2OrganizationOrganization is a system which operates through human activity.Organizations are very complex social formations, their links can’t be described with only one theory.Organization Theories concerns 3 levels:Macro: cooperation among different organizationMezzo: structures of the organizations, and influencing factorsMicro: behavior of the members of the organizations, motivation, conflict etc.
3What is Management?Definition: Coordinating work activities so that they are completed efficiently and effectively with and through other peopleEfficiency: getting the most output from the least inputEffectiveness: completing activities so that the organization’s goals are attained.
4Getting work done through others Management is…EffectivenessEfficiencyGetting work done through othersManagement is getting work done through others.Managers have to be concerned with efficiency and effectiveness in the workplace. Efficiency is getting work done with a minimum of effort, expense, or waste. Effectiveness is accomplishing tasks that help full organizational objectives, such as customer service and satisfaction.
5Managerial Roles Figurehead Leader Liaison Monitor Disseminator SpokespersonEntrepreneurDisturbance HandlerResource AllocatorNegotiatorInterpersonalInformationalDecisionalInterpersonal Roles–interacting with othersfigurehead role: managers perform ceremonial dutiesleader role: managers motivate and encourage workers to accomplish organizational objectivesliaison role: managers deal with people outside their unitsInformational Roles–obtaining and sharing informationmonitor role: managers scan their environment for information, actively contact others for informationdisseminator role: managers share the information they have collected with their subordinates and others in the companyDecisional Roles–making good decisionsentrepreneur role: managers adapt themselves, their subordinates, and their units to incremental changedisturbance handler role: managers respond to pressures and problems so severe that they demand immediate attention and actionresource allocator role: managers decide who will get what resources and how many resources they getnegotiator role: managers negotiate schedules, projects, goals, outcomes, resources, and employee raises
6Classical Management Functions Updated Management Functions PlanningOrganizingStaffingLeadingControllingMaking Things HappenMeeting the CompetitionOrganizing People, Projects, and ProcessesClassical Management FunctionsUpdated Management FunctionsClassical functions of management are planning, controlling, organizing, and leading.Planning is determining organizational goals and a means for achieving them. Controlling is monitoring progress toward goal achievement and taking corrective action when progress isn’t being made. Organizing is deciding where decisions will be made, who will do what jobs and tasks, and who will work for whom in the company. Leading is inspiring and motivating workers to work hard to achieve organizational goals.Old-style managers think of themselves as the “manager” or the “boss.” New-style managers think of themselves as sponsors, team leaders, or internal consultants. Old-style managers follow the chain of command (reporting to the boss, who reports to the next boss at a higher managerial level, etc.), while new-style managers work with anyone who can help them accomplish their goals. Old-style managers make decisions by themselves. New-style managers ask others to participate in decisions. Old-style managers keep proprietary company information confidential. New-style managers share that information with others. Old-style managers demand long hours. New-style managers demand results.Note that these new functions do not replace the classical functions of management; they build on them.The textbook is organized around the four updated management functions, as shown on this slide, which have evolved out of the classical functions.
7Levels of Management Top Level Management Middle Level Management The jobs and responsibilities of the four kinds of managers are shown in Exhibit 1.2.First-LineManagement
8Top Managers Responsible for… Creating a context for change Developing attitudes of commitment and ownership in employeesCreating a positive organizational culture through language and actionMonitoring their business environmentsTop managers hold positions like chief executive officer (CEO) or chief operating officer (COO) and are responsible for the overall direction of the organization.
9Middle Managers Responsible for… Setting objectives consistent with top management goals, planning strategiesCoordinating and linking groups, departments, and divisionsMonitoring and managing the performance of subunits and managers who report to themImplementing the changes or strategies generated by top managersMiddle managers hold positions like plant manager, regional manager, or divisional manager.Note how middle managers’ responsibilities are influenced by those of top managers.Note also how their responsibilities are more narrowly focused than of top managers.
10First-Line Managers Responsible for… Managing the performance of entry-level employeesTeaching entry-level employees how to do their jobsMaking schedules and operating plans based on middle management’s intermediate-range plansFirst-line managers hold positions like office manager, shift supervisor, or department manager.First-line managers are the only managers who don’t supervise other managers.They are closest to employees and have daily contact with employees.
11What Companies Look for in Managers Technical SkillsHuman SkillConceptual SkillDesign SkillTechnical skills are most important for lower level managers, because these managers supervise the workers who produce products or serve customers. Team leaders and first-line managers need technical knowledge and skills to train new employees and help employees solve problems. Technical skills become less important as managers rise through the managerial ranks, but they are still important.Human skills are equally important at all levels of management, from first-line supervisors to CEOs. However, because lower level managers spend much of their time solving technical problems, upper level managers may actually spend more time dealing directly with people.Conceptual skill is the ability to see the organization as a whole, how the different parts of the company affect each other, and how the company fits into or is affected by its external environment. Conceptual skill increases in importance as managers rise through the management hierarchy.Managers typically have a stronger motivation to manage than their subordinates, and managers at higher levels usually have stronger motivation to manage than managers at lower levels.Furthermore, managers with stronger motivation to manage are promoted faster, are rated by their employees as better managers, and earn more money than managers with a weak motivation to manage.
12Core skills and their use in the different levels Managerial levelsMiddleLowerTopConceptual skillsHuman skillsTechnical skills
13Management Theory Pre-Classical Classical Approaches Frederick Taylor: Scientific Management (1886)Frank and Lillian Gilbreth: Time/motion studies (later 1800s)Henri Fayol: 14 Principles of Management (1880s-1890s)Max Weber : Bureaucracy (1920s)Behavioral ApproachesThe Hawthorne Experiment (1927)MacGregor’s Theory X and Theory Y (1960)Quantitative ApproachesContemporary ApproachesOuchi’s Theory Z (1981)Contingency Management
14Classical Approaches Frederick Taylor: Scientific Management (1886) Frank and Lillian Gilbreth: Time and motion studies (later 1800s)Henri Fayol: Fourteen Principles of Management (1880s-1890s)Max Weber : Bureaucracy (1920s)
15Frederick W. Taylor Developed Scientific Management Laid foundation for the study of managementKey ideas:Management as a separate field of studyExplicit guidelines for scientific study of management functionsTime studies for setting standardsFunctional specialization of managers’ dutiesPiece-rate Incentive systems
16Taylor’s Principles of Management The “one best way.”Management using scientific observationScientific selection of personnelPut right worker in right job, find limitations, trainFinancial incentivesPutting right worker in right job not enoughA system of financial incentives is also neededFunctional foremanshipDivision of labor between manager and workersManager plans, prepares, inspectsWorker does the actual work“Functional foremen” , specialized experts, responsible for specific aspects of the job
17Frank & Lillian Gilbreth Time and motion efficiency expertsDeveloped therbligs, breakdown of manual skills into 16 actionsFrank was a lazy bricklayer looking for an easier way and Lillian was a psychologist.Endorsed piece-work and suggested a higher rate per unit if his directions were followed.Disagreed with Taylor’s idea that management should choose which workers took which jobs.
18Henri FayolFirst came up with the five basic functions of management—Planning, Organizing, Staffing, Directing, Communicating, and ControllingFirst wrote that management is a set of principles which can be learned.Developed Fourteen Principles of Management
201. Specialization of labor 1. Specialization of labor. Specializing encourages continuous improvement in skills and the development of improvements in methods.2. Authority. The right to give orders and the power to exact obedience.3. Discipline. No slacking, bending of rules.4. Unity of command. Each employee has one and only one boss.5. Unity of direction. A single mind generates a single plan and all play their part in that plan.6. Subordination of Individual Interests. When at work, only work things should be pursued or thought about.7. Remuneration. Employees receive fair payment for services, not what the company can get away with.
218. Centralization. Consolidation of management functions 8. Centralization. Consolidation of management functions. Decisions are made from the top.9. Scalar Chain (line of authority). Formal chain of command running from top to bottom of the organization, like military10. Order. All materials and personnel have a prescribed place, and they must remain there.11. Equity. Equality of treatment (but not necessarily identical treatment)12. Personnel Tenure. Limited turnover of personnel. Lifetime employment for good workers.13. Initiative. Thinking out a plan and do what it takes to make it happen.14. Esprit de corps. Harmony, cohesion among personnel.
22Max Weber Coined “bureaucracy”: the perfect office Well defined chain of commandClear division of work (job descriptions)Procedures for any situationImpersonalityEmployment and promotion based on technical competence.
23Behavioral Approaches The Hawthorne Experiment (1927)Chester Barnard (1930s – 1960s)Herbert Simon (1947)MacGregor’s Theory X and Theory Y (1960)
24The Hawthorne Experiment Research conducted at the Hawthorne plant of the Western Electric Company near Chicago,Initial study: effects of lighting on worker performanceBut the “Hawthorne Effect” was instead identifiedThe workers values, desires, and needs may be more important than physical conditions.Workers want to have input.Workers want to be respected.
25Theories X and Y Conducted in 1960s by Douglas McGregor Theory X: classical theoryMost people dislike work and responsibility, they are motivated only by money and do not care about the job.Close supervision is required and people must be carefully controlled and coerced into workingAverage person prefers direction
26Theories X and Y Theory Y: Modern Management Theory People often enjoy their work and will exercise self-control at work.People are motivated by wanting to do a good job and will do well if the opportunity is presentedPeople have capacity for imagination, ingenuity, and creativityPeople enjoy expending physical and mental effort in work as much as play and rest
27Contemporary Approaches Ouchi’s Theory Z (1981)Contingency Management
28Ouchi’s Theory Z Theory Z Value of culture in an industrial society Intimate and cooperative work relationshipsAlienated in work environment in which family ties, traditions, and social institutions are minimizedWorkers have strong sense of moral obligation, discipline and order
30Brief Behavioral Quantitative Approach System Theory Mary Parker Follet : “Power Sharing”Chris Argyris: Model I & Model II OrganisationsQuantitative ApproachManagement ScienceOperation ManagementMISSystem Theory