Fundamentals of Management BE1302 Management concepts and Practice

1.0 Introduction
Management is the process of planning, organizing, leading and controlling the work of
organization members of using all available organizational resources to reach the stated
organizational goals.

The process of management consists of

 Planning- The process of establishing goals and a suitable course of action for
achieving those goals.
 Organizing- The process of engaging two or more people in working together in a
structural way to achieve a specific goal or a set of goals.
 Leading- The process of directing and influencing the task related activities of
group members or an entire organization.
 Controlling- The process of ensuring that actual activities conform to planned
activities. (Stoner et al. 2009)

Planning

Controlling Organizing

Leading

Figure 1.1: Model of Management (Stoner et al. 2009)

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1.1 Roles of Managers

Managers are considered to be the leading personalities of an organization. Therefore the
managers should improve some important habits in their role. Several roles of Managers have
been described.

 Informational Role- This involves the role of assimilating and disseminating

information as and when required.
 Monitor- Collecting information from organization from both inside and
outside of the organization
 Disseminator- Communicating information to organizational members
 Spokesperson- Representing the organization to outsiders
 Interpersonal role – This role involves activities with people working in the
organization. This is a supportive role for informational and decisional roles.
 Figurehead- Ceremonial role and symbolic role
 Leadership- Leading organization in terms of recruiting, motivating etc.
 Liaison- Liaisoning with external bodies and public relation activities.
 Decisional role- It involves decision making
 Entrepreneur- Initiating new ideas to improve organizational performance
 Disturbance handler- Taking corrective action to cope with adverse situation
 Negotiator- Negotiating with trade unions or any other stake holders
(Agarwal, 2004)

1.2 Managerial Skills

A manager should be enhanced with several managerial skills. In order to become a more
successful manager, the person should develop these below mentioned managerial skills.

 Technical Skills-The ability to use the procedures, techniques, and knowledge of

specialized field.
 Human skills- The ability to work with, understand and motivate other people as
individuals or in groups.

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 Conceptual Skills- The ability to coordinate and integrate all of an organizations

interests and activities. (Stoner et al. 2009)
1.3 Types of Managers
 First Line Managers- Managers who are responsible for the work of operating
employees only and don’t supervise other managers. They are considered as the lowest
level of managers in an organizational hierarchy.
E.g. ; Supervisors in a research department
 Middle Managers- Managers who are responsible for other managers and sometimes
for some operating employees.
They are considered to be the managers of the midrange of the hierarchy.
 Top Managers- Managers who are responsible for the overall management of the
organization. (Stoner et al, 2009)

Top Managers Conceptual- (C) (H) (T)

Middle Managers (C) Human-(H) (T)

First-line Managers (C) (H) Technical-(T)

Table 1.1- The Skill level variations of Management levels (Stoner et al. 2009)

1.4 Management Theories

The scientific management theory arose in part from the need to increase productivity. A
management approach formulated by Frederick W. Taylor and other between 1890 and 1930
sought to determine scientifically the best methods for performing any task and for selecting,
training and motivating works.

Frederick W. Taylor rested his philosophy on four basic principles.

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 The development of a true science of management so that the best method for
performing each task could be determined.
 The scientific selection of works, so that each worker would be given responsibility for
the task for which he or she was best suited.
 The scientific education and development of the worker.
 Intimate, friendly cooperation between management and labor. (Stoner et al, 2009)

Classical organization theory grew out of the need to find guidelines for managing such
complex organizations as factories.

Henri Fayol is generally hailed as the founder of the classical management theory. Fayol has
presented 14 principles of management.

 Division of labor
 Authority
 Discipline
 Unity of Command
 Unity of Direction
 Subordination of individual interest
 Remuneration
 Centralization
 The Hierarchy
 Order
 Equity
 Stability of staff
 Initiative
 Espirit de Corps (Stoner et al, 2009)

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2.0 Case Study- Holcim Lanka Factory

Holcim Lanka is a part of the global Holcim group. Being the market leader in the cement
industry, the company focuses on Economic, Social and Environmental performance along the
triple bottom line of sustainable development. The company currently operates one fully
integrated cement plant in Puttalam, while also operating a grinding plant in Galle. A new
packing unit is planned for Trincomalee, for better customer focus and coverage. Also
accessible for imported cement is the Ambuja Terminal, now called Galle Cement Terminal if
additional cement is required.

Holcim Lanka sold approximately 1.031 million tons of cement in 2009.

The Holcim cement range meets customer requirements with the application based sub-brands
Supiri (concrete applications), Pedereru (masonry applications, Ambuja (Concrete Product
Applications), Ready flow for infrastructure and project applications. Holcim Lanka also
manufactures special cements for large scale infrastructure projects. In addition Holcim Lanka
provides a host of technical services as construction solutions to its customers. The company
operates in all regions of Sri Lanka selling cement and providing services, creating
approximately 15,000 (direct & indirect) employment opportunities. Holcim Lanka generated
annual revenues of approximately LKR 12.3 billion (107 million USD) in 2009.

VISION
Be the leading and preferred supplier of cement and related building materials to build
foundations for Sri Lanka’s future.
MISSION
To be Sri Lanka’s most respected and attractive company - creating value for all the
stakeholders.

The global Holcim group has appointed a board of directors for the Holcim Lanka. The current
management level consist of the following Hierarchy

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.
Chairman

Deputy Chairman

Chief Executive
Officer

Director

Non Executive
Director

Vice President Vice President Vice President Vice President HR &

Finance and Controls Marketing & Sales Manufacturing Cooperate

Figure 2.1: The Hierarchy of the Holcim Lanka Management level

Abbreviation: HR & Cooperate- Human Resources and Cooperate

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The Current Management committee consists of the following personals

Chairman : Mr. .Manilal Fernando

Deputy Chairman : Mr. Paul Hugentobler

CEO : Mr. Stefan Huber

Director : Mr. Tim Mackay

Mr. Onne Van der Weijde

Non-Executive Director : Mr. Mano Selvanathan

Mr. M L Narula

Vice President, Finance & Controls : Mr. Rajesh Surana

Vice President, Marketing & Sales : Mr. Viraj Gunasekara
Vice President, Manufacturing : Mr. Pascal Paijens
Vice President, HR & Corporate : Mr. Prasad Piyadigama
General Manager, Geocycle : Mr. Asela Iddawela

The Holcim Lanka factory believes that it is much easier to achieve the goals by dividing the
task among the people. Therefore the four main departments have been stated and these
departments are lead by the vice president. It has made the management much easier as well as
the tasks much easier to accomplish. The above hierarchy clearly implies the Fayol’s theories
of Authority and Unity of Direction. The top management has allowed the vice presidents of
the departments to take the necessary actions to guide their departments towards success
without waiting to gain permission from the top management level. This also indicates that the
Holcim Lanka has implied centralization in their factory.

The departments, lead by the vice president to have a hierarchy of work. The tasks have been
made easier for the vice president by dividing the tasks among several managers.

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2.1 Finance and Controls Department

Finance and controls department is included with Finance section, IT section and the
Maintenance section. The tasks of the department has been divided among the below hierarchy
of employees.

Vice President

Manager: IT and Manager: Maintenance Manager: Finance

Communication

Preventive Maintenance Corrective Maintenance

Engineer Engineer

Chief Accountant
Hardware Engineer Software Engineer

Figure 2.2: The hierarchy of the Finance and Controls Department

This department has implied the methods of Centralization, Order, Initiative and Espirit De
Corps. The vice president is supplied with all the information of the department by the
managers of the three sections and the tasks of the managers have been made easier by the
specialists who are listed. As the finance and controls is the most important department of the
company it should maintain a high standard of working.

The department has so far achieved the expected tasks quite easily because of this
management hierarchy. The maintenance section is in charge of all the maintaining issues of
the factory. Therefore the task has been made easier by dividing the maintenance into two
sections, Corrective maintenance and preventive maintenance. It has made the tasks much

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easier to perform and the specialists have enough ability to perform the tasks in a higher
standard as well.

The same theory has been applied to the IT and communication as well. The Holcim factory is
using a software system and this software system is needed to be handled with care. Therefore
the company has appointed a specialist in this software to prevent any disastrous situation. The
communication processes of the department are handled by several employees and all the
details regarding these are reported in the software system. Therefore the manager can easily
analyze the required details.

2.2 Marketing and Sales Department

The marketing and sales department is considered as another important department of the
Holcim Lanka factory. This department has the sole responsibility in promoting the Holcim
brand name in Sri Lanka as well as continuing the sales in a proper manner. The hierarchy of
the department is,

Vice President

Marketing Manager Sales Executive

Figure 2.3: The Hierarchy of the Marketing and Sales Dep.

The marketing department consists of several employees who have a well known knowledge
about marketing. The marketing department works as a group to uplift the processes of their
department. The employees unite together and analyze creative ideas and then the manager is
informed. The manager too analyzes the relevant factors and finalizes the process. The posters,
TV advertisements and many other innovative ideas are put forward by the department to
attract more customers.

The Holcim products are spread island wide. The sales department has a vital role to play in
the sales process of the factory. As the Holcim supply several kinds of products to the market,
sales department has a huge task to perform. The sales department has connected Agents

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Island wide in order to make the process easier. For an example the factory in Galle supplies a
large number of cement tons to the market. Cement bags and ready flow cement are the most
common features which have a higher demand. The sales department has to organize the
supply of ready flow cement to the oncoming Lorries as well as to supply cement bags to the
customers.

2.3 Manufacturing Department

This is considered as the most important department of the Holcim factory. The entire
progress of the factory is depended on the success of this department. The hierarchy of the
department is,

Vice President

Production Engineer

Supervisor

Figure 2.3: Hierarchy of the manufacturing Department

The production process is a huge task. Before performing a massive production, a sample is
taken into testing. The production engineer prepares the sample according to the necessity and
later it is taken into the laboratory testing. Only after the sample is accepted it is sent to the
production department employees. The supervisor guides the employees to prepare the
products while the production engineer too keeps a close eye on the production.

Later after the product is completed, again samples are checked by the production engineer. If
the production is not up to the required standards, necessary steps are taken to bring that up to
the required standards. The entire process is handled mainly by the production engineer and
the supervisors support them.

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2.4 HR and Cooperate Department

The HR and Cooperate department is considered as the department which holds the company
together. HR department has the responsibility to keep an eye on the safety of the workers,
recruiting people and look after the rights of the employees.

Holcim Lanka strives to continuously improve the efficiency and effectiveness of the end
result of our HR activities. All HR processes were automated with the introduction of the
electronic documented work flow and approval system, which significantly reduced
processing time.
Every two months, HR clinics are conducted at each of the sites giving Line Managers the
opportunity to engage in open dialogue and discussion with key HR people on people-related
issues.
The HR department has taken necessary steps to retain the stability of the staff. The
department has given offers to the very old staff members and let them retire before time and
they were paid a large amount by the Holcim.

The Holcim factory in Galle has recently removed number of their employees and paid them a
huge amount. This has been made in order to maintain the stability of the staff.

The hierarchy of the department is not much complex. Only the HR vice president and the HR
managers are the management level employees in the department. This department too plays a
vital role for the success of the Holcim factory.

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Conclusion

Management is an important factor for any kind of process or an organization. In the modern
day management plays a vital role for the success of the organization. When it comes to a
factory management beholds a much more importance.

The management theories of Henri Fayol and Frederick Taylor are implemented on most of
the factories. Mostly the 14 principles of Fayol are implied in a factory. When Holcim is
considered many of the main principles are used. The mostly used principles are

 The division of labor

 Authority

 Order

 Centralization

Applying these methods has brought success to the Holcim and it has gained a satisfactory
position in the Sri Lankan market. The analysis has proved that the Holcim factory has
achieved their stated goals easily through the successful management process.

So it is crystal clear that in order to gain success in an organization management is vastly

important and furthermore management theories must be applied with care to gain success.

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List of References

 Agarwal, R., D., 2004, Organization and Management, New Delhi: Tata McGraw-Hill
publishers.
 Stoner, J. A. F., Freeman, R.E. and Gilbert, D.R., 2009, Management, 6th Ed. N.J:
Prentice Hall.

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