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Copyright ©2013 Pearson EducationChapter Managers and Management Copyright ©2013 Pearson Education
Copyright ©2013 Pearson EducationLearning Outcomes Tell who managers are and where they work. Define management. Describe what managers do. Explain why it’s important to study management. Describe the factors that are reshaping and redefining management. After studying this chapter you will be able to: Tell who managers are and where they work Define management Describe what managers do Explain why it’s important to study management, and Describe the factors that are reshaping and redefining management Copyright ©2013 Pearson Education
Copyright ©2013 Pearson Education
Who Are Managers? Where Do They Work?Organization A deliberate arrangement of people brought together to accomplish a specific purpose Common Characteristics of Organizations Goals People Structure Managers work in organizations, which we define as a deliberate arrangement of people brought together to accomplish a specific purpose. Three characteristics that identify an organization are its: Goals People, and Structure. Examples of organizations include: Your neighborhood convenience store The Dallas Cowboys football team Fraternities and sororities The Cleveland Clinic, and Internationally known corporations such as Nokia. Copyright ©2013 Pearson Education
Copyright ©2013 Pearson EducationHere we see the three common characteristics that organizations share: Goals, which express the distinct purpose of a particular organization People, who make decisions and reach the organization’s goals, and A deliberate structure, which systematically defines, limits, and guides its members’ behavior. Copyright ©2013 Pearson Education
How Are Managers Different from Nonmanagerial Employees?People who work directly on a job or task and have no responsibility for overseeing the work of others Examples: Associates and Team Members Managers Individuals in organizations who direct the activities of others Members of an organization can be divided into two categories: Nonmanagerial employees work directly on a task and do not oversee the work of others. Examples include a cashier in a department store or someone who processes your license at the registry of motor vehicles office. Managers, who direct and oversee the activities of the people in the organization. Copyright ©2013 Pearson Education
Copyright ©2013 Pearson EducationHere we see three levels of managers whose titles describe their place in the managerial hierarchy: top, middle, and first-line managers. Copyright ©2013 Pearson Education
What Titles Do Managers Have?Top Managers Make decisions about the direction of the organization Examples: President, Chief Executive Officer, Vice-President Middle Managers Manage the activities of other managers Examples: District Manager, Division Manager First-line Managers Direct nonmanagerial employees Examples: Supervisor, Team Leader Top managers are those at or near the top of an organization. For instance, a Chief Executive Office (or CEO) often makes decisions about the direction of the organization and establishes policies and philosophies that affect all organizational members. Middle managers fall between the lowest and highest levels of the organization. They often manage other managers and sometimes nonmanagerial employees, and are responsible for translating the goals set by top managers into specific detailed tasks that lower-level managers oversee. Titles for middle managers may include plant manager, department manager, or project leader. First-line managers are responsible for directing the day-to-day activities of nonmanagerial employees, and receive such titles as supervisor, shift manager, or unit coordinator. Copyright ©2013 Pearson Education
Copyright ©2013 Pearson Education
Copyright ©2013 Pearson EducationWhat Is Management? Management is the process of getting things done effectively and efficiently, with and through people. Effectiveness “Doing the right things”: the tasks that help an organization reach its goals Efficiency “Doing things right”: the efficient use of such resources as people, money, and equipment Management is the process of getting things done effectively and efficiently, with and through people. Getting things done effectively means “doing the right things,” that is, tasks that help an organization reach its goals. Doing the job efficiently means “doing things right” so that the organization’s resources—its people, money, and equipment—are used to their fullest. Copyright ©2013 Pearson Education
Copyright ©2013 Pearson EducationIn 1911, mechanical engineer Frederick Winslow Taylor’s newly published book, Principles of Scientific Management, described the theory of scientific management as the use of scientific methods to define the “one best way” for a job to be done. Taylor’s experience in the steel industry taught him that: Workers used vastly different techniques to do the same job, and Workers were placed in jobs with little concern for matching specific workers’ abilities and aptitudes with the tasks required of them. As illustrated here, efficiency is concerned with the means of getting things done by: Doing a task correctly Minimizing both resource use and cost, and Getting the greatest output from the smallest amount of inputs. Effectiveness is concerned with the ends, that is, doing the right tasks that result in attaining organizational goals. Copyright ©2013 Pearson Education
Copyright ©2013 Pearson Education
Copyright ©2013 Pearson EducationWhat Do Managers Do? In the functions approach proposed by French industrialist Henri Fayol, all managers perform certain activities or functions. Management researchers have developed three approaches to describe what managers do: By their functions By their roles, and By their skills and competencies. In the functions approach proposed by Henri Fayol, a French industrialist in the early twentieth century, all managers perform certain activities and functions, such as planning, organizing, commanding, coordinating, and controlling. Copyright ©2013 Pearson Education
Four Management FunctionsPlanning Defining the organizational purpose and ways to achieve it Organizing Arranging and structuring work to accomplish organizational goals Leading Directing the work activities of others Controlling Monitoring, comparing, and correcting work performance The four key management functions identified in contemporary management are planning, organizing, leading, and controlling. Planning, which includes defining goals, establishing strategy, and developing plans to coordinate activities, ensures that the work is kept in proper focus and helps organizational members keep their attention on what is most important. Organizing and structuring work to accomplish the organization’s goals includes determining which tasks need to be done and by whom, how tasks are to be grouped, who reports to whom, and who will make decisions. Leading means that the manager will direct and coordinate the work activities of the people she supervises, motivate employees, select the most effective communication channel, and resolve conflicts among members. Controlling, which is the fourth and final management function, involves monitoring, comparing, and correcting work performance. Copyright ©2013 Pearson Education
What Are Management Roles?In the late 1960s, Canadian academic Henry Mintzberg conducted an empirical study of chief executives and discovered that managers were engaged in a number of varied, un-patterned, and short-duration activities. As a result, he defined management by categorizing ten roles that managers play, organized into the following three general categories: Interpersonal relationships involving subordinates and people outside the organization in the roles of figurehead, leader, and liaison; Information transfer that involves collecting, receiving, and disseminating information in the roles of monitor, disseminator, and spokesperson; and Decision-making that entails making choices in the roles of entrepreneur, disturbance handler, resource allocator, and negotiator. Copyright ©2013 Pearson Education
Minzberg Manager’s Role: UpdateManager’s role is to influence action by: Managing actions directly Managing people who take action Managing information that propels people to take action Manager’s dual roles include: Framing Scheduling Mintzberg’s most current research concludes that managing is about influencing action that helps organizations and units get things done. Based on his observations, Mintzberg postulates that managers influence action in three ways: Managing actions directly through negotiating contracts, managing projects, and the like Managing people who take action through such activities as motivating them, building teams, and enhancing the organization’s culture, and Managing information that propels people to take action using budgets, goals, task delegation, and so on. Based on these actions, Mintzberg asserts that a manager has two important roles: framing and scheduling. Framing defines how a manager approaches his or her job; and Scheduling “brings the frame to life” through the distinct tasks the manager does while managing actions directly, managing people who take action, or managing information. Mintzberg’s newest study provides additional insights to our understanding of what managers do. Copyright ©2013 Pearson Education
What Skills Do Managers Need?Conceptual Skills Used to analyze and diagnose complex situations Interpersonal Skills Used to work with, understand, and motivate individuals and groups Technical Skills Involve job-specific knowledge and techniques required to perform tasks Political Skills Used to build a power base and establish connections Another way to describe what managers do is by looking at the skills they need for managing. Management researcher Robert L. Katz and others describe four critical skills: Conceptual skills Interpersonal skills Technical skills, and Political skills. Copyright ©2013 Pearson Education
Is the Manager’s Job Universal?Level in the Organization Profit vs. Nonprofit Until now, we’ve looked at management as a generic activity. But in reality, a manager’s job varies depending on: The manager’s level in the organization, and Whether the organization is a profit or nonprofit organization. Depending on a manager’s position within an organization, the importance of a manager’s role differs in degree and emphasis. That is, the decisions of a top manager will have greater ramifications than those of a middle manager due to the content of the decision. All managers—whether in profit or nonprofit organizations—make decisions and plan, lead, organize, and control. However, the following variables change based on the manager’s level in the organization: The amount of time a manager gives to each activity is not necessarily constant. For example, as seen in this illustration, as managers move up the organization they spend less time supervising and more time planning. The content of the managerial activities also changes with the manager’s level. That is, a first-level manager spends the majority of his time leading but a top manager spends the majority of his time organizing. It’s important to note that management performance is measured according to different objectives depending on the nature of the organization: For businesses, profit is the bottom line, but Nonprofits do not exist to maximize profits. Copyright ©2013 Pearson Education
Is the Manager’s Job Universal? (cont.)Size of the organization Dictates the manager’s main roles and time spent in each role Transferability of managerial concepts Requires modification with countries other than free-market democracies Small business managers spend much of their time in entrepreneurial activities. How generic or universal are the manager’s roles when it comes to working in a small organization versus a large corporation? What differences might exist? Are the managerial concepts we’ve been discussing transferable across countries? If so, they would apply universally in any country in the world. However, research shows that while concepts transfer easily among many English-speaking countries, managers will likely have to modify their management when dealing with India, China, Chile, or other countries with economic, political, social, or cultural environments that differ from those of traditional Western free-market democracies. Copyright ©2013 Pearson Education
Copyright ©2013 Pearson EducationAs we see here, the importance of managerial roles in small and large businesses differ. For the purposes of our discussion, a small business is an independent business having fewer than 500 employees that doesn’t necessarily engage in any new or innovative practices and has relatively little impact on its industry. The most important role of a small business manager is that of spokesperson, performing externally in meeting with customers, arranging financing with bankers, searching for new opportunities, and stimulating change. The actions of manager in a large organization, however, are directed internally, deciding which organizational units get which and how much of the available resources.. A small business manager is more likely to be a generalist in a less formal, less structured, and less complex environment than his counterpart in a large organization. Managers in both small and large organizations perform essentially the same activities, but how they go about those activities and the proportion of time they spend on each differ. Copyright ©2013 Pearson Education
Copyright ©2013 Pearson Education
Copyright ©2013 Pearson EducationWhy Study Management? We all benefit from efficiently and effectively run businesses. Well-managed organizations prosper even in challenging economic times. After graduation, most students become managers or are managed. Understanding management offers insights into why some companies get our orders right the first time, why once-thriving organizations no longer exist, and which companies continue to prosper during challenging economic times. Studying management provides knowledge about manager skills and responsibilities, how organizations function, and how people behave in the workplace. Copyright ©2013 Pearson Education
Copyright ©2013 Pearson Education
What Factors Are Reshaping and Redefining Management?Today, managers must deal with: Changing workplaces Ethical and trust issues Global economic uncertainties Changing technologies Trader Joe’s success results from outstanding customer service. Managers everywhere face changing circumstances such as managing workers in both domestic and foreign workplaces, emerging technologies, ethical and trust issues, and global economic uncertainties. As a result, how they manage is also changing and affecting the way they plan, organize, lead, and control. Two important changes to note are: The increasing importance of customers, and Innovation. Copyright ©2013 Pearson Education
Why Are Customers Important?Without customers, most organizations would cease to exist. Employee attitudes and behaviors play a big part in customer satisfaction. Managers must create a customer-responsive environment where employees are friendly, knowledgeable, and sensitive to customer needs. Organizations need customer to exist. Until recently, customer focus was thought to be the responsibility of marketing, but organizations are now discovering that employee attitudes and behaviors play a big role in customer satisfaction. Managers are recognizing that delivering consistent high-quality customer service is essential for survival and success in today’s competitive environment. They recognize that employees are an integral part of creating a customer-responsive organization where employees are friendly and courteous, accessible, knowledgeable, prompt in responding to customer needs, and willing to do what’s necessary to please the customer. Copyright ©2013 Pearson Education
Why Is Innovation Important?“Nothing is more risky than not innovating.” Innovation isn’t only important for high technology companies; it is essential in all types of organizations. Innovation means doing things differently, exploring new territory, and taking risks. In today’s challenging environment, innovation is critical and managers need to understand what, when, where, how, and why innovation can be fostered and encouraged throughout an organization. Managers need to be personally innovative and to encourage their employees to be innovative. Copyright ©2013 Pearson Education
Copyright ©2013 Pearson EducationHistory Module A Brief History of Management’s Roots Copyright ©2013 Pearson Education
Copyright ©2013 Pearson EducationEarly Management Management has been practiced for thousands of years. Organized projects were directed by people responsible for planning, organizing, leading, and controlling. The Egyptian pyramids are proof that projects of tremendous scope, employing more than 100,000 workers for some 20 years, were completed in ancient times. Someone had to plan the project, organize the labor and materials, and to impose controls to ensure that the work was done correctly. Copyright ©2013 Pearson Education
Classical Approaches (1911–1947)Scientific Management Frederick W. Taylor described scientific management as a method of scientifically finding the “one best way to do a job.” At the beginning of the twentieth century, the discipline of management began to evolve as a unified body of knowledge. Frederick W. Taylor, known as the father of scientific management, developed a method of scientifically finding the “one best way to do a job” in his 1911 groundbreaking book, Principles of Scientific Management. Copyright ©2013 Pearson Education
Other Classical ApproachesGeneral Administrative Theory Focused on what constituted good management. Henri Fayol identified five management functions and 14 management principles. Max Weber described the bureaucracy as an ideal rational form of organization. Unlike Taylor, who focused on an individual production worker’s job, Henri Fayol and Max Weber looked at organizational practices by focusing on what managers do and what constituted good management. This approach is known as general administrative theory. Fayol first identified five management functions and fourteen principles of management that could be applied to all organizations. Weber, shown here, is known for his description and analysis of bureaucracy, which he believed was an ideal form of organization structure, especially for large organizations. Copyright ©2013 Pearson Education
Behavioral ApproachesEarly management writers included: Robert Owen, who was concerned about deplorable working conditions Hugo Munsterberg, a pioneer the field of industrial psychology Mary Parker Follett, who recognized that organizations could be viewed from both individual and group behavior perspectives Managers get things done by working with people. From the late 1700s to the early 1900s, several management writers recognized the importance of people to an organization’s success. Some examples are: Robert Owen, who was concerned about deplorable working conditions, proposed an idealistic workplace. Hugo Munsterberg, a pioneer in the field of industrial psychology, suggested using psychological tests for employee selection, learning theory concepts for employee training, and studies of human behavior for employee motivation. Mary Parker Follett recognized that organizations could be viewed from both individual and group behavior perspectives, and argued that organizations should be based on a group ethic rather than on individualism. Copyright ©2013 Pearson Education
Copyright ©2013 Pearson EducationThe Hawthorne Studies Studies conducted at the Hawthorne Works of the Western Electric Company: Provided new insights into individual and group behavior at work. Concluded that group pressures can significantly impact individual productivity. From 1924 to the mid-1930s, the Hawthorne Studies—conducted at the Hawthorne Works of the Western Electric Company in Illinois—were the most important contribution to the behavioral approach to management. Initially designed as a scientific management experiment to measure the effect of various lighting levels on worker productivity, these studies revealed that pressures significantly affect individual productivity and that people behave differently when being observed. The Hawthorne Studies had a dramatic impact on management beliefs about the role of people in organizations and led to a new emphasis on the human behavior factor in organizational management. Copyright ©2013 Pearson Education
Quantitative ApproachesUsed quantitative techniques to improve decision- making. Evolved from mathematical and statistical solutions developed for military problems during World War II. W. Edwards Deming and Joseph M. Duran’s ideas became the basis for total quality management (TQM). During the 1940s and 1950s, the quantitative approach provided tools for managers to make their jobs easier. These tools focused on the application of statistics, optimization models, information models, computer simulations, and other quantitative techniques to improve decision-making. Quality experts W. Edwards Deming and Joseph M. Duran’s ideas became the basis for total quality management, or TQM, a management philosophy devoted to continual improvement and response to customer needs and expectations. Copyright ©2013 Pearson Education 1-32
Contemporary ApproachesFocused on managers’ concerns outside the organization Organizations are open systems that are influenced by and interact with their environments. Fred Feildler’s contingency approach states that organizations, employees, and situations require different managerial approaches. Dramatic changes in information technology connect nearly everyone in an organization, and managers now supervise employees remotely. Most of the early approaches to management focused on managers’ concerns inside the organization. Beginning in the 1960s, management researchers began to look at what was happening in the environment outside the organization. The systems approach views systems as a set of interrelated and interdependent parts arranged in a manner that produces a unified whole. Organizations function as open systems, which means they are influenced by and interact with their environments. A manager must efficiently and effectively manage all parts of the system to achieve established goals. In the 1960s, Fred Feildler first popularized the contingency approach, which states that organizations, employees, and situations are different and require different management approaches. Since the 1980s, dramatic changes in information technology have directly affected the manager’s job. Nearly everyone in an organization is connected via technology and managers may manage employees working from home or halfway around the world. Copyright ©2013 Pearson Education
Copyright ©2013 Pearson Education
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