Description
Complete BBA 1 TMU teaching ppts of Introduction to Business.
Chapter 1
Introduction to Management
Syllabus
•Definitions & Characteristics •Management Science or Art •Development of Management Thought •Scope of Management •Functions of Management •Contribution by Management Experts
What is Management?
? All managers work in organizations ? Organizations – collections of
people who work together and coordinate their actions to achieve a wide variety of goals
1.0 The Management Process
Resources
Management Functions
Goal
Human Planning Financial Physical Informational
Organizing Directing
Controlling
Achievements
Question?
Person responsible for supervising the use of an organization’s resources to meet its goals? A. Team leader B. Manager C. President D. Resource allocator
Managers
Managers –
? The people responsible for supervising the use of an
organization’s resources to meet its goals
What is Management?
The planning, organizing, leading, and controlling of human and other resources to achieve organizational goals effectively and efficiently
What is Management?
? Resources include people, skills,
know-how and experience, machinery, raw materials, computers and IT, patents, financial capital, and loyal customers and employees
5 M’s of Management
1. Money
2. Manpower
3. Materials
4. Machinery
5. Methods
DEFINITIONS:
• F.W. Taylor - “Art of knowing what you want to do
and then seeing that it is done the best and cheapest way”.
• Henry Fayol – “To Manage is to forecast, to plan, to
organize, to command, to co-ordinate and to control”.
• Peter F.Drucker –”Management is work and as such
it has its own skills, its own tools and its own techniques”.
• “Management is the art of getting things done
through and with people”.
The Universalism of Management
Across Organizations of Different Size and Types
Business
Governmental Educational Agencies Institutions
Social Services
Health Care Delivery
Across Organizational Levels
Across Functional Areas
Top Management Middle Management Lower Management Production Marketing Finance Personnel
CHARACTERISTICS OF MANAGEMENT
1. 2. 3. 4. 5. 6. 7. 8. 9.
Universal Process Purposeful Creative Group Phenomenon Social Process Multidisciplinary Continuous Process Intangible Both Science and Art
MANAGEMENT AS SCIENCE OR ART:
Management is the art of getting things done through others MANAGEMENT AS A SCIENCE PROVIDES PRINCIPLES AND AS AN ART HELPS IN TACKLING SITUATIONS.
• • • • • • • • • • • •
Art Practical know how Technical skills Concrete results Creativity Personalized nature Science Empirically Derived Critically tested General principles Cause and effect relationship Universal applicability
MANAGEMENT AS A PROFESSION ??
• Existence of an organized and systematic body of knowledge, • Formalized methods of acquiring knowledge and skills, • Existence of an apex level body with Professionalization as its goal, • Existence of an ethical code to regulate the behavior of the members of the profession, • Charging of fees based on service and
A close scrutiny of management as a profession reveals that it has a long way to go to have a universal acceptance of management as a profession. Unlike other profession such as medicine, law etc., the practice of management is not restricted to individuals with a special degree.
Copyright © 2006 Thomson Business and Economics. All rights reserved.
1–18
Copyright © 2006 Thomson Business and Economics. All rights reserved.
1–19
Copyright © 2006 Thomson Business and Economics. All rights reserved.
1–20
Management Skills and Functions
?
Differences among management levels in skill needed and the functions performed:
Planning
Controlling
Organizing
Copyright © 2006 Thomson Business and Economics. All rights reserved.
Leading
1–21 Exhibit
DIFFERENT ROLES OF A MANAGER
? INTERPERSONAL ROLES ? INFORMATIONAL ROLES ? DECISION ROLES
? Interpersonal Roles: 1. The figurehead role (performing ceremonial/social duties as the organization’s chief) 2. The leader role 3. The liaison role (particularly communicating with the outsiders) ? Informational Roles: 1. The recipient role (receiving information about the organization) 2. The disseminator role (passing information to subordinates) 3. The spokesperson role (transmitting information to those outside) ? Decision Roles: 1. The entrepreneurial role 2. The disturbance-handler role 3. The resource allocator role
Levels of Management
Board of Directors Managing Director
TOP MANAGEME NT
Executive Directors
Marketing Manager
Finance Manager
Personnel Manager
MIDDLE MGT
Branch Manager
Chief Accountant
Labor Officers
Sale Officers
Finance Officers
LOWER MGT
FUNCTIONS OF TOP LEVEL 1. To provide a basic sense of direction to the activities of the company by setting its MANAGEMENT long range mission and translating into clear
set of objectives 2. To design the organization structure of the company in terms of differentiated and integrated activities, role of various positions, authority & responsibility between them. 3. Top management must ensure the quality of personnel in terms of their skills, orientations and commitment 4. To ensure that the resource conversion and exchange systems are designed and operated efficiently. 5. Periodic review of objectives for necessary modifications is a part of this function
FUNCTIONS OF MIDDLE LEVEL MANAGEMENT
? ? ?
?
?
To interpret and explain the plans and policies formulated by top management To monitor & control the operating performance To cooperate among themselves so as to integrate the various activities of a department To train, motivate and develop supervisory personnel; and To lay down rules & regulations to be followed by supervisory personnel.
FUNCTIONS OF LOWER LEVEL MANAGEMENT
1. To plan day to day production within the goal laid down by higher authorities 2. To assign jobs to workers and to make arrangements for their training and development 3. To issue orders & instructions 4. To supervise & control workers’ operations and to maintain personal contact with them 5. To arrange materials and tools and to maintain machinery 6. To advise & assist workers by explaining work procedures, solving their problems etc. 7. To maintain discipline and good human relations among workers 8. To report feedback information and workers’ problems to the higher authorities.
FUNCTIONS OF MANAGEMENT
? PLANNING:
Plans give the org its objectives and set up the best procedures for reaching them.
? ORGANISING:
It is the process of arranging and allocating work, authority and resources among organization’s members so they can achieve the org’s goals.
? LEADING:
It involves directing, influencing, and motivating employees to perform essential tasks.
? CONTROLLING:
There are three main elements of controlling: 1. establishing standard of performance 2. measuring current performance 3. Comparing these performance to the established standards 4. taking corrective action
Organizational Performance
Efficiency ? A measure of how well or how productively resources are used to achieve a goal Effectiveness ? A measure of the appropriateness of the goals an organization is pursuing and the degree to which they are achieved.
Figure 1.1
Levels of Management
Figure 1.3
Areas of Managers
Department ? A group of managers and employees who work together and possess similar skills or use the same knowledge, tools, or techniques
Levels of Management
• First line managers - Responsible for daily supervision of the non-managerial employees who perform many of the specific activities necessary to produce goods and services • Middle managers - Supervise first-line managers. Responsible for finding the best way to organize human and other resources to achieve organizational goals
Levels of Management
• Top managers – ? Responsible for the performance of all departments and have crossdepartmental responsibility. ? Establish organizational goals and monitor middle managers ? Decide how different departments should interact ? Ultimately responsible for the success or failure of an organization
Levels of Management
? Chief executive officer (CEO) is
company’s most senior and important manager ? Central concern is creation of a smoothly functioning top-management team ? CEO, COO, Department heads
Relative Amount of Time That Managers Spend on the Four Managerial Functions
Figure 1.4
Question?
What skill is the ability to understand, alter, lead, and control the behavior of other individuals and groups?
A. Conceptual
B. Human
C. Technical D. Managerial
Managerial Skills
? Conceptual skills ? The ability to analyze and diagnose a situation and distinguish between cause and effect. ? Human skills ? The ability to understand, alter, lead, and control the behavior of other individuals and groups. ? Technical skills ? Job-specific skills required to perform a particular type of work or occupation at a high level.
Skill Types Needed
Figure 1.5
Core Competency
Specific set of departmental skills, abilities, knowledge and experience that allows one organization to outperform its competitors
Discussion Question
What is the biggest challenge for management in a
Global Environment?
Building a Competitive Advantage B. Maintaining Ethical Standards C. Managing a Diverse Workforce D. Global Crisis Management
A.
Movie Example: Office Space
What type of manager is Bill Lumbergh in the movie ? Office Space??
The Range of Management Activities
?Planning ?Investigating
?Organizing
?Commanding ?Coordination
?Communicating
?Securing Efforts ?Formulating purposes
?Controlling
?Directing ?Leading
?Staffing
?Motivating ?Innovating
?Representing
?Activating
?Decision making
?Evaluating
The Management Process under Pressure
When you are up to your elbows in alligators, it’s hard to remember that your objective was to drain the swamp.
Chapter Two
The Evolution of Management Thought
The Evolution of Management Theory
? The driving force behind the evolution of
management theory is to search for better ways to utilize organizational resources.
? Advances in management thought occur as
managers and researchers find better ways to perform the principal management tasks: planning, organizing, leading and controlling organizational resources.
The Evolution of Management Theory
? The evolution of modern management began
in the closing decades of the 19th century, after the industrial revolution had swept through Europe and America.
? Many major economic, technical and cultural
changes were taking place at this time.
? There has been a shift from small-scale crafts
production to large-scale mechanized manufacturing. Managers began to search for new techniques to manage their organizations.
Scientific Management theory
? Modern management began in the
late 19th century.
? Organizations
? Machinery ? Managers
were seeking ways to better satisfy customer needs.
was changing the way goods were produced. had to increase the efficiency of the worker-task mix.
Job specialization
? Adam Smith, 18th century economist,
found firms manufactured pins in two ways:
? Craft
-- each worker did all steps. ? Factory -- each worker specialized in one step.
? Smith found that the factory method had
much higher productivity.
? Each
worker became very skilled at one, specific task.
? Breaking down the total job allowed for
the division of labor.
The Evolution of Management Theory
Job Specialization and the Division of Labor
? Adam Smith (18th century economist)
? In a study of factories that
manufactured pins, he observed two different ways of production:
? - Craft-style—each worker did all steps.
? - Production—each worker specialized in
one step.
Job Specialization and the Division of Labor
? Job Specialization
? process by which a division of labor
occurs as different workers specialize in specific tasks over time
F.W. Taylor and Scientific Management
? Scientific Management
? The systematic study of the
relationships between people and tasks for the purpose of redesigning the work process to increase efficiency.
F.W. Taylor and Scientific Management
1) Study the way workers perform their tasks,
gather all the informal job knowledge that workers possess and experiment with ways of improving how tasks are performed: Time-and-motion study 2) Codify the new methods of performing tasks into written rules and standard operating procedures 3) Carefully select workers who possess skills and abilities that match the needs of the task, and train them to perform the task according to the established rules and procedures 4) Establish a fair or acceptable level of performance for a task, and then develop a
Problems with Scientific Management
? Managers frequently implemented only the
increased output side of Taylor’s plan.
? Workers did not share in the increased output.
? Specialized jobs became very boring, dull. ? Workers ended up distrusting the Scientific Management method. ? Scientific Management brought many workers
more hardship than gain and a distrust of managers who did not seem to care about workers’ well-being.
Scientific Management
? Defined by Frederick Taylor, late 1800’s. ? The systematic study of the relationships
between people and tasks to redesign the work for higher efficiency.
? Taylor
sought to reduce the time a worker spent on each task by optimizing the way the task was done.
The 4 Principles
? Four Principles to increase efficiency:
1. Study the way the job is performed now & determine new ways to do it.
?
?
Gather detailed, time and motion information. Try different methods to see which is best. Teach to all workers.
2. Codify the new method into rules.
?
3. Select workers whose skills match the rules set in Step 2. 4. Establish a fair level of performance and pay for higher performance.
?
Workers should benefit from higher output.
Problems of Scientific Management
? Managers often implemented only the
? They
increased output side of Taylor’s plan.
did not allow workers to share in increased output. ? Specialized jobs became very boring, dull. ? Workers ended up distrusting Scientific Management.
? Workers could purposely “under-
perform” ? Management responded with increased use of machines.
The Gilbreths
? Frank and Lillian Gilbreth refined Taylor’s
methods.
? Made
many improvements to time and motion studies.
? Time and motion studies:
? 1.
Break down each action into components. ? 2. Find better ways to perform it. ? 3. Reorganize each action to be more efficient.
? Gilbreths also studied fatigue problems,
lighting, heating and other worker issues.
Administrative Management
? Seeks to create an organization that
leads to both efficiency and effectiveness.
? Max Weber developed the concept of
bureaucracy.
? A formal
system of organization and administration to ensure effectiveness and efficiency. ? Weber developed the Five principles shown in
Bureaucratic Principles Figure 2.2
Written rules
System of task A Bureaucracy should have relationships
Hierarchy of authority
Fair evaluation and reward
Key points of Bureaucracy
Authority is the power to hold people accountable for their actions. Positions in the firm should be held based on performance not social contacts. Position duties are clearly identified. People should know what is expected of them. Lines of authority should be clearly identified. Workers know who reports to who. Rules, Standard Operating Procedures (SOPs), & Norms used to determine how the firm operates. ? Sometimes, these lead to ?red-tape? and other problems.
Fayol’s Principles
? Henri Fayol, developed a set of 14
principles:
1. Division of Labor: allows for job specialization.
?
Fayol noted firms can have too much specialization leading to poor quality and worker involvement.
2. Authority and Responsibility: Fayol included both formal and informal authority resulting from special expertise. 3. Unity of Command: Employees should have only one boss. 4. Line of Authority: a clear chain from top to bottom of the firm. 5. Centralization: the degree to which authority rests at the very top.
Fayol’s Principles
6. Unity of Direction: One plan of action to guide the organization. 7. Equity: Treat all employees fairly in justice and respect. 8. Order: Each employee is put where they have the most value.
9. Initiative: Encourage innovation.
10. Discipline: obedient, applied, respectful employees needed.
Fayol’s Principles
11. Remuneration of Personnel: The payment system contributes to success. 12. Stability of Tenure: Long-term employment is important. 13. General interest over individual interest: The organization takes precedence over the individual. 14. Esprit de corps: Share enthusiasm or devotion to the organization.
Behavioral Management
? Focuses on the way a manager should
personally manage to motivate employees. ? Mary Parker Follett: an influential leader in early managerial theory.
? Suggested
workers help in analyzing their jobs for improvements. ? The worker knows the best way to improve the job. ? If workers have the knowledge of the task, then they should control the task.
The Hawthorne Studies
? Study of worker efficiency at the
Hawthorne Works of the Western Electric Co. during 1924-1932.
? Worker
productivity was measured at various levels of light illumination. ? Researchers found that regardless of whether the light levels were raised or lowered, productivity rose.
? Actually, it appears that the workers
enjoyed the attention they received as part of the study and were more productive.
Theory X and Y
? Douglas McGregor proposed the two
different sets of worker assumptions.
?Theory
X: Assumes the average worker is lazy, dislikes work and will do as little as possible.
?
Managers must closely supervise and control through reward and punishment.
?Theory
Y: Assumes workers are not lazy, want to do a good job and the job itself will determine if the worker likes the work.
?
Managers should allow the worker great latitude, and create an organization to stimulate the worker.
Theory X v. Theory Y Figure 2.3
Theory X
Employee is lazy
Theory Y
Employee is not lazy Must create work setting to build initiative Provide authority to workers
Managers must closely supervise Create strict rules & defined rewards
Theory Z
? William Ouchi researched the cultural
differences between Japan and USA.
USA culture emphasizes the individual, and managers tend to feel workers follow the Theory X model. ? Japan culture expects worker committed to the organization first and thus behave differently than USA workers.
?
? Theory Z combines parts of both the USA
and Japan structure.
?
Managers stress long-term employment, workgroup, and organizational focus.
Management Science
? Uses rigorous quantitative techniques to
maximize resources.
Quantitative management: utilizes linear programming, modeling, simulation systems. Operations management: techniques to analyze all aspects of the production system. Total Quality Management (TQM): focuses on improved quality. Management Information Systems (MIS): provides information about the organization.
Organization-Environment Theory
? Considers relationships inside and
outside the organization.
? The
environment consists of forces, conditions, and influences outside the organization.
? Systems theory considers the impact of
stages:
Input: acquire external resources. Conversion: inputs are processed into goods and services. Output: finished goods are released into the environment.
Systems Considerations
? An open system interacts with the
environment. A closed system is selfcontained.
? Closed
systems often undergo entropy and lose the ability to control itself, and fails.
? Synergy: performance gains of the
whole surpass the components.
? Synergy
is only possible in a coordinated
system.
The Organization as an Open System Figure 2.4
Input Stage
Raw Materials Conversion Stage Machines
Human skills
Output Stage
Goods Services
Sales of outputs Firm can then buy inputs
Contingency Theory
? Assumes there is no one best way to
manage.
? The
environment impacts the organization and managers must be flexible to react to environmental changes. ? The way the organization is designed, control systems selected, depend on the environment.
? Technological environments change
rapidly, so must managers.
Structures
? Mechanistic: Authority is centralized at
the top. (Theory X)
? Employees
closely monitored and managed. ? Very efficient in a stable environment.
? Organic: Authority is decentralized
throughout employees. (Theory Y)
? Much
looser control than mechanistic. ? Managers can react quickly to changing environment.
The Gilbreths
Followers of Taylor: Frank & Lillian GILBRETH (1878-1972) They continued with time and motion studies.
Ø
Ø Ø
Break up and analyze every individual action necessary to perform a particular task into each of its component actions Find better ways to perform each component action Reorganize each of the component actions so that the action as a whole could be performed more efficiently-at less cost in time and effort
Administrative Management Theory
? Administrative
Management
? The study of how to
create an organizational structure that leads to high efficiency and effectiveness.
Administrative Management Theory
? Max Weber
? Developed the principles of bureaucracy as a formal
system of organization and administration designed to ensure efficiency and effectiveness.
Weber’s Principles of Bureaucracy
Figure 2.2
Weber’s Principles of Bureaucracy
1)
2)
3)
4)
5)
A manager’s formal authority derives from the position he holds in the organization. People should occupy positions because of their performance, not because of their social standing or personal contacts. The extent of each position’s formal authority and task responsibilities and it’s relationship to other positions should be clearly specified. Authority can be exercised effectively when positions are arranged hierarchically, so employees know whom to report to and who reports to them. Managers must create a well-defined system of rules, standard operating procedures, and norms so they can effectively control behavior .
Weber’s Principles of Bureaucracy
? Bureaucracy: A formal system of organization and
administration designed to ensure efficiency and effectiveness.
? Authority: The power to hold people accountable
for their actions and to make decisions concerning the use of organizational resources.
Rules, SOPs and Norms
? Rules ? formal written instructions that specify actions to be taken under different circumstances to achieve specific goals ? Standard Operating Procedures (SOPs) ? specific sets of written instructions about how to perform a certain aspect of a task ? Norms ? unwritten, informal codes of conduct that prescribe how people should act in particular situations
Fayol’s Principles of Management
? Fayol had identified 14 principles that he thought were essential to
increase efficiency and effectiveness:
? Division of Labor
? Allows for job specialization. However; jobs can have too much
specialization leading to poor quality and worker dissatisfaction.
? Authority and Responsibility
? Managers have the right to give orders and the power to exhort
subordinates for obedience.
? Unity of Command
? Employees should only have one boss
? Line of Authority
? A clear chain of command from top to bottom of the firm.
? Centralization
? Authority should not be concentrated at the top of the chain of command.
Fayol’s Principles of Management
? Unity of direction
? There should be a single plan to guide the managers and the
workers.
? Equity
? All organizational members are entitled to be treated with justice and
respect.
? Order
? The arrangement of employees where they will be of the most value
to the organization and to provide career opportunities.
? Initiative
? Managers should allow employees to be innovative and creative.
? Discipline
? Obedient, applied, respectful employees are necessary for the
organization to function.
Fayol’s Principles of Management
? Remuneration of personnel ? An equitable uniform payment system that motivates
contributes to organizational success. ? Stability of Tenure of Personnel ? Long-term employment is important for the development of skills that improve the organization’s performance. ? Subordination of Individual Interest to the Common Interest ? The interest of the organization takes precedence over that of the individual employee. ? Esprit de corps ? Comradeship, shared enthusiasm foster devotion to the common cause (organization).
Discussion Question?
Which of the following is the most important aspect of Fayol’s principles of management?
Division of Labor B. Unity of Command C. Remuneration of Personnel D. Esprit de corps
A.
Behavioral Management Theory
? Behavioral Management
? The study of how managers should personally behave to
motivate employees and encourage them to perform at high levels and be committed to the achievement of organizational goals.
Behavioral Management
? Mary Parker Follett
? Concerned that Taylor ignored the human side of the
organization
? Suggested workers help in analyzing their jobs ? If workers have relevant knowledge of the task, then they should
control the task, they should participate in the work development process ? Unlike Fayol, she believed that power is fluid, it should flow to the person who can best help the organization achieve its goals. ? Her approach was very radical for her time.
The Hawthorne Studies
? Studies of how characteristics of the work setting
affected worker fatigue and performance at the Hawthorne Works of the Western Electric Company from 1924-1932.
? Worker productivity was measured at various levels of
light illumination.
The Hawthorne Studies
? Human Relations Implications
? Hawthorne effect — workers’ attitudes toward their
managers affect the level of workers’ performance
The Hawthorne Studies
? This finding led many researchers to turn their
attention to managerial behavior and leadership.
? If supervisors could be trained to behave in
ways that would elicit cooperative behavior from their subordinates, then productivity could be increased.
? From this view emerged the human relations
movement.
The Hawthorne Studies
? Human relations movement
? advocates that supervisors be behaviorally trained to
manage subordinates in ways that elicit their cooperation and increase their productivity
Implications of the Hawthorne Studies
? Behavior of managers and workers in the work setting is
as important in explaining the level of performance as the technical aspects of the task
? Demonstrated the importance of understanding how the
feelings, thoughts, and behavior of work-group members and managers affect performance
? Led to the development of an area of management known
as ?organizational behavior?:
? The study of the factors that have an impact on how individuals
and groups respond to and act in organizations.
Theory X vs. Theory Y
Figure 2.3
Management Science Theory
? Management Science Theory
? Contemporary approach to management that focuses on
the use of rigorous quantitative techniques to help managers make maximum use of organizational resources to produce goods and services. ? It is like the contemporary extension of scientific management developed by Taylor
Management Science Theory
? Quantitative management
? utilizes mathematical techniques, like linear
programming, modeling, simulation and chaos theory
? Operations management
? provides managers a set of techniques they can use to
analyze any aspect of an organization’s production system to increase efficiency
Management Science Theory
? Total quality management
? focuses on analyzing an organization’s input,
conversion, and output activities to increase product quality
? Management information systems
? help managers design systems that provide information
that is vital for effective decision making
Organizational Environment Theory
? Organizational Environment
? The set of forces and conditions that operate beyond an
organization’s boundaries but affect a manager’s ability to acquire and utilize resources
The Open-Systems View
? Open System
? A system that takes resources from its external
environment and transforms them into goods and services that are then sent back to that environment where they are bought by customers.
The Organization as an Open System
Figure 2.4
The Open-Systems View
? Input stage ? organization acquires resources such as raw materials, money, and skilled workers to produce goods and services ? Conversion stage ? inputs are transformed into outputs of finished goods ? Output stage ? finished goods are released to the external environment
Closed System
? Closed system
? A self-contained system that is not affected by changes
in its external environment. ? Likely to experience entropy and lose its ability to control itself
? Entropy: The tendency of a closed system to lose its ability to
control itself and thus dissolve and disintegrate.
The Organization as an Open System
? Synergy
? the performance gains that result from the combined
actions of individuals and departments ? Possible only in an organized system
Contingency Theory
? Contingency Theory
? The idea that the organizational structures and control
systems managers choose are contingent on characteristics of the external environment in which the organization operates. ? ?There is no one best way to organize?
Contingency Theory
Figure 2.5
Type of Structure
? Mechanistic Structure
? Authority is centralized at the top. ? Emphasis is on strict discipline and order ? Employees are closely monitored and
managed. ? Can be very efficient in a stable environment.
Type of Structure
? Organic Structure
? Authority is decentralized throughout the organization. ? Departments are encouraged to take a cross-
departmental or functional perspective ? Works best when environment is unstable and rapidly changing
Type of Structure
? Nokia’s organic approach to operating:
? Control is much looser and decentralized ? Reliance on shared norms and common
expectations to guide organizational activities is greater ? Organic structure can react more quickly to a changing environment ? More expensive due to increasing coordination costs
doc_204921037.pptx
Complete BBA 1 TMU teaching ppts of Introduction to Business.
Chapter 1
Introduction to Management
Syllabus
•Definitions & Characteristics •Management Science or Art •Development of Management Thought •Scope of Management •Functions of Management •Contribution by Management Experts
What is Management?
? All managers work in organizations ? Organizations – collections of
people who work together and coordinate their actions to achieve a wide variety of goals
1.0 The Management Process
Resources
Management Functions
Goal
Human Planning Financial Physical Informational
Organizing Directing
Controlling
Achievements
Question?
Person responsible for supervising the use of an organization’s resources to meet its goals? A. Team leader B. Manager C. President D. Resource allocator
Managers
Managers –
? The people responsible for supervising the use of an
organization’s resources to meet its goals
What is Management?
The planning, organizing, leading, and controlling of human and other resources to achieve organizational goals effectively and efficiently
What is Management?
? Resources include people, skills,
know-how and experience, machinery, raw materials, computers and IT, patents, financial capital, and loyal customers and employees
5 M’s of Management
1. Money
2. Manpower
3. Materials
4. Machinery
5. Methods
DEFINITIONS:
• F.W. Taylor - “Art of knowing what you want to do
and then seeing that it is done the best and cheapest way”.
• Henry Fayol – “To Manage is to forecast, to plan, to
organize, to command, to co-ordinate and to control”.
• Peter F.Drucker –”Management is work and as such
it has its own skills, its own tools and its own techniques”.
• “Management is the art of getting things done
through and with people”.
The Universalism of Management
Across Organizations of Different Size and Types
Business
Governmental Educational Agencies Institutions
Social Services
Health Care Delivery
Across Organizational Levels
Across Functional Areas
Top Management Middle Management Lower Management Production Marketing Finance Personnel
CHARACTERISTICS OF MANAGEMENT
1. 2. 3. 4. 5. 6. 7. 8. 9.
Universal Process Purposeful Creative Group Phenomenon Social Process Multidisciplinary Continuous Process Intangible Both Science and Art
MANAGEMENT AS SCIENCE OR ART:
Management is the art of getting things done through others MANAGEMENT AS A SCIENCE PROVIDES PRINCIPLES AND AS AN ART HELPS IN TACKLING SITUATIONS.
• • • • • • • • • • • •
Art Practical know how Technical skills Concrete results Creativity Personalized nature Science Empirically Derived Critically tested General principles Cause and effect relationship Universal applicability
MANAGEMENT AS A PROFESSION ??
• Existence of an organized and systematic body of knowledge, • Formalized methods of acquiring knowledge and skills, • Existence of an apex level body with Professionalization as its goal, • Existence of an ethical code to regulate the behavior of the members of the profession, • Charging of fees based on service and
A close scrutiny of management as a profession reveals that it has a long way to go to have a universal acceptance of management as a profession. Unlike other profession such as medicine, law etc., the practice of management is not restricted to individuals with a special degree.
Copyright © 2006 Thomson Business and Economics. All rights reserved.
1–18
Copyright © 2006 Thomson Business and Economics. All rights reserved.
1–19
Copyright © 2006 Thomson Business and Economics. All rights reserved.
1–20
Management Skills and Functions
?
Differences among management levels in skill needed and the functions performed:
Planning
Controlling
Organizing
Copyright © 2006 Thomson Business and Economics. All rights reserved.
Leading
1–21 Exhibit
DIFFERENT ROLES OF A MANAGER
? INTERPERSONAL ROLES ? INFORMATIONAL ROLES ? DECISION ROLES
? Interpersonal Roles: 1. The figurehead role (performing ceremonial/social duties as the organization’s chief) 2. The leader role 3. The liaison role (particularly communicating with the outsiders) ? Informational Roles: 1. The recipient role (receiving information about the organization) 2. The disseminator role (passing information to subordinates) 3. The spokesperson role (transmitting information to those outside) ? Decision Roles: 1. The entrepreneurial role 2. The disturbance-handler role 3. The resource allocator role
Levels of Management
Board of Directors Managing Director
TOP MANAGEME NT
Executive Directors
Marketing Manager
Finance Manager
Personnel Manager
MIDDLE MGT
Branch Manager
Chief Accountant
Labor Officers
Sale Officers
Finance Officers
LOWER MGT
FUNCTIONS OF TOP LEVEL 1. To provide a basic sense of direction to the activities of the company by setting its MANAGEMENT long range mission and translating into clear
set of objectives 2. To design the organization structure of the company in terms of differentiated and integrated activities, role of various positions, authority & responsibility between them. 3. Top management must ensure the quality of personnel in terms of their skills, orientations and commitment 4. To ensure that the resource conversion and exchange systems are designed and operated efficiently. 5. Periodic review of objectives for necessary modifications is a part of this function
FUNCTIONS OF MIDDLE LEVEL MANAGEMENT
? ? ?
?
?
To interpret and explain the plans and policies formulated by top management To monitor & control the operating performance To cooperate among themselves so as to integrate the various activities of a department To train, motivate and develop supervisory personnel; and To lay down rules & regulations to be followed by supervisory personnel.
FUNCTIONS OF LOWER LEVEL MANAGEMENT
1. To plan day to day production within the goal laid down by higher authorities 2. To assign jobs to workers and to make arrangements for their training and development 3. To issue orders & instructions 4. To supervise & control workers’ operations and to maintain personal contact with them 5. To arrange materials and tools and to maintain machinery 6. To advise & assist workers by explaining work procedures, solving their problems etc. 7. To maintain discipline and good human relations among workers 8. To report feedback information and workers’ problems to the higher authorities.
FUNCTIONS OF MANAGEMENT
? PLANNING:
Plans give the org its objectives and set up the best procedures for reaching them.
? ORGANISING:
It is the process of arranging and allocating work, authority and resources among organization’s members so they can achieve the org’s goals.
? LEADING:
It involves directing, influencing, and motivating employees to perform essential tasks.
? CONTROLLING:
There are three main elements of controlling: 1. establishing standard of performance 2. measuring current performance 3. Comparing these performance to the established standards 4. taking corrective action
Organizational Performance
Efficiency ? A measure of how well or how productively resources are used to achieve a goal Effectiveness ? A measure of the appropriateness of the goals an organization is pursuing and the degree to which they are achieved.
Figure 1.1
Levels of Management
Figure 1.3
Areas of Managers
Department ? A group of managers and employees who work together and possess similar skills or use the same knowledge, tools, or techniques
Levels of Management
• First line managers - Responsible for daily supervision of the non-managerial employees who perform many of the specific activities necessary to produce goods and services • Middle managers - Supervise first-line managers. Responsible for finding the best way to organize human and other resources to achieve organizational goals
Levels of Management
• Top managers – ? Responsible for the performance of all departments and have crossdepartmental responsibility. ? Establish organizational goals and monitor middle managers ? Decide how different departments should interact ? Ultimately responsible for the success or failure of an organization
Levels of Management
? Chief executive officer (CEO) is
company’s most senior and important manager ? Central concern is creation of a smoothly functioning top-management team ? CEO, COO, Department heads
Relative Amount of Time That Managers Spend on the Four Managerial Functions
Figure 1.4
Question?
What skill is the ability to understand, alter, lead, and control the behavior of other individuals and groups?
A. Conceptual
B. Human
C. Technical D. Managerial
Managerial Skills
? Conceptual skills ? The ability to analyze and diagnose a situation and distinguish between cause and effect. ? Human skills ? The ability to understand, alter, lead, and control the behavior of other individuals and groups. ? Technical skills ? Job-specific skills required to perform a particular type of work or occupation at a high level.
Skill Types Needed
Figure 1.5
Core Competency
Specific set of departmental skills, abilities, knowledge and experience that allows one organization to outperform its competitors
Discussion Question
What is the biggest challenge for management in a
Global Environment?
Building a Competitive Advantage B. Maintaining Ethical Standards C. Managing a Diverse Workforce D. Global Crisis Management
A.
Movie Example: Office Space
What type of manager is Bill Lumbergh in the movie ? Office Space??
The Range of Management Activities
?Planning ?Investigating
?Organizing
?Commanding ?Coordination
?Communicating
?Securing Efforts ?Formulating purposes
?Controlling
?Directing ?Leading
?Staffing
?Motivating ?Innovating
?Representing
?Activating
?Decision making
?Evaluating
The Management Process under Pressure
When you are up to your elbows in alligators, it’s hard to remember that your objective was to drain the swamp.
Chapter Two
The Evolution of Management Thought
The Evolution of Management Theory
? The driving force behind the evolution of
management theory is to search for better ways to utilize organizational resources.
? Advances in management thought occur as
managers and researchers find better ways to perform the principal management tasks: planning, organizing, leading and controlling organizational resources.
The Evolution of Management Theory
? The evolution of modern management began
in the closing decades of the 19th century, after the industrial revolution had swept through Europe and America.
? Many major economic, technical and cultural
changes were taking place at this time.
? There has been a shift from small-scale crafts
production to large-scale mechanized manufacturing. Managers began to search for new techniques to manage their organizations.
Scientific Management theory
? Modern management began in the
late 19th century.
? Organizations
? Machinery ? Managers
were seeking ways to better satisfy customer needs.
was changing the way goods were produced. had to increase the efficiency of the worker-task mix.
Job specialization
? Adam Smith, 18th century economist,
found firms manufactured pins in two ways:
? Craft
-- each worker did all steps. ? Factory -- each worker specialized in one step.
? Smith found that the factory method had
much higher productivity.
? Each
worker became very skilled at one, specific task.
? Breaking down the total job allowed for
the division of labor.
The Evolution of Management Theory
Job Specialization and the Division of Labor
? Adam Smith (18th century economist)
? In a study of factories that
manufactured pins, he observed two different ways of production:
? - Craft-style—each worker did all steps.
? - Production—each worker specialized in
one step.
Job Specialization and the Division of Labor
? Job Specialization
? process by which a division of labor
occurs as different workers specialize in specific tasks over time
F.W. Taylor and Scientific Management
? Scientific Management
? The systematic study of the
relationships between people and tasks for the purpose of redesigning the work process to increase efficiency.
F.W. Taylor and Scientific Management
1) Study the way workers perform their tasks,
gather all the informal job knowledge that workers possess and experiment with ways of improving how tasks are performed: Time-and-motion study 2) Codify the new methods of performing tasks into written rules and standard operating procedures 3) Carefully select workers who possess skills and abilities that match the needs of the task, and train them to perform the task according to the established rules and procedures 4) Establish a fair or acceptable level of performance for a task, and then develop a
Problems with Scientific Management
? Managers frequently implemented only the
increased output side of Taylor’s plan.
? Workers did not share in the increased output.
? Specialized jobs became very boring, dull. ? Workers ended up distrusting the Scientific Management method. ? Scientific Management brought many workers
more hardship than gain and a distrust of managers who did not seem to care about workers’ well-being.
Scientific Management
? Defined by Frederick Taylor, late 1800’s. ? The systematic study of the relationships
between people and tasks to redesign the work for higher efficiency.
? Taylor
sought to reduce the time a worker spent on each task by optimizing the way the task was done.
The 4 Principles
? Four Principles to increase efficiency:
1. Study the way the job is performed now & determine new ways to do it.
?
?
Gather detailed, time and motion information. Try different methods to see which is best. Teach to all workers.
2. Codify the new method into rules.
?
3. Select workers whose skills match the rules set in Step 2. 4. Establish a fair level of performance and pay for higher performance.
?
Workers should benefit from higher output.
Problems of Scientific Management
? Managers often implemented only the
? They
increased output side of Taylor’s plan.
did not allow workers to share in increased output. ? Specialized jobs became very boring, dull. ? Workers ended up distrusting Scientific Management.
? Workers could purposely “under-
perform” ? Management responded with increased use of machines.
The Gilbreths
? Frank and Lillian Gilbreth refined Taylor’s
methods.
? Made
many improvements to time and motion studies.
? Time and motion studies:
? 1.
Break down each action into components. ? 2. Find better ways to perform it. ? 3. Reorganize each action to be more efficient.
? Gilbreths also studied fatigue problems,
lighting, heating and other worker issues.
Administrative Management
? Seeks to create an organization that
leads to both efficiency and effectiveness.
? Max Weber developed the concept of
bureaucracy.
? A formal
system of organization and administration to ensure effectiveness and efficiency. ? Weber developed the Five principles shown in
Bureaucratic Principles Figure 2.2
Written rules
System of task A Bureaucracy should have relationships
Hierarchy of authority
Fair evaluation and reward
Key points of Bureaucracy
Authority is the power to hold people accountable for their actions. Positions in the firm should be held based on performance not social contacts. Position duties are clearly identified. People should know what is expected of them. Lines of authority should be clearly identified. Workers know who reports to who. Rules, Standard Operating Procedures (SOPs), & Norms used to determine how the firm operates. ? Sometimes, these lead to ?red-tape? and other problems.
Fayol’s Principles
? Henri Fayol, developed a set of 14
principles:
1. Division of Labor: allows for job specialization.
?
Fayol noted firms can have too much specialization leading to poor quality and worker involvement.
2. Authority and Responsibility: Fayol included both formal and informal authority resulting from special expertise. 3. Unity of Command: Employees should have only one boss. 4. Line of Authority: a clear chain from top to bottom of the firm. 5. Centralization: the degree to which authority rests at the very top.
Fayol’s Principles
6. Unity of Direction: One plan of action to guide the organization. 7. Equity: Treat all employees fairly in justice and respect. 8. Order: Each employee is put where they have the most value.
9. Initiative: Encourage innovation.
10. Discipline: obedient, applied, respectful employees needed.
Fayol’s Principles
11. Remuneration of Personnel: The payment system contributes to success. 12. Stability of Tenure: Long-term employment is important. 13. General interest over individual interest: The organization takes precedence over the individual. 14. Esprit de corps: Share enthusiasm or devotion to the organization.
Behavioral Management
? Focuses on the way a manager should
personally manage to motivate employees. ? Mary Parker Follett: an influential leader in early managerial theory.
? Suggested
workers help in analyzing their jobs for improvements. ? The worker knows the best way to improve the job. ? If workers have the knowledge of the task, then they should control the task.
The Hawthorne Studies
? Study of worker efficiency at the
Hawthorne Works of the Western Electric Co. during 1924-1932.
? Worker
productivity was measured at various levels of light illumination. ? Researchers found that regardless of whether the light levels were raised or lowered, productivity rose.
? Actually, it appears that the workers
enjoyed the attention they received as part of the study and were more productive.
Theory X and Y
? Douglas McGregor proposed the two
different sets of worker assumptions.
?Theory
X: Assumes the average worker is lazy, dislikes work and will do as little as possible.
?
Managers must closely supervise and control through reward and punishment.
?Theory
Y: Assumes workers are not lazy, want to do a good job and the job itself will determine if the worker likes the work.
?
Managers should allow the worker great latitude, and create an organization to stimulate the worker.
Theory X v. Theory Y Figure 2.3
Theory X
Employee is lazy
Theory Y
Employee is not lazy Must create work setting to build initiative Provide authority to workers
Managers must closely supervise Create strict rules & defined rewards
Theory Z
? William Ouchi researched the cultural
differences between Japan and USA.
USA culture emphasizes the individual, and managers tend to feel workers follow the Theory X model. ? Japan culture expects worker committed to the organization first and thus behave differently than USA workers.
?
? Theory Z combines parts of both the USA
and Japan structure.
?
Managers stress long-term employment, workgroup, and organizational focus.
Management Science
? Uses rigorous quantitative techniques to
maximize resources.
Quantitative management: utilizes linear programming, modeling, simulation systems. Operations management: techniques to analyze all aspects of the production system. Total Quality Management (TQM): focuses on improved quality. Management Information Systems (MIS): provides information about the organization.
Organization-Environment Theory
? Considers relationships inside and
outside the organization.
? The
environment consists of forces, conditions, and influences outside the organization.
? Systems theory considers the impact of
stages:
Input: acquire external resources. Conversion: inputs are processed into goods and services. Output: finished goods are released into the environment.
Systems Considerations
? An open system interacts with the
environment. A closed system is selfcontained.
? Closed
systems often undergo entropy and lose the ability to control itself, and fails.
? Synergy: performance gains of the
whole surpass the components.
? Synergy
is only possible in a coordinated
system.
The Organization as an Open System Figure 2.4
Input Stage
Raw Materials Conversion Stage Machines
Human skills
Output Stage
Goods Services
Sales of outputs Firm can then buy inputs
Contingency Theory
? Assumes there is no one best way to
manage.
? The
environment impacts the organization and managers must be flexible to react to environmental changes. ? The way the organization is designed, control systems selected, depend on the environment.
? Technological environments change
rapidly, so must managers.
Structures
? Mechanistic: Authority is centralized at
the top. (Theory X)
? Employees
closely monitored and managed. ? Very efficient in a stable environment.
? Organic: Authority is decentralized
throughout employees. (Theory Y)
? Much
looser control than mechanistic. ? Managers can react quickly to changing environment.
The Gilbreths
Followers of Taylor: Frank & Lillian GILBRETH (1878-1972) They continued with time and motion studies.
Ø
Ø Ø
Break up and analyze every individual action necessary to perform a particular task into each of its component actions Find better ways to perform each component action Reorganize each of the component actions so that the action as a whole could be performed more efficiently-at less cost in time and effort
Administrative Management Theory
? Administrative
Management
? The study of how to
create an organizational structure that leads to high efficiency and effectiveness.
Administrative Management Theory
? Max Weber
? Developed the principles of bureaucracy as a formal
system of organization and administration designed to ensure efficiency and effectiveness.
Weber’s Principles of Bureaucracy
Figure 2.2
Weber’s Principles of Bureaucracy
1)
2)
3)
4)
5)
A manager’s formal authority derives from the position he holds in the organization. People should occupy positions because of their performance, not because of their social standing or personal contacts. The extent of each position’s formal authority and task responsibilities and it’s relationship to other positions should be clearly specified. Authority can be exercised effectively when positions are arranged hierarchically, so employees know whom to report to and who reports to them. Managers must create a well-defined system of rules, standard operating procedures, and norms so they can effectively control behavior .
Weber’s Principles of Bureaucracy
? Bureaucracy: A formal system of organization and
administration designed to ensure efficiency and effectiveness.
? Authority: The power to hold people accountable
for their actions and to make decisions concerning the use of organizational resources.
Rules, SOPs and Norms
? Rules ? formal written instructions that specify actions to be taken under different circumstances to achieve specific goals ? Standard Operating Procedures (SOPs) ? specific sets of written instructions about how to perform a certain aspect of a task ? Norms ? unwritten, informal codes of conduct that prescribe how people should act in particular situations
Fayol’s Principles of Management
? Fayol had identified 14 principles that he thought were essential to
increase efficiency and effectiveness:
? Division of Labor
? Allows for job specialization. However; jobs can have too much
specialization leading to poor quality and worker dissatisfaction.
? Authority and Responsibility
? Managers have the right to give orders and the power to exhort
subordinates for obedience.
? Unity of Command
? Employees should only have one boss
? Line of Authority
? A clear chain of command from top to bottom of the firm.
? Centralization
? Authority should not be concentrated at the top of the chain of command.
Fayol’s Principles of Management
? Unity of direction
? There should be a single plan to guide the managers and the
workers.
? Equity
? All organizational members are entitled to be treated with justice and
respect.
? Order
? The arrangement of employees where they will be of the most value
to the organization and to provide career opportunities.
? Initiative
? Managers should allow employees to be innovative and creative.
? Discipline
? Obedient, applied, respectful employees are necessary for the
organization to function.
Fayol’s Principles of Management
? Remuneration of personnel ? An equitable uniform payment system that motivates
contributes to organizational success. ? Stability of Tenure of Personnel ? Long-term employment is important for the development of skills that improve the organization’s performance. ? Subordination of Individual Interest to the Common Interest ? The interest of the organization takes precedence over that of the individual employee. ? Esprit de corps ? Comradeship, shared enthusiasm foster devotion to the common cause (organization).
Discussion Question?
Which of the following is the most important aspect of Fayol’s principles of management?
Division of Labor B. Unity of Command C. Remuneration of Personnel D. Esprit de corps
A.
Behavioral Management Theory
? Behavioral Management
? The study of how managers should personally behave to
motivate employees and encourage them to perform at high levels and be committed to the achievement of organizational goals.
Behavioral Management
? Mary Parker Follett
? Concerned that Taylor ignored the human side of the
organization
? Suggested workers help in analyzing their jobs ? If workers have relevant knowledge of the task, then they should
control the task, they should participate in the work development process ? Unlike Fayol, she believed that power is fluid, it should flow to the person who can best help the organization achieve its goals. ? Her approach was very radical for her time.
The Hawthorne Studies
? Studies of how characteristics of the work setting
affected worker fatigue and performance at the Hawthorne Works of the Western Electric Company from 1924-1932.
? Worker productivity was measured at various levels of
light illumination.
The Hawthorne Studies
? Human Relations Implications
? Hawthorne effect — workers’ attitudes toward their
managers affect the level of workers’ performance
The Hawthorne Studies
? This finding led many researchers to turn their
attention to managerial behavior and leadership.
? If supervisors could be trained to behave in
ways that would elicit cooperative behavior from their subordinates, then productivity could be increased.
? From this view emerged the human relations
movement.
The Hawthorne Studies
? Human relations movement
? advocates that supervisors be behaviorally trained to
manage subordinates in ways that elicit their cooperation and increase their productivity
Implications of the Hawthorne Studies
? Behavior of managers and workers in the work setting is
as important in explaining the level of performance as the technical aspects of the task
? Demonstrated the importance of understanding how the
feelings, thoughts, and behavior of work-group members and managers affect performance
? Led to the development of an area of management known
as ?organizational behavior?:
? The study of the factors that have an impact on how individuals
and groups respond to and act in organizations.
Theory X vs. Theory Y
Figure 2.3
Management Science Theory
? Management Science Theory
? Contemporary approach to management that focuses on
the use of rigorous quantitative techniques to help managers make maximum use of organizational resources to produce goods and services. ? It is like the contemporary extension of scientific management developed by Taylor
Management Science Theory
? Quantitative management
? utilizes mathematical techniques, like linear
programming, modeling, simulation and chaos theory
? Operations management
? provides managers a set of techniques they can use to
analyze any aspect of an organization’s production system to increase efficiency
Management Science Theory
? Total quality management
? focuses on analyzing an organization’s input,
conversion, and output activities to increase product quality
? Management information systems
? help managers design systems that provide information
that is vital for effective decision making
Organizational Environment Theory
? Organizational Environment
? The set of forces and conditions that operate beyond an
organization’s boundaries but affect a manager’s ability to acquire and utilize resources
The Open-Systems View
? Open System
? A system that takes resources from its external
environment and transforms them into goods and services that are then sent back to that environment where they are bought by customers.
The Organization as an Open System
Figure 2.4
The Open-Systems View
? Input stage ? organization acquires resources such as raw materials, money, and skilled workers to produce goods and services ? Conversion stage ? inputs are transformed into outputs of finished goods ? Output stage ? finished goods are released to the external environment
Closed System
? Closed system
? A self-contained system that is not affected by changes
in its external environment. ? Likely to experience entropy and lose its ability to control itself
? Entropy: The tendency of a closed system to lose its ability to
control itself and thus dissolve and disintegrate.
The Organization as an Open System
? Synergy
? the performance gains that result from the combined
actions of individuals and departments ? Possible only in an organized system
Contingency Theory
? Contingency Theory
? The idea that the organizational structures and control
systems managers choose are contingent on characteristics of the external environment in which the organization operates. ? ?There is no one best way to organize?
Contingency Theory
Figure 2.5
Type of Structure
? Mechanistic Structure
? Authority is centralized at the top. ? Emphasis is on strict discipline and order ? Employees are closely monitored and
managed. ? Can be very efficient in a stable environment.
Type of Structure
? Organic Structure
? Authority is decentralized throughout the organization. ? Departments are encouraged to take a cross-
departmental or functional perspective ? Works best when environment is unstable and rapidly changing
Type of Structure
? Nokia’s organic approach to operating:
? Control is much looser and decentralized ? Reliance on shared norms and common
expectations to guide organizational activities is greater ? Organic structure can react more quickly to a changing environment ? More expensive due to increasing coordination costs
doc_204921037.pptx