Introduction to Management Notes First Chapter

CHAPTER 1: Managers and Management A. What is Management?  Management – The process of getting things done, effectively, and efficiently with and through other people 1. Efficiency – Doing the task right, or getting the most output from the least amount of inputs (Minimize resource cost) 2. Effectiveness – Doing the tasks by doing the tasks that would help the organization reach its goals  Conclusion: Good management aims to satisfy both effectiveness and efficiency while Poor management focuses too much on effectiveness and disregards efficiency B. Who are Managers and Where do they work?  Organization – Systemic arrangement of people brought together to accomplish a specific purpose  Characteristics of an organization 1. Distinct Purpose or Goal 2. Composed by People 3. Deliberate and Systematic structure  Difference between Managers and Non-managerial employees 1. Managers – Individuals in an organization who direct the activities of others 2. Non-managerial Employees – People who work directly on a job or task and have no responsibility for overseeing the work of others  What titles do managers have? 1. Top / Senior Managers – Managers who make decisions about the direction of the organization and establishing policies and philosophies that affect all organizational members 2. Middle Managers – Managers who manage other managers and some non-managerial employees; they are usually responsible for translating the goals set by top managers into specific details so that first line managers could execute them in actions 3. First-Line Managers – Managers who direct the day-to-day activities of non-managerial employees C. Why Study Management?  In studying management, there are two reasons… 1. All of us have a vested interest in improving the way organizations are managed as they interact with our everyday lives. If organizations are well-managed, they would find ways to prosper even in economically challenging times 2. The reality is that when one graduates from university, one either manages or gets managed. Therefore, either you like it or not, one must know management in order to gain insights into the way a boss and fellow employees behave and how organizations function D. What do Manages do?  Management researchers have developed three approaches to describe what managers do: Functions, Roles, and Skills/Competencies  Functions Approach – Managers perform certain activities or functions as they direct and oversee others’ work. By doing so, managers enable the organization to achieve stated purposes or goals Henri Fayol once proposed the manager’s role in five different categories, but recently, it has been reduced into four 1. Planning – Defining goals, establishing strategy, and developing subplans to coordinate activities 2. Organizing – Determining what tasks are to be done, who is to do them, how the tasks are to be grouped, who reports to whom, and who will make decisions 3. Leading – Directing, and coordinating the work activities of an organization’s people 4. Controlling – Monitoring activities to ensure that they are accomplished as planned  Managerial Roles – In 1960s, Henry Mintzberg conducted a study to find out specific categories of managerial actions or behaviors expected of a manager 1. Interpersonal Roles – Involves people and other duties that are ceremonial and symbolic in nature 1. Figurehead 2. Leader 3. Liaison 2. Informational Roles – Involves collecting, receiving, and disseminating information 1. Monitor 2. Disseminator 3. Spokesperson 3. Decisional Roles – Involves decision making 1. 2. 3. 4. Entrepreneur Disturbance handler Resource allocator Negotiator  Skills Approach 1. Conceptual Skills – Skills managers use to analyze and diagnose complex situations, these skills are pivotal in making good decisions 2. Interpersonal Skills – Skills involved with working well with other people both individually and in groups, such as communication, motivation, and delegation skills 3. Technical Skills – Job-specific knowledge and techniques needed to perform work tasks 1. Top-level managers: Knowledge of industry and understanding of organization’s processes and products general 2. Middle and Lower managers: Knowledge required in areas where they work 4. Political Skills – Skills to build a power base and establish the right connections  Universality of Manager – Management is essentially the same in all positions and organizations 1. Level in the organization – The difference exists in its degree and emphasis, but not of the activity (All managers do POLC, but in different emphasis) 2. Profit vs. Non-Profit – The difference is how performance is measured 3. Size of Organization – In small business, a manager becomes more generalist whereas big firms have specialized managers in each divisions of work E. History of Management  Classical Approach 1. Beginning around turn of 20th century, management began to evolve as a body of knowledge 2. Fredrick Taylor published a “theory of scientific management” which determines one best way to maximize individual worker’s productivity  Assigning the apt person for the job with correct tools and equipment  Having standardized method of executing a job  Providing economic incentives to the worker 3. Henri Fayol introduced “general administrative theory” identifying the five management functions and identified 14 Principles of Management  Division of Work – Specialization increases output by increasing efficiency  Authority – The right to give orders  Discipline – Employees must obey and respect the rules of the organization  Unity of Command – Employees must receive orders from one leader  Unity of Direction – All organizational activities must be directed to one goal  Subordination of individual interest to the general interest – An interest of an individual must not precede over interest of the organization  Remuneration – Employees must be paid with fair wage  Centralization – Degree to which subordinates are involved in decision-making  Scalar chain – Line of authority from top management to lowest rank  Order – People and materials must be placed in the right places and time  Equity – Managers should be kind and fair to the subordinates  Stability of Tenure of Personnel – Management should provide orderly personnel planning and ensure replacements are available to fill vacancies  Initiative – Employees who are allowed to originate and carry out plans will exert higher level of effort  Esprit de Corps – Promoting team spirit will build harmony 4. Max Weber described and analyzed “bureaucracy” as an ideal and rational form of overall organization structure  Career Orientation  Formal Selection  Division of Labor  Formal Rules and Regulations  Authority Hierarchy  Impersonality  Behavioral Approach 1. Human Relations Movement – Study of how managers should motivate, care, and encourage employees in order for them to perform at high levels and be able to achieve organizational goals (Ex: Maslow’s hierarchy of five needs and McGregor’s theories relating to a manager’s beliefs about employee’s motivation to work) 2. Organizational Behavior – The field of study that researches the actions of people at work  Quantitative Approach 1. Focuses on the application of statistics, optimization models, information models, computer simulations to improve managerial decision making 2. An examples of quantitative approach include… 1. Quantitative Management 2. Operations Management 3. Management Information Systems  Contemporary Approach 1. Systems Approach – Views systems as a set of interrelated and interdependent parts arranged in a manner that produces a unified whole 2. Closed System – Not influenced by and don’t interact with the environment (All system input and output are internal) 3. Open System – Interacting with the environment by taking inputs and transforming them into outputs from their environment  Contingency Approach (Situational Approach) – An approach to management that says that individual organizations, employees, and situations are different, thus require different ways of managing