Topic 1: Introduction to Management Theory

Introduction to Management/Management Theory

• Management is the coordination of people and resources to meet goals effectively and efficiently
• Organizations are collections of people who work together to achieve goals
• Managers are responsible for supervising resource use to meet organizational goals
• Management includes planning, organizing, leading, and controlling human and other resources

What is Management?

• Organizations are collections of people who work together to achieve goals.
• Managers are responsible for supervising the use of an organization's resources to meet its goals.
• Management involves planning, organizing, leading, and controlling human and other resources to accomplish organizational goals efficiently and effectively.
• Resources include: people and their skills, machinery, raw materials, financial capital, computers, and information technology, and loyal employees and customers.

Achieving High Performance: A Manager's Goal

• Organizational performance is a measure of how effectively and efficiently managers use available resources to meet customer needs and achieve organizational goals.
• Efficiency is the measure of how well resources are used to achieve a goal.
• Effectiveness is a measure of the appropriateness of the goals an organization is pursuing and the degree to which the organization achieves those goals.
• High-performing organizations are both efficient and effective.

Why Study Management?

• Individuals learn through personal experiences and the experiences of others.
• The economic benefits of being a good manager are impressive.
• Learning management principles helps make better decisions in non-work contexts.

Figure 1.2 Four Tasks of Management

• Controlling: Establish accurate monitoring systems to evaluate how well organizational goals are met.
• Planning: Choose appropriate organizational goals and courses of action to achieve goals.
• Organizing: Establish task and authority relationships so people can work together to achieve organizational goals.
• Leading: Motivate, coordinate, and energize individuals and groups to achieve organizational goals.

Managerial Roles

• Decisional Roles: Entrepreneur (develop new ideas), Disturbance handler (solving unexpected problems), Resource allocator (allocating resources), Negotiator (working with others to reach agreements).
• Interpersonal Roles Figurehead (symbolic head), Leader (motivating and guiding employees), Liaison (linking and coordinating with others).
• Informational Roles: Monitor (monitoring external/internal environments), Disseminator (sharing information with others), Spokesperson (representing the organization to outsiders).

Levels and Skills of Managers

• Top managers are responsible for all departments, setting organizational goals.
• Middle managers are responsible for finding the best way to use resources to meet organizational goals.
• First-line managers (supervisors) supervise non-managerial employees and oversee daily tasks.
• Different levels of management focus on varying combinations of planning, organizing, leading, and controlling.

Types of Managerial Skills

• Conceptual Skills: Analyze and diagnose situations and distinguish cause and effect.
• Human Skills: Ability to understand, lead, and control the behaviors of individuals and groups.
• Technical Skills: Job-specific knowledge and techniques to perform organizational roles.
• Skill intensity varies across management levels, with top managers needing more conceptual skills and front-line managers more technical skills.

Core Competency

• Specific set of departmental skills, knowledge, and experience that allows an organization to outperform competitors.
• Dell's materials management produced PCs at a lower cost than competitors.

Recent Changes in Management Practices

• Restructuring: Downsizing by eliminating jobs of managers and employees.
• Outsourcing: Contracting with another company to perform work previously done internally.

Empowerment and Self-Managed Teams

• Empowerment: Giving employees more authority and responsibility over how they perform their work activities.
• Self-managed teams: Groups of employees who are collectively responsible for organizing, supervising, and controlling their own work.

Challenges for Management in a Global Environment

• Build a competitive advantage
• Maintaining ethical and socially responsible standards.
• Manage a diverse workforce.
• Utilize new technologies effectively.
• Practice global crisis management.

Evolution of Management Theory

• Different theories emerged and evolved over time, each contributing to the field of management.

Scientific Management Theory (F.W. Taylor and The Gilbreths)

• Systematic study of relationship between people and tasks to increase efficiency.
• Analyzing tasks, improving methods, selecting and training workers, and motivating workers with appropriate pay.

Administrative Management Theory (Max Weber and Fayol)

• Establishing formal structures, rules, and procedures in organizations for efficiency and effectiveness.
• Principles include authority, responsibility, unity of command, line of authority, centralization, unity of direction, equity, order, and discipline.

Behavioral Management Theory (Mary Parker Follett, The Hawthorne Studies)

• Focuses on the human aspects of work, recognizing the impact of motivation and social interactions on worker performance.
• Importance of social dynamics and management styles on work group behavior and individual performance.
• Importance of informal organization.

Theory X and Theory Y(Douglas McGregor)

• Theory X describes workers as inherently lazy and needing close supervision to work, and Theory Y holds the opposite belief.

Management Science Theory

• Focuses on quantitative methods to make maximum use of organizational resources.
• Includes techniques like linear programming, modeling, simulation and operations management.

Contingency Theory

• Recognizes that the best organizational structure and control systems depend on external environment conditions.
• There is no one best way to organize, depending on the situation.

Organizational Environment Theory

• The set of forces and conditions that operate beyond an organization’s boundaries influencing its ability to acquire and utilize resources.

The Open-Systems View

• Organizations are open systems interacting with their environment.
• Inputs (resources) are transformed into outputs (goods and services) through a conversion process, which is influenced by elements of the environment.

Types of Organizational Structure

• Mechanistic structure: Centralized, specific tasks, and close supervision (stable environment). Examples are McDonald’s.
• Organic structure: Decentralized, ambiguous tasks, and cooperative team effort (changing environment). Examples are Google and Apple.

Dynamic Capabilities

• Build, integrate, and reconfigure processes to adapt to rapidly changing internal and external environments.
• Organizations need unique capabilities to sense opportunities, seize value, and adapt and transform effectively.