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Chapter

1
Management and Its Evolution

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After reading this chapter, you should be able to:

Understand

Learning Objectives

the roles played by individuals, teams, and managers in carrying out company activities. Practice the four major functions of management Recognize the interpersonal, informational, and decisional roles played by top level managers. Apply the general skills needed to carry out managerial responsibilities. Integrate the major elements from the various perspectives of management theory.

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The performance of organizations depends to a large extent on how their resources are allocated and their ability to adapt to changing conditions. Successful organizations know how to manage people and resources efficiently to accomplish organizational goals and to keep those goals in tune with changes in the external environment.

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Management in the New Millennium

A

firm can be efficient by making the best use of people, money, physical plant, and technology. is ineffective if its goals do not provide a sustained competitive advantage. firm with excellent goals would fail if it hired the wrong people, lost key contributors, relied on outdated technology, and made poor investment decisions.
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It

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Levels of management
Strategic Managers

Tactical Managers

Operational Managers

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Strategic Managers
The

firms senior executives with overall responsibility for the firm.

Developing

the companys goals Focus on long-term issues Emphasize the growth and overall effectiveness of the organization
Concerned

primarily with the interaction between the organization and its external environment.
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Tactical Managers
Responsible

for translating the general goals and plans developed by strategic managers into specific objectives and activities.
Shorter

time horizon Coordination of resources

These
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are middle managers

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Operational Managers
Lower-level

managers who supervise the operations of the organization. involved with non-management employees Implementing the specific plans developed with tactical managers. This is a critical role to the organization. Operational managers are the link between management and nonmanagement staff

Directly

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Management Functions
Planning Organizing

Leading

Controlling

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Planning
The

management function that assesses the management environment to set future objectives and map out activities necessary to achieve those objectives. be effective, the objectives of individuals, teams, and management should be coordinated to support the firms mission.
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To

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Organizing
The

management function that determines how the firms human, financial, physical, informational, and technical resources are arranged and coordinated to perform tasks to achieve desired goals.

The

deployment of resources to achieve strategic goals.

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Leading
The

management function that energizes people to contribute their best individually and in cooperation with other people.

This involves: Clearly communicating organizational goals Inspiring and motivating employees Providing an example for others to follow Guiding others Creating conditions that encourage management of diversity
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Controlling
The

management function that measures performance, compares it to objectives, implements necessary changes, and monitors progress. of these issues involve feedback or identifying potential problems and taking corrective action.

Many

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Management as a set of roles

Day-to-day

management activities are routine, orderly, and rational. include: Interpersonal roles - communication with superiors,
peers, subordinates, and people from outside the organization.
Information Decisional

These

Roles - obtaining, interpreting, and giving

out information.

Roles - choosing among competing

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alternatives.
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Management as a set of skills

The

four basic management functions require a set of skills to be carried out properly. most managerial tasks are unique, ambiguous, and situation-specific, there is seldom one best way to approach them.

Because

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Management as a set of skills

Four

major categories of skills will help you become a good manager:

Strategic

Skills - the ability to see the big picture, focus on

key objectives without getting mired in details, and having a sense what is happening inside and outside the company.
Task-Related

Skills - the ability to define the best approach to

accomplish personal and organizational objectives. They include consideration of all resources, including time, organizational structure, financial resources, and people. They also involve the ability to prioritize, remain flexible to make necessary changes, and ensure that value is being created
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Management as a set of skills

People-Related

Skills - getting work done through others and

with others. Include the ability to delegate tasks, share information, resolve conflicts, be a team player, and work with people from very different backgrounds
Self-Awareness

Skills - Being aware of your personal

characteristics can help you adapt to others and can help you understand why you react to them the way you do. These skills can help you to avoid rushed judgments, appreciate the nuances of particular situations, size up opportunities, capitalize on your personal strengths, and avoid situations in which you are likely to fail.
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Skills for Managerial Success

Strategic Skills
Environmental assessment scanning Strategy formulation Mapping strategic intent and defining mission Strategy implementation Human resource congruency

Task Skills
Setting and prioritizing objectives Developing plan of action and implementation Responding in a flexible manner Creating value Working through the organizational structure Allocating human resources Managing time efficiently

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Skills for Managerial Success

People Skills

(continued)

Self-Awareness Skills

Delegating Influencing Motivating Handling conflict Win-win negotiating Networking Communicating Verbal Nonverbal Listening Cross-cultural management Heterogeneous teamwork

Personal adaptability Understanding personal biases Internal locus of control

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The Evolution of Management Thought

Early Management Thought

Classical Perspective

Contemporary Management Perspectives

Behavioral Perspective

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Early Management Thought

Early
Sun

ideas about management strategy

Tzu, The Art of War

Early

ideas about leadership

Machiavelli, The Prince

Nicol

Early

ideas about the design and organization of work

Smith, The Wealth of Nations

Adam

division of labor

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The Operational Perspective

Scientific

Management
W. Taylor

Frederick

Quantitative
Ford

Management

W. Harris

Quality

Management
A. Shewhart

Walter

Bureaucratic
Max

Management

Weber

Administrative
Henri

Management

Fayol

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Taylors Four Principles of Scientific Management

Scientifically study each part of a task and develop the best method of performing the task. Carefully select workers and train them to perform the task by using the scientifically developed method. Cooperate fully with workers to ensure that they use the proper method. Divide work and responsibility so that management is responsible for planning work methods using scientific principles and workers are responsible for executing the work accordingly.
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Key Characteristics of Webers Ideal Bureaucracy

Specialization Formal

of labor

rules and procedures

Impersonality Well-defined Career

hierarchy

advancement based on merit

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Fayols 14 Principles of Management

Division of work

Centralization

Authority
Discipline Unity of command Unity of direction Subordination of individual interest to the general interest Remuneration

Scalar chain
Order Equity Stability and tenure Initiative Esprit de corps

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Behavioral Perspective
The

behavioral perspective acknowledges that psychological and social processes of human behavior can result in improvements in productivity and work satisfaction.
The

Hawthorne effect - when a manager shows concern for employees, their motivation and productivity levels are likely to improve. Human Relations Approach - the relationship between employees and a supervisor is a vital aspect of management. Employee motivation Leadership style
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Hawthorne Effect

The discovery that paying special attention to employees motivates them to put greater effort into their jobs.
(from the Hawthorne management studies, performed from 1924 1932 at Western Electric Companys plant near Chicago)

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Maslows Hierarchy of Needs

Self-Actualization

Need for Self Esteem

Need for Social Relations

Need for Security

Physical Needs

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McGregors Theory X and Theory Y

Leaders

and managers who hold Theory X assumptions believe that employees are inherently lazy and lack ambition. A negative perspective on human behavior. and managers who hold Theory Y assumptions believe that most employees do not dislike work and want to make useful contributions to the organization. A positive perspective on human behavior.
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Leaders

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Contemporary Management Perspectives

Systems

Theory Theory

Contingency

The

Learning Organization Perspective

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Systems Theory
Views

the organization as a system of interrelated parts that function in a holistic way to achieve a common purpose. theory concepts that affect management

Systems
Open

thinking:
and closed systems Subsystems Synergy Equifinality

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Contingency Theory
States

that there is no one best way to manage an organization.

Because

what works for one organization may not work for characteristics (contingencies) differ

another
Situational Managers

need to understand the key contingencies that determine the most effective management practices in a given
situation

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The Learning Organization

The

management approach based on an organization anticipating change faster than its counterparts to have an advantage in the market over its competitors. are two ways organizations can learn:
learning

There

Experimental

External learning

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