Principles Of Management (MGT 101) Module 1 PDF

PRINCIPLES OF MANAGEMENT (MGT 101) Module 1: Management and the Organization Environment  What is Management and why is it needed? Management is the process of getting things done effectively and efficiently, with and through people. · Process: a series of actions or st...

PRINCIPLES OF MANAGEMENT (MGT 101) Module 1: Management and the Organization Environment  What is Management and why is it needed? Management is the process of getting things done effectively and efficiently, with and through people. · Process: a series of actions or steps taken in order to achieve a particular end. · Effectiveness “Doing the right things”: the tasks that help an organization reach its goals · Efficiency “Doing things right”: the efficient use of such resources as people, money, and equipment NB. Management operates with an environment called an organisation where managers perform different functions, roles and skills.  Organization – A deliberate arrangement of people brought together to accomplish a specific purpose Common Characteristics of Organizations – Goals - – People - – Structure /organization of people within the organization. Within an organisation, there are 1. Nonmanagerial employees People who work directly on a job or task and have no responsibility for overseeing the work of others. Examples: Associates and Team Members 2. Managers Individuals in organizations who direct the activities of others. There are different levels of managers. Top Managers · Make decisions about the direction of the organization · Examples: President, Chief Executive Officer, Vice-President Middle Managers · Manage the activities of other managers · Examples: District Manager, Division Manager First-line Managers · Direct nonmanagerial employees · Examples: Supervisor, Team Leader FOUR FUNCTIONS OF MANAGEMENT 1. Planning - Defining the organizational purpose and ways to achieve it. 2. Organizing - Arranging and structuring work to accomplish organizational goals. 3. Leading - Directing the work activities of others. 4. Controlling - Monitoring, comparing, and correcting work performance. What roles do managers perform? The term managerial roles refers to specific actions or behaviors expected of and exhibited by a manager. Henry Mintzberg concluded that what managers do, can best be described by looking at the managerial roles they engage in at work. Managerial Roles by Henry Mintzberg The interpersonal roles are ones that involve people (subordinates and persons outside the organization) and other duties that are ceremonial and symbolic in nature. The three interpersonal roles include figurehead, leader, and liaison. The informational roles involve collecting, receiving, and disseminating information. The three informational roles include monitor, disseminator, and spokesperson. The decisional roles entail making decisions or choices. The four decisional roles include entrepreneur, disturbance handler, resource allocator, and negotiator Manager’s role is to influence action by: Managing actions directly Managing people who take action Managing information that propels people to take action Manager’s dual roles may include: 1. negotiating 2. Scheduling What are the skills that managers need? Robert L. Katz proposed that managers need three critical skills in managing: technical, human, and conceptual. Conceptual Skills – The ability to think, analyze and diagnose complex situations. Human Skills – Involve the ability to work with, understand, and motivate individuals and groups Technical Skills – Involve job-specific knowledge and techniques required to perform tasks. What factors are reshaping and redefining Management today? Today, managers must deal with: Changing workplaces Ethical and trust issues Global economic uncertainties Changing technologies BUSINESSES MUST BECOME MORE INNOVATION IN HOW THEY MANAGE. “Nothing is more risky than not innovating.” Innovation isn’t only important for high technology companies; it is essential in all types of organizations  Adding Value to the Organization The evolution and emergence of management thought. Scientific Management: Scientific management is defined as the use of the scientific method to define the “one best way” for a job to be done. Important Contributions to scientific management theory were made by Frederick W. Taylor and Frank and Lillian Gilbreth.. FREDERICK W. TAYLOR Taylor did most of his work at the Midvale and Bethlehem Steel Companies in Pennsylvania. As a mechanical engineer with a Quaker and Puritan background, he was continually appalled by workers' inefficiencies. Employees used vastly different techniques to do the same job. They were inclined to "take it easy" on the job, and Taylor believed that worker output was only about one-third of what was possible. Virtually no work standards existed. Workers were placed in jobs with little or no concern for matching their abilities and aptitudes with the tasks they were required to do. Managers and workers were in continual conflict. He set out to correct the situation by applying the scientific method to shop floor jobs. He spent more than two decades passionately pursuing the "one best way" for each job to be done. Taylor's experiences at Midvale led him to define clear guidelines for improving production efficiency. Taylor’s experiences at Midvale led him to define clear guidelines for improving production efficiency. Probably the best known example of Taylor’s scientific management efforts was the pig iron experiment. Workers loaded “pigs” of iron (each weighing 92 lbs.) onto rail cars. Their daily average output was 12.5 tons. However, Taylor believed that by scientifically analyzing the job to determine the “one best way” to load pig iron, output could be increased to 47 or 48 tons per day. After scientifically applying different combinations of procedures, techniques, and tools, Taylor succeeded in getting that increased level of productivity. By putting the right person on the job with the correct tools and equipment, Having the worker follow his instructions exactly, Motivating the worker with an economic incentive of a significantly higher daily wage. Using similar approaches for other jobs, Taylor was able to define the “one best way” for doing each job. Overall, Taylor achieved consistent productivity improvements in the range of 200 percent or more. Based on his groundbreaking studies of manual work using scientific principles, Taylor became known as the “father” of scientific management. Taylor’s Four Principles of Scientific Management: Taylor's four principles are as follows: 1. Replace working by "rule of thumb," or simple habit and common sense, and instead use the scientific method to study work and determine the most efficient way to perform specific tasks. 2. Rather than simply assign workers to just any job, match workers to their jobs based on capability and motivation, and train them to work at maximum efficiency. 3. Monitor worker performance, and provide instructions and supervision to ensure that they're using the most efficient ways of working. 4. Allocate the work between managers and workers so that the managers spend their time planning and training, allowing the workers to perform their tasks efficiently.  FRANK AND LILLIAN GILBRETH A construction contractor by trade, Frank Gilbreth gave up his contracting career in 1912 to study scientific management after hearing Taylor speak at a professional meeting. Frank and his wife Lillian, a psychologist, studied work to eliminate wasteful hand-and-body motions. The Gilbreths also experimented with the design and use of the proper tools and equipment for optimizing work performance. Frank is probably best known for his experiments in bricklaying. By carefully analyzing the bricklayer's job, he reduced the number of motions in laying exterior brick from 18 to about 5, and on laying interior brick the motions were reduced from 18 to 2. Using Gilbreth's techniques, the bricklayer could be more productive and less fatigued at the end of the day. The Gilbreths were among the first researchers to use motion pictures to study hand-and-body motions. They invented a device called a microchronometer that recorded a worker's motions and the amount of time spent doing each motion. Wasted motions missed by the naked eye could be identified and eliminated. The Gilbreths also devised a classification scheme to label 17 basic hand motions (such as search, grasp, hold), which they called therbligs (Gilbreth spelled backward with the th transposed). This scheme allowed the Gilbreths a more precise way of analyzing a worker's exact hand movements. How today’s managers use scientific management Many of the guidelines and techniques that Taylor and the Gilbreths devised for improving production efficiency are still used in organizations today. When managers analyze the basic work tasks that must be performed, use time-and-motion study to eliminate wasted motions, hire the best-qualified workers for a job, or design incentive systems based on output, they’re using the principles of scientific management.  General Administrative Theory HENRI FAYOL Fayol’s attention was directed at the activities of all managers. He wrote from his personal experience as the managing director of a large French coal-mining firm. Fayol described the practice of management as something distinct from accounting, finance, production, distribution, and other typical business functions. His belief that management was an activity common to all business endeavors, government, and even the home led him to develop 14 principles of management—fundamental rules of management that could be applied to all organizational situations and taught in schools. The 14 principles of management exhibited in table below.  MAX WEBER Weber (pronounced VAY-ber) was a German sociologist who studied organizational activity. Writing in the early 1900s, he developed a theory of authority structures and relations. Weber described an ideal type of organization he called a bureaucracy—a form of organization characterized by division of labor, a clearly defined hierarchy, detailed rules and regulations, and impersonal relationships. Weber recognized that this "ideal bureaucracy" didn't exist in reality. Instead he intended it as a basis for theorizing about work and how work could be done in large groups. His theory became the model structural design for many of today's large organizations How today’s managers use general administrative theory Several of our current management ideas and practices can be directly traced to the contributions of general administrative theory. For instance, the functional view of the manager’s job can be attributed to Fayol. In addition, his 14 principles serve as a frame of reference from which many current management concepts—such as managerial authority, Centralized decision making, reporting to only one boss, and so forth—have evolved. Weber’s bureaucracy was an attempt to formulate an ideal prototype for organizations Quantitative Management The quantitative approach evolved from mathematical and statistical solutions developed for military problems during World War II. After the war was over, many of these techniques used for military problems were applied to businesses. What exactly does the quantitative approach do? This approach to management involves applications of statistics, optimization models, information models, computer simulations to management activities. This approach is primarily concerned with decision making. Quantitative techniques are also used frequently in total quality management.(TQM). Total quality management, or TQM, is a management philosophy devoted to continual improvement and responding to customer needs and expectations.  Organizational Behaviour As we know, managers get things done by working with people. This explains why some writers have chosen to look at management by focusing on the organization’s people. The field of study that researches the actions (behavior) of people at work is called organizational behavior (OB). Much of what managers do today when managing people—motivating, leading, building trust, working with a team, managing conflict, and so forth—has come out of OB research. Early Advocates Although there were a number of people in the late 1800s and early 1900s who recognized the importance of the human factor to an organization's success, four individuals stand out as early advocates of the OB approach. They are Robert Owen, Hugo Munsterberg, Mary Parker Follett, and Chester Barnard. The contributions of these individuals were varied and distinct, yet they all had in common a belief that people were the most important asset of the organization and should be managed accordingly. Their ideas provided the foundation for such management practices as employee selection procedures, employee motivation programs, employee work teams, and organization- external environment management techniques. ROBERT HUGO MARY CHESTER OWEN MUNSTERBERG PARKER-FOLLET BERNARD The Hawthorne Studies Without question, the most important contribution to the developing OB field came out of the Hawthorne Studies, a series of studies conducted at the Western Electric Company Works in Cicero, Illinois. These studies, started in 1924 and continued through the early 1930s, were initially designed by Western Electric industrial engineers as a scientific management experiment. The original purpose of the Hawthorne studies was to examine how different aspects of the work environment, such as, the timing of breaks, and the length of the workday and lighting or illumination levels had on workers’ productivity. Control and experimental groups were set up with the experimental group being exposed to various lighting intensities, and the control group working under a constant intensity. In the most famous of the experiments, the focus of the study was to determine if increasing or decreasing the amount of light that workers received would have an effect on how productive workers were during their shifts. Employee productivity seemed to increase due to the changes but then decreased once the experiment was over. In 1927, the Western Electric engineers asked Harvard professor Elton Mayo and his associates to join the study as consultants. They conducted experiments in the redesign of jobs, changes in workday and workweek length, introduction of rest periods, and individual versus group wage plans. For example, one experiment was designed to evaluate the effect of a group piecework incentive pay system on group productivity. The results indicated that the incentive plan had less effect on a worker's output than did group pressure, acceptance, and the accompanying security. The researchers concluded that social norms or group standards were the key determinants of individual work behavior. Systems Approach Managing Systems : Another way to look at the manager’s job is from the perspective of managing systems. A system is a set of interrelated and interdependent parts arranged in a manner that produces a unified whole. It is a concept taken from the physical sciences and applied to organizations. The two basic types of systems are a) Closed systems are not influenced by and do not interact with their environment. b) Open systems dynamically interact with their environment. Today, when we call organization systems, we mean open systems, that is, an organization that constantly interacts with its environment. The systems theory approach is based on the notion that organizations can be visualized as systems of interrelated parts or subsystems that operate as a whole in pursuit of common goals. The major components of a system are: a) Inputs: the various human, material, financial, equipment, and informational resources required to produce goods and services. b) Transformation processes: the organization’s managerial and technological abilities that are applied to convert inputs into outputs. c) Outputs: the products, services, and other outcomes produced by the organization d) Feedback: information about results and organizational status relative to its environment. Open versus closed systems. These are terms indicating the relative degree with which a system interacts with its environment. While there are very few, if any, completely open or completely closed systems, we usually view open systems as those having continual interaction with its environment. Closed systems are those with little interaction and feedback from their environments. Contingency Approach Contingency approach A management approach that recognizes organizations as different,which means they face different situations (contingencies) and require different ways of managing. A good way to describe contingency is “if, then.” If this is the way my situation is, then this is the best way for me to manage in this situation. It’s intuitively logical because organizations and even units within the same organization differ—in size, goals, work activities, individual differences and environmental uncertainty.  Managing social responsibility and ethics What do we mean by ethics? We’re defining it as the principles, values, and beliefs that define right and wrong decisions and behavior. Business Ethics therefore comprises the principles, values and standards that guide behavior in the world of business. Code of ethics: a formal statement of an organization’s primary values and the ethical rules it expects its employees to follow Social obligation: when a firm engages in social actions because of its obligation to meet certain economic and legal responsibilities Classical view: the view that management’s only social responsibility is to maximize profits The Organization Environment and How the Environment Affects Managers The environment is defined as outside institutions and forces outside the organiza-tion that potentially affect an organization’s performance that potentially affect an organization’s performance. It consists of the specific environment and the general environment. 1. The specific environment (Micronevironment) is that part of the environment that includes the constituencies that are directly relevant to the achievement of an organization’s goals. The specific environment is unique and changes with conditions. It also varies depending on the niche the organization serves with re-spect to the range of products or services it offers and the markets it serves. The main constituencies include customers, suppliers, competitors, and pressure groups. Suppliers include firms that provide materials and equipment as well as providers of financial and labor inputs. Managers seek to ensure a steady flow of the needed materials, equip-ment, financial, and labor inputs at the lowest possible price. Customers are the reasons that organizations exist, as they absorb the outputs. They obviously represent potential uncertainty, particularly if their tastes and desires change. Competitors cannot be ignored. They’re an important environmental force to monitor and respond to. Most organiza-tions have one or more competitors.  Pressure groups also cannot be ignored by managers. Changes in social and political movements influence the power that these pressure groups have on organizations. 2. The general environment( macroenvironment) includes the broad economic, political/legal, sociocultural, demographic, technological, and global conditions. Economic conditions include interest rates, inflation rates, changes in disposable income, stock market fluctuations, and the general business cycle, among other things. Political/legal conditions include the general political stability of countries in which an organization does business and the specific attitudes that elected officials have toward business. Federal, state, and local governments can influence what organizations can and cannot do. Sociocultural conditions include the changing expectations of society. Societal values, customs, and tastes can change, and managers must be aware of these changes. Demographic conditions, including physical characteristics of a population, such as gender, age, level of education, geographic location, income and family composition, can change, and managers must adapt to these changes. Technological conditions include the changes that are occurring in technology. Global factors include global competitors and global consumer markets. How the Environment Affects Managers. Three ways in which the external environment affect managers include: Its impact on jobs and employment The amount of environmental uncertainty The nature of stakeholders relationships Understanding the Global Environment Several significant forces are reshaping the global environment that managers face. Two im-portant features of the global environment are regional trading alliances and the different types of global organizations. The world has become a global village, a world without boundaries in which managers must adapt to a variety of cultures, systems, and techniques. By the mid-1960s, multinational corporations (MNCs) were common. Even though this type of corporation maintained significant operations in two or more countries simultaneously, decision making was controlled by the home office. Now, transnational corporations (TNCs) also maintain significant operations in more two or more countries, but decision making is decentralized. Many large companies are breaking down internal arrangements that impose artificial geographic barriers, thereby forming a new type of organization—the borderless organization. They are moving to borderless management in order to increase efficiency and effectiveness in a competitive global marketplace. The international business environment Managers might have one of three perspectives or attitudes toward international business. 1) An ethnocentric attitude is the parochialistic belief that the best work approaches and practices are those of the home country (the country in which the company’s headquarters are located). 2) A polycentric attitude is the view that the managers in the host country (the foreign country where the organization is doing business) know the best work approaches and practices for running their business. 3) A geocentric attitude is a world-oriented view that focuses on using the best approaches and people from around the globe. To be a successful global manager, you need to be sensitive to differences in national customs and practices. How Organizations Go Global An organization evolves into a global one by typically proceeding through three stages. These three stages are illustrated in Stage 1 is a passive response stage, which involves exporting products to other countries or importing products to sell at home. Stage 2 involves managers making more of an investment by committing to sell products in foreign countries or to having them made in foreign factories. However, there is still no physical presence of company employees outside the company’s home country Stage 3 involves establishing global operations either through licensing/franchising, joint ventures, strategic alliances, or foreign subsidiaries Managing in a global environment. There are many challenges associated with managing in a global environment. A. The Legal-Political Environment. The legal-political environment doesn’t have to be unstable or revolutionary to be a challenge to managers. B. The Economic Environment. The economic environment also presents many challenges to foreign-based managers. Obviously, currency rate fluctuations, inflation, and diverse tax policies are economic challenges to managers. C. The Cultural Environment. The cultural environment involves cultural differences between nations. National culture is the values and attitudes shared by individuals from a specific country that shape their behavior and their beliefs about what is important. The internal environment: constraints and challenges ❖ Workforce diversity requires managers to be more sensitive to the differences each group brings to the work setting. They must deal with the different values, needs, interests, and expectations of employees. They must avoid any action that can be interpreted as being sexist, racist, or offensive to minorities; and they must not illegally discriminate against any employee. ❖ In the past, a simple rule held true: hire employees during good times and fire employees in bad times. Modern organizations, however, are responding to the global business environment in other ways, such as redesigning jobs or downsizing—extensive layoffs intended to cut costs and boost efficiency. At issue for these corporations is staffing their ranks properly, or rightsizing, according to their strategic goals.  ❖ As a result, many firms are now outsourcing—using outside firms to provide necessary products and services. Rather than disappearing, big companies are changing how they operate, for instance, blending large size with agility by dividing into smaller, more flexible units. ❖ Thousands of organizations have cut costs and increased flexibility by converting many full-time jobs into part-time positions, thereby creating the contingent workforce. Faced with a volatile business environment, organizations with large numbers of permanent, full-time workers are cumbersome. Those that rely on contingent workers, on the other hand, are more flexible, but temporary workers present special challenges for management. Making a Company’s Culture More Customer-responsive Actions that create employees with the competence, ability, and willingness to solve customer problems as they arise: 1) Selection: hiring the right personalities and attitudes 2) Training: developing the customer-focus employees 3) Organizing: creating customer-friendly controls 4) Empowerment: independence in relating to customers 5) Leadership: commitment to the customer-focus vision 6) Evaluation: performance measured by behaviors 7) Rewards: contingent on outstanding customer service  REFERENCES: TEXT BOOKS Robbins. S, Coulter. M. (2012) , Management 11th edition. New Jersey USA. Pearson Education, Inc. Online text book: Principles of Management. Virtual University of Pakistan WEBSITES: https://www.mindtools.com/pages/article/newTMM_Taylor.htm https://www.verywellmind.com/what-is-the-hawthorne-effect-2795234