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Chapter 1 Managers and Managing in the 21st Century

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1 Chapter 1 Managers and Managing in the 21st Century
FOM 1.1 1

2 Learning Outcomes Explain what a manager is Define the term management
Differentiate between efficiency and effectiveness Describe the four basic management activities (continued) 2

3 Learning Outcomes (continued)
Classify the three levels of managers and identify the primary responsibility of each level Summarize the essential roles performed by managers Describe the four general skills necessary for becoming a successful manager (continued) 3

4 Learning Outcomes (continued)
Explain the changes in management over time Describe the implications for managers of a changing world environment Explain the importance of viewing management from a global perspective 3

5 Organization A systematic arrangement of people brought together to accomplish some specific purpose Before we can begin our study of management, we need to look at where managers work. Managers work in organizations. But what is an organization? An organization is a systematic arrangement of people brought together to accomplish some specific purpose. FOM 1.5 4

6 The Characteristics of an Organization
People Purpose Structure While there are many different types of organizations, small and large, all organizations have these three characteristics. Purpose: The purpose is usually expressed in the organization’s vision, mission or goals. People: For the organization to accomplish anything, people must be there to make things happen. Structure: And every organization must develop a structure of some kind that shapes and defines the acceptable behaviours of people in the organization. 5

7 The Levels of an Organization
Supervise Others Top Managers Middle Managers First-Line Managers We can describe organizational members in one of two ways. Frontline employees are individuals who work directly on a job or task and have no responsibility for overseeing the work of others. Managers direct the activities of other people in the organization. In addition, managers are usually classified as top, middle, or first-line managers. First-line managers (frequently titled “supervisor”) are responsible for directing the day-to-day activities of operative employees. Middle managers represent the level of management between first-line managers and top management. These managers manage other managers (and may manage frontline employees). Further, these managers are usually responsible for translating the goals of top management into specific details that lower-level managers can perform. Top managers are responsible for making decisions about the direction of the organization and setting policies that affect all organizational members. Work on Jobs Front-Line Employees The Levels of an Organization 6

8 Management Process of getting things done, efficiently and effectively, through and with other people Let’s now look at what we mean by “management.” First, it is a process… and it is a process of getting things done through and with other people. But there is also a need for the process to be both efficient and effective. FOM 1.8 7

9 Efficiency and Effectiveness
Means Efficiency Ends Effectiveness Goals Goal Attainment Resource Usage Low Waste High Attainment What is meant by efficient and effective? Referring to inputs and outputs, doing the task right is being efficient. Therefore, efficient means "doing things right" Effectiveness means "doing the right things" Therefore, managers play an increasingly important role in helping the organization be both efficient and effective. Can an organization be effective without being efficient? What about vice-versa? For example, a computer college may be able to process students through its program quickly, but if the students aren’t learning the necessary skills, the college is not being effective. It is importance to note, however, that high efficiency is typically associated with high effectiveness. Also, poor management is most often associated with both inefficiency and ineffectiveness. FOM 1.9 8

10 Management Activities
Organizing Determining what needs to be done, in what order, and by whom Planning Defining goals and establishing action plans Effective Management Controlling Monitoring activities to ensure that they are achieving results Leading Guiding and motivating all involved parties Every manager performs four basic activities. Planning--defining goals, establishing a strategy for achieving those goals, and developing a plan to integrate and coordinate activities. Top managers would define goals for the overall organization. Leading--motivating and guiding employees to achieve the goals. Today, this is one of the key skills required in any manager. Organizing--determining what tasks are to be done, who is to do them, how the tasks are to be grouped, who reports to whom, and where decisions are to be made. The last activity is controlling--monitoring the organization’s (or work units) progress against the goals. The manager is also responsible for ensuring that the organization gets back on track if the results are not as expected. FOM 1.10 9

11 Changes in Management Over Time
Scientific management--”one best way” General administrative theories--universal set of activities Human relations--importance of human factor Today, management is a blend scientific (efficiencies), general administrative (bureaucracy), and human relations (employees have a large impact on success of company) The concept of getting action done through others has been around for thousands of years. However, it wasn’t until the industrial revolution that people began to have ideas about management. Different theories have emerged over time. Scientific management came from Taylor who used scientific methods to define the “one best way” to get the job done. Current focus on efficiencies have come from Taylor. General administrative theories created the concept of bureaucracy as an ideal type of organization--characterized by division of labour, clear hierarchy, detailed rules, and impersonal relations with all stakeholders. Human relations began to surface in the early 20th century and focused on the notion that work was done by people and therefore that managers ought to recognize the importance that employees play in the success of the enterprise. Today, there is a blend. However, what is important to remember now is that successful management is recognizing the tremendous impact employees have on company performance. A more thorough discussion of this will occur in chapter 11 (Leadership and Trust).

12 Scientific Management
Developed by Frederick Taylor One best way to get the job done Viewed workers as inefficient Promoted Four Principles 1. Develop a science for each component of work 2. Scientifically Select and Train Workers 3. Actively cooperate with workers 4. Divide work equally between workers and management

13 General Administrative Theories
Developed by Fayol Described management as universal set of activities. Focuses on division of labour, clear hierarchy, rules and impersonal relations

14 Human Relations Idea surfaced in early 20th Century
Focused on the notion that work was done by people Need to focus on human element Maslow and motivation and Theory X and Theory Y

15 Mintzberg’s Managerial Roles
Interpersonal Decisional Informational Henry Mintzberg, a professor at McGill University in Montreal, conducted a careful study of CEOs. Through this research, he concluded that there were 3 categories of behaviours evident in all managers. These were interpersonal, informational, and decisional. You will note that Exhibit 1-4 in the text (page 11) describes each of these roles in more detail. 10

16 Mintzberg Roles See Page 11, Exhibit 1-4

17 Universality of Manager’s Job
Importance of roles varies depending on level in organization Manager’s job in for-profit and not-for-profit organizations generally the same Size of organization impacts whether manager is more of a generalist vs. more of a specialist Not all management concepts are universal Management concepts may need to be modified in other countries Earlier, we referred to the job of “manager” as being general across all types of organizations. However, what a manager does will be based on degree and emphasis of the activity. Thus, a senior manager will tend to do more planning than a first-level manager. Likewise, as managers move up the organization, they spend less time supervising and more time planning. All managers, however, make decisions and plan, lead, organize, and control. But the amount of time they give to each activity is not necessarily the same and the actual content of the managerial activities changes with the manager’s level. Also, whether you are a manager in a for-profit organization like Stelco or Tim Hortons, or in a not-for-profit such as the United Way, you are still expected to plan, organize, lead, and control. Results are expected whether the organization is profit-oriented or not. 11

18 Distribution of Manager’s Time
Let’s look a little more closely at the difference in the amount of time a manager spends on the various activities. You’ll note in this chart that a top-level manager spends about 28% of the time planning whereas the first-level manager spends about 15% of the time planning. Likewise, the top-level manager spends 22% of the time in the leading activity whereas the first-level manager spends most of their time (51%) motivating and working with employees. 12

19 The Roles That Managers Play
Small Firms Importance Large Firms High Resource Allocator Spokesperson Entrepreneur Figurehead Leader Liaison, Monitor Disturbance Handler Negotiator Moderate The size of the organization has an impact on what a manager does and the role played. “Small business” in Canada accounts for the majority of job growth in today’s economy. Typically, small business is any independently owned and operated profit-seeking enterprise that has fewer than 500 employees. The difference between managers in large and small organizations lies in the importance of roles. The small business manager’s most important role is that of spokesperson. This manager spends a large amount of time in outwardly-directed actions such as meetings with customers, obtaining financing from bankers, seeking new opportunities, and promoting change. That is a small business manager is more likely to be a generalist. On the other hand, the manager in a large corporation is more internally directed—toward deciding which organizational units get what available resources and how much of them. Even so, managers in both large and small organizations perform essentially the same activities. The differences lie in how they go about them and the proportion of time they spend on each. Disseminator Entrepreneur Low 13

20 Management Across National Borders
Concepts and ideas are transferable to most English-speaking, free- market democracies We will need to modify some concepts in other countries If managerial concepts were generic, they would apply throughout the world. However, from studies conducted, managerial practices can be dramatically different depending on the economic, political, social, or cultural environment. For the purposes of this course, the management concepts we will be studying are generally applicable to English-speaking countries such as Canada, the U.S., the U.K., Australia, and New Zealand. Studies that have compared managerial practices between countries have not generally supported the universality of management concepts. Therefore, we should be prepared to modify these concepts if we want to apply them in India, China, Chile, or other countries where the economic, political, social, or cultural environment differs greatly from that of the so-called free-market enterprises. 14

21 Managers and Decisions
In order for managers to make decisions, they need to: Identify critical problems Gather and use appropriate data Make sense of the information Choose the best course of action One area of management that is universal is decision-making. Every manager makes decisions--whether it is setting goals, deciding how to structure jobs, determining who is hired, or deciding to take action if performance differs from what was planned. However, the best managers are those that can identify and act on critical problems, gather and use relevant information, and choose a course of action that will solve the problem. We will discuss more about decision-making in Chapter 4. 15

22 Managers and Change Be change agents
In order to deal with change, managers need to: Be change agents Be able to work in a dynamic environment Be flexible and adaptable The second universal area for managers is dealing with and handling change. In today’s business environment, change is a given--not an exception. Therefore, successful managers acknowledge the changes around them by being flexible and adaptable in their management practices. The entire area of change will be thoroughly reviewed in Chapter13. 16

23 General Management Skills
CONCEPTUAL INTERPERSONAL TECHNICAL POLITICAL Recognizing that all managers perform the four basic management activities of planning, organizing, leading, and controlling, what then are the critical areas related to managerial competence? Effective managers must be proficient in the following four general skills areas: Conceptual skills refer to the mental ability to analyze and diagnose complex situations. These skills help managers see how things fit together and help make good decisions. Interpersonal skills encompass the ability to to work with, understand, mentor, and motivate other people--both individually and in groups. All managers must have technical skills to apply specialized knowledge and expertise. Lastly, managers need political skills to establish the right connections or to build a “power base.” Managers with good political skills tend to be better at getting resources than managers with poor political skills.

24 Conceptual Skills Mental ability to analyze and diagnose complex situations Allow Managers to see how things fit

25 Interpersonal Skills Ability to work with, understand, mentor and motivate others Both individually and as a group Many managers fail in this

26 Technical Skills Ability to apply specialized knowledge or expertise
Engineer, accountant, etc

27 Political Skills Ability to enhance one position, build a power base, and establish the right connection

28 Specific Management Skills
These explain 50% of a managers effectiveness Controlling the organization’s environment and resources Organizing and coordinating Handling information Providing for growth and development of staff Motivating staff and handling conflicts Strategic problem-solving Research has also identified 6 sets of specific behaviours that explain more than 50 percent of a manager’s effectiveness. Controlling the organization’s environment and resources includes the ability to be proactive and make resource decisions based on clear and accurate knowledge of the organization’s goals. Organizing and coordinating. Managers organize around tasks and coordinate interdependent relationships among tasks wherever they exist. Handling information. Managers use information and communication channels for identifying problems, understanding a changing environment, and making effective decisions. Growth and development. Managers provide not only for their own growth and development but for their employees as well. Motivating employees and handling conflicts. Managers enhance the positive aspects of motivation so that employees perform and eliminate the conflicts that may detract from motivation. Strategic problem solving. Managers take responsibility for their decisions and ensure that subordinates use effective decision-making skills. 18

29 Management Competencies
Initiate and implement change Monitor, maintain and improve performance Monitor and control resources Secure effective resource allocation Recruit and select staff (continued) The most recent approach to describe the skills necessary to effectively perform the managerial processes refers to “competencies”--the cluster of knowledge skills and attitudes. The competencies listed here are based on an analysis of management activities through a comprehensive study of middle managers in the UK. According to this study, middle managers must: Be able to identify the opportunities for improvements in services or products. Establish and maintain the supply of resources for the work area. Control costs and activities against plans. Justify proposals for expenditures. Determine future staffing requirements and the skills necessary to ensure the hiring of capable staff. 19

30 Management Competencies (continued)
Develop teams, individuals, and self Plan, allocate, and evaluate work Create, maintain, and enhance relationships Seek, evaluate, and organize information Exchange information to solve problems Middle managers must also: Develop themselves and their employees for improved organizational performance. Plan, allocate, and evaluate work carried out by teams, individuals, and managers themselves Create, maintain, and enhance effective working relationships by providing support and establishing trust. Obtain and evaluate information for decision-making. Gather and exchange information to solve problems, and lead meetings and group discussions. 20

31 Managers and the Changing World Environment
Management is no longer constrained by national borders Managers need to understand what is going on in the world Managers need to take into consideration different economic, political, legal and cultural systems in other countries Managers need to be aware of what is going on throughout the world but they also need to be aware of the many different cultural, political, economic, legal, and social norms and values that exist in Canada.

32 Major Environmental Changes Affecting Managers
Technology E-commerce E-business Knowledge workers Technology has had a huge impact on every aspect of business. It has been used to increase efficiency and provide better service to customers. E-commerce: when business transactions are processed and transmitted over the Internet. This has had a tremendous impact on how business is conducted. This has allowed organizations to present products and fill orders without having a physical location. is perhaps the most visible example of e-commerce. E-business: When the full breadth of activities is done over the Internet--including communication between employees, customers, and suppliers; and collaborating with partners to electronically coordinated design and production. Again, the impact has been both positive and negative for managers. On one hand, it means that technology has helped streamline the internal operations of organizations. On the other hand it has changed how a manger’s work is performed. Managers are unable to rely as much on “face time” to ensure that work is done to standard and must focus on on the expected outcomes, not how the individual employee does the work.

33 Management from a Global Perspective
Globalization--doing business on a world-wide scale Managers need to be sensitive to issues in other countries Managers also need to be aware of different cultures in Canada It is very important to consider management from a global perspective. This is particularly true for Canadian managers since our economy is driven by what goes on in the rest of the world. Globalization is doing business beyond one’s own country’s borders--whether it be in goods or services. Managers need to understand the issues that might affect operations in another countries. Managers can no longer view matters from a single perspective as it is too narrow. For example, legal systems in other countries often change. Canadian managers also will encounter many different cultures in Canadian operations. When working with individuals from different cultures, managers must understand that individuals learn about their cultures informally. Managers need to be flexible in their dealings with non-Canadian born employees.

34 Importance of Managers in the Marketplace
Good managers can help an organization perform successfully Poor managers can do the reverse Managers tend to earn more as their responsibilities and accountabilities increase Good managers can turn straw into gold whereas poor managers can do the reverse. Managers tend to be more highly paid than front-line employees. Organizations willingly offer lucrative compensation packages to good managers.

35 Is Understanding Management Important?
Management affects everyone in an organization Poorly managed organizations will not be successful A good manager is a combination of many factors The business environment in Canada--and in North America--places high value on capable managers. Look at recent newspaper articles about the salaries paid to top CEOs. Managers generally are more highly compensated than non-managers. Everyone here will either be managed or be a manager--therefore it is important to understand what management is all about. As we go through the rest of the text, you will gain an understanding of the many factors that contribute to the success of an effective manager. 21


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