ESSENTIALS OF MANAGEMENT:

Chapter 1. Management: Science, Theory, and Practice Definition of Management: Its Nature and Purpose *Management is the process of *designing and *maintaining an environment *in which individuals, working together in groups and *efficiently accomplish selected aims.

The Functions of Management

*The five managerial functions around which managerial knowledge are organized are: *planning, *organizing, *staffing, *leading, and *controlling

Managerial Functions at Different Organizational Levels

*No basic distinction is made between managers, executives, administrators, and supervisors *All managers carry out managerial functions. However, the time spent for each function may differ .

Managerial Skills and the Organizational Hierarchy

The four skills for administrators are: *technical, *human, *conceptual, and *design skills

The Goals of All Managers and Organizations

*The aim of all managers should be to create a surplus. Thus, managers must establish an environment in which people can accomplish group goals with the least amount of time, money, materials, and personal dissatisfaction Characteristics of Excellent Companies (Peters & Waterman)
These firms

* * * * * * *

Were oriented toward action Learned about the needs of their customers Promoted managerial autonomy and entrepreneurship Achieved productivity by paying close attention to the needs of their people Were driven by a company philosophy often based on the values of their leaders Focused on the business they knew best Had a simple organization structure with a lean staff Were centralized as well as decentralized, depending on appropriateness

Excellent Companies Adapt to Changes in the 21st Century

*To be successful in the 21st Century, companies must take advantage of the new information technology - especially the Internet - and globalization *M-Commerce is mobile or wireless commerce

Definition of Productivity
*Productivity is the output-input ratio within a time period with due consideration for quality

Definitions of Effectiveness and Efficiency

*Productivity implies effectiveness and efficiency in individual and organizational performance *Effectiveness is the achievement of objectives *Efficiency is the achievement of the ends with the least amount of resources (time, money, etc.)

Managing: Science or Art?

*Managing as practice is an art; the organized knowledge underlying the practice may be referred to as a science The Evolution of Management Thought & Patterns of Management Analysis *Frederick Taylor and Scientific Management *Fayol, the Father of Modern Operational Management Theory *Elton Mayo and F. Roethlisberger and the Hawthorne Studies *Recent Contributors to Management Thought
Taylor's Principles of Scientific Management 1. Replacing rules of thumb with science (organized knowledge) 2. Obtaining harmony in group action, rather than discord 3. Achieving cooperation of human beings, rather than chaotic individualism 4. Working for maximum output, rather than restricted output 5. Developing all workers to the fullest extent possible for their own and their company's highest prosperity

Fayol, the Father of Modern Operational-Management Theory

*Authority and responsibility. authority is a combination of official-factors and personal factors * Unity of Command. Employees should receive orders from one superior only * Scalar Chain. A "chain of superiors" from the highest to the lowest ranks should be short-circuited when to follow it scrupulously would be detrimental * Esprit de Corps. This is the principle that "in union there is strength"

Elton Mayo and F. Roethlisberger and the Hawthorne Studies.

*In general, that the improvement in productivity was due to such social factors as morale, satisfactory interrelationships between members of a work group (a "sense of belonging"), and effective management--a kind of managing that would understand human behavior, especially group behavior, and serve it through such interpersonal skills as motivating, counseling, leading, and communicating

PATTERNS OF MANAGEMENT ANALYSIS: A MANAGEMENT THEORY JUNGLE? (1) the empirical, or case, approach, (2) the managerial roles approach, (3) the contingency, or situational, approach, (4) the mathematical, or "management science," approach, (5) the decision theory approach, (6) the reengineering approach, (7) the systems approach, PATTERNS OF MANAGEMENT ANALYSIS: -- continued (8) the sociotechnical systems approach, (9) the cooperative social systems approach, (10) the group behavior approach, (11) the interpersonal behavior approach, (12) McKinsey's 7-S framework, (13) the total quality management approach, (14) the management process, or operational, approach.

The Managerial Roles Approach (Mintzberg) *3 Interpersonal roles *3 Informational roles *4 Decision roles

The Management Process, or Operational, Approach

*This approach draws together the pertinent knowledge of management by relating it to the managerial job--what managers do *It tries to integrate the concepts, principles, and techniques that underlie the task of managing

The Five Managerial Functions

*Planning *Organizing *Staffing *Leading *Controlling

Definition of Planning
*Planning involves selecting missions and objectives and the actions to achieve them; it requires decision making

Definition of Organizing
*Organizing involves establishing an intentional structure of roles for people to fill in an organization

Definition of Staffing
*Staffing involves filling, and keeping filled, the positions in the organization structure

Definition of Leading
*Leading is influencing people so that they will contribute to organization and group goals

Definition of Controlling
*Controlling is measuring and correcting individual and organizational performance to ensure

that events conform to plans

Definition of Planning
*Planning involves selecting missions and objectives and the actions to achieve them; it requires decision making, that is, choosing from among alternative future courses of action Types of Plans
Plans can be classified as (1) mission or purposes, (2) objectives or goals, (3) strategies, (4) policies, (5) procedures, (6) rules, (7) programs, and (8) budgets

Types of Plans
*The mission, or purpose, identifies the basic purpose or function or tasks of an enterprise or agency or any part of it *Objectives, or goals, are the ends toward which activity is aimed *Strategy is the determination of the basic long-term objectives of an enterprise and the adoption of courses of action and allocation of resources necessary to achieve these goals *Policies are general statements or understandings that guide or channel thinking in decision making *Procedures are plans that establish a required method of handling future activities *Rules spell out specific required actions or nonactions, allowing no discretion *Programs are a complex of goals, policies, procedures, rules, task assignments, steps to be taken, resources to be employed, and other elements necessary to carry out a given course of action * A budget is a statement of expected results expressed in numerical terms

Steps in Planning
1. Being Aware of Opportunities 2. Establishing Objectives or Goals 3. Developing Premises 4: Determining Alternative Courses 5. Evaluating Alternative Courses 6. Selecting a Course 7. Formulating Derivative Plans 8. Quantifying Plans by Budgeting

Verifiable Objectives *Objectives are the important ends toward which organizational and individual activities are directed *An objective is verifiable when at the end of the period one can determine whether or not the objective has been achieved The Nature of Objectives *Hierarchy of Objectives

*Key Results Areas: Areas in which performance is essential for success

*Setting objectives and the organizational hierarchy *Multiplicity of objectives

Evolving Concepts in MBO

*MBO as used in this book *Management by objectives is a comprehensive managerial system that integrates many key managerial activities in a systematic manner and that is consciously directed toward the effective and efficient achievement of organizational and individual objectives Systems Approach to MBO Benefits of Management by Objectives
* * * * * Clear goals: Motivate Improve managing through resultsoriented planning Clarify organizational roles, structures and the delegation of authority Encourage personal commitment to their own and organizational goals. Facilitate effective controlling, measuring results, and leading to corrective actions

Failures of Management by Objectives *List some failures and limitations of MBO *What would you do to overcome the failures?

Decision Making
*Decision making is defined as the selection of a course of action from among alternatives

Decision Making Process

*Premising, *Identifying alternatives, *Evaluating alternatives in terms of the goal sought, and *Choosing an alternative, that is, making a decision

Limited, or "Bounded," Rationality

*Limitations of information, time, and certainty limit rationality, even though a manager tries earnestly to be completely rational *Satisficing is picking a course of action that is satisfactory or good enough under the circumstances Development of Alternatives and the Limiting Factor *A limiting factor is something that stands in the way of accomplishing a desired objective *The principle of the limiting factor: By recognizing and overcoming those factors that stand critically in the way of a goal, the best alternative course of action can be selected Quantitative and Qualitative Factors *Quantitative factors are factors that can be measured in numerical terms *Qualitative, or intangible, factors are those that are difficult to measure numerically

Marginal Analysis
*Marginal analysis is to compare additional revenues and the additional cost arising from increasing output

Cost Effectiveness Analysis

*Cost effectiveness analysis seeks the best ratio of benefit and cost

Selecting an Alternative: Three Approaches When selecting from among alternatives, managers can use: *Experience, *Experimentation, and *Research and analysis. Programmed And Nonprogrammed Decisions *Programmed decisions are used for structured or routine work *Nonprogrammed decisions are used for unstructured, novel, and ill-defined situations of a nonrecurring nature

Creativity and Innovation

*Creativity refers to the ability and power to develop new ideas *Innovation means the use of new ideas

The Creative Process

*The creative process is seldom simple and linear *It generally consists of four overlapping and interacting phases: *Unconscious scanning *Intuition *Insight *Logical formulation or verification

Rules for Brainstorming

*No ideas are criticized *The more radical the ideas are, the better *The quantity of idea production is stressed *The improvement of ideas by others is encouraged

The Nature of Organizing, Entrepreneuring, and Reengineering Organizational Roles

For an organizational role to exist and be meaningful, it must incorporate (1) verifiable objectives, which, are a major part of planning (2) a clear idea of the major duties or activities involved and (3) an understood area of discretion or authority so that the person filling the role knows what he or she can do to accomplish goals

Organizing involves:
(1) (2) (3) (4) the identification and classification of required activities, the grouping of activities necessary to attain objectives, the assignment of each grouping to a manager with the authority (delegation) necessary to supervise it, and the provision for coordination horizontally (on the same or a similar organizational level) and vertically (for example, corporate headquarters, division, and department) in the organization structure

Definition of Organization
*Organization implies a formalized intentional structure of roles or positions Formal and Informal Organization *Formal organization pertains to the intentional structure of roles in a formally organized enterprise *The informal organization is a network of interpersonal relationships that arise when people associate with each other

What is a Department?
The department designates a distinct area, division, or branch of an organization over

which a manager has authority for the performance of specified activities

Organization with Narrow Spans Organization with Wide Spans What is the Principle of the Span of Management?
*The principle of the span of management states that there is a limit to the number of subordinates a manager can effectively supervise, but the exact number will depend on the impact of underlying factors
What Determines an Effective Span of Management?

Difference Between an Intrapreneur and an Entrepreneur *An intrapreneur is a person who focuses on innovation and creativity and who transforms a dream or an idea into a profitable venture by operating within the organizational environment *The entrepreneur is a person who does similar things as the intrapreneur, but outside the organizational setting

Definition of Reengineering
*"...the fundamental rethinking and radical redesign of business processes to achieve dramatic improvements in critical contemporary measures of performance, such as cost, quality, service, and speed. *The underlined words are considered key aspects of reengineering by Hammer and Champy

Key Aspects of Reengineering

*Fundamental rethinking of what the organization is doing and why. *Radical redesign of the business processes [Note:Downsizing or "rightsizing" is not the primary purpose of reengineering, although in many cases it does result in a need for fewer people] *Reengineering calls for dramatic results *The fourth key word in the reengineering definition is processes. The need for carefully analyzing and questioning business processes

Management by Processes
The Steps in the Organizing Process:

1. 2. 3. 4. 5. 6.

Establishing enterprise objectives Formulating supporting objectives, policies, and plans Identifying, analyzing, and classifying the activities necessary to accomplish these Grouping these activities in light of the human and material resources available and the best way, under the circumstances, of using them Delegating to the head of each group the authority necessary to perform the activities Tying the groups together horizontally and vertically, through authority relationships and information flows

Effective Organizing and Organizational Culture

*In organizing there is no one best way; it depends on the specific situation *Establishment of objectives and orderly planning are necessary for good organization What Are the Advantages of Organization Planning?

Planning the organization structure helps determine future personnel needs and required training programs How to Avoid Organizational Inflexibility? *Through reorganization *Through readjustment and change How to Make Staff Work Effective? *Understanding authority relationships *Making line listen to staff *Keeping staff informed *Requiring complete staff work *Making staff work a way of organizational life Avoiding Conflict by Clarification *Organization Charts *An organization chart indicates how departments are tied together along the principal lines of authority *Advantages and limitations *Position Descriptions *A good position description informs everyone of the incumbent's responsibilities How to Ensure Understanding of Organizing? *By teaching the nature of organizing *By recognizing the importance of informal organization and the grapevine Promoting an Appropriate Organization Culture *Defining organization culture * Culture is the general pattern of behavior, shared beliefs, and values that members have in common *The influence of the leader on organization culture *What is a value? *A value is a fairly permanent belief about what is appropriate and what is not that guides the actions and behavior of employees in fulfilling the organization's aims
Chapter 12. Performance Appraisal and Career Strategy

Choosing the Appraisal Criteria *Appraising against verifiable preselected goals has extraordinary value *The system of measuring performance against preestablished objectives should be supplemented by an appraisal of a manager as a manager Appraising Managers Against Verifiable Objectives *A network of meaningful and attainable objectives is basic to effective managing *Management by objectives must be a way of managing, a way of planning, as well as the key to organizing, staffing, leading, and controlling Different Views on Appraisal Issues *The MBO philosophy places emphasis on self-control and self-direction *One should learn from past mistakes, but then use these insights for translating them into development plans for the future

Three Kinds of Reviews:

*Formal comprehensive review, *Progress or periodic reviews, and *Continuous monitoring

Appraising Managers as Managers *The most appropriate standards to use for appraising managers as managers are the fundamentals of management A Team Evaluation Approach
*Selection of job-related criteria *Development of examples of observable behavior *Selection of four to eight raters (peers, associates, other supervisors, and, naturally, the immediate superior) *Preparation of the rating forms applicable to the job *Completion of the forms by the raters *Integration of the various ratings *Analysis of the results and preparation of the report

Stress in Managing
Stress is an adaptive response, mediated by individual differences and/or psychological processes, that is, a consequence of any external (environmental) action, situation, or event that places excessive psychological and/or physical demands on a person Formulating the Career Strategy

Dual-Career Couples
*An effective career strategy requires that consideration be given to the career of the spouse *Dual-career couples, with both partners working, sometimes have to make very stressful choices
Chapter 14. Human Factors and Motivation

Definition of Leading
*Leading is the process of influencing people so that they will contribute to organizational and group goals

What is Managing?
*Managing requires the creation and maintenance of an environment in which individuals work together in groups toward the accomplishment of common objectives

The Importance of Personal Dignity *The concept of individual dignity means that people must be treated with respect, no matter what their position in the organization

What is Motivation?
*Motivation is a general term applying to the entire class of drives, desires, needs, wishes, and similar forces Theory X and Theory Y
*Theory X and Theory Y are two sets of assumptions about the nature of people *Example of Theory X
*Average human beings have an inherent dislike of work and will avoid it if they can

*Example of Theory Y
*The expenditure of physical effort and mental effort in work is as natural as play or rest

The Hierarchy of Needs Theory

*Maslow concluded that when one set of needs is satisfied, this kind of need ceases to be a motivator

Maslows Hierarchy of Needs Alderfer's ERG Theory *ERG theory has three categories: existence needs, relatedness needs, and growth needs
Herzbergs Motivation-Hygiene Theory *According to Herzberg, dissatisfiers are not motivators. They are also called maintenance, hygiene, or job context factors *Satisfiers are motivators related to job content
The satisfiers and dissatisfiers identified by Herzberg are similar to the factors suggested by Maslow.

The Expectancy Theory of Motivation

Vroom holds that people will be motivated to do things to reach a goal if they believe in the worth of that goal and if they can see that what they do will help them in achieving it

Force = Valence x Expectancy

*Force is the strength of a person's motivation. *Valence is the strength of an individual's preference for an outcome. *Expectancy is the probability that a particular action will lead to a desired outcome
The Porter and Lawler Motivation Model

Equity Theory
*Equity theory refers to an individual's subjective judgments about the fairness of the reward she or he got, relative to the inputs in comparison with the rewards of others *Outcomes by a person Outcomes by another -----------------------------= ----------------------------*Inputs by a person Inputs by another person person

Skinners Reinforcement Theory *Positive reinforcement or behavior modification, holds that individuals can be motivated by proper design of their work environment and praise for their performance and that punishment for poor performance produces negative results McClelland's Needs Theory of Motivation *McClellands types of motivating needs are: the need for power, need for affiliation, and the need for achievement Special Motivational Techniques *Money is often more than monetary value. It can also mean status or power, or other things *Intrinsic rewards may include a feeling of accomplishment, or even self-actualization *Extrinsic rewards include benefits recognition, status symbols, and, of course, money *Pay may be based on individual, group, and organizational performance *Motivation through the use of participation *Quality of working life (QWL) program is a systems approach to job design and a promising development in the broad area of job enrichment, combined with a grounding in the sociotechnical systems approach to management

Job Enrichment *Job enlargement means enlarging the scope of the job by adding similar tasks without enhancing responsibility *Job enrichment attempts to build into jobs a higher sense of challenge and achievement A Systems and Contingency Approach to Motivation *Motivation must be considered from a systems and contingency point of view Chapter 15. Leadership 1. Leadership and its ingredients. 2. The trait approaches to leadership and their limitations. 3. Various leadership styles based on the use of authority. 4. Blake and Mouton's managerial grid and the resulting extreme leadership styles. 5. The contingency approach to leadership. 6. The path-goal approach to leadership effectiveness. 7. The difference between transactional and transformational leaders Defining Leadership Leadership is the art or process of influencing people so that they will strive willingly and enthusiastically toward the achievement of group goals Ingredients of Leadership 1. Leadership as power (see Chapter 9). 2. Leadership as fundamental understanding of people 3. Leadership as the ability to inspire followers to apply their full capabilities 4. Leadership as the style and the development of the organizational climate Fundamental Principle of Leadership Since people tend to follow those who, in their view, offer them a means of satisfying their own personal goals, the more managers understand what motivates their subordinates and how these motivations operate, and the more they reflect this understanding in carrying out their managerial actions, the more effective they are likely to be as leaders Leadership Styles Based on Use of Authority *The autocratic leader commands and expects compliance, is dogmatic and positive, and leads by the ability to withhold or give rewards and punishment *The democratic, or participative, leader consults with subordinates and encourages participation from them *The free-rein leader uses his/ her power very little, if at all, giving subordinates a high degree of independence in their operations Leadership Styles Based on Use of Authority The Managerial Grid *The grid has two dimensions: concern for people and concern for production The Managerial Grid Leadership as a Continuum Leadership continuum conceptualizes leadership as involving a variety of styles, ranging from one that is highly boss-centered to one that is highly subordinate-centered Fiedler's Contingency Approach to Leadership People become leaders not only because of the attributes of their personalities but also because of various situational factors and the interactions between leaders and group

members Critical Dimensions of the Leadership Situation (Fiedler) *Position power *Task structure * Leader-member relations The Path-goal Approach to Leadership Effectiveness Path-goal theory suggests that the main function of the leader is to clarify and set goals with subordinates, help them find the best path for achieving the goals, and remove obstacles Transactional and Transformational Leadership *Transactional leaders identify what subordinates need to do to achieve objectives, clarify organizational roles and tasks, set up an organization structure, reward performance, and are considerate for the social needs of its followers *Transformational leaders articulate a vision and inspire followers. They have the capacity to motivate, shape the organizational culture, and create a climate favorable for organizational change