Tóm tắt sơ lược những kiến thức cơ bản liên quan đền quản trị doanh nghiệp, Tình huống thực tế trong môi trường doanh nghiệp Việt Nam. Giúp những người học kinh tế và quản trị có cái nhìn khái quát về quản trị doanh nghiệp
INTRODUCTION TO ORGANIZATION AND MANAGEMENT
Introduction to organization
Organization is defined as to seriously and carefully arrange employees to complete detailed tasks
Organization has three main characteristics including distinct purpose, deliberate structure and people
Firstly, every organization has its own different aims
This intention is clearly stated by goals which the organization expects to achieve
Describe three characteristics of organization
• Works are divided into specific jobs and departments
Describe three characteristics of organization
State who managers are, what they do, which skills they need to develop
• Responsibilities or tasks are associated with individual jobs
• Diverse organizational tasks are connected
• Jobs are clustered into units
• Relationships among individuals, groups, and departments are established
• Formal lines of authority are created
• Organizational resources are allocated and deployed
Secondly, each organization is composed of people It takes people to perform the work that’s necessary for the organization to achieve its goals
Organizations must focus on a purposeful structure to effectively manage employee performance Depending on the situation, this structure can range from strict to more open and dynamic, allowing for flexibility in work processes.
An enterprise refers to an organization, particularly a business or a significant initiative aimed at generating profit, characterized by the willingness and energy to undertake new, challenging efforts It encompasses any entity involved in economic activities, regardless of its legal structure, including self-employed individuals and family-owned businesses.
Purpose craft or other activities, and partnerships or associations regularly engaged in an economic activity
Organizations are evolving due to various internal and external influences, including industrial factors like suppliers, competitors, and customers, as well as macroeconomic elements such as the economy, society, and legal frameworks Traditional organizations tend to be stable, inflexible, job-focused, and centered on individual performance, characterized by a homogeneous workforce and hierarchical structures In contrast, contemporary organizations are dynamic, flexible, and skill-oriented, suited for diverse workforces and emphasizing customer and team collaboration through lateral and networked relationships.
Introduction to management
There are many definitions about management Each definition reflects single approach and specific aspect
Management is defined as the process of designing and maintaining an environment in which individual working together in groups efficiently accomplish the selected arm
Management is the art of achieving goals through the effective use of resources and teamwork It involves clearly defining objectives and ensuring they are met efficiently and cost-effectively Additionally, management functions as a vital organ within an organization, characterized by its key roles: forecasting, planning, organizing, coordinating, and controlling activities to drive success.
Management involves establishing and sustaining an internal environment within an organization that enables individuals to collaborate effectively and efficiently to achieve collective goals It is the skill of coordinating efforts and facilitating teamwork in structured groups to accomplish tasks successfully.
The scientific aspect of management is characterized by a systematic body of knowledge that encompasses a range of principles, rigorous scientific inquiry, and verifiable concepts, providing a dependable foundation for predicting future outcomes.
The application of management principles enables managers to achieve their goals effectively As a dynamic and multi-disciplinary field, management draws from economics, psychology, sociology, mathematics, and engineering Management science is categorized into two types: exact science, which provides precise results, and inexact science, which reflects the variability of human resources with diverse attitudes, aspirations, and perceptions This inherent complexity, coupled with unpredictable external changes, makes management an inexact science, often leading to unattained solutions and standards.
Art is the application of skills to achieve desired outcomes, and management embodies this concept as it requires practical knowledge and personal expertise Management is inherently creative, utilizing specific skills to produce tangible results effectively.
Management is both – science and an art
Management is a science because it contains general principles It is also and art because it requires certain personal skills to achieve desired results
The two terms Management and Administration are used interchangeably There is a lot of controversy on the use of these two terms
Table 1 1: Difference between administration and management
Basis of distinction Administration Management
1 Policy and objectives Determines policy to be followed and decide the objectives to be achieved
Implements the policy and achieve the objectives
Not directly involves in the execution of plan and achievement of objectives
Directly involves in the execution of plan and achieving objectives
3 Main functions Planning, organizing and staffing
4 Levels of executive Top level executives
(Owners or Board of Directors
Lower level executives (Manager, supervisor and workers)
5 Position Acts as a principal Acts as an agency
6 Knowledge Requires administrative ability more than technical ability
Requires technical ability more than administrative ability
Administration and Management is different from some points of view such as policy and objectives, directing of human efforts, main functions, levels of executive, position and knowledge
Different approaches to the analysis of management
Approaches to the analysis of management are empirical or case, interpersonal behavior, group behavior, cooperative social systems, socio- technical systems, decision theory, system approach, mathematical or
“management science”, contingency or situational approach, Mintzberg’s managerial roles, McKinsey’s 7-S framework, operational approach and contingency approach
Empirical or case approach studies experience through cases identifying successes and failures Interpersonal behavior approach focuses on interpersonal behavior, human relations, leadership, and motivation based on individual psychology
Group behavior approach emphasizes on behavior of people in groups based on sociology and social psychology often called “Organization behavior”
Cooperative social systems approach is concerned with both interpersonal and group behavioral aspects leading to a system of cooperation
The socio-technical systems approach emphasizes the significant impact of technical systems on social systems, including personal attitudes and group behavior This perspective is particularly relevant in production, office operations, and other domains where there is a strong interplay between technology and human interactions.
Decision theory approach focuses on the making of decisions, persons or groups making decisions, and the decision making process
The systems approach emphasizes the wide-ranging applicability of systems concepts, highlighting that organizations function as open systems with defined boundaries while interacting with their external environment This perspective underscores the significance of examining the interconnections among planning, organizing, and controlling within an organization, as well as the various subsystems that contribute to overall effectiveness.
The mathematical or "management science" approach views management as a logical process grounded in mathematical concepts, symbols, and models, emphasizing the use of quantitative methods to analyze and optimize management practices.
Contingency or situational approach means that managerial practice depends on circumstances (i.e., a contingency or a situation), recognizing the influence of given solutions on organizational behavior patterns
Mintzberg's managerial roles framework is based on a study that observed five chief executives, leading to the identification of ten distinct managerial roles These roles are categorized into three main groups: interpersonal, informational, and decision-making roles.
In McKinsey’s opinions, 7-S framework approach contains seven S’s such as (1) strategy, (2) structure, (3) systems, (4) style, (5) staff, (6) shared values, and (7) skills
The operational approach integrates concepts, principles, techniques, and knowledge from various fields and managerial practices Its goal is to create a scientific framework that emphasizes practical application, ultimately leading to a classification system centered on essential managerial functions: planning, organizing, staffing, leading, and controlling.
The contingency approach, also known as the situational approach, was developed by management consultants and researchers to address real-life scenarios This theory highlights that certain management concepts may work effectively in one situation but fail in another, leading to varying results By identifying the most suitable techniques for specific individuals, organizational environments, and timeframes, managers can apply the contingency approach to enhance decision-making This approach aligns closely with modern management theories, emphasizing its relevance in today's dynamic business landscape.
Managers focus on three key aspects: productivity, effectiveness, and efficiency Efficiency refers to "doing things right," maximizing output while minimizing input, whereas effectiveness is about "doing the right things" to achieve organizational goals Management entails coordinating and overseeing the work of others to ensure tasks are completed efficiently and effectively This distinction between managerial and non-managerial roles highlights the importance of leadership in guiding teams However, managers must operate within certain constraints, striving to ensure that work activities are conducted in a manner that meets both efficiency and effectiveness standards.
Efficiency is about maximizing output while minimizing input, which is crucial for managers who must optimize scarce resources like personnel, finances, and equipment This concept, often summarized as "doing things right," emphasizes the importance of resource conservation A prime example is the HON Company plant in Cedartown, Georgia, where the implementation of efficient manufacturing techniques—such as reducing inventory levels, shortening production times, and decreasing product rejection rates—led to significant cost savings, amounting to over $7 million in just one year.
It’s not enough, however, just to be efficient Management is also concerned with being effective, completing activities so that organizational goals are attained
Effectiveness is defined as "doing the right things" to help an organization achieve its goals, such as meeting customer demands and implementing world-class manufacturing strategies, as seen in the HON factory While effectiveness focuses on the attainment of these goals, efficiency relates to how tasks are accomplished Successful organizations typically exhibit both high efficiency and high effectiveness, whereas poor management often results in a lack of both, or being effective yet inefficient.
Figure 1 2: Effectiveness and efficiency of management
(Source: Robbins et al., 2018) 1.2.2 Functions of management
According to the functions approach, managers coordinate the work of others by performing specific activities efficiently and effectively In the early twentieth century, French businessman Henri Fayol identified five essential functions that all managers engage in: planning, organizing, commanding, coordinating, and controlling.
Practical trends in management
Current trends in management research and practice emphasize globalization, workforce diversity, and entrepreneurship Additionally, organizations must adapt to the challenges of managing in an e-business environment, while fostering innovation and flexibility Quality management, the development of learning organizations, and effective knowledge management are also critical Furthermore, workplace spirituality is gaining recognition as an important aspect of organizational culture.
LLO 1.2: Discuss dimensions of management
Managers in organizations of all sizes and types around the world are faced with the opportunities and challenges of operating in a global market
Globalization is such a significant integrate discussion of its impact on the various management functions throughout the text
In the twenty-first century, managers face the significant challenge of coordinating the efforts of a diverse workforce to achieve organizational goals Modern organizations are increasingly characterized by workforce diversity, encompassing a range of differences in gender, race, ethnicity, age, and other characteristics.
Entrepreneurship involves individuals or groups leveraging organized efforts to identify and seize opportunities for value creation and growth by addressing unmet needs through innovation and uniqueness Central to this concept is the discovery of opportunities and the resources necessary to capitalize on them A key aspect of entrepreneurship is the proactive pursuit of emerging trends and changes in the environment that others may overlook.
The second important theme in entrepreneurship is innovation Entrepreneurship involves changing, revolutionizing, transforming, and introducing new approaches-that is, new products or services or new ways of doing business
Growth is a crucial theme in entrepreneurship, as entrepreneurs are driven by the desire to expand their businesses rather than remain stagnant They actively seek opportunities for growth by monitoring trends and consistently innovating new products and approaches.
Managing In an E-Business World
In the early days of the Internet and World Wide Web, many managers and organizations were just beginning to embrace these new technologies As e-mail communication gained traction and Web addresses appeared in company advertisements, businesses of all sizes and industries, both global and domestic, started to transition into e-businesses Today, it is essential for managers to navigate and lead effectively in this digital landscape.
E-business (electronic business) is a comprehensive term describing the way an organization does its work by using electronic (Internet-based) linkages with its key constituencies (employees, managers, customers, suppliers, and partners) in order to efficiently and effectively achieve its goals It’s more than e-commerce, although e-business can include e-commerce
E-commerce (electronic commerce) is any form of business exchange or transaction in which the parties interact electronically Firms such as Dell (computers), Varsitybooks (textbooks), and PC Flowers and Gifts (flowers and other gifts) are engaged in e-commerce because they sell products over the Internet.
Management in private sector of Vietnam
The private sector in Vietnam has evolved over more than 40 years, influenced by the country's political and economic fluctuations Prior to 1986, Vietnam faced significant challenges under a central planning economic regime, leading to economic failure and hyperinflation following a prolonged war However, the economic renovation in 1986 marked a turning point, as the government began to lift restrictions on private enterprises, facilitating rapid growth in the private sector, particularly after the implementation of the Enterprise Law in 1989 (Tran-Nam, 1999).
January 1st of 2000, leading to a large number of new businesses Their rapid growth has been contributing to more than 50% of GDP and 60% of new jobs in 2013 (OECD, 2014)
State who managers are, what they do and which skills they need to develop
The private sector encounters significant challenges, including unfair competition from state-owned enterprises, limited resources for small and medium-sized businesses, and vulnerability to fluctuations in the global economy (Le, 2009).
Some obstacles in private sector development in Vietnam
Private sector of Vietnam is facing many difficulties from external and internal factors that are based on business environment as well as firm-specific characteristics
From perspectives of government actions, although Vietnam makes efforts to facilitate private sector to well run businesses by improving business environment by legislative policy in supporting private enterprises (Hoang,
2016), tax corruptions still happened to negatively impact private owned enterprises Tax corruptions impact sector private development (Nguyen et al.,
2017), petty corruption influences firm innovation in Vietnam (Nguyen et al., 2016)
Internal factors, including human capital, firm age, size, and production process enhancements, significantly influence organizational performance (Konings et al., 2015) However, the private sector often faces resource limitations in areas such as human resources, finance, and technology, with many enterprises being newly established Consequently, these internal factors can pose substantial challenges to improving overall performance.
Small – and – medium sized enterprises in Vietnam
Tran et al (2007) identify key factors influencing the development of SMEs, highlighting the importance of market-oriented reforms and a supportive business environment They emphasize Vietnam's commitment to fostering SME growth through a robust legal framework, dedicated support organizations, and various funding programs designed to assist small and medium-sized enterprises.
According to Le (1997), small and medium-sized enterprises (SMEs) play a crucial role in alleviating poverty, especially in rural regions, and in reducing developmental disparities between urban and rural areas Additionally, SMEs enhance labor market flexibility and significantly help absorb the economic shocks associated with transitioning from a centrally planned economy to a market-oriented system.
Research indicates that the degree of internationalization among Vietnamese SMEs is limited, with Kokko et al (2004) noting that few SMEs have been significantly impacted by the country's internationalization efforts As a result, these businesses possess unclear expectations regarding the implications of further internationalization and are not adequately preparing for the opening of the Vietnamese market Additionally, Swierczek et al (2003) found that SME owners in Vietnam are primarily driven by challenges and achievements rather than the pursuit of career stability or economic security, often adopting a short-term focus on net profits instead of long-term business growth In contrast, Thai SMEs demonstrate greater innovation and proactivity compared to their Vietnamese counterparts.
SMEs are inclined to be more risk-taking; Thai SMEs have higher perceived business growth, job creation and net profit than Vietnamese SMEs” (Swierczek et al., 2003)
According to Son Dang - Duc (2011), small and medium-sized enterprises (SMEs) face significant challenges in adhering to accounting standards This limited compliance is primarily attributed to a lack of perceived benefits, inadequate accounting skills, and insufficient infrastructure to effectively implement these regulations.
Recent research in Vietnam predominantly emphasizes functional management areas, including operations, human resources, quality, technology, supply chain, finance, and change management However, there is a growing interest among some authors in exploring management techniques, particularly in decision-making processes, management functions, and the management environment.
Managers
A manager plays a crucial role in coordinating and supervising the efforts of team members to achieve organizational objectives Their primary focus is not on personal success but on empowering others to excel in their roles.
Coordinating work can involve overseeing a departmental team or managing an individual employee This role may require facilitating collaboration among team members from various departments, as well as engaging with external parties like temporary staff or suppliers.
State who managers are, what they do, which skills they need to develop
The principles of management are essential for effectively achieving goals through the coordination of people, resources, and processes within organizations Defined as the activities that plan, organize, and control operations involving people, materials, machines, methods, money, and markets, these principles provide direction and leadership to human efforts French theorist Henri Fayol, recognized for developing the planning-organizing-leading-controlling (P-O-L-C) framework, laid the groundwork for modern management practices, which continue to evolve while remaining a dominant framework globally.
In traditionally structured organizations (which are often pictured as a pyramid because more employees are at lower organizational levels than at
Defining goals, establishing strategy, and developing plans to coordinate activities
Monitoring activities to ensure that they are accomplished as planned
Motivating, leading, and any other actions involved in dealing with people
Determining what needs to be done, how it will be done, and who is to do it
In an organization, managers are categorized into three levels: first-line, middle, and top management First-line managers, also known as supervisors or department managers, oversee non-managerial employees responsible for producing products or servicing customers Middle managers, positioned between first-line and top management, supervise first-line managers and may hold titles such as regional manager or project leader Understanding these management levels is essential for achieving organizational goals effectively.
Top managers hold key positions in an organization, responsible for making strategic decisions and setting overarching plans and goals that influence the entire company Common titles for these leaders include executive vice president, president, managing director, chief operating officer, and chief executive officer.
Mintzberg’s Managerial Roles and a Contemporary Model of Managing
Henry Mintzberg, a prominent management researcher, conducted an in-depth study of managers in their work environments He found that the activities of managers are best understood through the lens of the various managerial roles they fulfill These managerial roles encompass the specific actions and behaviors that are anticipated and demonstrated by managers in their daily tasks.
Consider the various roles you embody in life, including being a student, employee, member of a student organization, volunteer, and sibling, each accompanied by distinct responsibilities and expectations.
Managers are defined not by individual traits but by the expectations and responsibilities inherent in their role Their functions can be categorized into ten key roles that focus on interpersonal relationships, information transfer, and decision-making processes.
Interpersonal roles in management focus on interactions with people, both within and outside the organization, encompassing ceremonial and symbolic duties These roles are categorized into three types: figurehead, leader, and liaison Additionally, informational roles are crucial for gathering, sharing, and distributing information, which includes the roles of monitor, disseminator, and spokesperson Lastly, decisional roles involve making key decisions, with four specific roles identified: entrepreneur, disturbance handler, resource allocator, and negotiator According to Mintzberg, managers engage in both reflective thinking and actionable tasks while fulfilling these roles.
Figure 1 6: The Changing Roles of Management and Managers
Empowered lower-level managers and employees are responsible for the organization's competitiveness and their own development
Top management support personnel development and ensure employability
Top managers ensure the organization's competitiveness and lower level managers' and employees' job security
Lower-level managers and employees implement top management's strategy with loyalty and obedience
What types of skills do managers need? Robert L Katz proposed that managers need three critical skills in managing: technical, human, and conceptual
Technical skills refer to the specific knowledge and abilities required to effectively carry out job tasks These skills are particularly crucial for first-line managers, as they oversee employees who utilize various tools and techniques to deliver the organization's products or services Consequently, individuals with strong technical skills often find themselves advancing to first-line management positions.
Human skills are essential for effective collaboration with individuals and teams, making them crucial for all management levels Managers who excel in these skills can maximize their team's potential by mastering communication, motivation, leadership, and fostering enthusiasm and trust.
Conceptual skills are essential for managers as they enable them to think critically and understand complex, abstract situations These skills allow managers to view the organization holistically, grasp the interconnections among different subunits, and envision how the organization interacts with its larger environment Particularly crucial for top managers, these abilities facilitate strategic decision-making and effective leadership.
Figure 1 7: Skills needed at different management levels
Chapter summary by lesson learning outcomes
LLO 1.1 Describe three characteristics of organization
Organization has three characteristics that are distinct purpose, people and structure Nowadays, the organizations are changing to be more organic and flexible
LLO 1.2 Discuss dimensions of management
Management encompasses both scientific principles and artistic intuition, distinguishing itself from administration It focuses on enhancing productivity, effectiveness, and efficiency through its core functions: planning, organizing, leading, and controlling Additionally, the article highlights current practical and research trends in management to reflect the evolving landscape of this discipline.
LLO 1.3 State who managers are, what they do, which skills they need to develop
This book is designed for students interested in Vietnam, focusing on management within the private sector It outlines the various levels of management in organizations and the specific roles assigned to managers Additionally, it emphasizes the importance of developing essential managerial skills.
Case applications
Son, recently promoted to assistant director at Binh Minh Company, now oversees the product group, a shift from his previous role as commercial manager Shortly after assuming his new responsibilities, Mr Minh, the vice president, convened a meeting with various directors responsible for different product groups and the marketing department director to strategize the company's marketing plans.
Mr Ngoc, the director of Son, is unable to attend the meeting due to his busy schedule To ensure Son gains a better understanding of the company's operations and to support his transition into the new role, Mr Hung, the Marketing director, invited Son's assistant to represent Director Ngoc at the meeting.
Due to the large number of attendees, Mr Hung provided a brief introduction of Son to the company's vice president Vice President Minh, who chaired the meeting, initiated the discussion with inquiries directed at the product group leaders Each director then presented a detailed report on the business performance of their respective product groups.
Mr Minh requested Son to provide an update on the product group he managed, but Son appeared embarrassed and admitted that he was unaware of the issue at hand.
Vice Chairman Minh, with his impatient demeanor and military management style, overlooked Son's status as a new assistant during the meeting When Son admitted his lack of knowledge on a topic, Minh criticized him harshly, stating, "Son, you are really a bad employee, and I don't accept your irresponsible way of working."
Mr Hung faced a difficult decision: to confront Vice Chairman Minh to defend his assistant Son or to wait until after the meeting to address the issue privately Concerned about the embarrassment of not introducing Son beforehand, Mr Hung opted for silence After an hour, Vice Chairman Minh concluded the meeting feeling disappointed.
Mr Minh expressed concerns about "inappropriate planning" within the Marketing department and requested Mr Hung to stay for further discussion He was particularly puzzled by the lack of proper preparation exhibited by Mr Hung's team for the meeting.
Mr Minh candidly questioned Mr Hung about his communication style, asking, "Am I being too verbose with Son?" He emphasized the importance of having employees who can perform effectively in their roles.
Mr Hung addressed Mr Minh's impatience during the meeting, clarifying that Son, the new assistant, should not be the target of his anger He emphasized that criticizing Son was unjustified and questioned whether Mr Minh truly understood the impact of his words on the newcomer.
Hung replied that he really did not know Son very well, but he thought that Vice Chairman Minh behaved incorrectly with Son
Struggling with self-forgiveness, I felt out of control when Mr Minh urgently summoned Son to his office Moments later, Son arrived, visibly confused and anxious As Son entered, Mr Minh approached him with a friendly demeanor, offering a reassuring pat on the shoulder.
I sincerely apologize for my previous criticism, which was misguided I now realize that you are navigating a new role, and I should have been more understanding Please accept my heartfelt apology, young man.
A little bit confused, Son didn't think Mr Minh made a fault in this case
Mr Minh emphasized the importance of making informed decisions for the company, relying on accurate and complete information He highlighted that the young employee is a valuable resource and must ensure the quality of their work It is essential for the employee to fully understand their job responsibilities and take the necessary time to acclimate to their new role Mr Minh expressed his confidence in the employee's potential and hopes that within three months, they will be able to answer questions related to their product group He also expressed gratitude for the opportunity to meet and apologize.
1 What do you think about an effect of Mr Minh’s anger to Son and other members?
2 In your opinion, should Mr Minh apologize to Son or not? And what do you think about the meaning of this apology to Son?
3 How did Mr Minh think about Son’s responsibility as an assistant of product group? What does he think about his leadership role?
4 In your opinion, from this lesson, if you are the chairman of a meeting chair, what do you need to prepare in advance for the meeting to achieve a good result?
This chapter covers fundamental concepts of early management and explores various approaches, including classical, behavioral, quantitative, and contemporary theories Students are expected to grasp the contributions of past authors to management theories and apply their research findings to analyze real-world cases effectively.
Chapter 2 plays a crucial role in achieving CLO2 and CLO3 by applying effective leadership principles to analyze organizational case studies and evaluating the evolving theories on managerial behavior for motivating and controlling employees.
LLO 2.1: Describe examples of early management period
LLO 2.2: Explain and apply theories of classical approach into case studies
LLO 2.3: Explain and apply theories of behavioral approach into case studies
LLO 2.4: Explain and apply theories of quantitative approach into case studies
LLO 2.5: Explain and apply theories of contemporary approach into case studies
Egypt (pyramids), China (Great Wall) and
Venetians (floating warship assembly lines) are famous examples of early management
He published the book named “The Wealth of
Nations” in 1776 It advocated the division of labor (job specialization) to increase the productivity of workers
Industrial revolution leads to substituted machine power for human labor It created large organizations in need of management
LLO 2.1: Describe examples of early management period
Chapter 1 introduced several key management approaches, including Scientific Management, General Administrative Theory, Quantitative Management, Organizational Behavior, Systems Approach, and Contingency Approach, each contributing to the evolution of management practices as illustrated in the accompanying exhibit.
Figure 2 1: Development of major management theories
HISTORY OF MANAGEMENT
Introduction to early management
Egypt (pyramids), China (Great Wall) and
Venetians (floating warship assembly lines) are famous examples of early management
He published the book named “The Wealth of
Nations” in 1776 It advocated the division of labor (job specialization) to increase the productivity of workers
Industrial revolution leads to substituted machine power for human labor It created large organizations in need of management
LLO 2.1: Describe examples of early management period
Chapter 1 introduced key management approaches, including Scientific Management, General Administrative Theory, Quantitative Management, Organizational Behavior, Systems Approach, and Contingency Approach, each contributing to the evolution of management practices as illustrated in the accompanying exhibit.
Figure 2 1: Development of major management theories
Theories of classical approach
The formal study of management emerged in the early twentieth century, marking a significant shift in organized efforts that had been present throughout history This initial phase, known as the classical approach, focused on enhancing efficiency by prioritizing rationality in both organizations and their workforce.
LLO 2.2: Explain and apply theories of classical approach into case studies
The classical approach to management is primarily divided into two key theories: scientific management and general administrative theory Scientific management was significantly influenced by Frederick W Taylor and the husband-wife duo of Frank and Lillian Gilbreth In contrast, the general administrative theory was shaped by notable figures such as Henri Fayol and Max Weber Understanding the contributions of these pivotal management theorists is essential for grasping the foundations of modern management practices.
Fredrick Winslow Taylor, known as the “father” of scientific management theory, published his influential work, Principles of Scientific Management, in 1911 He advocated for the application of scientific methods to identify the most efficient way to perform tasks, emphasizing the importance of optimizing work processes for improved productivity.
Putting the right person on the job with the correct tools and equipment
Having a standardized method of doing the job
Providing an economic incentive to the worker
He suggested four principles of management as follows:
Developing a scientific approach for each aspect of an individual's work will replace outdated rule-of-thumb methods Managers should focus on scientifically selecting, training, and developing workers Additionally, fostering strong cooperation with employees is essential to ensure that all tasks align with established scientific principles Finally, responsibilities and work should be divided fairly between management and workers, with management taking on tasks better suited to their expertise.
Frank and Lillian Gilbreth focused on increasing worker productivity through the reduction of wasted motion and developed the micro chronometer to time worker motions and optimize work performance
In today's competitive landscape, managers can leverage scientific management principles to enhance productivity and achieve effective results This includes implementing time and motion studies, recruiting highly qualified employees, and creating incentive systems that reward output.
Henri Fayol believed that the practice of management was distinct from other organizational functions He also developed fourteen principles of management that applied to all organizational situations
Division of Work – When employees are specialized, output can increase because they become increasingly skilled and efficient
Authority – Managers must have the authority to give orders, but they must also keep in mind that with authority comes responsibility
Discipline – Discipline must be upheld in organizations, but methods for doing so can vary
To ensure effective management, employees should report to a single supervisor, promoting clarity and accountability Additionally, teams pursuing the same goals must operate under the guidance of one manager and follow a unified plan, which facilitates coordinated actions and enhances overall efficiency.
Subordination of Individual Interests to the General Interest – The interests of one employee should not be allowed to become more important than those of the group This includes managers
Remuneration – Employee satisfaction depends on fair remuneration for everyone This includes financial and non-financial compensation
Centralization focuses on the proximity of employees to decision-making processes, emphasizing the need for a balanced approach Additionally, the Scalar Chain principle highlights the importance of employees understanding their position within the organization's hierarchy, ensuring clarity in the chain of command.
Order – The workplace facilities must be clean, tidy and safe for employees Everything should have its place
Equity – Managers should be fair to staff at all times, both maintaining discipline as necessary and acting with kindness where appropriate
Stability of Tenure of Personnel – Managers should strive to minimize employee turnover Personnel planning should be a priority
Initiative – Employees should be given the necessary level of freedom to create and carry out plans
Esprit de Corps – Organizations should strive to promote team spirit and unity
Max Weber developed a theory of authority based on an ideal type of organization (bureaucracy) and emphasized rationality, predictability, impersonality, technical competence, and authoritarianism
Division of labor: Jobs broken down into simple, routine and well- defined tasks
Authority hierarchy: Positions organized in a hierarchy with a clear chain of command
Formal selection: People selected for jobs based on technical qualifications
Formal rules and regulations: System of written rules and standard operating procedures
Impersonality: Uniform application of rules and controls, not according to personalities
Career orientation: Managers are career professionals, not owners of units they manage
2.2.3 How today’s managers apply General Administrative Theory to their management
Many of today's management concepts and practices stem from general administrative theory, particularly the functional perspective on a manager's role, which can be credited to Fayol's contributions.
14 principles serve as a frame of reference from which many current management concepts - such as managerial authority, centralized decision making, reporting to only one boss, and so forth - have evolved
Weber's bureaucracy aimed to create an ideal organizational prototype, and while many of its characteristics persist in large organizations today, its popularity has waned since the twentieth century Many managers believe that bureaucratic structures stifle employee creativity and hinder an organization's agility in a rapidly changing environment Nonetheless, even in flexible organizations filled with creative professionals like Microsoft, Samsung, General Electric, and Cisco Systems, certain bureaucratic mechanisms remain essential for ensuring efficient and effective resource utilization.
Theories of behavioral approach
Managers achieve results through collaboration with their teams, which is why some authors emphasize the importance of focusing on the organization's personnel in management studies This area of research delves into the behaviors and interactions of individuals within an organization.
Organizational behavior (OB) refers to the study of how individuals act within a workplace It encompasses key managerial functions such as motivating employees, leading teams, fostering trust, and resolving conflicts, all of which are informed by extensive research in the field of OB.
LLO 2.3: Explain and apply theories of behavioral approach into case studies
In the early twentieth century, four key figures—Robert Owen, Hugo Munsterberg, Mary Parker Follett, and Chester Barnard—emphasized the crucial role of people in organizational success, advocating for the Organizational Behavior (OB) approach Despite their varied contributions, they collectively recognized that individuals are an organization's most valuable asset and should be managed effectively Their pioneering ideas laid the groundwork for essential management practices, including employee selection, motivation programs, and the development of work teams.
Robert Owen (Late 1700s) concerned about deplorable working conditions He proposed idealistic workplace He argued that money spent improving labor was smart investment
Hugo Munsterberg, a pioneer in industrial psychology in the early 1900s, advocated for the scientific study of individuals in the workplace, emphasizing the importance of psychological tests for employee selection, learning theory for training, and understanding human behavior to enhance motivation Similarly, Mary Parker Follett, also from the early 1900s, introduced a more people-oriented approach to organizational behavior, suggesting that organizations should prioritize group ethics over the rigid principles of scientific management.
In the 1930s, Chester Barnard emphasized the importance of viewing organizations as social systems that thrive on cooperation He argued that a manager's primary role is to effectively communicate and motivate employees to achieve their highest potential Additionally, Barnard was a pioneer in the concept of organizations as open systems, highlighting their dynamic interactions with the external environment.
How today’s managers use the behavioral approach
The behavioral approach has significantly influenced modern organizational management, impacting job design, team collaboration, and communication strategies Key insights from early organizational behavior advocates and the Hawthorne studies have laid the groundwork for contemporary theories in motivation, leadership, group dynamics, and various other behavioral methodologies.
Theories of quantitative approach
The quantitative approach originated from mathematical and statistical methods developed for military issues during World War II, which were later adapted for business applications This approach utilizes various quantitative techniques, including statistics, optimization models, information models, and computer simulations, to enhance management activities For example, linear programming aids managers in optimizing resource allocation, while critical-path scheduling analysis improves work scheduling efficiency Additionally, the economic order quantity model assists in determining optimal inventory levels for better management.
LLO 2.4: Explain and apply theories of quantitative approach into case studies
Each of these is an example of quantitative techniques being applied to improve managerial decision making Another area where quantitative techniques are used frequently is in total quality management
In the 1980s and 1990s, a quality revolution transformed both business and public sectors, largely driven by influential quality experts like W Edwards Deming and Joseph M Juran Initially, their ideas, introduced in the 1950s, gained little traction in the United States but were widely adopted by Japanese organizations As Japanese manufacturers began to outperform U.S competitors in quality, Western managers started to seriously consider Deming's and Juran's principles, which ultimately laid the foundation for modern quality management programs.
Total Quality Management (TQM) is a management philosophy focused on continuous improvement and meeting customer needs and expectations The term "customer" encompasses not only external buyers but also employees and suppliers who interact with the organization's products or services To achieve continual improvement, accurate measurements are essential, utilizing statistical techniques to assess critical variables within the organization's work processes These measurements are then compared to established standards to identify and rectify any issues.
Quality management refers to customer orientation, continual improvement, process focused, quality improvement, accurate measurement and employee empowerment
Customers encompass both external buyers of the organization's products or services and internal stakeholders who engage with and support others within the organization Effective quality management requires a relentless commitment to continuous improvement and never settling for the status quo.
"Very good" is insufficient; continuous improvement in quality is essential for organizations Quality management emphasizes enhancing work processes to elevate the quality of products and services This encompasses various aspects, including product quality, delivery efficiency, complaint response times, and customer service interactions By employing statistical techniques, organizations can measure critical operational variables against established standards to identify and address issues at their root Involving frontline employees in the improvement process is crucial, as teams play a vital role in quality management programs, empowering them to identify and resolve problems effectively.
Using the quantitative approach in management today
The quantitative approach plays a crucial role in enhancing management decision-making, particularly in planning and control processes Managers often utilize quantitative techniques for tasks such as budgeting, scheduling, queuing, and quality control While specialized software has simplified the application of these techniques, many managers still experience anxiety when employing them.
Theories of contemporary approach
Many foundational management theories still shape contemporary managerial practices, with a significant emphasis on internal organizational dynamics.
Beginning in the 1960s, management researchers shifted their focus to the external environment surrounding organizations This exploration led to the development of two key contemporary management perspectives: systems theory and contingency theory, which emphasize the importance of understanding external influences on organizational dynamics.
Explain and apply theories of contemporary approach into case studies
System is defined as a set of interrelated and interdependent parts arranged in a manner that produces a unified whole
Systems can be categorized into two fundamental types: closed systems and open systems Closed systems operate independently of their environment, with all inputs and outputs remaining internal In contrast, open systems actively engage with their surroundings, accepting inputs and transforming them into outputs that are released back into the environment.
How to imply the Systems Approach in managing people
Effective management requires the coordination of various organizational components to ensure overall functionality Decisions made in one department can significantly impact other areas, highlighting the interconnectedness within the organization Additionally, organizations must remain adaptable to external environmental changes, as they are not isolated entities.
The contingency approach, also known as the situational approach, emphasizes that there is no single set of universally applicable management principles for organizations Each organization is unique, encountering various situations or contingency variables that necessitate tailored management strategies Key contingency variables include organization size, the routine nature of tasks, environmental uncertainty, and individual differences.
• Organization size: As size increases, so do the problems of coordination
• Routineness of task technology: Routine technologies require organizational structures, leadership styles, and control systems that differ from those required by customized or non-routine technologies
• Environmental uncertainty: What works best in a stable and predictable environment may be totally inappropriate in a rapidly changing and unpredictable environment
• Individual differences: Individuals differ in terms of their desire for growth, autonomy, tolerance of ambiguity, and expectations.
Chapter summary by lessom learning outcomes
LLO 2.1: Describe examples of early management period:
Studying history is crucial as it reveals the foundations of modern management practices and highlights what has succeeded or failed over time Notable early examples include the construction of the Egyptian pyramids and the arsenal of Venice A significant milestone was Adam Smith’s publication of "Wealth of Nations," which emphasized the advantages of job specialization The Industrial Revolution further transformed management needs, as factory manufacturing became more economical than home production, necessitating the development of formal management theories to effectively oversee these operations.
LLO 2.2: Explain and apply theories of classical approach into case studies :
Frederick W Taylor, recognized as the "father" of scientific management, applied scientific principles to manual work to enhance production efficiency by identifying the optimal methods for tasks Meanwhile, the Gilbreths focused on discovering efficient hand and body motions and creating suitable tools and equipment to maximize work performance Henri Fayol contributed by asserting that management functions are universal across all businesses, yet distinct from other organizational roles.
The development of 14 management principles has led to the evolution of many contemporary management concepts Max Weber introduced the notion of bureaucracy, which continues to characterize many large organizations today Modern managers apply scientific management techniques by analyzing work tasks, conducting time-and-motion studies to minimize inefficiencies, recruiting highly qualified employees, and creating output-based incentive systems Additionally, they utilize general administrative theory to effectively manage functions and structure their organizations, ensuring efficient and effective resource utilization.
LLO 2.3: Explain and apply theories of behavioral approach into case studies:
Early organizational behavior (OB) advocates, including Robert Owen, Hugo Munsterberg, Mary Parker Follett, and Chester Barnard, emphasized that people are the most valuable asset of any organization and should be managed with this principle in mind The Hawthorne Studies significantly transformed management perspectives regarding the importance of human behavior in organizational settings, leading to a greater focus on the human element in management practices This behavioral approach has fundamentally influenced contemporary management strategies, with many modern theories on motivation, leadership, and group dynamics stemming from the insights of early OB advocates and the findings of the Hawthorne Studies.
LLO 2.4: Explain and apply theories of quantitative approach into case studies:
The quantitative approach utilizes statistics, optimization models, information models, and computer simulations to enhance management activities Modern managers increasingly rely on this approach for decision-making, particularly in resource allocation, quality improvement, work scheduling, and optimizing inventory levels Additionally, total quality management, which focuses on continuous improvement and addressing customer needs, incorporates quantitative methods to achieve its objectives.
Explain and apply theories of contemporary approach into case studies:
The systems approach emphasizes that organizations utilize inputs from their environment, transforming these resources into outputs that are then distributed back into that environment This framework aids managers in understanding the interdependence of various organizational units and highlights that decisions in one area can impact others Consequently, it underscores that organizations are not isolated entities; they depend on their environment for crucial inputs and as channels for their outputs.
The contingency approach emphasizes that organizations vary significantly and encounter unique circumstances, necessitating tailored management strategies This perspective highlights that there are no one-size-fits-all solutions for managers; instead, they must assess their specific situations to identify the most effective management methods.
Review and discussion questions
1 Explain why studying management history is important
2 What early evidence of management practice can you describe?
3 Describe the important contributions made by the classical theorists
4 What did the early advocates of OB contribute to our understanding of management?
5 Why were the Hawthorne Studies so critical to management history?
6 What kind of workplace would Henri Fayol create? How about Mary Parker Follett? How about Frederick W Taylor?
7 Explain what the quantitative approach has contributed to the field of management
9 How do systems theory and the contingency approach make managers better at what they do?
10 How do societal trends influence the practice of management? What are the implications for someone studying management?
CHAPTER 3 MANAGEMENT AND ORGANIZATION ENVIRONMENT
Managers must understand that organizational culture and the working environment significantly influence management practices Both internal culture and external factors shape an organization, providing insights into the complexities of its surroundings This chapter explores the cultural context and critical aspects of management, highlighting two perspectives—omnipotent and symbolic—on the manager's role in an organization's success or failure It also views the organization as an open system affected by various external challenges that impact managerial decision-making Additionally, the chapter emphasizes the importance of organizational culture, detailing its characteristics and effects Finally, it addresses four contemporary issues related to organizational culture.
Chapter 3 outlines four key learning outcomes designed to fulfill the requirements of CLO3 and CLO5, focusing on the evaluation of evolving theories regarding managerial behavior for motivating and controlling employees Additionally, it emphasizes the practical application of this knowledge to enhance management effectiveness.
3.1 The manager: omnipotent or symbolic?
The prevailing belief in management theory and society is that managers play a crucial role in determining an organization's success or failure, often referred to as the omnipotent view of management However, some argue that many factors influencing an organization's outcomes are beyond the control of management, suggesting that external influences, rather than management alone, significantly impact success or failure.
This perspective has been labelled the symbolic view of management
Contrast the actions of managers according to the omnipotent and symbolic views
What is the Omnipotent View of Management?
Contrast the actions of managers according to the omnipotent and symbolic views
Describe the constraints and challenges facing managers in today’s external environment
Discuss the characteristics and importance of organizational culture
Describe current issues in organization al culture LLO 3.4
The omnipotent view of managers portrays them as all-knowing leaders who exert complete control over an organization's mission and operations As visionaries, they guide every aspect of the organization and bear individual responsibility for its overall performance.
The perception of managers as all-powerful aligns with the common stereotype of a decisive executive capable of overcoming any challenge to achieve organizational goals Ultimately, the success or failure of an organization is predominantly influenced by the actions and decisions of its top-level managers.
Pursuant to this logic, the quality of an organization is synonymous with the quality of its managers
The perspective that high-level management plays a largely symbolic role contrasts sharply with the belief in their omnipotence, suggesting that managers have a limited impact on the organization’s ability to achieve its goals and objectives.
While the adequate performance of management responsibilities has an effect on organizational performance, the manager's activities are not the driving force behind strong organizational performance
Environmental factors such as economic, political, legal, competitive, consumer-based, and technological influences significantly impact an organization's performance, often beyond the control of its managers Consequently, managers cannot be solely held accountable for the organization's success or failure, as multiple elements contribute to its overall quality.
Describe the constraints and challenges facing managers in today’s external environment
Organizations function as open systems that interact with their external environment by receiving inputs and delivering outputs Four key factors of the external environment significantly influence the decision-making processes of organizational managers To understand these influences, it is essential to first define what constitutes the external environment.
At the last of the section, we also discuss the constraints and challenges facing managers in today’s external environment
Different types of organizations include not-for-profit, for-profit, public, private, government, voluntary, family owned and operated, and publicly traded on stock exchanges
Organizations are commonly referred to as companies, firms, corporations, institutions, agencies, associations, groups, consortiums, and conglomerates
The "external environment" encompasses the various forces and institutions outside an organization that can impact its performance For organizations to succeed and grow, they must effectively adapt to, leverage, and align with these external forces Essentially, organizations are structured groups of individuals united to achieve specific goals through coordinated efforts and strategic planning.
Organizations function within various external environments and are structured internally to address both external and internal demands The external environment, or general environment, encompasses all factors that influence business operations, necessitating organizational responses to maintain operational flow Key elements of the general macro environment include sociocultural, technological, economic, governmental, and natural factors, along with human-induced challenges Economic forces, such as exchange rates, employment statistics, and inflation, significantly impact hiring, unemployment, operating costs, revenues, and profits at multiple economic levels Additionally, political policies, international conflicts, natural disasters, and technological advancements interact with these economic factors, highlighting the interconnectedness of these influences on organizations Understanding these dimensions is crucial, as most organizational changes stem from these interrelated sources.
Organizations function as open systems that engage with their specific environments while being mindful of broader environmental influences Factors such as type, size, scope, location, purpose, and mission shape an organization's external environment To thrive, an organization must effectively address the demands and challenges posed by both its immediate and general surroundings.
The micro environment factors represent the external elements that directly influence an organization's operations and decision-making processes These factors include customers, suppliers, competitors, and pressure groups, all of which play a crucial role in helping managers achieve the organization’s goals Understanding these constituents is essential for effective business strategy and success.
Customers are individuals and businesses that purchase goods and services, and understanding their needs is crucial for organizations aiming to improve their offerings By closely monitoring customer relationships, businesses can identify areas for enhancement in both service and product quality Organizations exist primarily to serve their customers, who ultimately consume their outputs, including government entities However, customer preferences can be unpredictable; changes in tastes or dissatisfaction can pose challenges for businesses A prime example is McDonald’s, which has had to revamp its menus and restaurant designs in response to increasing customer demand for healthier and fresher food options.
Another example is Starbucks This famous coffee brand strongly believes in meeting customer service standards
At Starbucks, employees are trained to focus on the visual presentation of each drink, ensuring that beverages like the caramel macchiato feature a specific design This iconic drink is adorned with a precise pattern of caramel sauce, consisting of seven vertical and horizontal lines, complemented by two full circles, enhancing its overall appeal.
Suppliers are firms that deliver essential materials and equipment to organizations, encompassing not only physical goods but also financial and labor resources Key sources of labor include labor unions, employment agencies, universities, trade schools, and the local labor market, all of which contribute to the workforce needed for business operations.
When the source of employees dries up, it can constrain managers ’decisions and actions