Principles of Management

Management

• Maintaining a firm's competitive advantage.
• Planning, organizing, and controlling organizational activities.

Efficiency vs. Effectiveness

• Efficiency maximizes output with minimal input, "doing things right," avoiding wasted time and effort.
• Effectiveness attains an intended objective, "doing the right thing," meeting the desired goal.

Four Management Functions

• Planning: Select goals and ways to attain them.
• Organizing: Assign responsibility for task accomplishment.
• Leading: Use influence to motivate employees.
• Controlling: Monitor activities and make corrections.

Factors Influencing Management

• Globalization
• Ecosystems
• Psychology
• Technology
• Sustainability and Corporate Social Responsibility.

Nature and Types of Organization

• Businesses should assess the size and nature of the business, level of control, expected profit, tax implications, and vulnerability to lawsuits.

Role and Skills of Managers/Levels of Management

• Top Level: (Director, VP, COO, CEO, Managing Director)
• Middle Level: (Department Head, Division Manager)
• Low Level: (Supervisor, First Line, Frontline)

Management Roles

Interpersonal

• Figurehead
• Leader
• Liaison

Informational

• Monitor
• Disseminator
• Spokesperson

Decisional

• Entrepreneur
• Disturbance Handler
• Resource Allocator
• Negotiator

Management Skills

Conceptual Skills

• Analyzing situations, identifying opportunities/resources, deciding on best strategies.

Human Skills

• Motivating, leading subordinates, communicating effectively with employees.

Technical Skills

• Possessing specific competencies for assigned tasks and specialization in a particular department.

The Development of Management

• 1100 BC (Chinese): Four managerial functions
• 400-350 BC (Greek): Scientific Approach
• (Romans): Management decentralization
• (Venetians): Assembly line, inventory system, building warehouses
• 1780-1840: Economies of scale
• Early 20th Century: Business Schools
• 20th Century to Present (US): Manufacturing as core business

Classical Management Theories

Scientific Management Theory

• Scientific methods redesign processes for efficiency.
• Advocated by Frederick W. Taylor, Henry Gantt, and Frank and Lillian Gilbreth.
• Important cornerstone of the Efficiency Movement (Early 20th Century).
  • Limitations: Creates routine operations, focusing on money as incentive, may lead to managers.
• Four Principles of Scientific Management (Frederick Winslow Taylor)
  • Replace rule-of-thumb methods with scientifically proven ones.
  • Select, train, and develop workers scientifically.
  • Cooperate to ensure scientific methods are followed at work.
  • Divide the work between managers and workers.

Administrative Management Theory

• Introduced in the Early 20th Century by Henry Fayol.
• Focuses on the overall management of the organization and emphasizes on the role of managers as administrators.

Five Functions of Administrative Management

• Planning
• Organizing
• Communicating
• Coordinating
• Controlling

Fourteen Principles of Administrative Management

• Division of work into specialized tasks
• Authority of managers to delegate work and tasks to the employees
• Discipline
• Unity of command
• Unity of direction
• Predominance of general interest of the organization
• Remuneration of employee efforts
• Centralization
• Scalar chain
• Order
• Equity
• Stability and tenure of personnel
• Initiative
• Esprit de corps

Bureaucracy

• Focuses on a formal rigid organization structure with legitimate authority.
• Relationships must be impersonal, free from personal interests
• Laws and regulations are set.
• Suited for organizations with routine tasks.

Other Contributors of Administrative Management

• Max Weber: Studies on public administration and bureaucracy
• Chester Barnard: The Functions of the Executive
• Mary Parker Follet: Dynamic Organization and Human Relations

Human Relations Theory

• Established in the 1920s and pioneered by Elton Mayo to improve the workplace and focus on human factors.
• Worker motivation improves productivity.
  • Hawthorne studies started: work hours, break times, lighting, manager supervision.
• Abraham Maslow: individual behavior influenced by certain needs.
  • These needs are described according to a hierarchy; the lower level needs must be met first before progressing.
• Managers must meet workers' essential needs to guarantee maximum performance.

McGregor's Theory of Motivation, Theory X and Theory Y

• Formulated by Douglas McGregor to represent how employees view work.

Theory X

• Work is avoided
• Employees need to be controlled
• People avoid responsibility
• Workers seek security

Theory Y

• Work is natural
• Capable of self-direction
• Seek responsibility
• Can make good decisions
• Theory X creates an adversarial environment
• Theory Y leads to empowered workers and a more cooperative spirit.

Barnard's Cooperative Systems

• Formulated by Chester I. Barnard.

• Organizations are cooperative systems that integrate individual contributions.

• Systems of cooperation are critical for effective organization.

• Aims to satisfy social relations and personal fulfillment to motivate employees.

• Considers employees as people with social and psychological needs.

• Employees are the organizations most valuable resource.

Quality Management Theory

• Focuses on consistency and minimal errors, resulting in high customer satisfaction and increased revenue, involves managers/employees, and Kaizen.

William Edwards Deming

• Emergence of quality perspective in the 1950s.
• Helped Japanese industries improve production.
• Methods included statistical process control and problem-solving techniques.

Joseph Moses Juran

• Worked with Japanese businesses.
• Concept focuses on training for top and middle managers.
• Established institute in 1979, contributing to making Japan an industrial power.

Contingency Theory

• Universal theories cannot be applied to organizations because each one is unique, performance affected by internal/external factors
• Introduced in 1967 by Fred Fiedler
  • Fiedler's Contingency Model: leadership personality addresses workplace situations.
  • Other Experts: Lawrence, Lorsch, and Thompson.

Quantitative Management Theory

• Applying quantitative approaches to arrive at a management decision.
• Branches:
  • Management Science
  • Operations Management

Systems Theory

• How interrelated parts operated to achieve a common purpose.
• Preferred model of business organization and management.
• Composed of four elements(Open or Closed)

Management by Objectives

• Managers and employees define department, project, and person goals to monitor performance.

Four Major Activities of Management by Objectives

• Setting Goals with employee involvement at all levels
• Develop Action Plans that define the course to achieve goals.
• Appraise Overall Performance to evaluate goal achievement for individuals and departments.

Competitive Strategy

• Michael Porter-Father of Competitive Strategy
• Techniques for analyzing industries and competitors
• Provides features for internal and external competition among industries