Weihrich and Koontz

8th Edition

© 2010

An International Perspective
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Science, Theory, and Practice

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Chapter Objectives
After studying this chapter, you should be able to:
1. Explain the nature and purpose of management
2. Understand that management, as used in this book, applies
to all kinds of organizations and to managers at all
organizational levels
3. Recognize that the aim of all managers is to create a
surplus
4. Identify the trends in information technology and
globalization
5. Explain the concepts of productivity, effectiveness, and
efficiency
6. Describe the evolution of management and some recent
contributions to management thought
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Chapter Objectives
After studying this chapter, you should be able to:

7. Describe the various approaches to management, their

contributions, as well as their limitations
8. Show how the management process or operational process
approach to management theory and science has a basic
core of its own and draws from other approaches
9. Realize that managing requires a systems approach and
that practice must always take into account situations and
contingencies
10. Define the managerial functions of planning, organizing,
staffing, leading, and controlling
11. Understand how this book is organized
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DEFINITION OF MANAGEMENT
Its Nature and Purpose ( 1 )
Management is the process of
designing and maintaining an
environment in which individuals,
working together in groups,
efficiently accomplish selected aims.
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The Functions of Management

The five managerial functions

around which managerial knowledge
are organized are: planning,
organizing, staffing, leading, and
controlling.
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Management as an Essential for

Any Organization ( 2 )

Management applies to small or

large organizations, to profit and
not-for-profit enterprises, to
manufacturing as well as service
industries.
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Managerial Functions at Different

Organizational Levels ( 2 )

 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
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Time Spent in Carrying Out Managerial Functions

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Managerial Skills and the

Organizational Hierarchy

The four skills for administrators are:

 Technical
 Human
 Conceptual
 Design skills (Define and Solve
Problem)
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3 Primary Managerial Skills Principles of Management

(KATZ)

• Technical skills FOCUS IS ON WHAT IS DONE

– Specialized knowledge and proficiency

– Analytical ability
– Works with things, tools and techniques
• Interpersonal skills FOCUS IS ON HOW SOMETHING IS DONE
– Works with and through people
– Effective as a group/team member
– Motivates, communicates, & resolves conflicts
• Conceptual skills FOCUS IS ON WHY SOMETHING IS DONE

– Sees the “big picture” (how the parts fit together)

– Understands the corporation as a whole
• Future-oriented…thinks strategically
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The Goals of All Managers and

Organizations ( 3 )

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.
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Characteristics of Excellent and Most

Admired 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
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Advances in Technologies, Trends

in Globalization, and a focus
Entrepreneurship for Adapting to
Changes in the 21st Century ( 4 )

To be successful in the 21st Century,

companies must take advantage of the
new information technology- especially
the Internet– Globalization- and
Entrepreneurship. …..Uber mobile apps
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Definition of Productivity ( 5 )

Productivity is the output-input

ratio within a time period with
due consideration for quality.
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Definitions of Effectiveness and

Efficiency ( 5 )
 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.)
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Efficiency Principles of Management

versus
Effectiveness

Efficiency: Effectiveness:
Operating in Successful Doing the right
such a way Manageme things in the
that resources nt right way at
are not wasted the right times
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MANAGING: SCIENCE OR ART?

Managing as practice is an art;

the organized knowledge
underlying the practice may be
referred to as a science.
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Management: Science or Art? Principles of Management

• 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.
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THE EVOLUTION OF MANAGEMENT

THOUGHT ( 6 )

 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
 Principles of
Figure 2.1 Major branches in the classical approach to
Management

management
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Principles of Management
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Taylor's Principles of Scientific

Management
 Replacing rules of thumb with science
(organized knowledge)
 Obtaining harmony in group action, rather
than discord
 Achieving cooperation of human beings,
rather than chaotic individualism
 Working for maximum output, rather than
restricted output
 Developing all workers to the fullest extent
possible for their own and their company's
highest prosperity
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Scientific management
• Henry L. Gant (1901) – Called for scientific
selection of workers and “harmonious
cooperation” between labor and management.
Developed the Gantt chart . Stressed the need for
training.
• Frank and Lillian Gilbreth (1900) – Frank is
known primarily for has time and motion studies.
Lillian, and industrial psychologist, focused on the
human aspects of work and the understanding of
workers’ personalities and needs.
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Principles of Management
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Modern operational-management theory

• Henri Fayol - Administration Industrielle et

Generale (1916) – Referred to as “the father of
modern management theory”.
• Divided industrial activities into six groups:
technical, commercial, financial, security,
accounting, and managerial.
• Recognized the need for teaching management.
Formulated fourteen principles of management,
such as authority and responsibility, unity of
command, scalar chain, and spirit de corps.
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Principles of Management
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Henri Fayol – 14 Principles

• Division of work. Work should be divided among individuals and
groups to ensure that effort and attention are focused on special portions
of the task. Fayol presented work specialization as the best way to use the
human resources of the organization.
• Authority. Managers must be able to give orders. Authority gives them
this right. Note that responsibility arises wherever authority is exercised.
• Discipline. Employees must obey and respect the rules that govern the
organization. Good discipline is the result of effective leadership, a clear
understanding between management and workers regarding the
organization's rules, and the judicious use of penalties for infractions of
the rules.
• Unity of command. Every employee should receive orders from only
one superior.
• Unity of direction. Each group of organisational activities that have the
same objective should be directed by one manager using one plan.
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14 Principles:
• Subordination of individual interests to the general
interest. The interests of any one employee or group of employees
should not take precedence over the interests of the organization as a
whole.
• Remuneration. Workers must be paid a fair wage for their services.

• Centralisation. Centralisation refers to the degree to which

subordinates are involved in decision making. Whether decision
making is centralized (to management) or decentralized (to
subordinates) is a question of proper proportion. The task is to find
the optimum degree of centralisation for each situation.

• Scalar chain. The line of authority from top management to the

lowest ranks represents the scalar chain. Communications should
follow this chain. However, if following the chain creates delays,
cross-communications can be allowed if agreed to by all parties and
superiors are kept informed.
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14 Principles:
• Order. People and materials should be in the right place at the
right time.
• Equity. Managers should be kind and fair to their
subordinates.

• Stability of tenure of personnel. High employee turnover

is inefficient. Management should provide orderly personnel
planning and ensure that replacements are available to fill
vacancies.

• Initiative. Employees who are allowed to originate and carry

out plans will exert high levels of effort.

• Esprit de corps. Promoting team spirit will build harmony

and unity within the organization.
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Principles of Management
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Principles of Management
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Principles of Management

The Ideal Bureaucracy – Max Weber

• Division of Labor
 Horizontal specialization
• Hierarchy of Authority
 Vertical specialization
• Rules and Procedures
 Enforced
• Technical Competence
 Selection and promotion
• Impersonal Treatment
 No favoritism
• Centralized Decision-Making
 Exceptions controlled from the top
• Formalization
 Documentation
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Behavioral sciences ( 7 )
• Hugo Munsterberg (1912) – Application of psychology
to industry, legal and management.
• Walter Dill Scott (1901, 1911) – Application of
psychology to advertising, marketing, and personnel.

• Vilfredo Pareto – Reffered to as “the father of the

social systems approach” to organization and
management. Famous for 80 – 20 principle.

• Elton Mayo and F.J. Roethlisberger (1933)- Famous

studies at the Hawthorne plant of the Western Electric
Company. Influence of social attitudes and
relationships of work groups on performance.
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Principles of Management
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Key Managerial Roles (Mintzberg)

Principles of Management

Key
Management
Roles

Interpersonal Informational Decisional

Roles Roles Roles

1. Figurehead 1. Monitor 1. Entreprene

2.Leader 2.Disseminat ur
3.Liaison or (Innovator)
3.Spokespers 2.Disturbanc
on e handler
3.Resource
Allocator
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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.
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Principles of Management
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Systems theory

• Chester Barnard – The Functions of the

Executive (1938) – The task of managers is to
maintain a system of cooperative effort in a
formal organization. He suggested a
comprehensive social systems approach to
managing.
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Emergence of modern management thought and
recent contributors to management
• Peter F. Drucker (1974) – Very prolific writer on many
general management topics. Introduced quality control in
Japan.
• W. Edwards Deming (after World War II) – Introduced
quality control in Japan.
• Laurence Peter (1969) – Observed that eventually people
get promoted to a level where they are incompetent.
• William Ouchi (1981) – Discussed selected Japanese
managerial practices adapted in the U.S. environment.
• Thomas Peters and Rober Waterman (1982) – Identified
characteristics of companies they considered excellent.
•
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Principles of Management
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PATTERNS OF MANAGEMENT
ANALYSIS: A Management Theory Jungle?
(1) the empirical, or case study 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
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PATTERNS OF MANAGEMENT
ANALYSIS
(8) the socio-technical systems approach
(9) the cooperative social systems
approach – interpersonal and group
behavior aspects leading to cooperation.
(10) the group behavior approach
(11) the interpersonal behavior approach
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PATTERNS OF MANAGEMENT
ANALYSIS
(12)McKinsey's 7-S framework: Strategy,
Structure, Systems, Style, Staff, Shared
values, Skills.
(13)the total quality management approach
(14)the management process, or
operational approach
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Principles of Management
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The Management Process or

Operational Approach ( 8 )

 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
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The Management Process or Operational Approach

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THE SYSTEMS APPROACH TO THE

MANAGEMENT PROCESS ( 9 )

A model of process or operational

management that indicates how the
various inputs are transformed through
the managerial functions of planning,
organizing, staffing, leading, and
controlling. This book is about systems
approach to management process.
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The Systems Model of Management

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Inputs and Claimants

The inputs from the external

environment may include people,
capital, managerial skills, as well
as technical knowledge and skills.
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Input-Output Model
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The Managerial Transformation

Process

The task of managers is to transform

the inputs, in an effective and
efficient manner, into outputs.
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The Communication System

Communication integrates the

managerial functions. It is through
communication that one determines
whether events and performance
conform to plans. It is communication
that makes managing possible.
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External Variables

Effective managers regularly scan

the external environment.
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Outputs

Products, services, profits,

satisfaction, integration of the
goals of claimants to the
enterprise.
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Reenergizing the System

In the systems model of the

management process, some of the
outputs become inputs again.
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THE FUNCTIONS OF MANAGERS ( 10 )

 Planning
 Organizing
 Staffing
 Leading
 Controlling
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The Management Process

Principles of Management
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Definition of Planning

Planning involves selecting missions

and objectives and the actions to
achieve them; it requires decision
making.
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Definition of Organizing

Organizing involves establishing an

intentional structure of roles for
people to fill in an organization.
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Definition of Staffing

Staffing involves filling, and keeping

filled, the positions in the
organization structure.
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Definition of Leading

Leading is influencing people so

that they will contribute to
organization and group goals.
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Definition of Controlling

Controlling is measuring and correcting

individual and organizational performance
to ensure that events conform to plans.
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Coordination
The Essence of Manager-ship

It is the essence of managership, for

achieving harmony among individual
efforts toward the accomplishment of
group goals. Each of the managerial
functions is an exercise contributing
to coordination.
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The Systems Model of Management

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Principles of Management

Management as a Profession
• Although Management does share some
characteristics of law, medicine (as profession) it
fails to meet the following criteria
▫ No formal educational requirements required
▫ No system for licensing or accrediting Managers
▫ No universal code of ethics
▫ No organized body of knowledge

(chartered engineer, MBBS degree)

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Principles of Management

Management and Administration

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Principles of Management

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
• Implement top management’s policies and plans.
• Supervise and coordinate lower-level managers’
activities.
• First-Line Managers
– Managers who supervise and coordinate the activities
of operating employees.
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Examples of Managers by Area Principles of Management

• 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
• Human Resource Managers
▫ Involved in planning, recruiting and selection, training and
development, designing compensation and benefit systems,
formulating performance appraisal systems.
• Administrative Managers
▫ Serve as generalists in functional areas and are not associated
with any particular management specialty.
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SKILLS
Principles of Management

• Technical : Ability to use tools, procedures,

techniques and knowledge of a specialized fields

• Human: Ability to work with, understand and

motivate other people as individuals or groups

• Conceptual and Design : Ability to see the

organization as a whole, to conceptualize the
environment , the organization and his own job
so that he can set appropriate goals for himself,
his team and organization.
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Principles of Management

Classical Management Perspective

• Scientific Management
▫ Concerned with improving the performance of
individual workers (i.e., efficiency).
▫ Grew out of the industrial revolution’s labor
shortage at the beginning of the twentieth century.
• Administrative Management
▫ A theory that focuses on
managing the total organization
rather than individuals.
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Steps in Scientific Management

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Principles of Management

Management and Administration

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Mintzberg