Understanding the Manager’s Job Chapter One Understanding the Manager’s Job

Copyright © 2005 by Houghton Mifflin Company. All rights reserved. Chapter Outline An Introduction to Management Kinds of Managers Basic Management Functions Fundamental Management Skills The Science and the Art of Management The Evolution of Management The Importance of History and Theory The Historical Context of Management The Classical Management Perspective Copyright © 2005 by Houghton Mifflin Company. All rights reserved.

Chapter Outline (cont’d) The Evolution of Management (cont’d) The Behavioral Management Perspective The Quantitative Management Perspective Contemporary Management Thought The Systems Perspective The Contingency Perspective Contemporary Management Challenges and Opportunities Copyright © 2005 by Houghton Mifflin Company. All rights reserved.

Copyright © 2005 by Houghton Mifflin Company. All rights reserved. Learning Objectives After studying this chapter, you should be able to: Define management, describe the kinds of managers found in organizations, and briefly explain the four basic management functions. Justify the importance of history and theory to managers and explain the evolution of management thought. Discuss contemporary management issues and challenges. Copyright © 2005 by Houghton Mifflin Company. All rights reserved.

Copyright © 2005 by Houghton Mifflin Company. All rights reserved. What is Management? A set of activities planning and decision making, organizing, leading, and controlling directed at an organization’s resources human, financial, physical, and information with the aim of achieving organizational goals in an efficient and effective manner. Copyright © 2005 by Houghton Mifflin Company. All rights reserved. 5

Basic Purpose of Management EFFICIENTLY Using resources wisely and in a cost-effective way And EFFECTIVELY Making the right decisions and successfully implementing them Copyright © 2005 by Houghton Mifflin Company. All rights reserved. 6

Copyright © 2005 by Houghton Mifflin Company. All rights reserved. What is a Manager? Someone whose primary responsibility is to carry out the management process. Someone who plans and makes decisions, organizes, leads, and controls human, financial, physical, and information resources. Copyright © 2005 by Houghton Mifflin Company. All rights reserved.

Figure 1.1 Kinds of Managers by Level and Area Copyright © 2005 by Houghton Mifflin Company. All rights reserved.

Kinds of Managers by Level Top Managers The relatively small group of executives who manage the organization’s overall goals, strategy, and operating policies. Middle Managers Largest group of managers in organizations Implement top management’s policies and plans. Supervise and coordinate lower-level managers’ activities. First-Line Managers Managers who supervise and coordinate the activities of operating employees. Copyright © 2005 by Houghton Mifflin Company. All rights reserved.

Kinds of Managers by Area Marketing Managers Work in areas related to getting consumers and clients to buy the organization’s products or services. Financial Managers Deal primarily with an organization’s financial resources. Operations Managers Concerned with creating and managing the systems that create organization’s products and services. Copyright © 2005 by Houghton Mifflin Company. All rights reserved.

Kinds of Managers by Area (cont’d) Human Resource Managers Involved in human resource processes Planning, recruiting and selection, training and development, designing compensation and benefit systems, formulating performance appraisal systems. Administrative Managers Serve as generalists in functional areas and are not associated with any particular management specialty. Other Kinds of Managers Assigned as specialists in positions directly related to the needs of the organization. Copyright © 2005 by Houghton Mifflin Company. All rights reserved.

Management in Organizations Inputs from the environment • Human resources Financial resources Physical resources Information resources Planning and decision making Leading Organizing Controlling Goals attained Efficiently Effectively Copyright © 2005 by Houghton Mifflin Company. All rights reserved.

Figure 1.2 The Management Process Copyright © 2005 by Houghton Mifflin Company. All rights reserved.

The Management Process (cont’d) Planning and Decision Making Setting an organization’s goals and selecting a course of action from a set of alternatives to achieve them. Organizing Determining how activities and resources are grouped. Leading Getting organizational members to work together to advance the interests of the organization. Controlling Monitoring organizational progress towards goals. Copyright © 2005 by Houghton Mifflin Company. All rights reserved. 9

Skills and the Manager Fundamental Management Skills Technical Skills Interpersonal Skills Conceptual Skills Fundamental Management Skills Diagnostic Skills Communication Skills Decision-Making Skills Time-Management Skills Copyright © 2005 by Houghton Mifflin Company. All rights reserved.

Fundamental Management Skills Technical Skills necessary to accomplish or understand the specific kind of work being done in an organization. Interpersonal The ability to communicate with, understand, and motivate both individuals and groups. Conceptual The manager’s ability to think in the abstract. Diagnostic The manager’s ability to visualize the most appropriate response to a situation. Copyright © 2005 by Houghton Mifflin Company. All rights reserved. 17

Fundamental Management Skills (cont’d) Communication The manager’s abilities both to convey ideas and information effectively to others and to receive ideas and information effectively from others. Decision-Making The manager’s ability to recognize and define problems and opportunities correctly and then to select an appropriate course of action to solve the problems and capitalize on opportunities. Time-Management The manager’s ability to prioritize work, to work efficiently, and to delegate appropriately. Copyright © 2005 by Houghton Mifflin Company. All rights reserved. 17

Management: Science or Art? The Science of Management Assumes that problems can be approached using rational, logical, objective, and systematic ways. Requires technical, diagnostic, and decision-making skills and techniques to solve problems. The Art of Management Decisions are made and problems solved using a blend of intuition, experience, instinct, and personal insights. Requires conceptual, communication, interpersonal, and time-management skills to accomplish the tasks associated with managerial activities. Copyright © 2005 by Houghton Mifflin Company. All rights reserved. 18

Sources of Management Skills Copyright © 2005 by Houghton Mifflin Company. All rights reserved.

The Importance of Theory and History Why Theory? Provides a conceptual framework for organizing knowledge and providing a blueprint for action. Management theories, used to build organizations, are grounded in reality. Most managers develop their own theories about how they should run their organizations. Why History? An awareness and understanding of historical developments in management are important. Furthers the development of management practices. Avoiding the mistakes of others in the past. Copyright © 2005 by Houghton Mifflin Company. All rights reserved.

Early Management Pioneers Robert Owen (1771–1858) British industrialist who was one of the first managers to recognize the importance of human resources and the welfare of workers. Charles Babbage (1792–1871) English mathematician who focused on creating efficiencies of production through the division of labor, and the application of mathematics to management problems. Copyright © 2005 by Houghton Mifflin Company. All rights reserved. 4

Classical Management Perspective Scientific Management Concerned with improving the performance of individual workers (i.e., efficiency). Grew out of the industrial revolution’s labor shortage at the beginning of the twentieth century. Administrative Management A theory that focuses on managing the total organization rather than individuals. Copyright © 2005 by Houghton Mifflin Company. All rights reserved. 5

Scientific Management Frederick Taylor (1856–1915) Replaced old methods of how to do work with scientifically-based work methods. Eliminated “soldiering,” where employees deliberately worked at a pace slower than their capabilities. Believed in selecting, training, teaching, and developing workers. Used time studies of jobs, standards planning, exception rule of management, slide-rules, instruction cards, and piece-work pay systems to control and motivate employees. Copyright © 2005 by Houghton Mifflin Company. All rights reserved. 7

Figure 1.3 Steps in Scientific Management Copyright © 2005 by Houghton Mifflin Company. All rights reserved.

Scientific Management Pioneers Frank and Lillian Gilbreth Both developed techniques and strategies for eliminating inefficiency. Frank reduced the number of movements in bricklaying, resulting in increased output of 200%. Lillian made substantive contributions to the fields of industrial psychology and personnel management. Copyright © 2005 by Houghton Mifflin Company. All rights reserved. 9

Classical Management Perspective (cont’d) Administrative Management Theory Focuses on managing the whole organization rather than individuals. Henri Fayol (1841–1925) Was first to identify the specific management functions of planning, organizing, leading, and controlling. Lyndall Urwick (1891–1983) Integrated the work of previous management theorists. Max Weber (1864–1920) His theory of bureaucracy is based on a rational set of guidelines for structuring organizations. Copyright © 2005 by Houghton Mifflin Company. All rights reserved. 12

Classical Management Perspective…Today Contributions Laid the foundation for later developments. Identified important management processes, functions, and skills. Focused attention on management as a valid subject of scientific inquiry. Limitations More appropriate approach for use in traditional, stable, simple organizations. Prescribed universal procedures that are not appropriate in some settings. Employees are viewed as tools rather than as resources. Copyright © 2005 by Houghton Mifflin Company. All rights reserved. 18

Behavioral Management Perspective Emphasized individual attitudes and behaviors, and group processes, and recognized the importance of behavioral processes in the workplace. Hugo Munsterberg (1863–1916) A German psychologist, “the father of industrial psychology”, who advocated applying psychological concepts to employees selection and motivation industrial settings. Mary Parker Follett (1868–1933) Recognized the importance of the role of human behavior in the workplace. Copyright © 2005 by Houghton Mifflin Company. All rights reserved. 21

Key Managerial Roles (Munsterberg) Key Management Roles Interpersonal Roles Informational Roles Decisional Roles Figurehead Leader Liaison Monitor Disseminator Spokesperson Entrepreneur Disturbance handler Negotiator Source: Van Fleet, David D., Contemporary Management, Second Edition. Copyright © 1991 by Houghton Mifflin Company. Used with permission. Copyright © 2005 by Houghton Mifflin Company. All rights reserved.

The Hawthorne Studies (1927–1932) Conducted by Elton Mayo and associates at Western Electric Illumination study—workplace lighting adjustments affected both the control and the experimental groups of production employees. Group study—implementation of piecework incentive plan caused production workers to establish informal levels of acceptable individual output. Over-producing workers were labeled “rate busters” and under-producing workers were considered “chiselers.” Interview program—confirmed the importance of human behavior in the workplace. Copyright © 2005 by Houghton Mifflin Company. All rights reserved. 21

Behavioral Management Perspective (cont’d) Human Relations Movement Grew out of the Hawthorne studies. Proposed that workers respond primarily to the social context of work, including social conditioning, group norms, and interpersonal dynamics. Assumed that the manager’s concern for workers would lead to increased worker satisfaction and improved worker performance. Copyright © 2005 by Houghton Mifflin Company. All rights reserved. 23

Behavioral Management Perspective (cont’d) Abraham Maslow (1908-1970) Advanced a theory that employees are motivated by a hierarchy of needs that they seek to satisfy. Douglas McGregor (1906-1964) Proposed Theory X and Theory Y concepts of managerial beliefs about people and work. Copyright © 2005 by Houghton Mifflin Company. All rights reserved. 23

Table 1.1 Theory X and Theory Y Theory X Assumptions People do not like work and try to avoid it. People do not like work, so managers have to control, direct, coerce, and threaten employees to get them to work toward organizational goals. People prefer to be directed, to avoid responsibility, and to want security; they have little ambition. Source: Douglas McGregor, The Human Side of Enterprise, Copyright © 1960 by McGraw-Hill. Reprinted by permission of The McGraw-Hill Companies. Copyright © 2005 by Houghton Mifflin Company. All rights reserved.

Table 1.1 (cont’d) Theory X and Theory Y (cont’d) Theory Y Assumptions People do not dislike work; work is a natural part of their lives. People are internally motivated to reach objectives to which they are committed. People are committed to goals to the degree that they receive rewards when they reach their objectives. People seek both seek and accept responsibility under favorable conditions. People can be innovative in solving problems. People are bright, but under most organizational conditions their potentials are underutilized. Source: Douglas McGregor, The Human Side of Enterprise, Copyright © 1960 by McGraw-Hill. Reprinted by permission of The McGraw-Hill Companies. Copyright © 2005 by Houghton Mifflin Company. All rights reserved.

Organizational Behavior A contemporary field focusing on behavioral perspectives on management. Draws on psychology, sociology, anthropology, economics, and medicine. Important topics in organizational behavior research: Job satisfaction and job stress Motivation and leadership Group dynamics and organizational politics Interpersonal conflict The structure and design of organizations Copyright © 2005 by Houghton Mifflin Company. All rights reserved. 26

Behavioral Management Perspective…Today Contributions Provided important insights into motivation, group dynamics, and other interpersonal processes. Focused managerial attention on these critical processes. Challenged the view that employees are tools and furthered the belief that employees are valuable resources. Copyright © 2005 by Houghton Mifflin Company. All rights reserved. 28

Behavioral Management Perspective…Today (cont’d) Limitations Complexity of individuals makes behavior difficult to predict. Many concepts not put to use because managers are reluctant to adopt them. Contemporary research findings are not often communicated to practicing managers in an understandable form. Copyright © 2005 by Houghton Mifflin Company. All rights reserved. 28

Quantitative Management Perspective Emerged during World War II to help the Allied forces manage logistical problems. Focuses on decision making, economic effectiveness, mathematical models, and the use of computers to solve quantitative problems. Copyright © 2005 by Houghton Mifflin Company. All rights reserved. 31

Quantitative Management Perspective (cont’d) Management Science Focuses on the development of representative mathematical models to assist with decisions. Operations Management Practical application of management science to efficiently manage the production and distribution of products and services. Copyright © 2005 by Houghton Mifflin Company. All rights reserved. 31

Quantitative Management Perspective…Today Contributions Developed sophisticated quantitative techniques to assist in decision making. Application of models has increased our awareness and understanding of complex processes and situations. Has been useful in the planning and controlling processes. Copyright © 2005 by Houghton Mifflin Company. All rights reserved. 32

Quantitative Management Perspective…Today (cont’d) Limitations Quantitative management cannot fully explain or predict the behavior of people in organizations. Mathematical sophistication may come at the expense of other managerial skills. Quantitative models may require unrealistic or unfounded assumptions, limiting their general applicability. Copyright © 2005 by Houghton Mifflin Company. All rights reserved. 32

Figure 1.4 The Systems Perspective of Organizations Copyright © 2005 by Houghton Mifflin Company. All rights reserved.

Integrating Perspectives for Managers Systems Perspective A system is an interrelated set of elements functioning as a whole. Open system An organizational system that interacts with its environment. Copyright © 2005 by Houghton Mifflin Company. All rights reserved. 34

Integrating Perspectives for Managers (cont’d) Closed system An organizational system that does not interact with its environment. Subsystems A system within another system. Their importance is due to their interdependence on each other within the organization. Copyright © 2005 by Houghton Mifflin Company. All rights reserved. 34

The Systems Perspective Synergy Subsystems are more successful working together in a cooperative and coordinated fashion than working alone. The whole system (subsystems working together as one system) is more productive and efficient than the sum of its parts. Copyright © 2005 by Houghton Mifflin Company. All rights reserved. 37

The Systems Perspective (cont’d) Entropy A normal process in which an organizational system declines due to failing to adjust to change in its environment Entropy can be avoided and the organization re-energized through organizational change and renewal. Copyright © 2005 by Houghton Mifflin Company. All rights reserved. 37

The Contingency Perspective Universal Perspectives Include the classical, behavioral, and quantitative approaches. An attempt to identify the “one best way” to manage organizations. The Contingency Perspective Suggests that each organization is unique. The appropriate managerial behavior for managing an organization depends (is contingent) on the current situation in the organization. Copyright © 2005 by Houghton Mifflin Company. All rights reserved.

The Contingency Perspective (cont’d) Problem or Situation Important Contingencies Solution or Action B Solution or Action A Solution or Action C Source: Van Fleet, David D., Contemporary Management, Second Edition. Copyright © 1991 by Houghton Mifflin Company. Used with permission. Copyright © 2005 by Houghton Mifflin Company. All rights reserved.

Contemporary Management Issues and Challenges Acute labor shortages in high-technology job sectors and an oversupply of less skilled labor An increasingly diverse and globalized workforce The need to create challenging, motivating, and flexible work environments The effects of information technology on how people work The complex array of new ways of structuring organizations Copyright © 2005 by Houghton Mifflin Company. All rights reserved.

Contemporary Management Issues and Challenges (cont’d) Increasing globalization of product and service markets The renewed importance of ethics and social responsibility The use of quality as the basis for competition The shift to a predominately service-based economy Copyright © 2005 by Houghton Mifflin Company. All rights reserved.