Chapter 1: An Overview of Management PDF

 Chapter 1: An overview of management Learning Outcomes After studying this chapter, you should be able to: Identify who managers are in an organisation Explain what managers do Understand the managerial process and the tasks of management Understand and classify the roles of manag...

 Chapter 1: An overview of management Learning Outcomes After studying this chapter, you should be able to: Identify who managers are in an organisation Explain what managers do Understand the managerial process and the tasks of management Understand and classify the roles of managers according to Mintzberg Debate the question as to the manager’s job is universal or not Understand that managers make decisions, manage change, and ensure that their organisations behave responsibly Understand the importance of management Identify the six key managerial competencies that managers need to master. Managers and their place in an organisation Organisations are collections of people who work together and coordinate their actions to achieve a wide variety of goals or desired future outcomes. Any organisation has three characteristics in common: 1. They have a purpose. The purpose of an organisation is expressed in terms of goals. 2. They are each made up of people (employees). No purpose or goal can be achieved without people making decisions and performing a variety of goal-driven activities. 3. Organisations group people together in some way or other. When more than one person is involved in helping to achieve a goal, they need to be grouped together in some structure or other that defines and limits their behaviour. Organisations as systems A system is a set of interrelated parts that function to achieve a common purpose Not only is an organisation a system, but it is also an open system. This means that an organisation does not exist in a vacuum, but within a broader environment with which it interacts in the process of converting inputs into product or service outputs. Figure 1.1 Basic systems view of an organisation (p. 7) Source: Hellriegel (2005: 52) Managers versus operational employees Operational employees → (or operatives) are people who work on specific tasks, but who do not have any supervisory role or authority over other people within the organisation. Managers → are typically categorised as either top-, middle-, or first-line managers, are responsible for supervising both operational employees and lower-level What managers. sets managers apart from operational employees is the fact that managers are evaluated according to how well the people they supervise, do their jobs.  Because managers achieve organisational goals by enabling people to do their jobs effectively and efficiently – and not by performing all the tasks themselves – they must find ways to keep employees motivated. The fact that managers are mainly responsible for supervising the work of those under them, does not mean, of course, that managers never work directly on specific tasks. Many managers have operational responsibilities as well as managerial responsibilities. An important responsibility of managers is to ensure that their employees understand their individual work goals as well as how the achievement of their goals is related to the success of the organisation. Management levels While it would not be difficult to establish who the managers in any organisation are, they can have a variety of titles, which may also differ between organisations. While the top manager is ultimately responsible for the overall performance of the organisation, there may be various other top managers who participate in setting the direction for the organisation and who might also, therefore, be deemed to be part of the top management group. First line managers are responsible for supervising the day-to- day activities of operational employees. Middle managers are mainly responsible for managing first- line managers and for translating the goals set by top management into goals and activities for these lower-level managers to perform. Top managers are primarily responsible for making day-to-day decisions with regard to the strategic direction in which their organisations should go in the longer term. Defining management The term management refers to the process of getting things done, effectively and efficiently, through and with other people. The term process refers to the main tasks and activities that managers perform: planning, organising, leading, and controlling. The term effectiveness refers to identifying and performing those activities that are going to ensure that the organisation achieves its goals and fulfils the purpose for which it exists. The term efficiency refers to how well tasks are done. Another way of putting it is that efficiency is concerned with the organisation ‘doing things right’. Figure 1.2 Productivity and organisational performance (p. 9) Source: Schermerhorn (2001) The tasks of managers Figure 1.3 Basic managerial tasks (p. 10) Planning: Analysing the current situation Anticipating the future Determining objectives Choosing appropriate corporate and business strategies to achieve the objectives Determining the resources needed to achieve the organisation’s goals is a continuous process in which people throughout the organisation use their knowledge and experience, and relationships with stakeholders, to identify opportunities in order to create, capture, strengthen, and sustain competitive advantage as a means of delivering value to customers Organising: Attracting the right people to the right jobs within the organisation Specifying job responsibilities Grouping jobs into work units Getting and allocating resources Creating conditions so that people and things work together to achieve the greatest level of success The process by which managers establish the structure of working relationships among employees to allow them to achieve Leading: Involves motivating and inspiring others to perform the tasks necessary to achieve the organisation or department’s goals within the context of a supportive organisational culture Controlling: Establish performance standards Measure actual performance and compare results against those set performance standards Take action to correct any deviations, if necessary Adjust performance standards when necessary. The process by which a person, group, or organisation consciously monitors performance and takes corrective action, if needed The roles of managers Interpersona Figurehead l category Leader Liaison Information Monitor al category Disseminator Spokesperson Decisional Entrepreneur category Disturbance handler Resource allocator Negotiator Is a manager’s job the same in all organisations? Because organisations are different in terms of characteristics, such as size, geographical location, type of industry, and type of organisation, it would be surprising if the managerial tasks were carried out in exactly the same way in all organisational situations. There are four characteristics that have an impact on the actual activities undertaken by managers: 1. The size of the organisation 2. Whether the manager is a top-level executive or a first-line supervisor 3. Whether the organisation is a ‘for-profit’ or a ‘not-for-profit’ organisation 4. The geographic location of organisations. Level of management in the organisation While all managers carry out the managerial tasks of planning, organising, leading, and controlling, the proportion of their time spent on planning and organising increases as they move up the organisation, and the proportion of their time spent on directly leading the employees under them decreases. First-line managers spend most of their time on ‘leading’ Middle managers spend most of their time on ‘leading’ and ‘organising’ Top managers spend most of their time on ‘organising’ and ‘planning’ Profit versus not-for-profit organisations While managers in any organisation, whether it be a for profit or a not-for-profit organisation, have to plan, organise, lead, and control, clearly there are some differences. The most obvious difference is about the measurement of performance, or in a sense, ‘controlling’. For a business organisation, the most obvious measure of performance is profit. While the measurement of performance in schools, museums, and charitable organisations is more difficult, it still needs to be done to determine whether they are fulfilling their purposes or not. While not-for-profit organisations also need to worry about money, the difference is that the making of profit for distribution to the owners of the organisation is not their main focus. Organisational location If the managerial tasks were completely generic, we would expect them to be applicable in any country in the world regardless of economic, social, cultural, and political differences. Whether the organisation is classified as a multinational, global corporation, or transnational organisation, managers need to be sensitive when managing in a different national culture. Every country and region has a specific set of values, customs and economic, social, and political systems, driven by legislation, which will affect how the business should be managed. Making decisions In carrying out the managerial tasks of planning, organising, leading, and controlling, managers have to make decisions continuously. The best managers then are those who are able to diagnose problems, set goals, identify alternative solutions, compare solutions, choose solutions, implement solutions, and follow up and control. Decision making is a critical support activity that ensures effective planning. When planning, various decisions have to be made: What are the goals and objectives? Which strategies are most suitable? Is the vision a true reflection of the organisation’s dream? Does the mission statement reflect the true reason why the business exists? Managing change To survive and thrive in an increasingly turbulent environment, organisations have to manage change and adapt, preferably proactively. This is the responsibility of managers in general. They are responsible for making the changes that will ensure that their organisations exploit emerging opportunities and minimise the effects of impending threats. Resistance to change among employees is a reality, and managers, therefore, have to be able to convince their employees of the necessity of the change in order to earn their cooperation. Table 1.1 The evolution of the workplace (p. 15) Source: Based on Daft (2005: 26) Behaving responsibly Table 1.2 Total corporate responsibility (p. 20) Source: Adapted from Daft (2005: 172) The functional areas of a business organisation The activities of business functions are indispensable in the process of converting inputs into outputs and in delivering these outputs to consumers. Operations Marketing Logistics Finance Human Resources Public Relations The importance of management Innovation introduction of new goods and services or new business models Quality refers to the excellence of a product or service Speed separates the winners from the losers in a competitive business arena Cost Costs are kept low enough to enable you to realise competitiven ess profits and price your products at levels that are attractive to consumers Competencies of successful managers There are six key managerial competencies that managers need to master in order to be effective: 1. Communication competency 2. Planning and financial management competency 3. Teamwork competency 4. Strategic action competency 5. Global awareness competency 6. Emotional intelligence and self-management competency Chapter Summary An organisation is a collection of people working together to achieve a common purpose. An organisation is also an open system in that it interacts with and is influenced by its external environment, which presents it with various threats and opportunities. Managers take responsibility for ensuring that employees work harmoniously towards a common organisational purpose. Most managers perform four basic managerial tasks, which make up the managerial process: planning, organising, leading, and controlling Henry Mintzberg reduced the many tasks of managers to ten roles. Managers must be alert to changes taking place in the external environment. Most organisations probably have seven main functional areas: operations, purchasing, marketing, logistics, finance, human resources management, and public relations. Organisations need good management practice otherwise they will lack direction, be disorganised, will lack motivated employees, and will never know whether they are performing satisfactorily.