Principles and Functions of Management - Essay Example

PRINCIPLES AND FUNCTIONS OF MANAGEMENT Principles and Functions of Management In recent years, several management theories have been proposed by the gurus of management, such as Peter Drucker, Michael Hammer and Peter Senge. New concepts such as TQM (Total Quality Management), Strategic management, re-engineering and downsizing are now commonplace in business lingo. However, in actual practice, it is rare to find business theories being executed in a practical sense in organizations. Some of the notable management theories are as follows: (a) Management By Objectives: (MBO). This Management theory was advocated by Peter Drucker, as a function of his “rational” school of management and was in force just after the Second World War. This theory focused upon the achievement of short term objectives as a means to fulfilling the long term goals of the organization. (Birnbaum 2000:43-52). Employees in every department were to set out short-term objectives, which were to be achieved within a certain deadline. Companies such as General Motors and RCA Foods adopted this method of management. However, in actual practice, this theory failed to take into account the political bickering and rivalry that existed between various departments. In actual practice, the departments rarely bothered to make and adhere to short-term objectives and the theory was soon scrapped by 1985, because it was found to be ineffective. The reason for this was because the theory failed to take into account the unpredictable human factor, that often results in problems arising with the practical execution of a management theory that may be sound good on paper but fails in practice. Managers therefore failed to make use of this theory on a wide ranging basis, because while it sounded good as a theory it was not effective in actual practice. (b) Strategic Planning in Management: This is a commonly used management practice today and the tool through which it functions is commonly known as the SWOT analysis. This theory was also derived from Peter Drucker’s rational approach with an attempt to also include political inputs. This method involves the analysis of the Strengths, Weaknesses, Opportunities and Threats to a business. This was a management technique that was set out with the purpose of identifying a particular niche for every business. The aim and objective behind this management theory was to enable an organization to survive and compete effectively in a rapidly changing, globalizing environment. According to this theory, the SWOT analysis helps to analyze external and internal data within the organization and compare it with others in the industry in order to evaluate the exact position that the organization exists in and to help identify the trends in the business sector, with the aim of preparing a plan of action for the business to operate and function effectively in a competitive environment. After a detailed analysis of all factors, the aim of the theory is for the organization to determine the future course that it will take and to then set out the steps that it can pursue to achieve those ends.(Birnbaum 2000:63-75). But in actual practice, this management theory was found to be ineffective because it involved the collection of too much information, much of which was found to be too general to be of specific use to the organization in question. Moreover, forecasts that were made based upon a SWOT analysis were often found to be misleading or wrong, since the technique involved the planning of business strategy through prediction, which was often found to be inaccurate. Moreover, there was no significant difference between organizations that used strategic planning and those that didn’t therefore the theory was not one that was proven to have any merit. In practice, it was merely an application of general principles which could not guarantee success of a business and therefore was not attributed much value by managers in terms of actually practicing it. (c ) Total Quality Management: The theory of Total Quality Management was developed as a management practice that was to provide an effective opposition to the proliferation of Japanese control over the industrial marketplace. This theory was developed by W. Edward Deming, who is also referred to as the “father of TQM” (Birnbaum 2000: 92-108). The idea behind this theory was to develop statistical control and sampling processes which would focus upon the attainment of manufacturing quality by evaluating the product at every stage based upon consistent, continuous measurements. In a wider sphere, this is also being applied in other aspects of the functioning of organizations, where performance is being continuously evaluated in order to ensure that it means the standards that are specified. In the event that there is a shortfall in the standard as demonstrated by the quality measurement criteria that are applied, then action is taken to correct the process at the intermediary stage itself rather than waiting for completion of the process or product manufacture. The rationale behind this theory is also based upon the need to stay competitive in a rapidly changing and globalizing environment. But in practice, managers have not taken to this theory very enthusiastically. The problem with this theory lies in the fact that it is difficult to precisely define quality itself. While quality is something everybody in the organization wants to achieve, it is not easy to quantify quality and effectively measure it. Thus in practice, this theory was found to be difficult to implement and was also found to be an expensive process, requiring extensive paperwork and resulting in the creation of bureaucracies within the organization which were a hindrance to its overall progress. Thus, this theory has not been found to be practical in use. (d) Business Process re-engineering: This management theory places great stress upon the value of Consultants as the answer to the problems a business faces. Reengineering attempts to completely reorganize and overthrow existing systems in order to develop new systems that incorporate information technology. The process involves the breaking down of a business and then putting it back together in a manner that will generate more efficiency and productivity. This process involves the disintegration of traditional hierarchies in order to evolve a more balanced network wherein fewer people are integrated in order to produce a streamlined product, This process often involves the eschewing of traditional job descriptions and functions, as also traditional production processes and ways of doing business. It seeks to break down component parts of the system and then reorganize it in an innovative manner that will prove to be more beneficial to the corporation. This management theory has been advocated by people like Hammer Champy and William Bratton and the modern wave of lay offs and “downsizing” of corporations is the result of this theory. For example, according to Micklethwait and Wooldridge (1996), in the year 1994, 516,069 jobs were cut out and $10 billion was spent on the restructuring of companies which resulted in a rise in American corporate profits by 11 percent. Re-engineering essentially involves the cutting down of staff in order to reduce the expenses incurred by a corporation and thereby increase profits. Outsourcing is also the new mantra that is touted in connection with reengineering and resizing of corporations in order to make them function more efficiently. American corporations are shifting their operational businesses into other countries by sub contracting or outsourcing their business to the developing countries where the labor costs are less and where overall expenses of the Company are thus reduced. However, it may be seen from the hue and cry that it being raised by the public, that reengineering is not a very popular option with the majority of the middle class working force, that resents the fact that jobs are being transferred out of the country, thereby depriving them of a livelihood a and increasing the gap between the rich and the poor. A theory and practice that was essentially meant to transform business culture and make it simpler and more unified has instead become synonymous with downsizing, outsourcing and loss of jobs. In fact this is one of the most unfavorable theories from the point of view of middle managers, because many of them have lost their jobs in the downsizing of corporations. The failure of this business theory is perhaps best exemplified in the statement of one of the founders and advocates of the re-engineering process, Michael Hammer, who said: “I wasn’t smart enough about that [human element]. I was reflecting my engineering background and was sufficiently appreciative of the human dimensions, I’ve learned that’s critical” (Birnbaum 2000: 112-113). Conclusion: Therefore, in conclusion it may be seen that it is often that vital human factor that most management gurus fail to take note of in framing their theories. It is this human factor that is unpredictable and makes it impossible to execute the theories as they are framed, when applied in a practical, everyday situation. Many of these business theories begin with great fanfare and end with “a world where the promises of change have made no difference to people’s day to day work lives.” (Block 1999:263). These theories are founded upon the principle that new success generating behavior can be induced, measured or coerced out of employees, whereas in view of the unpredictability of the human elements, such changes are only resisted all the more fiercely. The basis of most management theories lies in the roots of the belief in executive decisiveness. The traditional view of a business is that managers can make the difference, it is executive behavior that will dictate the progress of the company and that when the boss is in agreement with a theory or a principle, it is likely to work. However, this is based upon a wrong assumption altogether, because “no single person runs a business, no one person makes or delivers a product, no one general ever fought a war.” (Block 1999:263) The reason why most managers do not subscribe to management theories is the fact that they understand the limitations of these theories in actual practice as very few other people do. Managers are faced each day with the reality that “many of their best intentions have little impact on the way the work gets done.” (Block 1999:264). The reality is that the manner in which work gets done in a business and the success that it enjoys is often dependent upon the employees of the organization and the manner in which they work together, are motivated and cooperate in the achievement of a common goal. According to Block (1999), change in the human systems has “more to do with the consent of the governed than the will and ability of those who govern.” (p 264). Therefore what a manager actually does may be quite different from what he would be expected to do in adherence to a particular theory. A Manager’s actions and decisions are often conditioned by the hard realities on the ground, by the actual situations as far as people and circumstances are concerned, rather than the guidelines of any particular theory that may have been advocated by the management Gurus. While these theories may lay out policies and action plans, a manager can implement them only to the extent that they actually suit the realities that he faces every day when dealing with the people who are working under him. References: Birnbaum, R, 2000. “Management Fads in Higher Education: Where They Come From, What They Do, Why They Fail”. San Francisco: Jossey-Bass. Block, P, 1999. “Flawless Consulting, Second Edition, A Guide to getting your expertise used.” San Fransisco: Jossey Bass/Pfeiffer Micklethwait, J. and A. Wooldridge, 1996. “The Witch Doctors: Making Sense of the Management Gurus”. NewYork: Times Books. Read More