Essentials of Management

Textbooks

Introduction to Management by Ricky W. Griffin

Introduction to Management by John R. Schermerhorn

 What Is an Organization?

“A group of people working together in a structured and coordinated fashion

to achieve a set of goals”

“A system of consciously coordinated activities of two or more persons.”

All organizations use four basic kinds of resources from their environment.

• Human (managerial talent and labor)

• Financial (capital used by the organization to finance both ongoing and long-term
operations)
• Physical (raw materials, office and production facilities, and equipment)
• Information (usable data needed to make effective decisions)

Managers are responsible for combining and coordinating these various

resources to achieve organizational goals.
• All organizations regardless of whether they are large or small, profit-seeking or
not-for-profit, domestic or multi-national use some combination of human,
financial, physical, and information resources to achieve their goals.

• These resources are generally obtained from the organization’s environment.

 Management in Organizations

Planning
and decision Organizing
making
Inputs from the environment
• Human resources Goals attained
• Financial resources • Efficiently
• Physical resources • Effectively
• Information resources

Controlling Leading
 What is Management?

“A set of activities planning and decision

making, 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”
Basic Purpose of Management

EFFICIENTLY
Using resources wisely and
in a cost-effective way
And

EFFECTIVELY
Making the right decisions and
successfully implementing them
 Efficiency
versus
Effectiveness
 What is a Manager?

• Someone whose primary responsibility is to

carry out the management process.
• Someone who plans and makes decisions,
organizes, leads, and controls
human, financial, physical,
and information resources.
Kinds of Managers by Level and Area
Levels of Management

Top managers

Middle managers

First-line managers

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Areas of Management
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 Kinds of Managers by Level
• Top Managers
– The relatively small group of executives who manage the
organization’s overall goals, strategy, and operating
policies.
• Middle Managers
– Largest group of managers in organizations who are
primarily responsible for implementing the policies and
plans of top managers. They supervise and coordinate
the activities of lower-level managers.
• First-Line Managers
– Managers who supervise and coordinate the activities of
operating employees. Common titles are supervisor,
coordinator and office manager.
 Kinds of Managers by Area
• Marketing Managers
– Work in areas related to getting consumers and
clients to buy the organization’s products or services.
• Financial Managers
– Deal primarily with an organization’s financial
resources.
• Operations Managers
– Concerned with creating and managing the systems
that create organization’s products and services.
 Kinds of Managers by Area
• Human Resource Managers
– Involved in human resource planning, recruiting and
selection, training and development, designing
compensation and benefit systems, formulating
performance appraisal systems.
• Administrative Managers
– Generalists who are familiar with all functional areas
of management and who are not associated with any
particular management specialty.
• Other Kinds of Managers
– Specialized managerial positions directly related to
the needs of the organization.
The Management Process
Planning and
Decision Making Organizing
Determining how
Setting the organiza-
best to group
tion’s goals and
activities and
deciding how best
resources
to achieve them

Controlling Leading
Monitoring Motivating members
and correcting of the organization
ongoing activities to work in the best
to facilitate goal interests of the
attainment organization
 The Management Process
• Planning and Decision Making
– Setting an organization’s goals and selecting a course of
action from a set of alternatives to achieve them.
– Decision making: Part of the planning process that involves
selecting a course of action from a set of alternatives.

• Organizing
– Determining how activities and resources are grouped.
• Leading
– The set of processes used to get organizational
members to work together to advance the
interests of the organization.
– Most challenging of all managerial activities.

• Controlling
– Monitoring organizational progress towards goal
attainment.
 Management: Science or Art?
• The Science of Management
– Assumes that problems can be approached using rational,
logical, objective, and systematic ways.
– Requires technical, diagnostic, and decision-making skills
and techniques to solve problems.

• The Art of Management

– Decisions are made and problems solved using a blend of
intuition, experience, instinct, and personal insights.
– Requires conceptual, communication, interpersonal, and
time-management skills to accomplish the tasks associated
with managerial activities.
 Importance Of Theory And History

Theory

A conceptual framework for organizing

knowledge and providing a blueprint for
action.

Management theories, used to build

organizations and guide them toward their
goals, are grounded in reality.
 History

• Understanding of important historical

developments are important to contemporary
managers.

• Understanding the historical context of

management help managers avoid the
mistake of others.
 Early Management Pioneers

• Robert Owen (1771–1858)

– British industrialist who was one of the first managers to

recognize the importance of human resources and the
welfare of workers.

• Charles Babbage (1792–1871)

– English mathematician who focused on creating

efficiencies of production through the division of labor,
and the application of mathematics to management
problems.
 Management Perspective

Classical Behavioral Quantitative

Management Management Management
Perspectives Perspectives Perspectives

Universal Mgt Perspective: One best way

 Management Perspectives

Classical Behavioral Quantitative

Management Management Management
Perspectives Perspectives Perspectives
Methods for Insights for moti- Techniques for
enhancing vating performance improving decision
efficiency and
and understanding making, resource
facilitating planning,
individual behavior, allocation, and
organizing, and
groups and teams, operations
and leadership
controlling
THE MANAGEMENT PERSPECTIVE

THE UNIVERSAL MANAGEMENT PERSPECTIVE

Classical
Scientific Management
Administrative Management

Behavioral
Hawthorne Study
The Human Relations Movement
Organizational Behavior

Quantitative
Management Science
Operation Management

INTEGRATING PERSPECTIVES FOR MANAGERS

System Approach
Contingency Theory
 Classical Management Branches
Scientific Management

“Concerned with improving the performance of individual

workers”

• Productivity was a major problem in 20 th century

• Business was expanding, capital was available but labor was in
short supply.
• Thus managers began to search for ways to use existing labor more
efficiently.
• In response experts began to focus on ways to Improve the
performance of individual workers
• This work led to the development of scientific management
Scientific Management Perspective

Fredrick Taylor Frank and Lillian Gilbreth

Henry Gantt Harrington Emerson

 Scientific Management
Frederick Taylor (1856–1915)

– Replaced old 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.

– Believed in selecting, training, teaching, and developing

workers.

– He implemented a piecework pay system i.e. rather than

paying all employees the same wage, he began increasing
the pay of each worker who met and exceeded the target
level of output set for his or her job.
 Steps in Scientific Management

1 2 3 4
Supervise employees
Develop a science Scientifically select Continue to plan
to make sure they
for each element of employees and then follow the prescribed the work, but use
the job to replace old train them to do the job workers to get the
methods for performing
rule-of-thumb methods as described in step 1 work done
their jobs
 Frank and Lillian Gilbreth

• (Husband and Wife) Industrial engineers

– Both developed techniques and strategies for

eliminating inefficiency.
– Frank reduced the number of
movements in bricklaying, resulting
in increased output of 200%.
– Lillian made substantive contributions
to the fields of industrial psychology
and personnel management.
 Henry Gantt
Developed other techniques,
including the Gantt chart, to
improve working efficiency
through planning/scheduling.

Can be generated for each

worker or for a complex
project as a whole.
 Henry Gantt – A scheduling Devise

Completed Week 1 Week 2 Week 3 Week 4

Planned 1 2 3 4 5 8 9 10 11 12 15 16 17 18 19 22 23 24 25 26

1. Design

2. Purchase Parts

3. Fabricate Bodies

4. Fabricate Frames

5. Build Drive Trains

6. Assemble Carts

7. Test Carts
 Harrington Emerson

• Management Consultant (1910)

• Appeared before Interstate Commerce

Commission to testify about a rate increase
requested by the railroads.

• By using Scientific management railroads could

save $1 million a day

• Advocated job specialization in both managerial

and operating jobs.
Administrative Management Perspective

Henry Fayol Max Weber

Chester Bernard Lyndal Urwick

Administrative Management Theory

Focuses on managing the whole organization rather than

individuals.

• Henri Fayol (1845–1925)

– Was first to identify the specific management functions of
planning, organizing, leading, and controlling.

• Lyndall Urwick (1891–1983)

– Integrated the work of previous management theorists.
Max Weber (1864–1920)
– His theory of bureaucracy is based on a rational set of guidelines for
structuring organizations.

Chester Barnard

• The “Functions of the Executive”- book

• Subordinates Acceptance of Authority = f (understands it; able to comply

with it; views it as appropriate)
Behavioral Management Perspective
Emphasized individual attitudes and behaviors, and group
processes, and recognized the importance of behavioral
processes in the workplace.

• Hugo Munsterberg (1863–1916)

– A German psychologist, considered the father of
industrial psychology, who advocated the practice of
applying psychological concepts to employees selection
and motivation.

• Mary Parker Follett (1868 –1933)

– Recognized the importance of the role of human
behavior in the workplace.
 The Hawthorne Studies (1927–1932)
• Conducted by Elton Mayo and associates at Western Electric

– Illumination study—workplace lighting adjustments affected

both the control and the experimental groups of production
employees.

– Group study—implementation of piecework incentive plan

caused production workers to establish informal levels of
acceptable individual output.

• Over-producing workers were labeled “rate busters” and

under-producing workers were considered “chiselers.”

– Interview program—confirmed the importance of human

behavior in the workplace.
Human Relations Movement

– Grew out of the Hawthorne studies.

– Proposed that workers respond primarily
to the social context of work, including
social conditioning, group norms,
and interpersonal dynamics.
– Assumed that the manager’s
concern for workers would lead to
increased worker satisfaction and
improved worker performance.
• Abraham Maslow
– Advanced a theory that employees are motivated
by a hierarchy of needs that they seek to satisfy.

• Douglas McGregor
– Proposed Theory X and Theory Y concepts
of managerial beliefs about people
and work.
 The Emergence Of Organizational Behavior

• A contemporary field focusing on behavioral

perspectives on management.
– Draws on psychology, sociology, anthropology, economics,
and medicine.

• Important topics in organizational behavior research:

– Job satisfaction and job stress
– Motivation and leadership
– Group dynamics and organizational politics
– Interpersonal conflict
– The structure and design of organizations
Quantitative Management Perspective
applies quantitative techniques to management.

Emerged during World War II to help the Allied

forces manage logistical problems.

– Focuses on decision making, economic

effectiveness, mathematical models, and the use
of computers to solve quantitative problems.
 Quantitative Management Perspective (cont’d)

Management Science

• Focuses specifically on the development of mathematical

models. A mathematical model is a simplified representation
of a system, process, or a relationship. At its most basic
level, management science focuses on models, equations,
and similar representations of reality.

• Management Science is concerned with developing and

applying models and concepts that help to illuminate
management issues and solve managerial problems.
Operations Management

Practical application of management science to

efficiently manage the production and distribution

of products and services.

 An integrative framework of management
perspectives
• Each of the major perspectives on management can be useful
to modern managers.

• Before using any of them, however, the manager should

recognize the situational context within which they operate.

• The systems and contingency perspectives serve to integrate

the classical, behavioral and quantitative management
perspectives.
Integrating Perspectives for Managers

• A complete understanding of management requires an

appreciation of, classical, behavioral, and quantitative
approaches.

– The systems perspectives and

– Contingency perspectives
 The systems perspective

System

An interrelated set of elements functioning as

a whole.

• By viewing an organization as a system, we can

identify four basic elements: inputs,
transformation processes, outputs, and feedback.
The Systems Perspective of Organizations

Inputs Transformation Outputs

Process:
from the into
technology,
environment: the environment:
operating systems,
material inputs, products/services,
administrative
human inputs, profits/losses,
systems, and
financial inputs, employee behaviors,
control systems
and and information
information inputs. outputs

Feedback
 The System Perspective - Concepts

• Open system
• Closed systems
• Subsystem
• Synergy
• Entropy

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 Open System

An
organizational
system that
interacts with
its environment
 Closed System

An organizational
system that doesn’t
interacts with its
environment
 Subsystem

A system
within
another
broader
system

2 - 50
 Synergy
Two or more
subsystems
working together
may often be
more successful
than working
alone

2 - 51
 Entropy

A normal
process
leading to
system
decline

2 - 52
• When an organization does not
monitor feedback from its
environment and make appropriate
adjustments, it may fail.

• A primary objective of management,

from a systems perspective, is to
continually re-energize the
organization to avoid entropy.
 The Contingency Perspective

• The classical, behavioral and quantitative approaches are

considered Universal Perspective because they tried to
identify the “one best way” to manage organizations.

 Contingency Perspective
In contrast suggests that universal theories cannot be applied
to organizations, because each organization is unique.
suggests that appropriate managerial behavior in a given
situation depends on a wide variety of elements.