chap12 introduction evolution of mgt

FUNDAMENTALS OF MANAGEMENT BY: LAI VAN TAI Chapter INTRODUCTION Learning Objectives o After studying the chapter, you should be able to: n Describe what management is, why management is important, what managers do, and how managers utilize organizational resources efficiently and effectively to achieve organizational goals n Distinguish among planning, organizing, leading, and controlling (the four managerial functions), and explain how managers’ ability to handle each one can affect organizational performance Learning Objectives (cont’d) n Differentiate among three levels of management, and understand the responsibilities of managers at different levels in the organizational hierarchy n Identify the roles managers perform, the skills they need to execute those roles effectively and the way new information technology is affecting these roles and skills n Discuss the principal challenges managers face in today’s increasingly competitive global environment What Is Management? o Managers n The people responsible for supervising the use of an organization’s resources to meet its goals o Management n The planning, organizing, leading, and controlling of human and other resources to achieve organizational goals effectively and efficiently o Resources n n are organizational assets People ØSkills ØKnowledge ØInformation Raw materials ØMachinery ØFinancial capital Management Key Concepts o Organization n o People working together and coordinating their actions to achieve specific goals Goal n A desired future condition that the organization seeks to achieve Organizational Performance o Organizational Performance n o Efficiency n o A measure of how efficiently and effectively managers are using organizational resources to satisfy customers and achieve goals A measure of how well or productively resources are used to achieve a goal (Doing things right) Effectiveness n A measure of the appropriateness of the goals an organization is pursuing and the degree to which they are achieved (Doing the right things) Efficiency and Effectiveness LAI VAN TAI Figure 1.1 Four Functions of Management LAI VAN TAI Figure 1.2 Managerial Functions o Henri Fayol n n First outlined the four managerial functions in his book General Industrial Management Managers at all levels in all organizations perform each of the functions of Planning, Organizing, commanding, Coordinating, Controlling (NOW: planning, organizing, leading, and controlling) Weber’s Five Principles of Bureaucracy o o o o o Authority is the power to hold people accountable for their actions Positions in the firm should be held based on performance, not social contacts Position duties are clearly identified so that people know what is expected of them Lines of authority should be clearly identified such that workers know who reports to who Rules, standard operating procedures (SOPs), and norms guide the firm’s operations Behavioral Management Theory o Behavioral Management n n The study of how managers should behave to motivate employees and encourage them to perform at high levels and be committed to the achievement of organizational goals Focuses on the way a manager should personally manage to motivate employees Behavioral Management o Mary Parker Follett n n n An influential leader in early managerial theory Organization could be viewed from both individual & group behavior (group ethnic rather than individual) Held a horizontal view of power and authority in organizations o o Suggested workers help in analyzing their jobs for improvements the worker knows the best way to improve the job If workers have relevant knowledge of the task, then they should control the task The Hawthorne Studies o Studies of how characteristics of the work setting affected worker fatigue and performance at the Hawthorne Works of the Western Electric Company from 1924-1932 n n Worker productivity was measured at various levels of light illumination Researchers found that regardless of whether the light levels were raised or lowered, worker productivity increased The Hawthorne Studies o Human Relations Implications n n n Hawthorne effect—workers responded to the attention they received and were more productive Managers should be behaviorally trained to manage subordinates to elicit their cooperation and increase their productivity Groups impose informal performance norms on their members (both “rate busters” and “chiselers”) o n Group influence on individual behavior significantly Gave rise to the field of Organizational Behavior o The study of the factors that have an impact on how individuals and groups respond to and act in organizations Theory X and Theory Y o Douglas McGregor proposed the two different sets of assumptions about workers n Theory X assumes the average worker is lazy, dislikes work and will as little as possible o n Managers must closely supervise and control through reward and punishment Theory Y assumes workers are not lazy, want to a good job and the job itself will determine if the worker likes the work o Managers should allow workers greater latitude, and create an organization to stimulate the workers Theory X versus Theory Y Source: LAI VAN TAI Figure 2.3 Maslow’s Hierarchy of Needs Self Esteem Social Safety Physiological Management Science/ Quantitative o An approach to management that uses rigorous quantitative techniques to maximize the use of organizational resources n n n n Quantitative management—utilizes linear programming, modeling, simulation systems Operations management—techniques to analyze all aspects of the production system Total Quality Management (TQM)—focuses on improving quality throughout an organization Management Information Systems (MIS)—provides information about the organization Organizational Environment Theory o Organizational Environment n The set of forces and conditions that operate beyond an organization’s boundaries but affect a manager’s ability to acquire and utilize resources The Open-Systems View o Open System n n n n A system that takes resources for its external environment and converts them into goods and services that are then sent back to that environment for purchase by customers Inputs: the acquisition of external resources Conversion: the processing of inputs into goods and services Output: the release of finished goods into the environment The Organization as an Open System LAI VAN TAI Figure 2.4 Other System Considerations o Closed system n n o A system that is self-contained and thus not affected by changes occurring in its external environment Often undergoes entropy and loses its ability to control itself, and fails Synergy n Performance that results when individuals and departments coordinate their actions o Performance gains of the whole surpass the sum of the performance of the individual components Contingency Theory o Contingency Theory n n The idea that the organizational structures and control systems manager choose depend on—are contingent on—characteristics of the external environment in which the organization operates Assumes there is no one best way to manage o n The environment impacts the firm and managers must be flexible to react to environmental changes In rapidly changing organizational environments, managers must find ways to coordinate different departments to respond quickly and effectively Contingency Theory of Organizational Design Source: LAI VAN TAI Figure 2.5 ... CIRCUMSTANCES o Maximin (pessimistic - Best among the Worst) STATUS – Benefits Alternativ es S1 S2 S3 S4 A1 100 300 -5 0 800 -5 0 A2 1200 400 -1 00 -2 0 -1 00 A3 -8 0 500 1000 -8 0 Min Do nothing ! DECISION... guided the evolution of management theory Explain the principle of job specialization and division of labor, and tell why the study of person-task relationships is central to the pursuit of increased... career DECISION MAKING - Concept definition - Assumptions for behavioral reasonably -Should have clear objectives -All alternatives should be clearly determined -Weight of criteria should be clearly