Page 52 - DCOM102_DMGT101_PRINCIPLES_AND_PRACTICES_OF_MANAGEMENT

Principles and Practices of Management

Notes 4. Principles of management can become the focal points for useful research both to ascertain
their validity and to improve their applicability.
5. Managing is an art (like medicine and engineering). It should rely on underlying science-
concepts, theory and principles and techniques.
6. While the total culture and the physical and biological universe variously affect the
manger’s environment, as they do in every other field of science and art, management
science and theory need not encompass all knowledge in order to serve as a useful
foundation of management practice.
George R. Terry has advocated the use of “modified management process” approach. This
approach is quite similar to operational approach suggested by Koontz, ODonnell and Weihrich.
Terry feels that such an approach should be followed which can be termed the electric process
school of management, featuring the basic frame work of the process approach modified by
certain theories from other appropriate schools of management thought. Electric means
“consisting of what is selected” and this term has been interpreted to indicate taking the best
from what is available in the management thought and working it into a single theory moulded
around the process framework as the central core.

Case Study Implementing New Systems at VXM

he past three years at VXM software have been very good as the company grew
well in terms of business and growth rate. It managed to get huge contracts for ten
Tvery large companies and is in the process of setting up its fourth office in Pune.
Since its Inception six years back, the company has come a long way and the founder CEO,
Vijay Kamath, has embarked upon a massive expansion plan. He has planned to grow into
international market and double their turnover within the next three years.
As Vijay compared many options available to him for getting the required finance to
support this expansion, he was impressed by the concept of loans by venture capitalists.
He asked the chief financial officer, Suryakant, to get more information on the subject and
discuss it with their advisor. Within five months, the deal was finalised and the company
received a loan of 20 crores to put in their expansion plans. In the coming year, the
company rose up to double their employees and business grew by thirty five per cent. The
business from international market started coming in slowly but by the end of the year
1998, the business from this sector rose to almost double.
Vijay, however, felt that the focus on increase in business had led to other problems like
those of performance and quality. Coming back from a meeting with his old friend and a
market analyst, he kept thinking about their conversation. They had discussed the general
topics and then his friend had said, "You must look at the performance from all levels.
While you are busy in creating and maintaining products, you have so far ignored your
performance on other non-financial parameters such as employee turnover, customer
retention, etc." Vijay realised that they actually don't have any objective way of measuring
performance in these areas. So far no system has been developed or used to cover these
factors. He decided that he must do something in this direction and the next morning, on
reaching office he called his top managers for a meeting.
'With growing business, our focus has been on developing products and expansion
strategies. Last two years have been immensely profitable for us with business coming
Contd...

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