Chapter Outline Chapter Outline

Chapter
Chapter Outline
Outline
• An Introduction to Management
– Kinds of Managers
– Basic Management Functions
– Fundamental Management Skills
• The Evolution of Management
– Classical Management Perspective
• Scientific Management & Administrative Theory
– The Behavioral Management Perspective
• Human Relations and Human Resources Management
– The Quantitative Management Perspective
• Contemporary Management Thought
– The Systems Perspective
– The Contingency Perspective
– Contemporary Management Challenges and Opportunities
Copyright © 2005 by Houghton Mifflin Company. All rights reserved. 1–1

Management
Management
A form of work that involves coordinating an organization’s
human, financial, physical and information resources
toward accomplishing organizational objectives.
Attainment of organizational goals in an effective and

efficient manner through planning, organizing, leading and
controlling organizational resources.
NOTE THESE CHARACTERISTICS:

Goal-driven
Activity is effective and efficient
Uses the four managerial functions

What
What is
is Management?
Management?
A set of activities
planning and decision making, organizing, leading, and
controlling
directed at an organization’s resources
human, financial, physical, and information
with the aim of achieving organizational goals
in an efficient and effective
manner.

Efficiency
Efficiency
versus
versus
Effectiveness
Effectiveness
Efficiency: Effectiveness:
Operating in Doing the right
Successful
such a way things in the
Management
that resources right way at
are not wasted the right times
Source: Adapted from Van Fleet, David D., Contemporary Management, Second Edition.
Copyright © 1991 by Houghton Mifflin Company. Used with permission.

What
What is
is aa Manager?
Manager?
• Someone whose primary responsibility is to
carry out the management process.
• Someone who plans and makes decisions,
organizes, leads, and controls
human, financial, physical,
and information resources.

Figure
Figure 1.1
1.1
Kinds
Kinds of
of Managers
Managers by
by Level
Level and
and Area
Area

Kinds
Kinds of
of Managers
Managers by
by Level
Level
• Top Managers
– The relatively small group of executives who manage
the organization’s overall goals, strategy, and
operating policies.
• Middle Managers
– Largest group of managers in organizations
• Implement top management’s policies and plans.
• Supervise and coordinate lower-level managers’ activities.
• First-Line Managers
– Managers who supervise and coordinate the activities
of operating employees.

Examples
Examples of
of Managers
Managers by
by Area
Area
• Marketing Managers
– Work in areas related to getting consumers and clients to buy the
organization’s products or services.
• Financial Managers
– Deal primarily with an organization’s financial resources.
• Operations Managers
– Concerned with creating and managing the systems that create
organization’s products and services
• Human Resource Managers
– Involved in planning, recruiting and selection, training and
development, designing compensation and benefit systems,
formulating performance appraisal systems.
• Administrative Managers
– Serve as generalists in functional areas and are not associated
with any particular management specialty.

Management
Management in
in Organizations
Organizations
Planning
and decision Organizing
making
Inputs from the environment
• Human resources Goals attained
• Financial resources • Efficiently
• Physical resources • Effectively
• Information resources
Controlling Leading

The
The Management
Management Process
Process

The
The Functions
Functions of
of Management
Management
• Planning
– Setting an organization’s goals and selecting a course
of action to achieve them.
• Organizing
– Determining how activities and resources are grouped.
• Leading
– Getting organizational members to work together to
advance the interests of the organization.
• Controlling
– Monitoring organizational progress towards goals.

Planning
Planning and
and Organizing
Organizing Involve…
Involve…
• Planning
– Environmental scanning and analysis
– Developing a vision of the future
– Setting long-term organizational objectives
– Developing organizational and competitive strategies
• Organizing
– Defining tasks and duties
– Grouping positions into effective structures (departments)
– Clarifying authority, responsibility, and reporting relationships
– Allocating scarce resources (financial, human, physical)
– Staffing positions with qualified personnel

Leading
Leading and
and Controlling
Controlling Involve…
Involve…
• Leading
– Effective communication
– Inspiring others to do their best
– Motivation and rewards
– Trust and assurance
• Controlling
– Clear standards
– Monitoring progress and results
– Knowing when and how to intervene
– Correcting deviations successfully

Skills
Skills and
and the
the
Manager
Manager Technical Skills
Interpersonal Skills
Conceptual Skills
Fundamental
Fundamental
Management
Management Diagnostic Skills
Skills
Skills
Communication Skills
Decision-Making Skills
Time-Management Skills

Fundamental
Fundamental Management
Management Skills
Skills
• Technical
– Skills necessary to accomplish or understand the
specific kind of work being done in an organization.
• Interpersonal
– The ability to communicate with, understand, and
motivate both individuals and groups.
• Conceptual
– The manager’s ability to think in the abstract and to
see the “big picture.” To perceive how all the parts fit
together.

33 Primary
Primary Managerial
Managerial Skills
Skills (KATZ)
(KATZ)
• Technical skills FOCUS IS ON WHAT IS DONE
– Specialized knowledge and proficiency

– Analytical ability
– Works with things, tools and techniques
• Interpersonal skills FOCUS IS ON HOW SOMETHING IS DONE
– Works with and through people
– Effective as a group/team member
– Motivates, communicates, & resolves conflicts
• Conceptual skills FOCUS IS ON WHY SOMETHING IS DONE
– Sees the “big picture” (how the parts fit together)

– Understands the corporation as a whole
– Future-oriented…thinks strategically

Fundamental
Fundamental Management
Management Skills
Skills (cont’d)
(cont’d)
Diagnostic
– The manager’s ability to visualize the most appropriate response
to a situation.
• Communication
– The manager’s abilities both to convey ideas and information
effectively to others and to receive ideas and information
effectively from others.
• Decision-Making
– The manager’s ability to recognize and define problems and
opportunities correctly and then to select an appropriate course
of action to solve the problems and capitalize on opportunities.
• Time-Management
– The manager’s ability to prioritize work, to work efficiently, and to
delegate appropriately.

Management
Management Skill
Skill Mixes
Mixes at
at Different
Different
Organizational
Organizational Levels
Levels

Managerial
Managerial Activities
Activities MINTZBERG
MINTZBERG
• Characterized by variety, fragmentation, and brevity

– Little time for quiet reflection
– Crises are interspersed with trivial events
– Must be able to shift gears quickly
• Managers perform a great deal of work at an unrelenting
pace.
• In one day…
– Processed 36 memos, letters and notes
– Attended 8 meetings
– Got 11 phone calls
– Met with some very unhappy customers
– Refereed two internal managerial disputes
– Spent an average of 9 minutes on each task during the day

Key
Key Managerial
Managerial Roles
Roles (Mintzberg)
(Mintzberg)
Key
KeyManagement
Management
Roles
Roles
Interpersonal
Interpersonal Informational
Informational Decisional
Decisional
Roles
Roles Roles
Roles Roles
Roles
1.1. Figurehead
Figurehead 1.1. Monitor
Monitor 1.1. Entrepreneur
Entrepreneur
2.2. Leader
Leader 2.2. Disseminator
Disseminator (Innovator)
(Innovator)
3.3. Liaison
Liaison 3.3. Spokesperson
Spokesperson 2.2. Disturbance
Disturbance
handler
handler
3.3. Resource
Resource
Allocator
Allocator
4.4. Negotiator
Negotiator

Managerial
Managerial Success
Success Factors
Factors
• Personal Factors
– Abilities and skills
– Motivation
– Personality
• Situational Factors
– Nature of the work and environment
– Relationships with subordinates and supervisors
– Abilities of subordinates
• Actions Taken
– Appropriate for the situation?
• Luck
– Being in the right place at the right time?

Management:
Management: Science
Science or
or Art?
Art?
• The Science of Management
– Assumes that problems can be approached using
rational, logical, objective, and systematic ways.
– Requires technical, diagnostic, and decision-making
skills and techniques to solve problems.
• The Art of Management
– Decisions are made and problems solved using a
blend of intuition, experience, instinct, and personal
insights.
– Requires conceptual, communication, interpersonal,
and time-management skills to accomplish the tasks
associated with managerial activities.

The
The Importance
Importance of
of Theory
Theory
Most managers develop theories about how to run the organization
Management Models represents the “real world” and how it functions
Provides a framework for organizing knowledge & a blueprint for action
– Helps us organize our knowledge
– Tells us what to pay attention to and what to ignore
– Helps us to understand why events occur (causal relationships)
– Summarizes diverse findings and highlights relationships
– Gives guidance about how to bring about positive change
• Three Types of Management Theories

– DESCRIPTIVE 80% +
– PREDICTIVE ~ 15%
– PRESCRIPTIVE < 5%

Theories
Theories are
are derived
derived from…
from…
• Observation and deduction
– Personal experience
– On-site observation
– Archival records
• Survey research
– Interviews
– Questionnaires
• Experimentation
– Laboratory
– Field
– Natural

Research
Research Designs--Observation
Designs--Observation
• POSITIVES
– Probe one situation in great detail
– A search for clues/causes of problems
– Discovers unexpected relationships
– Rich in optional explanations
• NEGATIVES
– Selective observation and limited recall
– Researcher bias toward the dramatic
– Data not easily quantified or recorded
– Generalizations are difficult (impossible) to make
– Time consuming…when do you stop observing/gathering info?

Research
Research Designs--Surveys
Designs--Surveys
• POSITIVES
– Collect data independent of the researcher
– Questions/info gathered can be standardized
– Allows quantitative analysis of findings
– Sampling of populations is possible (census isn’t necessary)
• NEGATIVES
– Objectivity of responses?
– Issue of non-responses
– Identifies symptoms, not cause-effect links
– Requires much expertise and time

Research
Research Designs--Experiments
Designs--Experiments
• POSITIVES
– Can infer cause-effect relationships
– Can be repeated…checked for consistency
• NEGATIVES
– Difficult to control all the variables (precision)
– Timing of observations and measurements
– Impact of the experiment on work productivity
– Subject bias and loss
– Generalizability to other organizations

History
History of
of Management
Management Through
Through the
the Ages
Ages
D Greeks
C Babylonians G Venetians
B Egyptians E Romans
A Sumerians F Chinese
3000 B.C. 2500 B.C. 2000 B.C. 1500 B.C. 1000 B.C. 500 B.C. A.D.500 A.D.1000 A.D.1500
A Used written rules and regulations for governance E Used organized structure for communication and control
B Used management practices to construct pyramids F Used extensive organization structure for government
agencies and the arts
C Used extensive set of laws and policies for governance
G Used organization design and planning concepts to
D Used different governing systems for cities and state control the seas

Early
Early Management
Management Pioneers
Pioneers
• Robert Owen (1771–1858)
– British industrialist who was one of the first managers
to recognize the importance of human resources and
the welfare of workers.
• Charles Babbage (1792–1871)
– English mathematician who focused on creating
efficiencies of production through the division of labor,
and the application of mathematics
to management problems.

Classical
Classical Management
Management Perspective
Perspective
• Scientific Management
– Concerned with improving the performance of
individual workers (i.e., efficiency).
– Grew out of the industrial revolution’s labor shortage
at the beginning of the twentieth century.
• Administrative Management
– A theory that focuses on
managing the total organization
rather than individuals.

Scientific
Scientific Management
Management
• Frederick Taylor (1856–1915)
– Replaced old methods of how to do work with
scientifically-based work methods.
• Eliminated “soldiering,” where employees deliberately worked
at a pace slower than their capabilities.
– Believed in selecting, training, teaching, and
developing workers.
– Used time studies of jobs, standards planning,
exception rule of management, slide-rules, instruction
cards, and piece-work pay systems to control and
motivate employees.

Steps
Steps in
in Scientific
Management

Frederick
Frederick Taylor
Taylor
• Work Experiments
– Midvale Steel
– Simonds Rolling Machine Co.
– Bethlehem Steel
• Pig Iron
• Shoveling
• Contributions
– Time Study
– Standards for Work
– Job Specialization
– Managerial Planning and Control
– Worker Selection and Training
– Incentives

Others
Others in
in Scientific
Management
• Henry Gantt
– Gantt Charts
– Sliding Incentives for Workers
– Incentives for Supervisors
• Frank & Lillian Gilbreth

– Motion Studies (therbligs)
– Fatigue Reduction
– Suggestion Systems

Summary
Summary of
of Scientific
Management
• Assumptions
– Productivity is a primary workplace problem
– Managers should plan and direct the work
– Individuals are economically motivated
• Contributions
– “Scientific” or systematic study of work (time and motion)
– Division of labor…Managers vs workers
– Setting of work standards (and job descriptions)
– Careful selection and training of workers
– Use of Incentives
• Limitations
– Social “needs” of workers overlooked
– Many studies weren’t very scientific
– Loss of self-control alienated workers
– Group dynamics were ignored
Administrative
Administrative Management
Management Theory
Theory
• Focuses on managing the whole organization
rather than individuals
– Henri Fayol (1841–1925)

• Was first to identify the specific management functions of
planning, organizing, leading, and controlling.
– Lyndall Urwick (1891–1983)
• Integrated the work of previous management theorists.
– Max Weber (1864–1920)
• His theory of bureaucracy is based on a rational set of
guidelines for structuring organizations.

Administrative
Administrative Theory
Theory –– Henry
Henry Fayol
Fayol
• Functions of Management
– Planning
– Organizing
– Commanding
– Coordinating
– Controlling
• Principles of Management
– Division of Labor (specialization)
– Scalar Chain of Command (hierarchy of authority)
– Unity of Command (only one superior for each worker)
– Span of Control (number of subordinates supervised)

The
The Ideal
Ideal Bureaucracy
Bureaucracy –– Max
Max Weber
Weber
• Division of Labor
• Horizontal specialization
• Hierarchy of Authority
• Vertical specialization
• Rules and Procedures
• Enforced
• Technical Competence
• Selection and promotion
• Impersonal Treatment
• No favoritism
• Centralized Decision-Making
• Exceptions controlled from the top
• Formalization
• Documentation

Summary
Summary of
of Administrative
Administrative Theory
Theory
• Assumptions
– There is an ideal way to structure the organization and administer
the management processes necessary for organizational success
– Management skills are generalizable
• Contributions
– Functions and Principles of management
– Ideal Bureaucracy
– Raised awareness of basic management problems likely to be found
in any organization
• Limitations
– Stressed a “one-best-way” of organizing and managing
– Theories were based on intuition and observation rather than
empirical investigation
– Principles are not applicable to organizations which exist in
turbulent environments

The
The Hawthorne
Hawthorne Studies
Studies (1927–1932)
(1927–1932)
• Conducted by Elton Mayo and Fritz Roethlisberger at
Western Electric
– Illumination studies
• Relay Assembly 1
• Relay Assembly 2
– Incentive Studies
• Mica-splitting
• Bank Wiring Room
– Interview program
• Discoveries at Hawthorne
– Hawthorne Effect
– Catharsis
– Informal Group Influence

Human
Human Relations
Relations Management
Management Views
Views
• Assumptions
– Workers are motivated by social relationships and needs
– Satisfied workers are the most productive workers
– Management needs strong social skills to be successful
• Contributions
– Grew out of the Hawthorne studies
– The “Hawthorne Effect” and “Catharsis” – attention given to workers
impacts their behavior
– Influence of the informal group
– Emphasized worker needs and motivation
• Limitations
– Happy, satisfied workers aren’t necessarily productive workers
– Economics (money, wages) DOES affect work activity
– Boring work isn’t less so with friendly supervisor – motivation problem
– Suspicion that supervisor interest isn’t genuine – is this manipulation?
– Should business be responsible for meeting ALL human needs on the
job?

The
The Transition
Transition to
to Human
Human Resource
Resource
Management
Management
• Abraham Maslow (1943)
– Advanced a theory that employees are motivated by a
hierarchy of needs that they seek to satisfy.
• Douglas McGregor (1964)
– Proposed Theory X and Theory Y concepts of
managerial beliefs about people and work.
• Frederick Herzberg (1965)
– Proposed the Two-Factor Theory of motivation
(hygienes and intrinsic factors) which implies that job
enrichment is important.

Theory
Theory XX and
and Theory
Theory YY
• Theory X Assumptions
– People do not like work and try to avoid it, so managers have to
control, direct, coerce, and threaten employees to get them to
work toward organizational goals.
– People prefer to be directed, to avoid responsibility, and to want
security; they have little ambition.
• Theory Y Assumptions
– People do not dislike work; work is a natural part of their lives.
– People are internally motivated to reach objectives to which they
are committed. People can be innovative in solving problems.
– People are committed to goals to the degree that they receive
rewards when they reach their objectives.
– People both seek and accept responsibility under favorable
conditions.
– People are bright, but under most organizational conditions their
potentials are underutilized.

Emergence
Emergence of
of Organizational
Organizational Behavior
Behavior
• A contemporary field focusing on behavioral
perspectives on management.
– Draws on psychology, sociology, anthropology,
economics, and medicine.
• Important topics in organizational behavior
research:
– Job satisfaction and job stress
– Motivation and leadership
– Group dynamics and organizational politics
– Interpersonal conflict
– The structure and design of organizations

Human
Human Resource
Resource Management
Management Views
Views
• Assumptions
– Interesting work motivates intrinsically
– Workers are trustworthy…give them responsibility
– The Manager’s job is to challenge workers to develop their talents
• Contributions
– Theory X and Y
– Participative decision-making and management
– Job Enrichment and Job Redesign
– Management by Objectives
– More rigorously-tested theories
• Limitations
– Not everyone wants a challenging job
– Complexity of individuals makes behavior difficult to predict.
– Contemporary research findings are not often communicated to
practicing managers in an understandable form.

Quantitative
Quantitative Management
Management Perspective
Perspective
• Quantitative Management
– Emerged during World War II to help the Allied forces
manage logistical problems.
– Focuses on decision making, economic effectiveness,
mathematical models, and the use of computers to
solve quantitative problems.

Quantitative
Quantitative Management,
Management, Contd
Contd
• Management Science
– Focuses on the development of representative
mathematical models to assist with decisions.
• Operations Management
– Practical application of management
science to efficiently manage the
production and distribution
of products and services.
• Quality Management
– Statistical improvement models

Quantitative
Quantitative Management
Management
• Contributions
– Developed sophisticated quantitative techniques to assist in
decision making.
– Application of models has increased our awareness
and understanding of complex processes and situations.
– Has been useful in the planning and controlling processes.
• Limitations
– Quantitative management cannot fully explain or predict the
behavior of people in organizations.
– Mathematical sophistication may come at the expense of other
managerial skills.
– Quantitative models may require unrealistic or unfounded
assumptions, limiting their general applicability.

The
The Systems
Systems Perspective
Perspective of
of Organizations
Organizations

Systems
Systems Perspectives
Perspectives for
for Managers
Managers
• A system is an interrelated set of elements functioning
as a whole
• Open system
– An organizational system that interacts with its environment.
• Closed system
– An organizational system that does not interact with its
environment.
• Subsystems
– A system within another system. Their importance is due to their
interdependence on each other within the organization.

Synergy
Synergy and
and Entropy
Entropy
• Synergy
– Subsystems are more successful working together in a
cooperative and coordinated fashion than working alone.
– The whole system (subsystems working together as one system)
is more productive and efficient than the sum of its parts.
• Entropy
– A normal process in which an organizational system declines due
to failing to adjust to change in its environment
– Entropy can be avoided and
the organization re-energized
through organizational change
and renewal.

The
The Contingency
Contingency Perspective
Perspective
• Universal Perspectives
– Include the classical, behavioral, and quantitative
approaches.
– An attempt to identify the “one best way” to manage
organizations.
• The Contingency Perspective
– Suggests that each organization is unique.
– The appropriate managerial behavior for
managing an organization depends
(is contingent) on the current
situation in the organization.

The
The Contingency
Contingency Perspective
Perspective (cont’d)
(cont’d)
Problem
Problemor
orSituation
Situation
Important
Important
Contingencies
Contingencies
Solution
Solutionor
or Solution
Solutionor
or Solution
Solutionor
or
Action
ActionAA Action
ActionBB Action
ActionCC
Source: Van Fleet, David D., Contemporary Management, Second Edition.

Copyright © 1991 by Houghton Mifflin Company. Used with permission.

An
An Integrative
Integrative Framework
Framework
of
of Management
Management Perspectives
Perspectives
Systems Approach Contingency Perspective
• Recognition of internal • Recognition of the situational
interdependencies nature of management
• Recognition of • Response to particular
environmental influences characteristics of situation
Classical Behavioral Quantitative

Management Management Management
Perspectives Perspectives Perspectives
Methods for Insights for moti- Techniques for
enhancing vating performance improving decision
efficiency and and understanding making, resource
facilitating planning, individual behavior, allocation, and
organizing, and groups and teams, operations
controlling and leadership
Effective and efficient management

The
The Emergence
Emergence of
of Modern
Modern Management
Management
Perspectives
Perspectives
How management theory and practice has evolved over time

Contemporary
Contemporary
Management
Management Issues
Issues and
and Challenges
Challenges
– An increasingly diverse and globalized workforce

– The need to create challenging, motivating, and flexible work
environments
– Acute labor shortages in high-technology job sectors and an
oversupply of less-skilled labor
– The effects of information technology on how people work
– The complex array of new ways of structuring organizations
– Increasing globalization of product and service markets
– The renewed importance of ethics and social responsibility
– The use of quality as the basis for competition
– The shift to a predominately service-based economy

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Attainment of organizational goals in an effective and

NOTE THESE CHARACTERISTICS:

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• Technical skills FOCUS IS ON WHAT IS DONE

– Specialized knowledge and proficiency

– Sees the “big picture” (how the parts fit together)

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• Characterized by variety, fragmentation, and brevity

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• Three Types of Management Theories

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• Frank & Lillian Gilbreth

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– Henri Fayol (1841–1925)

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Source: Van Fleet, David D., Contemporary Management, Second Edition.

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