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Chapter
1
Management and Its Evolution
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Learning Objectives
After reading this chapter, you should be able to:
 Understand
the roles played by individuals, teams,
and managers in carrying out company activities.
 Practice the four major functions of management
 Recognize the interpersonal, informational, and
decisional roles played by top level managers.
 Apply the general skills needed to carry out
managerial responsibilities.
 Integrate the major elements from the various
perspectives of management theory.
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The performance of organizations depends to
a large extent on how their resources are
allocated and their ability to adapt to changing
conditions.
Successful organizations know how to
manage people and resources efficiently to
accomplish organizational goals and to keep
those goals in tune with changes in the
external environment.
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Management in the New Millennium
 A firm
can be efficient by making the
best use of people, money, physical
plant, and technology.
 It
is ineffective if its goals do not provide
a sustained competitive advantage.
 A firm
with excellent goals would fail if
it hired the wrong people, lost key
contributors, relied on outdated
technology, and made poor investment
decisions.
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Levels of management
Strategic Managers
Tactical Managers
Operational Managers
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Strategic Managers
 The
firm’s senior executives with
overall responsibility for the firm.
 Developing
the company’s goals
 Focus on long-term issues
 Emphasize the growth and overall
effectiveness of the organization
 Concerned
primarily with the
interaction between the
organization and its external
environment.
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Tactical Managers
Responsible
for translating the
general goals and plans
developed by strategic
managers into specific
objectives and activities.
Shorter
time horizon
Coordination of resources
These
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are middle managers
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Operational Managers
 Lower-level
managers who supervise the
operations of the organization.
 Directly
involved with non-management
employees
 Implementing the specific plans
developed with tactical managers.
 This is a critical role to the organization.
 Operational managers are the link
between management and nonmanagement staff
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Management Functions
Planning
Leading
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Organizing
Controlling
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Planning
 The
management function that
assesses the management
environment to set future objectives
and map out activities necessary to
achieve those objectives.
 To
be effective, the objectives of
individuals, teams, and
management should be coordinated
to support the firm’s mission.
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Organizing
 The
management function that
determines how the firm’s human,
financial, physical, informational,
and technical resources are
arranged and coordinated to
perform tasks to achieve desired
goals.
 The
deployment of resources to
achieve strategic goals.
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Leading
 The
management function that
energizes people to contribute their
best individually and in cooperation
with other people.
 This involves:
 Clearly communicating organizational goals
 Inspiring and motivating employees
 Providing an example for others to follow
 Guiding others
 Creating conditions that encourage management
of diversity
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Controlling
 The
management function that
measures performance, compares it
to objectives, implements necessary
changes, and monitors progress.
 Many
of these issues involve
feedback or identifying potential
problems and taking corrective
action.
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Management as a set of roles
 Day-to-day
management activities are routine,
orderly, and rational.
 These
include:
Interpersonal roles - communication with superiors,
peers, subordinates, and people from outside the
organization.
Information
Roles - obtaining, interpreting, and giving
out information.
Decisional
Roles - choosing among competing
alternatives.
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Management as a set of skills
 The
four basic management functions require a set
of skills to be carried out properly.
 Because
most managerial tasks are unique,
ambiguous, and situation-specific, there is seldom
one best way to approach them.
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Management as a set of skills
 Four
major categories of skills will help you become a good
manager:
 Strategic
Skills - the ability to see “the big picture”, focus on
key objectives without getting mired in details, and having a sense
what is happening inside and outside the company.
 Task-Related
Skills - the ability to define the best approach to
accomplish personal and organizational objectives. They include
consideration of all resources, including time, organizational
structure, financial resources, and people. They also involve the
ability to prioritize, remain flexible to make necessary changes,
and ensure that value is being created
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Management as a set of skills
 People-Related
Skills - getting work done through others and
with others. Include the ability to delegate tasks, share
information, resolve conflicts, be a team player, and work with
people from very different backgrounds
 Self-Awareness
Skills - Being aware of your personal
characteristics can help you adapt to others and can help you
understand why you react to them the way you do. These skills
can help you to avoid rushed judgments, appreciate the nuances of
particular situations, size up opportunities, capitalize on your
personal strengths, and avoid situations in which you are likely to
fail.
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Skills for Managerial Success
Task Skills
Strategic Skills
Environmental assessment
scanning
 Strategy formulation
 Mapping strategic intent and
defining mission
 Strategy implementation
 Human resource congruency

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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

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Skills for Managerial Success
People Skills










Delegating
Influencing
Motivating
Handling conflict
Win-win negotiating
Networking
Communicating
 Verbal
 Nonverbal
Listening
Cross-cultural management
Heterogeneous teamwork
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(continued)
Self-Awareness Skills



Personal adaptability
Understanding personal biases
Internal locus of control
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The Evolution of Management Thought
Early Management
Thought
Contemporary
Management
Perspectives
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Classical Perspective
Behavioral
Perspective
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Early Management Thought
 Early
 Sun
 Early
ideas about management strategy
Tzu, The Art of War
ideas about leadership
 Nicolò
 Early
ideas about the design and organization of work
 Adam

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Machiavelli, The Prince
Smith, The Wealth of Nations
division of labor
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The Operational Perspective
 Scientific
Management
 Frederick
W. Taylor
 Quantitative
 Ford
W. Harris
 Quality
Management
 Walter A.
Shewhart
 Bureaucratic
 Max
Management
Management
Weber
 Administrative
 Henri
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Management
Fayol
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Taylor’s Four Principles of Scientific
Management

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.
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Key Characteristics of Weber’s Ideal
Bureaucracy
 Specialization
 Formal
of labor
rules and procedures
 Impersonality
 Well-defined
 Career
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hierarchy
advancement based on merit
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Fayol’s 14 Principles of Management

Division of work

Centralization

Authority

Scalar chain

Discipline

Order

Unity of command

Equity

Unity of direction

Stability and tenure

Subordination of
individual interest to the
general interest

Initiative

Esprit de corps

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Remuneration
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Behavioral Perspective
 The
behavioral perspective acknowledges that
psychological and social processes of human behavior
can result in improvements in productivity and work
satisfaction.
 The
Hawthorne effect - when a manager shows concern for
employees, their motivation and productivity levels are likely
to improve.
 Human Relations Approach - the relationship between
employees and a supervisor is a vital aspect of management.
 Employee motivation
 Leadership style
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Hawthorne Effect
The discovery that paying special
attention to employees motivates them to
put greater effort into their jobs.
(from the Hawthorne management studies, performed from 1924 –
1932 at Western Electric Company’s plant near Chicago)
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Maslow’s Hierarchy of
Needs
Self-Actualization
Need for Self Esteem
Need for Social Relations
Need for Security
Physical Needs
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McGregor’s Theory X and Theory Y
 Leaders
and managers who hold Theory X
assumptions believe that employees are inherently lazy
and lack ambition.
A negative perspective on human behavior.
 Leaders
and managers who hold Theory Y
assumptions believe that most employees do not
dislike work and want to make useful contributions to
the organization.
A positive perspective on human behavior.
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Contemporary Management Perspectives
 Systems
Theory
 Contingency
 The
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Theory
Learning Organization Perspective
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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:
and closed systems
 Subsystems
 Synergy
 Equifinality
 Open
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Contingency Theory
 States
that there is no “one best way” to manage an
organization.
 Because
what works for one organization may not work for
another
 Situational
characteristics (contingencies) differ
 Managers
need to understand the key contingencies that
determine the most effective management practices in a given
situation
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The Learning Organization
 The
management approach based on an
organization anticipating change faster than its
counterparts to have an advantage in the market
over its competitors.
 There
are two ways organizations can learn:
 Experimental
learning
 External learning
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