Chapter 1 - Introduction to Management PDF

CHAPTER 1: Introduction to management  Why learn about management? 1. Develops conceptual skills - complements technical and social skills 2. Helps you to understand your managers 3. Improves your understanding of the role management plays in society - including first-line, middle...

CHAPTER 1: Introduction to management  Why learn about management? 1. Develops conceptual skills - complements technical and social skills 2. Helps you to understand your managers 3. Improves your understanding of the role management plays in society - including first-line, middle, top managers 4. Helps enhance organizational performance - including value creation and value capture 5. Fosters self-understanding  The nature of management The what of management: Key definitions 1. Management is the process of planning, organizing, leading, and controlling human and other resources towards the effective achievement of organizational goals 2. An organization is a goal-directed, deliberately-structured group of people working together to provide specific good and services What do managers do: - perform four management functions (Henri Fayol) - play ten managerial roles (Henry Mintzberg)  The nature of management (cont’d) The why of management Three approaches for understanding what it means to be a successful/effective manager Financial Bottom Line (FBL) Management - Focus on maximizing organizations’ financial performance - The dominant approach in the past century Triple Bottom Line (TBL) Management - Focus on maximizing financial performance via sustainable development (triple bottom line refers to financial, social, and ecological well-being) - Dominant approach over past twenty years Social and Ecological Thought (SET) Management - Focus on socio-ecological well-being ahead of maximizing financial - Poised to become dominant approach in future (esp among Millennials)  Financial Bottom Line (FBL) Management Based on: 1. A consequential utilitarian moral point of view, where an action’s rightness (and limiting its wrongness) is measured by its effect on the net overall happiness for everyone involved - “Net happiness” is often measure via financial wealth created 2. The idea of an Invisible hand which suggests that the good of a community is assured when every individual is permitted to pursue their own self-interests - Assumes everyone is self-interested and materialistic Shortcomings of FBL management Prone to create negative social and ecological externalities (externalities refer to negative and positive effects an organization has on society but which are not reflected in the organization’s financial statements).  Triple Bottom Line (TBL) Management Based on: 1. An enlightened consequential utilitarian moral point of view, which recognizes that firms can increase their financial well-being via reducing negative social and ecological externalities (i.e., via sustainable development) 2. Sustainable development means “meeting the needs of the present generation without compromising the ability of of future generations to meet their needs” (i.e., the focus is on reducing negative, rather than enhancing positive, externalities) 3. Developing a business case that justifies/documents how a proposed new organizational initiative will enhance an organization’s financial well- being - Over 90% of large corporations report on triple bottom line Shortcomings of TBL management Limited to improving socio-ecological well-being only when it serves to enhance financial well-being (i.e., requires a business case)  Social and Ecological Thought (SET) Mgmt Based on: 1. A virtue ethics moral point of view, which focuses on how happiness is achieved by practicing virtues in community 2. Importance on creating positive socio-ecological externalities (rather than only reducing negative externalities) 3. Managers focus on optimizing social and ecological well-being, while ensuring organizations remain financially viable (i.e., SET management does not focus on maximizing financial well-being) Shortcomings of TBL management Does not maximize financial well-being in the short-term (however, management if it enables humankind to avoid extinction, then SET may be seen as the most financially viable approach in the long-term) Depicting the three approaches (A) Depicting the three approaches (B)  Why learn three approaches to management 1. Increases critical thinking skills Key to difference between education vs training 2. Improve ethical thinking skills No approach to management is value-neutral. Learning multiple approaches compels and enables you to think about your own values, and how you will put them into practice during your career 3. Has benefits similar to becoming multilingual Enhances cultural empathy, open-mindedness, tolerance of ambiguity, and improves understanding of the particular approach to management that you prefer.  Entrepreneurial management Three top reasons why people become entrepreneurs: An entrepreneur is someone who conceives of new or improved goods and/or services and exhibits the initiative to develop that idea by making plans and mobilizing the necessary resources to convert the idea into reality 1. Desire for better work/autonomy To be able to be my own boss and manage my workplace using my preferred approach 2. To make the world a better place (SET management) To make positive differences for others, and/or the environment 3. To make money (FBL management) Most entrepreneurs do not even mention this when asked why they become entrepreneurs Types of entrepreneurs  QUESTIONS FOR REFLECTION AND DISCUSSION 1. Many people are attracted to the status, power, and financial rewards associated with being a manager. However, the lifestyle of managers can be stressful, with a high workload and an unrelenting sense of obligation and responsibility to the people being managed. For example, one U.S. study showed that senior managers work long hours and enjoy an average of only 12.2 vacation days per year. What do you think are some of the pros and cons of becoming a manager? Is this a profession and a lifestyle that appeals to you? Why are you studying management? 2. Which metaphor of management do you like better: the idea that managers perform four functions in an orderly manner, or that managers play ten roles alongside other organizational actors? Can you think of additional metaphors that might be useful for understanding management?  QUESTIONS FOR REFLECTION AND DISCUSSION 3. Do you think that financial success increases happiness? Some research suggests that the answer is “yes” for people who are living in poverty, but “no” for people who are already earning more than $75,000 per year. Other research suggests that money and materialism are, in fact, associated with a decline in life satisfaction and personal well-being. Think of a person you know who is truly happy and content. What would that person say about the relationship between overall well-being and an FBL worldview? Do you think that money can buy happiness? Explain your reasoning.  QUESTIONS FOR REFLECTION AND DISCUSSION 4. When someone is described as an “effective” or “successful” manager, do you assume that the manager is financially successful (FBL management), or do you assume they have been able maximize profits while at the same time responsibly attending to social and ecological externalities (TBL)? Or do you assume they have enhanced socio-ecological well-being (SET)? What criteria of success would you like to see used by the manager you report to? By which criteria would you like to be judged? 5. Recall a current or past manager you have worked for. How would you describe that person in terms of FBL, TBL, and SET approaches? What factors did you consider? 6. Why study three different approaches to management? Why not simply find the “best” or most popular approach and then learn about it?  QUESTIONS FOR REFLECTION AND DISCUSSION 7. Do you think that TBL management is able to adequately address the socio-ecological crises that are facing humankind? If not, why do you think the popularity of TBL management has been increasing so rapidly? Do you think SET management is needed? What are factors that might impede or promote the acceptance of SET management? 8. How likely (in percent) do you think it is that you will start a new organization in your career? What would be your main reasons for starting an organization? Look at Figure 1.2, and identify what type of entrepreneur most reflects who you are. Which of the three approaches to management would you like to emphasize in a start-up?