developed for the U.S. Air Force space programs.
There is a need for people who will champion the cause of improving the way business is done through effectively implementing TQM within a company. Your knowledge and skills in this area can help advance your career while improving your business. If you have any questions,
Basic Principles of Total Quality Management (TQM)
by Ron Kurtus (28 May 2001)
The basic principles for the Total Quality Management (TQM) philosophy of doing business are to satisfy the customer, satisfy the supplier, and continuously improve the business processes.
Questions you may have include:
• How do you satisfy the customer?
• Why should you satisfy the supplier?
• What is continuous improvement?
Satisfy the customer
The first and major TQM principle is to satisfy the customer--the person who pays for the product or service. Customers want to get their money's worth from a product or service they purchase.
Users
If the user of the product is different than the purchaser, then both the user and customer must be satisfied, although the person who pays gets priority.
Company philosophy
A company that seeks to satisfy the customer by providing them value for what they buy and the quality they expect will get more repeat business, referral business, and reduced complaints and service expenses.
Some top companies not only provide quality products, but they also give extra service to make their customers feel important and valued.
Internal customers
Within a company, a worker provides a product or service to his or her supervisors. If the person has any influence on the wages the worker receives, that person can be thought of as an internal customer. A worker should have the mind-set of satisfying internal customers in order to keep his or her job and to get a raise or promotion.
Chain of customers
Often in a company, there is a chain of customers, -each improving a product and passing it along until it is finally sold to the external customer. Each worker must not only seek to satisfy the immediate internal customer, but he or she must look up the chain to try to satisfy the ultimate customer.
Satisfy the supplier
A second TQM principle is to satisfy the supplier, which is the person or organization from whom you are purchasing goods or services.
External suppliers
A company must look to satisfy their external suppliers by providing them with clear instructions and requirements and then paying them fairly and on time.
It is only in the company's best interest that its suppliers provide it with quality goods or services, if the company hopes to provide quality goods or services to its external customers.
Internal suppliers
A supervisor must try to keep his or her workers happy and productive by providing good task instructions, the tools they need to do their job and good working conditions. The supervisor must also reward the workers with praise and good pay.
Get better work
The reason to do this is to get more productivity out of the workers, as well as to keep the good workers. An effective supervisor with a good team of workers will certainly satisfy his or her internal customers.
Empower workers
One area of satisfying the internal suppler is by empowering the workers. This means to allow them to make decisions on things that they can control. This not only takes the burden off the supervisor, but it also motivates these internal suppliers to do better work.
Continuous improvement
The third principle of TQM is continuous improvement. You can never be satisfied with the method used, because there always can be improvements. Certainly, the competition is improving, so it is very necessary to strive to keep ahead of the game.
Working smarter, not harder
Some companies have tried to improve by making employees work harder. This may be counter-productive, especially if the process itself is flawed. For example, trying to increase worker output on a defective machine may result in more defective parts.
Examining the source of problems and delays and then improving them is what is needed. Often the process has bottlenecks that are the real cause of the problem. These must be removed.
Worker suggestions
Workers are often a source of continuous improvements. They can provide suggestions on how to improve a process and eliminate waste or unnecessary work.
Quality methods
There are also many quality methods, such as just-in-time production, variability reduction, and poka-yoke that can improve processes and reduce waste.
Using TQM for a Competitive Advantage in Business
The Total Quality Management (TQM) philosophy of doing business emphasizes lowering costs by reducing waste, helping suppliers provide quality products and satisfying the customer with quality goods and services. Companies that can produce goods at lower costs than their competitors, while delivering quality products that satisfy their customers will have an advantage over those companies that do not duplicate those feats. Implementing TQM can help a company gain a competitive advantage in their business.
Questions you may have include:
• How can a company reduce costs?
• What does helping suppliers and workers do?
• How does customer satisfaction give an advantage?
Reducing costs
Achieving lower costs for getting or making products gives a company a great competitive advantage over their competition.
Getting products - case study
Wal-Mart has formed alliances with their suppliers, such that they are able to purchase goods at a discount that their competitors cannot achieve. The result is that Wal-Mart is able to offer products at such low prices that have actually driven many competitors out of business.
Making products - case study
Japanese automobile manufacturers Toyota and Honda have greatly lower worker pension and healthcare costs than the "Big-3" American manufacturers, General Motors (GM), Ford and Chrysler. This is true even for the Toyota and Honda facilities in the United States.
The cost per car for worker benefits paid by is $1360 for GM, $735 for Ford and $630 for Chrysler. Meanwhile, it costs Toyota $180 and Honda $106 per car. This results in much higher profits or lower prices for the Japanese autos.
Also, the Big-3 each have about 18,000 in "excess workers" that drive up their costs.
The Japanese auto manufacturers are winning the competition in terms of reduced costs.
Manufacturing cost reduction
Companies want to reduce the cost of getting or making their products. A major portion of the cost of goods involves wasteful practices that result in scrapped parts and returned goods from dissatisfied customers.
By continually improving the processes involved in making the product or delivering the service, a company can be more effective in reducing losses due to waste. This will allow the business to deliver products at lower prices while still achieving a good profit. Competitors may not be able to meet those prices.
Eliminating errors is a major goal. An extension of TQM is the Six-Sigma approach that seeks to eliminate errors to 6 parts in a million (six sigma deviation).
Getting lower cost, quality good from suppliers will also reduce costs.
Helping suppliers
A company's workers and suppliers provide the input that determined the cost and quality of the products being made. The company that empowers its workers and suppliers and helps them achieve these goals will have a competitive advantage over the company that browbeats its workers or suppliers.
Quality supplies
The first part of providing the customers with quality goods involves purchasing those products from suppliers or getting quality parts to make your own product. An important aspect of Kurtusian TQM is to help the supplier provide quality to your company.
Often companies browbeat their suppliers into providing goods at low costs. Wal-Mart has been known to be very tough on suppliers, even driving some out of business if they did not bend to Wal-Mart's demands. Other companies have also used such negative tactics.
By working closely with suppliers, you can provide a partnership where you get the quality supplies needed to gain your competitive advantage.
Quality workers
Your workers proved services that allow you to make quality products. Others deal with the customers and provide quality service to those customers. Courteous sales representatives can make for a pleasant buying experience for the customers.
Some companies demand much from their workers and even if they pay them well, they do not have a truly motivated staff. Some companies even demand that the sales people smile and act friendly, even if they don't feel like it.
Making the workers part of the team and helping them provide quality work can give you a good competitive advantage on competition that may have an unhappy workforce.
Customer satisfaction
A customer that is satisfied or even pleased with the products and services received, sees them as value-added. They will be glad to return to the company to purchase other items. They will refer others to the company.
This is not only true in sales to individuals, but it is also vital in corporate sales. In selling product or providing supplies to another company, you need to make sure the material is to specification and gives them the assurance that they can count on your company to provide such quality good in the future.
Customer satisfaction is the ultimate advantage a company can have over their competitors.
Applying TQM in a Church
A church, temple or place of worship is also a nonprofit business operation that has to remain financially viable. Applying our Total Quality Managment (TQM) principles to the operation of your church can help in maintaining its success. The three parts of implementing TQM are a focus on satisfying the customer, helping the suppliers provide quality goods and services, and continually improving the church's business processes.
Questions you may have include:
• How do you satisfy the customers?
• How do you help the suplliers?
• How do you improve processes?
Satisfy the Customer
Although they are usually called parishioners or church members, those people who attend your church and give donations are in essence your customers. The goal of your church should be to satisfy those customers by providing them with a high quality religious service that satisfies their needs and expectations.
You want repeat attendance
Like in any business—profit or nonprofit—a satisfied customer will become a regular customer and will also tell others about the business. You want your parishioners to attend church regularly and to bring their friends to the church.
Not only will satisfied attendees to your church come more often and give referrals, but they may also donate more money.
Find reason for attending service
In order to effectively satisfy those attending your church service, you should know why they come in the first place.
Most people attend religious services in order to receive spiritual guidance, assurances, and lessons. They attend to get food for their souls. There are some people who attend a specific church for social, political, or even business reasons. There are others who go only to appease their spouse or perhaps their parents.
Some of the more successful churches have ministers who are charismatic or entertaining orators or preachers. People come to hear the message and be inspired by the minister.
You need to find out why people come to your church, as well as why some did not return. Sometimes a survey or questionairre will provide that information. You may also get suggestions on how to improve the church experience for your members.
Give the customer what he wants and needs
If the attitude of the church is to provide a service to its members and guests, the activities will be to give those people what they came to church for in the first place.
Some years ago, the Catholic Church threatened parishioners with damnation if they did not attend church regularly. This was opposed to the TQM concept of providing a service that would cause them to want to return to recieve more spiritual food. The Church later found their approach no longer worked very well.
Help the suppliers
Another aspect of applying TQM in a church is to help your suppliers provide you with quality goods and services. The objective is to get quality goods on time and at the best price. Also, you want to reduce waste and costs.
Churches receive products and services from external suppliers and companies. They also receive internal services, such as musicians, ushers, chaplains, and youth leaders.
Selecting good suppliers for the church is important. But also, you need to deal with them in a manner that makes them want to do a good job for you. Just because you pay someone money does not mean that you have a right to be demanding.
Make your suppliers want to do business with your church. Find ways to help them and thank them. This will improve the operation of the facility and reduce the chances for problems.
Continuous improvement
Although you may think your church operation is running smoothly, there are always things that can be improved. Seek ways to streamline the operation of the church to make the best use of the money available. Also find ways to better satisfy the congregation and suppliers.
Not only must a church satisfy its customers, but they must also try to continually improve. Is there something they can do better in the church service or in Sunday school or such? You can look at ways to improve the use of your church property. You can try to make the services tighter and more professional.
You can survey the congregation to see if there are areas that need improvement. Is the sound system sufficient? Is the parking good enough? Are there services that the church can provide the community? Are there areas of waste where you are losing money and don't even realize it?
Seek to continually improve the way you do your church business.

LIST OF LIBRARY BOOKS/TITLES

WEL-COME TO MY LIBRARY

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The Rajive Gandhi College of Management Studides Library include a good number of books in all management subjects. The prime aim of the library to provide User satisatisfactory Services and also to Support Teaching activities in the college.

LIST OF TITLES

1. An Introduction To Statistical Methods---By Gupta, C B & Gupta, Vijay
2. Accounting for Mangement Text and Cases---By Bhattacharya & Deardon
3. Advertising management---By Batra Rajeev
4. Analysis and Design of Information System---By Senn, James
5. Business statistics---By Gupta, S. C
6. Business Law For Management---By Bulchandani
7. Business Statistics---By Beri
8. Business Statistics---By Sharma, J. K
9. Business Statistics---By Bhardwaj, R. S
10. .Business Optimisation Through Supply Chain Management---By Sharma Anand
11. Business Ethics---By Murthy
12. Business legislations---By Kumar, Niraj
13. Basic Marketing---By Perrault & Mccarthy
14. Brand Management---By Gupta
15. Business application of Computers---By Oka Milind
16. Business Law ---By Kapoor, N D
17. Business Process Re-Engineering---By Bhat
18. Blink (9.99 Pond)---By Gladwells, Malcohn
19. Company Law 11th Ed---By Majumdar, A K & Kapoor, G K
20. Company Law---By Avatar Singh
21. Cost Accounting For Managerial Emphasis---By Horngreen
22. Collins Dictionary of Business---By Christoper Pass
23. Compensation Management---By Bhatia
24. Company Law 11th Ed ---By Majumdar, A K & Kapoor, G K
25. Company Law---By Avatar, Singh
26. Cases and Problems on Quantitative Techniques---By Jhamb, L. C
27. Communication Skills For Effective Management---By Ghanekar
28. Communication Skills---By Rao
29. Communication Skills---By Sen
30. Commentary on Consumer Behaviour---By Chunawala
31. Consumer bahaviour---By Schiffman & Kanuk
32. Consumer relationship Management---By Kulkarni , M. V
33. Dhirubhaism---By Krishnamurthy, A G
34. Dynamics of Industrial Relation ---By Mamoria
35. Developing Communication Skills---By Mohan
36. Emotional Intellegence ( $7.99)---By Goleman
37. Essential of Management---By Koontz, Herold
38. Elements of Informarmation Technology---By Oka Milind
39. Essence of Drucker---By Drucker, Peter
40. Essentials of H R M & Industrial Relations ---By Subba Rao
41. Entrepreneurship---By Hisrich, Robert
42. Essentials of Marketing Research---By Aaker David A Kumar V
43. E-Business: Roadmap For Success---By Kalakota, Ravi & Robonson, Marcia
44. Economic Environment of Business---By Mishtra and Puri
45. Effective Human Resource Training and Development Strategy ---By Rattan Reddy
46. Entrepreneurship Development and Project Management---By Sarwate
47. Ethics In Management---By Sherlekar
48. Ethics, Indian Ethos and Management---By Balachandran
49. Economics---By Samuelson, Paul & Nordhous William
50. Elements of Corporate Law---By Maheshwari
51. Enterprice Application---By Murthy
52. Financial accounting---By Sontakke, K
53. Financial Derivatives and Risk Management---By O. P. Agrawal
54. Financial Accounting: A Managerial Perspective---By Narayanaswamy R
55. Financial Management: Theory and Practice---By Chandra Prasanna
56. Financial Management---By Khan. M .Y & Jain, P, K.
57. Financial Management---By Pandey, I .M.
58. Fundamentals of Financial Management---By Sharan
59. Financial Accounting: Reporting and Analysis---By Stice Earl K Stice James D
60. Financial Management---By Brigham
61. Fish---By Lundin, Stepehn
62. Good To Great---By Collins, Jim
63. Human factors in organizational management---By Kaila, H. L
64. Human Resource Management---By Bhattacharya D K
65. Human Resource Management---By Dessler Gary
66. Human Resource Management: Text and Cases---By Rao V S P
67. Human factors in organizations new paradigms---By Kaila, H. L
68. HRD skills for organizational excellence---By Pai, Satish
69. Heart at work---By Canfield, Jack
70. Human resource and managerial perspective for the new millennium---By Pai, Satish
71. Heart over matter---By Kapoor, Virendra
72. How to prepare and implement organizational manual---By Tripathy, J. D
73. International Business---By O. P. Agrawal
74. International Business Management---By Pherwani, Gautam
75. International Business :Text and Cases---By Subba, Rao
76. India Unbound---By Gurucharan das
77. Intenational Marketing Management : Indian Perspective---By Varshney, R L
78. Industrial Relations---By Venkatratnam
79. I'm OK You're Ok---By Harris, Thomas
80. Introduction to Computer --- By Norton Peter
81. .India: 2020 a vision for the new millennium---By APJ Abdul Kalam
82. Indian Economy---By Agarwal
83. International Finance---By Avadhani
84. Indirect Taxes :Law and Practice---By Datey, V. S
85. Information Systems Today :why is Matters---By Jessup & Valacich
86. Ignited Minds---By Abdul Kalam
87. International Marketing 10th ed---By Cherunilam, Frrancis
88. Introduction To Computer---By Leon, Alex & Leon, Mathews
89. Imagining India: Ideas For The New Century---By Nilekani, Nandan
90. Integrated Marketing Communication---By Niraj Kumar
91. Introduction To Information Technology ---By Rajaraman
92. Leadership Wisdom---By Robin Sharma
93. Leaders at all Levels---By Ram Charn
94. Let us C---By Kanetkar
95. Managerial Economics---By Bhivpathaki, D.
96. Managerial economics---By Mithani
97. Managerial Economics :Concept & Cases---By Mote & Paul & Gupta
98. Managerial Economics---By Petersen
99. Microeconomic Theory---By Dwivedi D N
100. Microeconomics for management studies---By Dholakia, Ravindra
101. Macroeconomics : Theory and Policies---By Dwivedi D N
102. Marketing of Financial Services---By Avadhani
103. Management: A Competency-Based Approach---By Hellriegel Don & Jackson Susan E
104. Managing For The Future---By Peter Drucker
105. Modern Management---By Certo,
106. Management---By Stoner & Freeman
107. Managerial Accounting ---By Jawaharlal
108. Management: Text and Cases---By Rao, V.S.P & Hari Krishna
109. Management Information Systems: Conceptual Foundations, Structure,and 109.Development---By Davis Gordon B & Olson Margrethe H
110. Management Information System---By Jawadekar
111. Management Information System---By Lauden
112. Management Information System:Text & applications---By C S V Murthy
113. Management Information Systems---By O'brien James A & Marakas George M
114. Marketing Research: With A Changing Information Environment---By Hair Joseph F & Bush Robert P
115. Marketing Management---By Saxena, Rajan
116. Marketing Research---By Luck & Rubin
117. Marketing Research---By Rajendra Nargundkar
118. Market Research ---By Sontakki
119. Marketing Management---By Bose
120. Marketing Management and Research---By Gupta P. K
121. Marketing Management ---By Karunakaran
122. Marketing Management---By Kotler, Philip & Keller
123. Modern Production/ operations Management---By Buffa, E S
124. Material Management---By Bhat
125. Management Information system---By Prasad L M
126. Market Research---By Malhotra Naresh
127. Manufacturing and operations Management---By Jhamb, L. C
128. Materials and Logistics Management---By Jhamb, L. C
129. Mathematics and Statistics For Management ---By Mittal
130. Monastery, Sanctuary, Laboratory: 50 Years of Iit- Bombay---By Manchanda, Rohit
131. Marketing Management Planning, Implementation & Control: Global Perspective Indian Context---By Ramaswamy V S & Namakumari S
132. Marketing of Non-Profit Organisation---By S.M.Jha
133. Managing Human Resources---By Gomex
134. Managing Human Resources---By Snell / Bohlander
135. Management: Value oriented holistic approach---By Sherlekar
136. Marketing Reserach---By Kulkarni , M. V
137. Organisational Behaviour---By Ghanekar
138. Organizational behaviour: A new look concept, theory ad cases---By Kumar, Niraj
139. Operation Research---By Taha
140. Options, Futures and Other Derivatives---By Hull
141. Operations Management---By Gaither, Norman
142. Operation Research---By Kapoor, V K
143. Organisational Behaviour---By Aswathappa
144. Organisation Theories and Structure and Design---By Bhattacharya,& Dipak Kumar
145. Organizational Behavior---By Luthans Fred
146. Organizational Behavior---By Prasad, I M
147. Organizational Behavior---By Robbins Stephen P
148. Personnel / Human Resource Management---By Decenzo & Robbins
149. Personal Management---By Mamoria
150. Principles of Operations Research with applications on Managerial Decisions---By Wagher, Harvey
151. Production & Operation Management ---By Chary S N
152. Practical Problems In Costing : Text book for cast and Works Accountants---By Purandare, Milind
153. Product Management---By Chunawala
154. Production Planning and Control---By Jhamb, L. C
155. Performance Management System---By Sharma
156. Project management---By Sontakki, V. C
157. Principles of management---By Ramasamy, T
158. Production and Operation Management---By Muhlemans
159. Production and Operation Management---By Patel, Chunawala
160. Production and Operation Management---By Aswathappa
161. Production and Operation Management---By Bedi, Kanishka
162. Psycholgy---By Baron, Robert
163. Quantitative Techniques in Management and economics---By Chakravarty, Palak
164. Quantitatives Methods and Operations research---By Bhat, K & Sridhara
165. Quantitative Techniques in Management---By Vohra, N D
166. Quantitative Techniques For Decision Making---By Gupta M P & Khanna R B
167. Quantitatives Techques For Decision Making---By Anand Sharma
168. Quantitative Techniques For Managerial Decision---By Sharma, J .K
169. Research Methodology: methods & techniques---By Kothari C R
170. Rural Marketing ---By Krishnamoorthy
171. Rural Marketing ---By Rehman
172. Re-engineering organizational productivity: Challenges ahead---By Pai, Satish
173. Retail Marketing Management---By Kulkarni , M. V
174. Retailing Management - Text & Cases---By Swapna Pradhan
175. Retail Management---By Barry, Bermans
176. Retail Management---By Gibson, Vedamanai
177. Supply Chain Management---By Bhivpathaki, D. P
178. Supply chain management: Strategy, planning and operation---By Chopra, Sunil
179. Supply Chain Management---By Sahay, B. S
180. Strategic Market Management---By Aaker David A & Kumar V
181. Strategy and business Landscape---By Ghemawat, Pankaj
182. Services Marketing---By Zeithmal
183. Statistics For Management---By Levin Richard I & Rubin David S
184. Statistical and Quantitative Methods---By Dhaygude
185. Strategic Management---By Jeyaratham
186. Structured Systems Analysis and Software Engineering---By Johri
187. Srategic Management and Marketing---By Narendra Singh
188. Students Guide To Accounting Standard---By Rawat, D S
189. Statistics a First Course---By Sander, D H
190. Students' Guide To Income Tax ---By Singhania Vinod K
191. Sales power: The silva mind method for sales professionals---By Silva, Jose
192. Services marketing: Concept practice and cases---By Shajahan, S
193. Sales and Distribution Management---By Chunawala
194. Security Analysis and Portfolio Managent ---By Avadhani
195. Security Analysis and Portfolio Management---By Fisher Donald
196. Seven Habits of Highly Effective People ($ 8.25)---By Covey Stephen
197. The Seven Spiritual Laws of Success---By Chopra, Deepak
198. The Art of Living : Vipassana Meditation by Goenka---By Hart, William
199. The One Minute Manager: Free Up Your Time---By Blanchard
200. Text Book of Research Methodology in Social Science---By Tripathy, P C
201. The complete idiat's guide to winning through negotiation---By Ilich, Jain
202. The silva mind control method of mental dynamics---By Silva, Jose
203. The silva mind control method for business manager---By Silva, Jose
204. The silva mind control method---By Silva, Jose
205. The silva method think and grow fit---By Silva, Jose
206. Thesarus---By Oxford
207. Theory and Problem In Production and Operation Management---By Chary S N
208. Understanding Organization Behaviour---By Pareek, Udai
209. Working it out at work---By Hay, Julie
210. White Tiger---By Adiga, Arvind
211. Wings of Fire : An Autobiography---By Abdul Kalam
212. World Class Manufacturing ---By Bhat
213. Webster's Universal : Thesarus---By Webster
214. Webster's Universal :English Dictionary---By Webster
215. Webster's Universal : Spelling , Grammar & Usage---By Webster