EMGT 1162 - Principles of Management - PDF

BET Honors Degree Program Faculty of Technology Wayamba University of Sri Lanka EMGT 1162 – Principles of Management INTRODUCTION Managers & Management Prof. MMDR Deegahawature B.Sc. (Bus.Ad.) Sp, MBA (Col), MBA (AIT), PhD (HUST), MIM, MAA Department of Ind...

BET Honors Degree Program Faculty of Technology Wayamba University of Sri Lanka EMGT 1162 – Principles of Management INTRODUCTION Managers & Management Prof. MMDR Deegahawature B.Sc. (Bus.Ad.) Sp, MBA (Col), MBA (AIT), PhD (HUST), MIM, MAA Department of Industrial Management Faculty of Applied Sciences Wayamba University of Sri Lanka  Learning Objectives  On the successful completion of this lesson, participants will be able to: – Explain who managers are – Tell where they work – Define Management – Describe the functions, roles, and skills of managers – Identify his/ her potentials as a manager EMGT1162 - Principles of Management - Prof. MMDR Deegahawature, Dept. of IMGT, FAS, WUSL 3  Who are Managers? Where Do They Work?  In Organizations – A group of people working together in a structured and coordinated fashion to achieve a set of goals – Two or more people wok together in a structured way to achieve a specific goal or set of goals EMGT1162 - Principles of Management - Prof. MMDR Deegahawature, Dept. of IMGT, FAS, WUSL 4  Who are Managers?  Characteristics of an Organization – Two or more (group of) people – Work together in a structured manner – With the purpose of achieving goals EMGT1162 - Principles of Management - Prof. MMDR Deegahawature, Dept. of IMGT, FAS, WUSL 5  Who are Managers? Non-Managers Vs. Managers  Non-Managers: – Work directly on a job or task, and have no responsibility for overseeing the work of others – Responsible for their own work and have no overseeing function  Managers: – Direct and oversee the activities of other people in the organization – Responsible for not only their work but also for how their reporting team performs EMGT1162 - Principles of Management - Prof. MMDR Deegahawature, Dept. of IMGT, FAS, WUSL 6  Who are Managers? What Title Do Managers have?  Classifying managers – Top Managers – Middle Managers – First-line Managers Managers Managers Non- EMGT1162 - Principles of Management - Prof. MMDR Deegahawature, Dept. of IMGT, FAS, WUSL 7  What is Management? Define Management  The process of getting things done, effectively and efficiently, through and with other people  Management is a process of planning, organizing, leading and controlling the limited physical and human resources effectively and efficiently to achieve pre-set objectives/goals  Management is the attainment of organizational goals in an effective and efficient manner through planning, organizing, leading and controlling the organizational resources EMGT1162 - Principles of Management - Prof. MMDR Deegahawature, Dept. of IMGT, FAS, WUSL 8  What is Management?  A process of set of activities – planning, 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. EMGT1162 - Principles of Management - Prof. MMDR Deegahawature, Dept. of IMGT, FAS, WUSL 9  What is Management?  What is missing in below definition? The process of getting things done, effectively and efficiently, through and with other people EMGT1162 - Principles of Management - Prof. MMDR Deegahawature, Dept. of IMGT, FAS, WUSL 10  What is Management?  Key words in above definitions – Process of set of Activities [Will be discuss later in detail] – Organizational Resources – Achieving Goals – Effectiveness – Efficiency EMGT1162 - Principles of Management - Prof. MMDR Deegahawature, Dept. of IMGT, FAS, WUSL 11  What is Management? Resources Factors of Production EMGT1162 - Principles of Management - Prof. MMDR Deegahawature, Dept. of IMGT, FAS, WUSL 12  What is Management? Resources The 5 M’s EMGT1162 - Principles of Management - Prof. MMDR Deegahawature, Dept. of IMGT, FAS, WUSL 13  What is Management? Efficiency  The ability to minimize the use of resources, and thus minimize the cost of recourses  Doing a task correctly; “Doing the thing correctly”  Refers to the relationship between inputs and outputs; seeks to minimize resource costs EMGT1162 - Principles of Management - Prof. MMDR Deegahawature, Dept. of IMGT, FAS, WUSL 14  What is Management? Effectiveness  The ability to attain goals  “Doing the right thing”  Doing those works/ tasks that help the organization reach its goals – Goal attainment EMGT1162 - Principles of Management - Prof. MMDR Deegahawature, Dept. of IMGT, FAS, WUSL 15  What is Management? Basic Purpose of Management EFFICIENTCY Using resources wisely and in a cost-effective way And EFFECTIVENESS Making the right decisions and successfully implementing them so that the organization can reach its goals EMGT1162 - Principles of Management - Prof. MMDR Deegahawature, Dept. of IMGT, FAS, WUSL 16  What is Management? Efficiency and Effectiveness EMGT1162 - Principles of Management - Prof. MMDR Deegahawature, Dept. of IMGT, FAS, WUSL 17  What is Management? Efficiency & Effectiveness in an Organization Efficiency Effectiveness EMGT1162 - Principles of Management - Prof. MMDR Deegahawature, Dept. of IMGT, FAS, WUSL 18  What is Management? Efficiency, Effectiveness and Management Doing Things Both Efficient & Efficient but not Efficiency Right Effective Management Effective Management Doing Things Both Inefficient & Effective but not Wrong Ineffective Efficient Management Management Doing the Doing the Right Thing Wrong Thing Effectiveness EMGT1162 - Principles of Management - Prof. MMDR Deegahawature, Dept. of IMGT, FAS, WUSL 19  What is Management? What is Performance?  Performance: The measure of how efficient and effective  Managerial Performance – The measure of how efficient and effective a manager is – How well a manager determines and achieves appropriate objectives by wisely using resources  Organizational Performance – The measure of how efficient and effective an organization is - How well it determines and achieves appropriate objectives by wisely using resources EMGT1162 - Principles of Management - Prof. MMDR Deegahawature, Dept. of IMGT, FAS, WUSL 20  What Do Managers Do? Functional Approach  Four functions: Planning, Organizing, Leading, Controlling EMGT1162 - Principles of Management - Prof. MMDR Deegahawature, Dept. of IMGT, FAS, WUSL 21  What Do Managers Do? Management Roles Approach o Figurehead Mintzberg’s Interpersonal o Leader Managerial Role o Liaison Roles o Monitor Informational o Disseminator Role o Spokesperson o Entrepreneur Decisional o Disturbance Handler Role o Resource Allocator o Negotiator EMGT1162 - Principles of Management - Prof. MMDR Deegahawature, Dept. of IMGT, FAS, WUSL 22  What Do Managers Do? Interpersonal Roles  Pertain to the relationship with people and other duties that are ceremonial and symbolic in nature  Involves managers’ interaction with people inside and outside their work units  Figurehead – Perform ceremonial and symbolic duties such as greeting visitors, handing over awards  Leader – Direct and motivate subordinates; Train, counsel and communicate with subordinates to accomplish goals EMGT1162 - Principles of Management - Prof. MMDR Deegahawature, Dept. of IMGT, FAS, WUSL 23  What Do Managers Do?  Liaison – Communicate with internal and external entities on behalf of the manager’s unit/ organization Informational Roles  Involve collecting, receiving, and disseminating information  Activities related to maintain and develop an information network  Monitor – Seek and scan environment, and receive current information; scanning reports, personal contacts, etc. EMGT1162 - Principles of Management - Prof. MMDR Deegahawature, Dept. of IMGT, FAS, WUSL 24  What Do Managers Do?  Disseminator – Share information with others in the organization; Send memos, reports, make phone calls, etc.  Spokesperson – Transmit information to outsiders of the organization; through speeches, reports, memos, etc. Decisional Roles  Revolve around making choices  Pertain to those events about which the manager must make a choice and take action EMGT1162 - Principles of Management - Prof. MMDR Deegahawature, Dept. of IMGT, FAS, WUSL 25  What Do Managers Do?  Entrepreneur – Initiate improvement projects; Identify new ideas; Delegate the responsibility of ideas to others  Disturbance Handler – Respond to problems that demand immediate action  Resource Allocator – Decide who gets resources; Prepare schedules, budgets, set priorities etc.  Negotiator – Represent interest of work unit during negotiations; Negotiate schedules, resources, contracts, etc. EMGT1162 - Principles of Management - Prof. MMDR Deegahawature, Dept. of IMGT, FAS, WUSL 26  What Do Managers Do? Attending ribbon-cutting ceremony for new Figurehead plant, Signing legal documents Interpersonal Encouraging employees to improve Leader productivity, training, counseling Liaison Coordinating activities of two projects Scanning industry reports to stay abreast of Monitor developments Informational Sending memos outlining new organizational Disseminator initiatives Spokesperson Making a speech to discuss growth plans Entrepreneur Developing new ideas for innovation Disturbance Resolving conflict between two subordinates, handler Resolve conflicts among subordinates Decisional Resource allocator Reviewing and revising budget requests Reaching agreement with a key supplier or Negotiator labor union EMGT1162 - Principles of Management - Prof. MMDR Deegahawature, Dept. of IMGT, FAS, WUSL 27  What Skills Do Managers Need? Managerial Skills EMGT1162 - Principles of Management - Prof. MMDR Deegahawature, Dept. of IMGT, FAS, WUSL 28  What Skills Do Managers Need? Managerial Skills  Technical Skills – Job-specific knowledge and techniques needed to proficiently perform work tasks – Includes mastery of the method, procedures, techniques and equipment and knowledge of specialized field such as engineering, finance or manufacturing – Includes job-specific knowledge needed to perform well in a specialized field EMGT1162 - Principles of Management - Prof. MMDR Deegahawature, Dept. of IMGT, FAS, WUSL 29  What Skills Do Managers Need?  Human Skills – Ability to work with, and through other people and to work effectively as a group member to get things done – Ability to communicate with, understand, and motivate both individuals and groups  Conceptual Skills – Cognitive ability to see the organization as a whole (think in abstract) and the relationships among its parts – Ability to coordinate and integrate all of an organization’s interests and activities EMGT1162 - Principles of Management - Prof. MMDR Deegahawature, Dept. of IMGT, FAS, WUSL 30  What Skills Do Managers Need? Skills Needed at Different Managerial Levels Top- Manager Middle - Conceptual Human Technical Manager Skills Skills Skills Lower-Level Manager Importance EMGT1162 - Principles of Management - Prof. MMDR Deegahawature, Dept. of IMGT, FAS, WUSL 31  What Skills Do Managers Need? What Companies Look for in Managers? Technical Human Skills Skills Conceptual Motivation to Skills Manage EMGT1162 - Principles of Management - Prof. MMDR Deegahawature, Dept. of IMGT, FAS, WUSL 32  Management: Science or Art? Management is a Science  Assumes that problems can be approached using rational, logical, objective, and systematic ways  Requires the use of technical, diagnostic, and decision-making skills and techniques to solve problems EMGT1162 - Principles of Management - Prof. MMDR Deegahawature, Dept. of IMGT, FAS, WUSL 33  Management: Science or Art? Management is an Art  Decisions are made and problems solved using a blend of intuition, experience, instinct, and personal insights  Requires the use of conceptual, communication, interpersonal, and time- management skills to successfully accomplish the tasks associated with managerial activities EMGT1162 - Principles of Management - Prof. MMDR Deegahawature, Dept. of IMGT, FAS, WUSL 34  Work Together  Hope, you have experience in working with managers in various capacities such as managers in organizations, principal in your school, leader in temple/ church etc. Obviously, some managers are better than others. Do certain characteristics help distinguish good managers? List those characteristics? For each item, indicate which management function and which management skill you think it falls under. EMGT1162 - Principles of Management - Prof. MMDR Deegahawature, Dept. of IMGT, FAS, WUSL 35  BET Honors Degree Program Faculty of Technology Wayamba University of Sri Lanka EMGT 1162 – Principles of Management EVOLUTION OF MANAGEMENT Prof. MMDR Deegahawature B.Sc. (Bus.Ad.) Sp, MBA (Col), MBA (AIT), PhD (HUST), MIM, MAA Department of Industrial Management Faculty of Applied Sciences Wayamba University of Sri Lanka  Learning Objectives  On the successful completion of this lesson, participants will be able to: – Describe early management examples – Explain various theories, practices, development and uses of the classical, behavioral, quantitative and contemporary approaches – Explain how organizations apply early management teachings today – Apply early teaching of management in present organizations EMGT1162 – Principles of Management - Prof. MMDR Deegahawature, Dept. of IMGT, FAS, WUSL  Why Management History?  Understand important historical developments in management  Understand important contemporary developments in furthering the development of management practices and  Avoid the mistakes in the past EMGT1162 – Principles of Management - Prof. MMDR Deegahawature, Dept. of IMGT, FAS, WUSL Major Approaches to Management Historical Classical Behavioral Quantitative Contemporary Background Approach Approach Approach Approach Early Examples of Management Adam Smith Industrial Revolution [3000 BC [1911 – [1700 – [1940 – [1960 – – 1776] 1947] 1950] 1950] Present] EMGT1162 – Principles of Management - Prof. MMDR Deegahawature, Dept. of IMGT, FAS, WUSL  Historical Background What Are Some Early Management Examples?  3000 – 2500 BC: Egyptian Pyramids – Tremendous projects – Employ more than 100,000 workers for some 20 years – Planning, managing materials and people, Controls EMGT1162 – Principles of Management - Prof. MMDR Deegahawature, Dept. of IMGT, FAS, WUSL  Historical Background  1400s: Venice – In arsenal of Venice, warships were floating along the canals, and at each stop materials and riggings were added – Also, had warehouses and inventory systems; Human resource function; accounting system EMGT1162 – Principles of Management - Prof. MMDR Deegahawature, Dept. of IMGT, FAS, WUSL  Historical Background  544-496 BC: Sun Tzu – Chinese philosopher, military general, strategist, & tactician – Wrote ‘Art of War’ – Presented early idea about management strategy  1532: Niccolò Machiavelli – Italian politician, diplomat, philosopher, humanist, & writer – Wrote ‘The Princes’ – The principles can be adopted and apply in management EMGT1162 – Principles of Management - Prof. MMDR Deegahawature, Dept. of IMGT, FAS, WUSL  Historical Background  1776: Adam Smith – Published ‘Wealth of Nations’ – Argued: Economic advantages of Division of Labor (Job Specialization) – Also, argued: free trade, market competition and the morality of private enterprise EMGT1162 – Principles of Management - Prof. MMDR Deegahawature, Dept. of IMGT, FAS, WUSL  Historical Background  1780 – Mid 1840s: Industrial Revolution – Possibly, the most important influence on management – The transition to new manufacturing processes – Large and efficient factories pumping out products; need of forecasting demand; ensuring supplies for large production EMGT1162 – Principles of Management - Prof. MMDR Deegahawature, Dept. of IMGT, FAS, WUSL  Historical Background – Machine power began to substitute for human power Lead to mass production of economical goods – Improved and less costly transportation systems became available Created larger markets for goods – Larger organizations developed to serve larger markets Created the need for formalized management practices EMGT1162 – Principles of Management - Prof. MMDR Deegahawature, Dept. of IMGT, FAS, WUSL Major Approaches to Management Historical Classical Behavioral Quantitative Contemporary Background Approach Approach Approach Approach Early Examples Scientific of Management Management Administrative Adam Smith Theory Industrial Revolution [3000 BC [1911 – [1700 – [1940 – [1960 – – 1776] 1947] 1950] 1950] Present] EMGT1162 – Principles of Management - Prof. MMDR Deegahawature, Dept. of IMGT, FAS, WUSL  Classical Approach What is Classical Approach?  Emphasizes a rational and scientific approach to make workers and organizations as efficient as possible  Focus on Job and Management Functions to determine the best way to manage  Converged with the emergence and evolution of large scale businesses  Two major theories – Scientific Management – Administrative Theory EMGT1162 – Principles of Management - Prof. MMDR Deegahawature, Dept. of IMGT, FAS, WUSL  Classical Approach What is Scientific Management?  Grew out of the industrial revolution’s labor shortage at the beginning of the twentieth century  Concerned with improving the performance of individual workers/ labor productivity/ efficiency  Proponents: – Fredrick W. Taylor – Frank and Lillian Gilbreth – Henry Gantt EMGT1162 – Principles of Management - Prof. MMDR Deegahawature, Dept. of IMGT, FAS, WUSL  Classical Approach  Frederick W Taylor (1856–1915) – Consider as the ‘Father of Scientific Management’ – Wrote ‘The Principles of Scientific Management’ (1911): Advocated the use of the scientific method to define the “one best way” for a job to be done – Replaced old “rule-of-thumb” methods of how to do work with scientifically-based work methods to eliminate “soldiering” where employees deliberately worked at a pace slower than their capabilities (due to natural Laziness) – Further suggested that an incentive wage plans motivate workers EMGT1162 – Principles of Management - Prof. MMDR Deegahawature, Dept. of IMGT, FAS, WUSL  Classical Approach – Taylor’s Four Principles of Scientific Management Replace rule-of-thumb work methods with methods based on a scientific study of the tasks Scientifically select, train, and develop each employee rather than passively leaving them to be trained themselves Provide detailed instruction and supervision to each worker in the performance of worker's discrete task so as to ensure that the work is done in accordance with the developed scientific principles Divide work between managers and workers, so that the managers apply scientific management principles to plan the work and the workers actually perform the tasks EMGT1162 – Principles of Management - Prof. MMDR Deegahawature, Dept. of IMGT, FAS, WUSL  Classical Approach  Frank and Lillian Gilbreth – Help workers reach full potential as human being – Pioneered Time and Motion Study – Aims to upgrade performance and reduce fatigues – Time Study developed in the direction of establishing standard times, while Motion Study evolved into a technique for improving work methods EMGT1162 – Principles of Management - Prof. MMDR Deegahawature, Dept. of IMGT, FAS, WUSL  Classical Approach What is Administrative Theory?  A theory that focuses on managing the total organization (rather than individuals)  Focused on general theories of what managers do and what constitutes good management practice  Attempt to identify the principles and skills that underline effective management  Proponents: – Henri Fayol – Max Weber EMGT1162 – Principles of Management - Prof. MMDR Deegahawature, Dept. of IMGT, FAS, WUSL  Classical Approach  Henri Fayol – Wrote “General and Industrial Management” – Helped systematize the practice of management – Was first to identify the specific management functions of planning, organizing, commanding, coordinating and controlling – Fayol insisted that management is a skill, and refused the idea that ‘Managers are born, not made’ – Introduced “Fayol’s 14 Principles of Management” Most frequently had to apply Fundamental or universal principles of management practice EMGT1162 – Principles of Management - Prof. MMDR Deegahawature, Dept. of IMGT, FAS, WUSL  Classical Approach  Fayol’s 14 Principles of Management Division of work Centralization Authority Scalar chain Discipline Order Unity of command Equity Unity of direction Stability of tenure of personnel Subordination of the individual Initiative Remuneration Esprit de corps EMGT1162 – Principles of Management - Prof. MMDR Deegahawature, Dept. of IMGT, FAS, WUSL  Classical Approach 1. Division of Work: Increase production by dividing work so that each worker completes smaller tasks or job element 2. Authority: Rights to give orders. However, responsibility goes along with authority 3. Discipline: Employees must obey and respect the rules that governs the organization 4. Unity of Command: Every employee should receive orders from only one superior 5. Unity of Direction: The organization should have same objectives in a single plan of action to guide managers and workers EMGT1162 – Principles of Management - Prof. MMDR Deegahawature, Dept. of IMGT, FAS, WUSL  Classical Approach 6. Subordination of the Individual to the General Interest: The interests of any one employee or group of employees should not take precedence over the interests of the organization as a whole. Management must see that the organization’s goals are always paramount 7. Remuneration: Workers must be paid a fair and uniform wage for their contribution and it is an important motivator 8. Centralization: The degree to which authority rests at the top of the organization. The degree to which subordinates are involved in decision making EMGT1162 – Principles of Management - Prof. MMDR Deegahawature, Dept. of IMGT, FAS, WUSL  Classical Approach 9. Scalar Chain (Line of Authority): The line of authority from top management to the lowest ranks. Generally, formal communications should follow this chain 10. Order: People and materials should be in the right place at the right time; No overlapping responsibilities, resources etc. 11. Equity: Managers should be kind and fair to their subordinates, and treat impartially to all workers. 12. Stability of Tenure of Personnel: Long-term employment is important for the development of skills and less turnover that improves the organization’s performance. Also, it ensures that replacements are available to fill vacancies EMGT1162 – Principles of Management - Prof. MMDR Deegahawature, Dept. of IMGT, FAS, WUSL  Classical Approach 13. Initiative: Employees who are allowed to originate (formulate) and carry out plans will exert high levels of effort 14. Esprit de Corps: Managers should foster and maintain morale of its employees, teamwork, team spirit, and a sense of unity among employees. Promoting team spirit will build harmony and unity within the organization EMGT1162 – Principles of Management - Prof. MMDR Deegahawature, Dept. of IMGT, FAS, WUSL  Classical Approach  Max Weber – Introduced ‘Theory of Bureaucracy’, based on a rational set of guidelines for structuring organizations – Bureaucracy is an organisational structure that is characterised by many rules, standardised processes, procedures and requirements, number of desks, meticulous division of labour and responsibility, clear hierarchies and professional, almost impersonal interactions between employees – Characteristics of Weber’s Bureaucracy: Career orientation, Division of labor, Authority hierarchy, Formal selection; Formal rules and regulations, Impersonality EMGT1162 – Principles of Management - Prof. MMDR Deegahawature, Dept. of IMGT, FAS, WUSL  Classical Approach 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 – Prescribed universal procedures that are not appropriate in some settings. – Not considered existence of difference among people – Tends to view employees as tools rather than human EMGT1162 – Principles of Management - Prof. MMDR Deegahawature, Dept. of IMGT, FAS, WUSL Major Approaches to Management Historical Classical Behavioral Quantitative Contemporary Background Approach Approach Approach Approach Early Examples Scientific Early of Management Management Advocates Administrative Hawthorne Adam Smith Theory Studies Industrial Human Revolution Relation Move. Behavioral Science Appro, [3000 BC [1911 – [1700 – [1940 – [1960 – – 1776] 1947] 1950] 1950] Present] EMGT1162 – Principles of Management - Prof. MMDR Deegahawature, Dept. of IMGT, FAS, WUSL  Behavioral Approach What is Behavioral Approach ?  A group of scholars, who trained in sociology, psychology and related fields, proposed more effective way to manage people in organizations  The early advocates of behavioral approach believed that people were the most important asset of an organization  Stressed the importance of understanding human behavior, human relations, needs and attitudes in the workplace, and thereby, motivating and encouraging employees towards achievements EMGT1162 – Principles of Management - Prof. MMDR Deegahawature, Dept. of IMGT, FAS, WUSL  Behavioral Approach  Their ideas provided the basis for employee selection procedures, motivation programs, work teams and working environment management techniques  Contributors – Early Advocates: Robert Owen Hugo Munsterberg Mary Parker Follett Chester Barnard – Elton Mayo and Hawthorne Studies – Human Relation Movement – Behavioral Science Approach EMGT1162 – Principles of Management - Prof. MMDR Deegahawature, Dept. of IMGT, FAS, WUSL  Behavioral Approach  Elton Mayo and Hawthorne Studies – A series of experiments conducted at Western Electric’s Hawthorne Plant (1924 to 1932) focusing behavior in the workplace – Examined, for example, how productivity changes as a result of changes in the working condition (i.e. lighting, temperature, and humidity) Illumination study: Worker productivity was measured at various levels of light illumination Researchers found that regardless of whether the light levels were raised or lowered, worker productivity increased EMGT1162 – Principles of Management - Prof. MMDR Deegahawature, Dept. of IMGT, FAS, WUSL  Behavioral Approach – Conclusion Social norms, group standards and attitudes more strongly influence individual output and work behavior than do monetary incentives – Human Relations Implications Hawthorne Effect – workers’ attitudes toward their managers affect the level of workers’ performance Behavior of managers and workers in the work setting is important in explaining the level of performance Demonstrated the importance of understanding how the feelings, thoughts, and behavior of work-group members and managers affect performance – Finally changed the prevalent view that ‘people are similar to machines’ EMGT1162 – Principles of Management - Prof. MMDR Deegahawature, Dept. of IMGT, FAS, WUSL  Behavioral Approach  Human Relation Movement – Grew out of the Hawthorne study and committed to management practices more human – Proposed that better human relations increase worker satisfaction, and thereby increase performances and productivity – Workers respond to employee participation, praise and being nice to people. Thus, manager’s concern on workers would lead to increased worker satisfaction – Proponents: Abraham Maslow Douglas McGregor EMGT1162 – Principles of Management - Prof. MMDR Deegahawature, Dept. of IMGT, FAS, WUSL  Behavioral Approach  Abraham Maslow – Hierarchy of Needs – Theory of Employee Motivation – Advanced a theory that employees are motivated by a hierarchy of needs that they seek to satisfy – Once a need of a person is substantially satisfied, it no longer served as a motivator to particular person EMGT1162 – Principles of Management - Prof. MMDR Deegahawature, Dept. of IMGT, FAS, WUSL  Behavioral Approach  Douglas McGregor – Theory X and Theory Y – Describe managers' beliefs about an employee's motivation to work  Theory X: Work is distasteful to employees, who must be motivated by force, money or praise  Theory Y: People are inherently motivated to work and do a good job EMGT1162 – Principles of Management - Prof. MMDR Deegahawature, Dept. of IMGT, FAS, WUSL  Behavioral Approach  Behavioral Science Approach/ Organizational Behavior (OB) – A contemporary approach focusing on behavioral perspectives of people in organizations – Relies on scientific research for developing theories to provide practical management tools – Important topics in organizational behavior: Job satisfaction and job stress Motivation and leadership Group dynamics and organizational politics Interpersonal conflict The design of organizations EMGT1162 – Principles of Management - Prof. MMDR Deegahawature, Dept. of IMGT, FAS, WUSL  Behavioral Approach Behavioral Approach… Today  Contributions – Provided important insights into motivation, group dynamics, and other interpersonal processes – Focused mgt. attention on these critical processes – Challenged the view that employees are tools and furthered the belief that employees are valuable resources  Limitations – Complexity of individuals makes behavior difficult to predict – Many concepts not put to use because managers are reluctant to adopt them EMGT1162 – Principles of Management - Prof. MMDR Deegahawature, Dept. of IMGT, FAS, WUSL Major Approaches to Management Historical Classical Behavioral Quantitative Contemporary Background Approach Approach Approach Approach Early Examples Scientific Early Management of Management Management Advocates Science Administrative Hawthorne Operations Adam Smith Theory Studies Management Industrial Human Revolution Relation Move. Behavioral Science Appro, [3000 BC [1911 – [1700 – [1940 – [1960 – – 1776] 1947] 1950] 1950] Present] EMGT1162 – Principles of Management - Prof. MMDR Deegahawature, Dept. of IMGT, FAS, WUSL  Quantitative Approach What is Quantitative Approach?  Emerged during World War II to help the Allied Forces manage logistic problems  An approach to solve management problem through the use of mathematical/ quantitative techniques for their modeling, analysis and solution  Focuses on decision making, economic effectiveness, mathematical models, and the use of computers to solve quantitative problems EMGT1162 – Principles of Management - Prof. MMDR Deegahawature, Dept. of IMGT, FAS, WUSL  Quantitative Approach  Management Science – Focuses on the development of representative mathematical models to assist with decisions – Search possibilities to use mathematics to aid in problem solving and decision making – Utilizes linear and nonlinear programming, modeling, simulation, queuing theory and chaos theory  Operations management – Techniques used to analyze any aspect of the organization’s production system – Practical application of management science to efficiently and effectively manage the production and distribution of products and services EMGT1162 – Principles of Management - Prof. MMDR Deegahawature, Dept. of IMGT, FAS, WUSL  Quantitative Approach Quantitative Approach… Today  Contributions – Developed sophisticated quantitative techniques to assist in decision making – Application of models has increased the awareness and understanding of complex processes and situations  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, unfounded assumptions, limiting their general applicability EMGT1162 – Principles of Management - Prof. MMDR Deegahawature, Dept. of IMGT, FAS, WUSL Major Approaches to Management Historical Classical Behavioral Quantitative Contemporary Background Approach Approach Approach Approach Early Examples Scientific Early Management System of Management Management Advocates Science Approach Administrative Hawthorne Operations Contingency Adam Smith Theory Studies Management Approach Industrial Human Revolution Relation Move. Behavioral Science Appro, [3000 BC [1911 – [1700 – [1940 – [1960 – – 1776] 1947] 1950] 1950] Present] EMGT1162 – Principles of Management - Prof. MMDR Deegahawature, Dept. of IMGT, FAS, WUSL  Contemporary Approach What is Contemporary Approach?  Though earlier approaches concern on inside the organization, contemporary approach focuses on what was happening in the external environment, outside the boundaries of the organization  Two contemporary approaches: – System Theory – Contingency Theory EMGT1162 – Principles of Management - Prof. MMDR Deegahawature, Dept. of IMGT, FAS, WUSL  Contemporary Approach  System Theory – View organizations as a set of interrelated and interdependent parts arranged in a manner that produces a unified/ integrated whole – Closed Vs. Open Systems – Contribution Organizations are made with interrelated and interdependent factors such as individuals, groups, attitudes, motives, formal structures, goals, authority etc. Decisions and actions of one area in the organization affect other areas Organizations rely on their environment for essential inputs, and as an outlet to absorb outputs EMGT1162 – Principles of Management - Prof. MMDR Deegahawature, Dept. of IMGT, FAS, WUSL  Contemporary Approach  Contingency Theory – Though early theorists believed that their management principles are universally applicable later it was believed that management principles are contingent to the situation – Universal vs. Contingency Approach Universal Approach attempts to identify the “one best way” to manage organizations Contingency Approach suggests organizations are different, face different situations (contingencies), and require different ways of managing. – Describes “If, Then”: If this is my situation, then this is the best way to manage…i.e.: differ in size, goal, work activities, individual differences, environ. uncertainty etc. EMGT1162 – Principles of Management - Prof. MMDR Deegahawature, Dept. of IMGT, FAS, WUSL Major Approaches to Management Historical Classical Behavioral Quantitative Contemporary Background Approach Approach Approach Approach Early Examples Scientific Early Management System of Management Management Advocates Science Approach Administrative Hawthorne Operations Contingency Adam Smith Theory Studies Management Approach Industrial Human Revolution Relation Move. Behavioral Science Appro, [3000 BC [1911 – [1700 – [1940 – [1960 – – 1776] 1947] 1950] 1950] Present] EMGT1162 – Principles of Management - Prof. MMDR Deegahawature, Dept. of IMGT, FAS, WUSL  Why Each Approach? Classical Approach Quantitative Approach WHY: Believed that Scientific Administrative quantitative techniques can WHY: Need to find ways WHY: Need to find be applied in management to improve the guidelines for managing efficiency of individual complex organization Contemporary workers such as factories Approach elements functioning as Behavioral Approach management principles WHY: Viewed a firm as are contingent to the an interrelated set of WHY: Believed that System Theory Contingency Human Relations Behavioral Science situation a whole WHY: Believed that WHY: Believed in better human relations scientific research for increase worker developing theories to satisfaction, and it provide practical increases productivity management tools EMGT1162 – Principles of Management - Prof. MMDR Deegahawature, Dept. of IMGT, FAS, WUSL  BET Honors Degree Program Faculty of Technology Wayamba University of Sri Lanka EMGT 1162 – Principles of Management ENVIRONMENT ANALYSIS Prof. MMDR Deegahawature B.Sc. (Bus.Ad.) Sp, MBA (Col), MBA (AIT), PhD (HUST), MIM, MAA Department of Industrial Management Faculty of Applied Sciences Wayamba University of Sri Lanka  Learning Objectives  On the successful completion of this lesson, participants will be able to: – Discuss the nature of the organizational environment and identify the environments of interest to most organizations. – Describe the components of the general and task environments and discuss their impact on organizations. – Identify the components of the internal environment and discuss their impact on organizations. EMGT1162 Principles of Management - Prof. MMDR Deegahawature, Dept. of IMGT, FAS, WUSL 3  Environment Analysis What Constitute An Organization’s Environment?  Understanding the dynamic nature of an organization’s environment is essential  Organizations must adapt to the changing needs  Environment includes – Internal Environment – External Environment EMGT1162 Principles of Management - Prof. MMDR Deegahawature, Dept. of IMGT, FAS, WUSL 4  The Business Environment  Internal Environment – The factors which are under the control of the organization, but can influence business strategy and other decisions – Conditions and forces present and at work within an organization Owners & Board of Directors Employees & Trade Unions Physical Resources & Technological Capabilities Corporate Culture Vision, Mission and Objectives Organizational Structure – Capabilities: Resources and Competencies EMGT1162 Principles of Management - Prof. MMDR Deegahawature, Dept. of IMGT, FAS, WUSL 5  The Business Environment  External Environment — everything outside an organization’s boundaries that might affect it: includes direct and indirect-action elements – General environment is everything outside an organization’s boundaries and makes general context for businesses — political, economic, socio- cultural, technological, environmental , legal, and international forces : includes elements that affect the climate in which organizational activities take place – Task environment (Specific environment) is composed of specific groups of organizations that affect the firm: includes elements that directly influence the organizational activities EMGT1162 Principles of Management - Prof. MMDR Deegahawature, Dept. of IMGT, FAS, WUSL 6 The Business Environment EMGT1162 Principles of Management - Prof. MMDR Deegahawature, Dept. of IMGT, FAS, WUSL 7  WHAT IS GENERAL ENVIRONMENT? WHAT DOES IT INCLUDE?  The External Environment  The General Environment – The set of broad dimensions and forces in an organization’s surroundings that create its overall context. – Economic dimension is the overall health and vitality of the economic system in which the organization operates. Interest rates, inflation, unemployment, exchange rate, economic growth, spending power, and other factors that affect the general health and well-being of a nation or the regional economy Managers usually cannot influence or control these factors but, they have profound impact on firms. EMGT1162 Principles of Management - Prof. MMDR Deegahawature, Dept. of IMGT, FAS, WUSL 9  The External Environment  The General Environment (Contd.) – Technological dimension refers to the knowledge, tools and techniques available for converting resources into products or services. Changes in the technology that managers use to design, produce, or distribute goods and services – Results in new opportunities or threats to managers – Often makes products obsolete very quickly. – Can change how managers manage. EMGT1162 Principles of Management - Prof. MMDR Deegahawature, Dept. of IMGT, FAS, WUSL 10  The External Environment  The General Environment (Contd.) – Sociocultural dimension includes the customs, norms, values, demographic characteristics, and related characteristics of the society in which the organization functions. Pressures emanating from the social structure of a country or society or from the national culture Cultures and their associated social structures, values, and norms differ widely throughout the world Pressure due to changes in demographic characteristics EMGT1162 Principles of Management - Prof. MMDR Deegahawature, Dept. of IMGT, FAS, WUSL 11  The External Environment  The General Environment (Contd.) – Demographic Forces Outcomes of change in, or changing attitudes toward, the characteristics of a population, such as age, gender, ethnic origin, race, sexual orientation, and social class During the past two decades, women have entered the workforce in increasing numbers and most industrial countries’ populations are aging. Working-mothers changes the opportunities for firms competing in these areas as demands for child care and health care are to increase dramatically. EMGT1162 Principles of Management - Prof. MMDR Deegahawature, Dept. of IMGT, FAS, WUSL 12  The External Environment  The General Environment (Contd.) – Political-legal dimension is the extent of government regulation of business and the general relationship between business and government. Outcomes of changes in laws and regulations, such as the deregulation of industries, the privatization of organizations, changes in tax policy, and increased emphasis on environmental protection, minimum wage law, consumer protection laws Increases in laws and regulations increase the costs of resources and limit the uses of resources that managers are responsible for acquiring and using effectively and efficiently. EMGT1162 Principles of Management - Prof. MMDR Deegahawature, Dept. of IMGT, FAS, WUSL 13  The External Environment  The General Environment (Contd.) – Global dimension is the extent to which the organization is affected by the matters in other countries. Outcomes of changes in international relationships; changes in nations’ economic, political, and legal systems; and changes in technology Eg. falling trade barriers, the growth of representative democracies, speed transportation, invention of trading blocks, and reliable and instantaneous communication Important opportunities and threats to managers EMGT1162 Principles of Management - Prof. MMDR Deegahawature, Dept. of IMGT, FAS, WUSL 14 The External Environment EMGT1162 Principles of Management - Prof. MMDR Deegahawature, Dept. of IMGT, FAS, WUSL 15 WHAT IS TASK ENVIRONMENT? WHAT DOES IT INCLUDE?  The External Environment  The Task Environment (Specific Environment) – Specific groups directly affecting the organization Customers who acquire an organization’s products or resources. Competitors seeking the same resources as the organization. Suppliers that provide resources for the organization. Regulators that control, legislate, or influence the organization’s policies or practices: – regulatory agencies. – interest groups. Strategic Partners (allies) who are in a joint venture or partnership with the organization. EMGT1162 Principles of Management - Prof. MMDR Deegahawature, Dept. of IMGT, FAS, WUSL 17  HOW ENVIRONMENTS AFFECT ORGANIZATIONS? How Environments Affect Organizations?  Three basic perspectives are used to explain how environments affects organizations – Environment change and complexity – Environmental turbulence – Competitive forces EMGT1162 Principles of Management - Prof. MMDR Deegahawature, Dept. of IMGT, FAS, WUSL 19  How Environments Affect Organizations? (cont’d)  Change and Complexity – Environmental change occurs in two ways: Degree of change – the extent to which the environment is relatively stable or relatively dynamic Degree of homogeneity – the extent to which the environment is relatively simple (few elements/segments) or relatively complex (many elements/segments) – Uncertainty (the outcome of change and homogeneity) is a driving force that influences organizational decisions. EMGT1162 Principles of Management - Prof. MMDR Deegahawature, Dept. of IMGT, FAS, WUSL 20  How Environments Affect Organizations? (cont’d)  Environmental Change, Complexity and Uncertainty Simple Degree of Homogeneity Least Moderate uncertainty uncertainty Moderate Most uncertainty uncertainty Complex Stable Degree of Change Dynamic EMGT1162 Principles of Management - Prof. MMDR Deegahawature, Dept. of IMGT, FAS, WUSL 21  How Environments Affect Organizations? (cont’d)  Environmental Turbulence – Unexpected changes and upheavals in the environment  Competitive Forces – Forces that create competitive environment to a firm: Porter’s Five Competitive Forces Threat of new entrants into the market Competitive rivalry among present competitors Threat of substitute products Power of buyers Power of suppliers EMGT1162 Principles of Management - Prof. MMDR Deegahawature, Dept. of IMGT, FAS, WUSL 22  Porter’s Five Competitive Forces Threat of new entrants – Extent to and ease with which new competitors can enter market Competitive rivalry – Rivalry among existing firms in an industry Threat of substitute products – Extent to which alternative products/services may replace the need for existing products/services Power of buyers – Extent to which buyers influence market rivals Power of suppliers – Extent to which suppliers influence market rivals EMGT1162 Principles of Management - Prof. MMDR Deegahawature, Dept. of IMGT, FAS, WUSL 23 HOW ORGANIZATIONS RESPOND TO THEIR ENVIRONMENTS?  How Organizations Respond to Their Environments?  Organization must adopt to the environment changes by assessing its own unique situation  Six basic mechanisms through which an organization adopts to the environment  Information Management  Strategic Response  Mergers, Acquisition and Alliance  Organization design and flexibility  Direct influence to the environment  Social Responsibility EMGT1162 Principles of Management - Prof. MMDR Deegahawature, Dept. of IMGT, FAS, WUSL 25  BET Honors Degree Program Faculty of Technology Wayamba University of Sri Lanka EMGT 1162 – Principles of Management PLANNING Prof. MMDR Deegahawature B.Sc. (Bus.Ad.) Sp, MBA (Col), MBA (AIT), PhD (HUST), MIM, MAA Department of Industrial Management Faculty of Applied Sciences Wayamba University of Sri Lanka What Do we Discuss in Planning? Decision Making Planning Foundation of Planning EMGT1162 Principles of Management - Prof. MMDR Deegahawature, Dept. of IMGT, FAS, WUSL 3 EMGT 1162 – Principles of Management MANAGERS AS DECISION MAKERS Prof. MMDR Deegahawature B.Sc. (Bus.Ad.) Sp, MBA (Col), MBA (AIT), PhD (HUST), MIM, MAA Department of Industrial Management Faculty of Applied Sciences Wayamba University of Sri Lanka  Learning Objectives  On the successful completion of this lesson, participants will be able to: – Explain decision making – Distinguish between programmed and non-program decisions – Make decisions in different decision making conditions – Describe and use steps in rational decision making process – Control influence of behavioral aspects in decision making – Use group decision making EMGT1162 Principles of Management - Prof. MMDR Deegahawature, Dept. of IMGT, FAS, WUSL 5  Decision Making What is Decision Making?  The act of choosing an alternative from a set of alternatives  An effective decision is one that optimizes some set of factors such as profits, sales, employee welfare, and market share  Managers make decisions about both problems and opportunities EMGT1162 Principles of Management - Prof. MMDR Deegahawature, Dept. of IMGT, FAS, WUSL 6  Types of Decisions Program Vs. Non-program Decisions  Programmed Decisions – A decision that is fairly structured decision or recurs with some frequency or both. – A decision that is repetitive and can be handled by routine approach Example: Starting your car in the morning. EMGT1162 Principles of Management - Prof. MMDR Deegahawature, Dept. of IMGT, FAS, WUSL 7  Types of Decisions Program Vs. Non-program Decisions  Non-programmed Decisions – Decisions that must be custom-made to solve unique and nonrecurring problems – A decision that is made in complex, important, and non-routine situations, often under new and largely unfamiliar situations Example: Choosing a vacation destination. EMGT1162 Principles of Management - Prof. MMDR Deegahawature, Dept. of IMGT, FAS, WUSL 8  Decision-Making Conditions What are decision making conditions?  Decision Making Under Certainty – A condition in which the decision maker knows with reasonable certainty what the alternatives are and what conditions are associated with each alternative.  Decision Making Under Risk – A condition in which availability of each alternatives and its potential payoffs and costs are all associated with risks. Thus, they can be estimated with a probability. EMGT1162 Principles of Management - Prof. MMDR Deegahawature, Dept. of IMGT, FAS, WUSL 9  Decision-Making Conditions  Decision Making Under Uncertainty – A condition in which the decision maker does not know all the alternatives, the risks associated with each of them, or the consequences of each alternative EMGT1162 Principles of Management - Prof. MMDR Deegahawature, Dept. of IMGT, FAS, WUSL 10 Decision-Making Conditions EMGT1162 Principles of Management - Prof. MMDR Deegahawature, Dept. of IMGT, FAS, WUSL 11  Rational Perspective on Decision Making The Classical Model of Decision Making  An approach to decision making that tells managers how they should make decisions; assumes that managers are logical and rational and that their decisions will be in the best interest of the organization When faced with a decision situation, managers should 1 Obtain complete information, Eliminate uncertainty, Evaluate everything rationally and 2 logically … and end up with a decision that best serve the interests of 3 the organization. EMGT1162 Principles of Management - Prof. MMDR Deegahawature, Dept. of IMGT, FAS, WUSL 12  Rational Decision Making Process Step Detail Example 1.Recognizing Some stimulus indicates A plant manager sees that and defining that a decision must be employee turnover has the decision made. The stimulus may increased by 5 percent. situation be positive or negative. 2.Identifying Both obvious and creative The plant manager can alternatives alternatives are desired. In increase wages, increase general, the more benefits, or change hiring important the decision, standards. the more alternatives should be considered. 3.Evaluating Each alternative is Increasing benefits may alternatives evaluated to determine its not be feasible. Increasing feasibility, its wages and changing satisfactoriness, and its hiring standards may satisfy consequences. all conditions. EMGT1162 Principles of Management - Prof. MMDR Deegahawature, Dept. of IMGT, FAS, WUSL 13  Rational Decision Making Process Step Detail Example 4. Selecting Consider all situational factors, Changing hiring standards the best and choose the alternative will take an extended alternative that best fits the manager’s period of time to cut situation. turnover, so increase wages. 5. Implement- The chosen alternative is The plant manager may ing the implemented into the need permission from chosen organizational system. corporate headquarters. alternative The human resource department establishes a new wage structure. 6. Following up At some time in the future, the The plant manager notes and manager should ascertain the that, six months later, evaluating extent to which the turnover has dropped to its the results alternative chosen in step 4 previous level. and implemented in step 5 has worked. EMGT1162 Principles of Management - Prof. MMDR Deegahawature, Dept. of IMGT, FAS, WUSL 14 Behavioral Aspects of Decision Making The Administrative Model of Decision Making When faced with a decision situation managers 1 actually… use incomplete and imperfect information, are 2 constrained by bounded rationality, tend to satisfies and end up with a decision that may or may not 3 serve the interest of the organization EMGT1162 Principles of Management - Prof. MMDR Deegahawature, Dept. of IMGT, FAS, WUSL 15  Behavioral Aspects of Decision Making  Bounded Rationality – The concept that decision makers are limited by their values and unconscious reflexes, skills, and habits.  Satisficing – The tendency to search for alternatives only until one is found that meets some minimum standard of sufficiency to resolve the problem.  Coalition – A political force in decision making which consists of an informal alliance of individuals or groups formed to achieve a goal EMGT1162 Principles of Management - Prof. MMDR Deegahawature, Dept. of IMGT, FAS, WUSL 16  Behavioral Aspects of Decision Making  Intuition – An innate belief about something without conscious consideration.  Escalation of Commitment – A decision maker is staying with a decision even when it appears to be wrong.  Risk Propensity – The extent to which a decision maker is willing to gamble when making a decision EMGT1162 Principles of Management - Prof. MMDR Deegahawature, Dept. of IMGT, FAS, WUSL 17 Group Decision Making in Organizations Advantages Disadvantages 1. More information and 1. The process takes longer than knowledge are available. individual decision making, so it is costlier. 2. More alternatives are likely to 2. Compromise decisions resulting from be generated. indecisiveness may emerge. 3. More acceptance of the final 3. One person may dominate the group. decision is likely. 4. Enhanced communication of 4. Goal displacement – need for wining the decision may result. the argument than solving the problem. 5. Better decisions generally 5. Groupthink may occur. emerge. 6. Training the less experienced 6. Logrolling members. EMGT1162 Principles of Management - Prof. MMDR Deegahawature, Dept. of IMGT, FAS, WUSL 18 Department of Industrial Management Faculty of Applied Sciences Wayamba University of Sri Lanka What Do we Discuss in Planning? Decision Making Planning Foundation of Planning IMGT 1112 Principles of Management - Prof. MMDR Deegahawature, Dept. of IMGT, FAS, WUSL 2 IMGT 1112 – Principles of Management FOUNDATION OF PLANNING Prof. MMDR Deegahawature B.Sc. (Bus.Ad.) Sp, MBA (Col), MBA (AIT), PhD (HUST), MIM, MAA Department of Industrial Management Faculty of Applied Sciences Wayamba University of Sri Lanka  Learning Objectives  On the successful completion of this lesson, participants will be able to: – Discuss the nature and purpose of planning – Classify the types of goals and plans – Compare and contrast approaches to set goals and develop plan – Set goals and develop plans – Define strategic management – Discuss strategic management process – Do SWOT analysis – Describe corporative strategies and business strategies IMGT 1112 Principles of Management - Prof. MMDR Deegahawature, Dept. of IMGT, FAS, WUSL 4  Nature and Purpose of Planning What is Planning?  Involves – Defining the organization’s objectives or goals – Establishing a strategy for achieving those goals, and developing plans to integrate and coordinate work activities  Planning is concerned with ends (what is to be done) as well as with means (how it is to be done)  Formal vs. Informal Planning IMGT 1112 Principles of Management - Prof. MMDR Deegahawature, Dept. of IMGT, FAS, WUSL 5  Nature and Purpose of Planning Is Planning Worthwhile? Planning Time Frame Planning Leads to Performance External Environment IMGT 1112 Principles of Management - Prof. MMDR Deegahawature, Dept. of IMGT, FAS, WUSL 6  Goals and Plans What are Goals?  Goals (objectives) are desired outcome or target  Desired future state that an organization attempts to realize  Goals are used for two purposes – To guide management decisions – To serve as the criterion against which results are measured  Goals should be in place before establishing plans to reach them IMGT 1112 Principles of Management - Prof. MMDR Deegahawature, Dept. of IMGT, FAS, WUSL 7  Goals and Plans What are Plans?  A plan is a document that outlines how goals are to be met  A blueprint specifying the necessary actions schedules and other resource allocations for accomplishing goals  Properly conceived plan tells what, when, how much and how something is to be done Action statement: Objective: Means to the end The end IMGT 1112 Principles of Management - Prof. MMDR Deegahawature, Dept. of IMGT, FAS, WUSL 8  Goals and Plans What are the Types of Goals and Plans?  Strategic Goals vs. Financial Goals  Stated Goals vs. Real Goals  Types of Plans IMGT 1112 Principles of Management - Prof. MMDR Deegahawature, Dept. of IMGT, FAS, WUSL 9  Goals and Plans  Strategic Plans Vs. Operational Plans – Strategic: Plans that apply to the entire organization and establish the organization’s overall goals – Operational: Plans that encompass a particular operational area of the organization  Long Term Vs. Short Term Plans – Long Term: Plan with a time frame beyond three years – Short Term: Plan covering one year or less IMGT 1112 Principles of Management - Prof. MMDR Deegahawature, Dept. of IMGT, FAS, WUSL 10  Goals and Plans  Specific Vs. Directional Plans – Specific: Plans that are clearly defined thus no rooms for interpretations – Directional: Plans that are flexible and set out general guidance  Single-use Vs. Standing Plans – Single-use: Plans specifically designed to meet the need of a unique situation – Standing: Plans that provides guidance for activities performed repeatedly IMGT 1112 Principles of Management - Prof. MMDR Deegahawature, Dept. of IMGT, FAS, WUSL 11 Setting Goals and Developing Plans What are the Approaches to Goal Setting? Traditional vs. MBO  Traditional goal setting – An approach to setting goals where goals are set by top managers, and flow them down through the organization thus, they become sub-goals for each organizational area/ level – Means-ends chain: An integrated network of goals in which the accomplishment of goals at one level serves as the means for achieving the goals, or ends, at the next level IMGT 1112 Principles of Management - Prof. MMDR Deegahawature, Dept. of IMGT, FAS, WUSL 12 Setting Goals and Developing Plans  Achieving from bottom to top – Means-ends Chain Objective: End Improve the organization’s Top Management performance Objective: Significantly improve the division’s production Means Middle Management End Objective: Increase the number of units produced Lower Management Objective: Just work faster Means IMGT 1112 Principles of Management - Prof. MMDR Deegahawature, Dept. of IMGT, FAS, WUSL 13 Setting Goals and Developing Plans  Management by Objectives (MBO) – A process of setting mutually agreed-upon goals and using those goals to evaluate employee performance – Four elements of MBO Program: Goal specificity: Determine or revise organizational objectives for the entire company based on its vision and mission Participative decision making An explicit time period, and Performance feedback: Monitoring, evaluation, providing feedback, and rewarding IMGT 1112 Principles of Management - Prof. MMDR Deegahawature, Dept. of IMGT, FAS, WUSL 14 Setting Goals and Developing Plans  Characteristics of Well Written Goals – Spell-out how much, of what kind of performance, by when – Well-stated objectives are SMART S.M.A.R.T. Specific Measurable Attainable Realistic/ Result Timely IMGT 1112 Principles of Management - Prof. MMDR Deegahawature, Dept. of IMGT, FAS, WUSL 15 Setting Goals and Developing Plans  SMART Goals – Well-stated objectives are SMART they should be stated in specific terms they should be measurable or quantifiable they should be challenging but attainable they should be results-oriented and support the organization’s vision they should specify target dates by which they should be accomplished IMGT 1112 Principles of Management - Prof. MMDR Deegahawature, Dept. of IMGT, FAS, WUSL 16  Strategic Management Process What is Strategic Management?  A way of approaching business opportunities and challenges.  A comprehensive and ongoing management process aimed at formulating and implementing effective strategies which align the organization with its environment to achieve major organizational goals IMGT 1112 Principles of Management - Prof. MMDR Deegahawature, Dept. of IMGT, FAS, WUSL 17  Strategic Management Process What are the Steps of the Strategic Management Process? IMGT 1112 Principles of Management - Prof. MMDR Deegahawature, Dept. of IMGT, FAS, WUSL 18  Strategic Management Process  Strategic Management Process is a six-step process that encompasses strategic planning, implementation and evaluation  Step 1: Identify the organization’s current Vision, Mission, Goals and Strategies – Identify the purpose of the organization – Clarify what it is in the business to do; What the business need to do – Basically try to understand the goals/ objectives of the organization IMGT 1112 Principles of Management - Prof. MMDR Deegahawature, Dept. of IMGT, FAS, WUSL 19  Strategic Management Process  Step 2a: Doing an External Environment Analysis – Analyse external environment’s components such as economic, demographic, political/legal, sociocultural, technological, and global components to see the trends and changes – At the end of this step managers need to pinpoint opportunities and threats – Opportunities: Positive trends in the external environment that the organization can exploit for benefits – Threats: Negative trends in the external environment that counteract or buffer against the success IMGT 1112 Principles of Management - Prof. MMDR Deegahawature, Dept. of IMGT, FAS, WUSL 20  Strategic Management Process  Step 2b: Doing an Internal Environment Analysis – Analyse internal environment’s components such as resources, capabilities, etc. – Resources: An organization’s assets that are used to develop, manufacture, and deliver products to its customers - financial, physical, human, and intangible – Capabilities: An organization’s skills and abilities in doing the work activities needed in its business – At the end of this step managers need to pinpoint strengths and weaknesses IMGT 1112 Principles of Management - Prof. MMDR Deegahawature, Dept. of IMGT, FAS, WUSL 21  Strategic Management Process – Strengths: Any activities the organization does well or any unique resources that it has – Weaknesses: Activities the organization does not do well or resources it needs but does not possess  SWOT analysis – An analysis of the organization’s strengths, weaknesses, opportunities, and threats IMGT 1112 Principles of Management - Prof. MMDR Deegahawature, Dept. of IMGT, FAS, WUSL 22  Strategic Management Process  Step 3: Formulating Strategies: – After completing the SWOT analysis, managers formulate appropriate strategies that help an organization achieve its strategies – Develop strategies that (1) Exploit an organization’s strengths and external opportunities, and/or (2) Work as a buffer and protect the organization from external threats, and/or (3) Correct critical weaknesses – Three levels of strategies: Corporate, Business/ Competitive and Functional strategies IMGT 1112 Principles of Management - Prof. MMDR Deegahawature, Dept. of IMGT, FAS, WUSL 23  Strategic Management Process Hierarchy of Strategies Corporate Strategy Business Strategy Functional Strategy IMGT 1112 Principles of Management - Prof. MMDR Deegahawature, Dept. of IMGT, FAS, WUSL 24  Strategic Management Process  Step 4: Implementing Strategies – The methods by which strategies are operationalized or executed within the organization – Focus on the processes through which the strategies are achieved – No matter how effectively an organization has planned its strategies, performance will suffer if the strategies aren’t implemented properly  Step 5: Evaluating Results – Evaluate the outcome of the strategies implemented – How effective have the strategies been at helping the organization reach its goals? What adjustments are necessary? IMGT 1112 Principles of Management - Prof. MMDR Deegahawature, Dept. of IMGT, FAS, WUSL 25  BET Honors Degree Program Faculty of Technology Wayamba University of Sri Lanka  Leading Managers Motivating & Employees Commun- ication Leadership and Influencing Process EMGT1162 Principles of Management - Prof. MMDR Deegahawature, Dept. of IMGT, FAS, WUSL 2 EMGT 1162 – Principles of Management MOTIVATING EMPLOYEES Dr. AD Dharmawansa B.Sc. (wyb-SL), M. Eng. (NUT - Japan), D. Eng. (NUT - Japan) Department of Industrial Management Faculty of Applied Sciences Wayamba University of Sri Lanka  Learning Objectives ❑ On the successful completion of this lesson, participants will be able to: – Define motivation and characterize its importance – Compare and contrast content perspective of motivation – Compare and contrast process perspective of motivation – Identify, describe and use popular motivational strategies – Design a motivating job EMGT1162 Principles of Management - Prof. MMDR Deegahawature, Dept. of IMGT, FAS, WUSL 4  Motivation What is Motivation? ❑ The inner power or energy that pushes one toward goal-directed behavior ❑ The psychological process by which a person’s efforts are energized, directed, and sustained toward attaining a goal ❑ The processes that account for an individual’s intensity, direction, and persistence of effort toward attaining a goal. – Intensity: how hard a person tries – Direction: toward beneficial goal – Persistence: how long a person tries EMGT1162 Principles of Management - Prof. MMDR Deegahawature, Dept. of IMGT, FAS, WUSL 5  Motivation ❑ The Motivation Framework Need or Search for ways Choice of deficiency to satisfy need behavior to satisfy need Determination of future needs and Evaluation of search/choice need satisfaction for satisfaction The motivation processes through a series of discreet steps. Content and process perspectives of motivation address different parts of this process. EMGT1162 Principles of Management - Prof. MMDR Deegahawature, Dept. of IMGT, FAS, WUSL 6  Content Perspective What is Content Perspective? ❑ Approach to motivation that try to answer the question: – “What factors in the workplace motivate people?” ❑ Theories in Content Perspective – Maslow’s Hierarchy of Needs – Aldefer’s ERG Theory – Herzberg’s Two-Factor Theory – McClelland’s Achievement, Power, and Affiliation Needs EMGT1162 Principles of Management - Prof. MMDR Deegahawature, Dept. of IMGT, FAS, WUSL 7  Content Perspective Maslow’s Hierarchy of Needs Theory ❑ There is a hierarchy of five categories of needs — physiological, safety, social, esteem, and self- actualization - as each need is substantially satisfied, the next need becomes dominant EMGT1162 Principles of Management - Prof. MMDR Deegahawature, Dept. of IMGT, FAS, WUSL 8  Content Perspective ❑ People must, in a hierarchical order, satisfy five groups of needs: – Physiological needs for basic survival and biological function. Needs required to sustain life. i.e. air, water, warmth, food, sleep, etc. – Security needs for a safe physical and emotional environment. Free from the physical threats and emotional harm. i.e. safe area, medical insurance, job security, financial reserves – Belongingness/ Social needs for love and affection. They are related to interaction with other people. i.e. need for friends/ friendship, need for belonging, need to give and receive love. EMGT1162 Principles of Management - Prof. MMDR Deegahawature, Dept. of IMGT, FAS, WUSL 9  Content Perspective – Esteem needs for positive self-image/self-respect and recognition and respect from others. i.e. self-respect, achievement, attention, recognition, reputation – Self-actualization needs for realizing one’s potential for personal growth and development. i.e. reaching one's full potential as a person. ❑Weakness of Maslow’s theory – Five levels of need are not always present. – Ordering or importance of needs is not always same. – Cultural differences. EMGT1162 Principles of Management - Prof. MMDR Deegahawature, Dept. of IMGT, FAS, WUSL 10  Content Perspective The ERG Theory (Alderfer) ❑ People’s needs are grouped into three overlapping categories—existence, relatedness, and growth. ❑ Maslow’s hierarchy is collapsed into three levels: – Existence needs related to physiological and security needs. – Relatedness needs that are similar to belongingness and esteem/ respect by others. – Growth needs encompass needs for self-esteem and self-actualization. EMGT1162 Principles of Management - Prof. MMDR Deegahawature, Dept. of IMGT, FAS, WUSL 11  Content Perspective ❑ Assumptions in ERG Theory – Multiple needs can be operative at one time (there is no absolute hierarchy of needs). – If a need is unsatisfied, a person will regress to a lower-level need and pursue that need (frustration- regression). EMGT1162 Principles of Management - Prof. MMDR Deegahawature, Dept. of IMGT, FAS, WUSL 12  Content Perspective The Two-Factor Theory (Herzberg) ❑ People’s satisfaction and dissatisfaction are influenced by two independent sets of factors— motivation factors and hygiene factors. ❑ Theory assumes that job satisfaction and job dissatisfaction are on two distinct continuums: – Hygiene factors (work environment) are on a separate continuum that ranges from dissatisfaction to no dissatisfaction. – Motivational factors (work content) are on a continuum that ranges from satisfaction to no satisfaction. EMGT1162 Principles of Management - Prof. MMDR Deegahawature, Dept. of IMGT, FAS, WUSL 13  Content Perspective Achievement, Recognition, Responsibility, Interest in the job, Advancement to higher level tasks, Growth Working conditions, Quality of supervision, Salary, Status, Security, Company, Interpersonal relations EMGT1162 Principles of Management - Prof. MMDR Deegahawature, Dept. of IMGT, FAS, WUSL 14  Content Perspective ❑ Thus, motivation is a two-step process: – Ensuring that the hygiene factors are not deficient and not blocking motivation – Giving employees the opportunity to experience motivational factors EMGT1162 Principles of Management - Prof. MMDR Deegahawature, Dept. of IMGT, FAS, WUSL 15  Content Perspective Individual Human Needs (McClelland) ❑ The need for ACHIEVEMENT – The desire to accomplish a goal or task more effectively than in the past ❑ The need for AFFILIATION – The desire for human companionship and acceptance ❑ The need for POWER – The desire to be influential in a group and to be in control of one’s environment EMGT1162 Principles of Management - Prof. MMDR Deegahawature, Dept. of IMGT, FAS, WUSL 16  Process Perspective What is Process Perspective? ❑ Process Perspectives – Approaches to motivation that focus on why people choose certain behavioral options to satisfy their needs and how they evaluate their satisfaction after they have attained their goals. ❑ Process Perspective of Motivation – Expectancy Theory – Equity Theory – Porter-Lawler Extension of Expectancy Theory – Goal-Setting Theory EMGT1162 Principles of Management - Prof. MMDR Deegahawature, Dept. of IMGT, FAS, WUSL 17  Process Perspective Expectancy Theory ❑ Motivation depends on how much we want something and how likely we are to get it. ❑ Assumes that: – Behavior is determined by a combination of personal and environmental forces. – People make decisions about their own behavior in organizations. – Different people have different types of needs, desires, and goals. – People choose one that leads to a desired outcome among alternative behaviors EMGT1162 Principles of Management - Prof. MMDR Deegahawature, Dept. of IMGT, FAS, WUSL 18  Process Perspective ❑ Motivation leads to effort, when combined with ability and environmental factors, that results in performance which, in turn, leads to various outcomes that have value (valence) to employees EMGT1162 Principles of Management - Prof. MMDR Deegahawature, Dept. of IMGT, FAS, WUSL 19  Process Perspective Equity Theory ❑ People are motivated to seek social equity in the rewards they receive for the performance. ❑ Equity is an individual’s belief that the treatment he or she receives is fair relative to the treatment received by others. ❑ Individuals view the value of rewards (outcomes) and inputs of effort as ratios and make subjective comparisons of themselves to other people Outcomes (self) Outcomes (other) = Inputs (self) Inputs (other) EMGT1162 Principles of Management - Prof. MMDR Deegahawature, Dept. of IMGT, FAS, WUSL 20  Motivation Strategies Steps a Manager Can Take to Motivate Subordinates ❑ Empowerment – The process of enabling workers to set their own work goals, make decisions, and solve problems within their sphere of influence ❑ Participation – The process of giving employees a voice in making decisions about their work. ❑ Rewards and performance incentives ❑ Consequences – Never use threats, but make people aware of the negative consequences of not getting results. EMGT1162 Principles of Management - Prof. MMDR Deegahawature, Dept. of IMGT, FAS, WUSL 21  Motivation Strategies ❑ New Forms of Working Arrangements – Variable Work Schedules Compressed work schedule— Working a full forty- hour week in less than five days. Flexible work schedules (flextime)—Allowing employees to select, within broad parameters, the hours they will work. Job sharing— Allowing two (or more) part-time employees share one full-time job. Telecommuting— Allowing employees to spend part of their time working off-site, usually at home, by using e-mail, the Internet, and other forms of information technology EMGT1162 Principles of Management - Prof. MMDR Deegahawature, Dept. of IMGT, FAS, WUSL 22  Motivation Strategies ❑ Pleasure –Providing pleasurable rewards creates eager and productive people. ❑ Create opportunities – i.e. to advance ❑ Communication ❑ Recognize achievement ❑ Trust and Respect ❑ Create challenges ❑ Let people be creative ❑ Constructive criticism ❑ Detailed instructions ❑ Kindness EMGT1162 Principles of Management - Prof. MMDR Deegahawature, Dept. of IMGT, FAS, WUSL 23  Designing A Motivating Job How to Design a Motivating Job? ❑ Job Characteristics Model (JCM) – A framework for analysing and designing jobs that identifies five primary core job dimensions, their interrelationships, and their impact on outcomes EMGT1162 Principles of Management - Prof. MMDR Deegahawature, Dept. of IMGT, FAS, WUSL 24  Designing A Motivating Job How to Design a Motivating Job? – Five core job dimensions Skill variety: the degree to which a job requires a variety of activities so that an employee can use a number of different skills and talents Task identity: the degree to which a job requires completion of a whole and identifiable piece of work Task significance: the degree to which a job has a substantial impact on the lives or work of other people Autonomy: the degree to which a job provides substantial freedom, independence, and discretion to the individual in scheduling the work and determining the procedures to be used in carrying it out EMGT1162 Principles of Management - Prof. MMDR Deegahawature, Dept. of IMGT, FAS, WUSL 25 Designing A Motivating Job Feedback: the degree to which doing work activities required by a job results in an individual obtaining direct and clear information about the effectiveness of his or her performance EMGT1162 Principles of Management - Prof. MMDR Deegahawature, Dept. of IMGT, FAS, WUSL 26