Chapter 1
Management
Why Do We Have Organizations?
1.
To Accomplish Something = Goal
2.
It Takes More Than 1 Person
CEO
Masterbatches
Functional
Chemicals
Fine
Chemicals
Europe
Soaps
Electric
Materials
Asia/
Pacific
Process
Chemicals
Specialty
What Is An Organization?
An organization is a group of individuals
who work together toward common goals.
MANAGEMENT
The process of administering and
coordinating resources effectively
and efficiently in an effort to
achieve the goals of the
organization.
MANAGEMENT
EFFECTIVENESS
Long term measure of how well an organization achieves
its objectives
EFFICIENCY
Short term measure of how well an organization uses it
resources
GOAL
A desired future states that contributes to the fulfillment of
the organization's mission
MISSION = Reason for existence
Effectiveness & Efficiency
Effectiveness is achieved when the
organization pursues appropriate
goals. This means “doing the right
thing.”
Efficiency is achieved by using fewer
inputs (e.g., people, money) to
generate a given output. This means
“doing things right.”
The Four Functions of Management
Planning
Organizing
determines how
Assessing the
the firm’s human,
management
financial, physical,
environment to set Organizational informational, and
goals
future objectives
technical resources
and map out
are arranged and
compares
activities necessarymeasures performance,
coordinated
to
it to objectives,
to achieve
those energizes
perform
tasks to
Leading
people
toControlling
contribute
achieve and
desired
objectives.
implements
necessary
changes,
their
best individually
in
goals.
cooperation
with
other people.
and monitors progress.
Levels of Management
Top-level
Managers
Strategic
Middle Managers
Tactical
First-line Managers
Operational Employees
Operational
Management Levels in the
Organizational Hierarchy
CEO
Corp
Head
Top Managers
VP
Admin
Business Unit Head
Gen. Mgr.
Administrator
Middle Managers
Dept. Manager
Info Srvcs Mgr
Product Line Mgr
Functional Head
Production Supervisor
MIS Supervisor
Nonmanagerial Employees
LineHarcourt
Jobs Brace & Company.
Staff Jobs
First-Line
Managers
Management as a set of skills: (continued)
• Four major categories of skills will help you
become a good manager:
– Strategizing Skills
– Task-Related Skills
– People-Related Skills
– Self-Awareness Skills
Skills for Managerial Success
Task Skills
Strategic Skills
• Environmental
assessment scanning
• Strategy formulation
• Mapping strategic
intent and defining
mission
• Strategy
implementation
• Human resource
congruency
• Setting and prioritizing
objectives
• Developing plan of action
and implementation
• Responding in a flexible
manner
• Creating value
• Working through the
organizational structure
• Allocating human
resources
• Managing time efficiently
Skills for Managerial Success
People Skills
•
•
•
•
•
•
•
Delegating
Influencing
Motivating
Handling conflict
Win-win negotiating
Networking
Communicating
– Verbal --Nonverbal
• Listening
• Cross-cultural
management
• Heterogeneous
teamwork
(continued)
Self-Awareness Skills
• Personal adaptability
• Understanding personal
biases
• Internal locus of control
Evolution of
Management
Thought
The Evolution of Management
Thought
Early
Management
Thought
Classical
Perspective
Contemporary
Management
Perspectives
Behavioral
Perspective
Classical Perspective
The oldest formal viewpoints of management, it
includes the following approaches:
Scientific
Management
Administrative
Management
Bureaucratic
Management
Focuses on the
productivity of
the individual
worker
Focuses on the
functions of
management
Focuses on the
overall
organizational
system
Frederick W. Taylor
Henri Fayol
Max Weber
Scientific Management
• Frederick W. Taylor (1865-1915)
– Father of “Scientific Management.
– Taylor was convinced that there was “one best
way” to perform every task.
– Taylor attempted to define “the one best way”
to perform every task through systematic study
and other scientific methods.
Taylor’s Four Principles of Scientific Management
1.
2.
3.
4.
Scientifically study each part of a task and develop the
best method of performing the task.
Carefully select workers and train them to perform the
task by using the scientifically developed method.
Cooperate fully with workers to ensure that they use
the proper method.
Divide work and responsibility so that management is
responsible for planning work methods using scientific
principles and workers are responsible for executing
the work accordingly.
Scientific Management
• Frank Gilbreth
– Specialized in time and motion studies to
determine the most efficient way to perform
tasks.
– Used the new medium of motion pictures to
examine the work of bricklayers.
– Identified 17 work elements (such as lifting and
grasping) and called them therbligs.
Scientific Management
• Lillian Gilbreth
– Was a strong proponent of better working
conditions as a means of improving efficiency
and productivity.
– Wrote an entertaining book about raising her
family entitled “Cheaper by the Dozen.”
Administrative Management
• Focuses on the managers and the functions
they perform
– This approach to management is most closely
identified with Henri Fayol (1841-1925).
– Fayol was the first to recognize that successful
managers had to understand the basic
managerial functions.
Administrative Management
• Henri Fayol
– Developed a set of 14 general principles of
management.
– His managerial functions of planning, leading,
organizing, and controlling are routinely used
in modern organizations.
Bureaucratic Management
• Focuses on the overall organizational
system and is based upon firm rules,
policies, and procedures; a fixed hierarchy;
and a clear division of labor
– Max Weber (1864-1920), a German sociologist
and historian, is most closely associated with
bureaucratic management.
Bureaucratic Management
• Max Weber
– Envisioned a system of management that would
be based upon impersonal and rational
behavior.
– Conceptualized the approach to management
referred to as bureaucracy.
•
•
•
•
•
Division of labor
Hierarchy of authority
Rules and procedures
Impersonality
Employee selection and promotion
Behavioral Perspective
• Behavioral Perspective
– Followed the classical perspective
– Acknowledged the importance of human
behavior in shaping management style
– Associated with the following scholars:
•
•
•
•
Mary Parker Follett
Elton Mayo
Douglas McGregor
Chester Barnard
Behavioral Perspective
• Mary Parker Follett
– Concluded that a key to effective management
was coordination.
– Felt that managers needed to coordinate and
harmonize group effort rather than force and
coerce people.
– Believed that management is a continuous,
dynamic process.
– Felt that the best decisions would be made by
people who were closest to the situation.
Behavioral Perspective
• Elton Mayo
– Conducted the famous Hawthorne Experiments.
– Concluded that productivity increased because
someone was “paying attention” to the workers.
– Mayo’s work represents the transition from
scientific management to the early human
relations movement.
Behavioral Perspective
• Douglas McGregor
– Proposed the Theory X and Theory Y styles of
management.
– Theory X managers perceive that their
subordinates have an inherent dislike of work
and will avoid it if at all possible.
– Theory Y managers perceive that their
subordinates enjoy work and that they will gain
satisfaction from performing their jobs.
Contemporary Management Perspectives
• Systems Theory
• Contingency Theory
• Total Quality Management
• The Learning Organization
Systems Theory
• Views the organization as a system of
interrelated parts that function in a holistic
way to achieve a common purpose.
• Systems theory concepts that affect
management thinking:
–
–
–
–
Open and closed systems
Subsystems
Synergy
Equifinality
The Basic Elements of a
System
Environment
Inputs
Transformation
Process
Feedback
Outputs
SIMPLE SYSTEM
Closed
System
wires
(communication
network)
Battery
Open
System
BASIC COMPONENTS OF ANY
SYSTEM
System has an objective which can be
accomplished by interaction of the system
sub-units
An energy source to “drive” system
An energy conversion process to “produce”
the objective Transformation
Process
A communication network between system
units
Contingency Perspective
• A view that proposes that there is no one
best approach to management for all
situations.
• Asserts that managers are responsible for
determining which managerial approach is
likely to be most effective in a given
situation.
• This requires managers to identify the key
contingencies in a given situation.
The Contemporary Manager
Slide 1 of 2
• The New Manager Profile
– Managers will no longer think of themselves as
“the boss,” but will view themselves as
sponsors, team leaders, or internal consultants.
What a Difference a Century Can Make
Contrasting views of the corporation:
CHARACTERISTIC
20TH CENTURY
ORGANIZATION
FOCUS
STYLE
SOURCE OF STRENGHT
STRUCTURE
RESOUCES
OPERATIONS
PRODUCTS
REACH
The Pyramid
The Web or Network
Internal
External
Structured
Flexible
Stability
Change
Self-sufficiency
Interdependencies
Atoms-physical assetsBits-information
Vertical integration Virtual integration
Mass production
Mass customization
Domestic
Global
DATA: BUSINESS WEEK
21ST CENTURY
What a Difference a Century Can Make
Contrasting views of the corporation:
CHARACTERISTIC
20TH CENTURY
21ST CENTURY
FININCIALS
INVENTORIES
STRATEGY
LEADERSHIP
WORKERS
JOB EXPECTIONS
MOTIVATION
IMPROVEMENTS
QYALITY
Quarterly
Months
Top-down
Dogmatic
Employees
Security
To compete
Incremental
Affordable best
Real time
Hours
Bottom-up
Inspirational
Employees/free agents
Personal growth
To build
Revolutionary
No compromise
DATA: BUSINESS WEEK
The Contemporary Manager
• Competencies of Tomorrow’s Managers
–
–
–
–
–
–
–
The great communicator
The team player
The technology master
The problem solver
The foreign ambassador
The change maker
The 21st-century leader
That’s it for today
Chapter 3
Social Responsibility
and Ethics
Ethics and
social
responsibility
are concerns of
all members of
an oranization
Ethics
• Ethics
– principles that explain what is right or
wrong, good or bad, and what is
appropriate or inappropriate in various
settings
• Ethical Behavior
– Behavior that is morally accepted as good or
right as opposed to bad or wrong.
Three Domains of Human Action
Domain of
Codified Law
(Legal Standard)
Domain of
Ethics
Domain of
Free Choice
(Social Standard) (Personal Standard)
Amount of
Explicit Control
High
Low
Ethics
• Lies between the domains of codified law
and free choice
• No specific laws
• Based on shared principles and values
• Obedience is to unenforceable norms and
standards
• Disagreements and dilemmas about proper
behavior often occur.
Business Ethics
The application of the general
ethical rules to business behavior.
Provide standards or
guidelines for the conduct
and decision making of
employees and managers
Ethics?
• People operate under different
ethical value systems depending on
their:
–Personal experiences
–Religious background
–Education
–Family background
Approaches for Ethical Dilemmas
• Utilitarianism
– A means of making decisions based on
what is good for the greatest number of
people.
• Individualism
– The degree to which a society values
individual self-interest over group
needs and goals.
– Individual self-interest should be
promoted as long as it does not harm
others.
Approaches for Ethical Dilemmas
• Rights approach
– A means of making decisions based on the
belief that each person has fundamental
human rights that should be respected and
protected.
• Justice approach
– An approach to decision making
based on treating all people fairly
and consistently when making
business decisions.
Ethical Responsibilities
Do What is Right
• Not necessarily codified into law
• May not serve the firm's direct economic
interests
• To be ethical organization decision makers
should:
Act with equity, fairness, and impartiality
Respect the rights of individuals
Treat individuals differently only when
relevant to the organization's goals.
Stakeholders
Stakeholders are all those who are affected
by or can affect the activities of the firm.
The Stakeholder View of the Firm
Environmental
Group
Local
Community
Group
Secondary
Stakeholders
Primary
Stakeholders
Owners
Organization
Employees
Media
Suppliers
Customers
Consumer
Group
Other
Special
Interest
Groups
ACLU
The Premises of the Social
Responsibility Debate
• Social contract
– An implied set of rights and obligations that are
inherent in social policy and assumed by
business.
• Moral agent
– The obligation of a business to act honorably
and to reflect and enforce values that are
consistent with those of society.
Three Perspectives of Social
Responsibility
• Economic Perspective
– The responsibility of business is to make a
profit within the “rules of the game.”
– Organizations cannot be moral agents. Only
individuals can serve as moral agents.
• Public Responsibility
– Businesses should act in a way that is consistent
with society’s view of responsible behavior, as
well as with established laws and policies.
Three Perspectives of Social
Responsibility
• Social Responsiveness
– Business should proactively seek to contribute
to society in a positive way.
– Organizations should develop an internal
environment that encourages and supports
ethical behavior at an individual level.
Ways In Which Organizations Foster
Business Ethics
• Whistleblowing
– A whistleblower is someone who exposes
organizational misconduct or wrongdoing to the
public.
Task
Chapter 4
Managing
Organizational
Culture and
Change
Organizational Culture
specific to each firm
A system of shared values,
assumptions, beliefs, and norms that
unite the members of an
organization.
“the way things are done around here.”
affects how employees
feel and act and the type
of employee hired
Organizational Culture and its
Effects
Effects everything
Functions performed by organizational culture:
• Employee Self-Management
– Sense of shared identity
– Generation of commitment
• Stability
– Sense of continuity
– Satisfies need for predictability, security, and
comfort
Functions performed by organizational culture:
(continued)
• Socialization
– Internalizing or taking organizational values as
one’s own
• Implementation Support of the
Organization’s Strategy
– If strategy and culture reinforce each other,
employees find it natural to be committed to the
strategy
Levels of Corporate
Culture
Not readily
observed
What
they say
Visible
Culture
Espoused
Values
Core
Values
See, hear, feel
Office layout
Symbols
dress
Widely shared
Perceived
Operate unconsciously
by how
Basic assumptions:
managers
purpose
of
life
explain actions
human nature
Creating and Sustaining Organizational Culture
Cultural
Symbols
Rituals and
Ceremonies
Company
Heroes
Stories
Policies and
Decisions
Leadership
Language
Characteristics of Culture
at Walt Disney
Disney uniforms
Shared
Things
Good Mickey
Shared
Sayings
Disney culture
Smiling
Shared
Behavior
Pride
Shared
Feelings
Baseball Team Culture
• High-risk decision
making & fast feedback
• Talent, innovation,
performance valued
and rewarded
• Movie production,
advertising, and
software development.
Club Culture
• Loyalty, commitment, and fitting in
• Values age & experience. Rewards
seniority
• Members start young and stay
• Promote from within, progress
slowly
• Individuals tend to be generalists
and may have vast experience
• Commercial banks and the military.
Academy Culture
• Specific track & gain high
expertise
• Employees rarely cross
divisions
• Hires young recruits
• Long, slow, steady climb in
organization
• Universities and large
corporations.
Fortress Culture
• In an environmental survival
situation
• Textile firms and savings and loans
• Offers little job security or
opportunity for professional growth
as companies restructure and
downsize to fit the new
environment.