Management and Its Evolution Evolution

Successful Organizations A firm can be efficient by making the best use of people, money, physical plants, and technology. A firm can be efficient by making the best use of people, money, physical plants, and technology. It is ineffective if its goals do not provide a sustained competitive advantage. It is ineffective if its goals do not provide a sustained competitive advantage. Successful organizations know how to manage people and resources efficiently and effectively to accomplish organizational goals and to keep those goals in tune with changes in the external environment. Successful organizations know how to manage people and resources efficiently and effectively to accomplish organizational goals and to keep those goals in tune with changes in the external environment.

How business in the 21 st century is different Emphasis on the Management of Change Emphasis on the Management of Change Increasing Emphasis on Customer Service Increasing Emphasis on Customer Service Need for Higher Business Ethics. Need for Higher Business Ethics.

Who is a manager? A person who is responsible for making resource allocation decisions and with the formal authority to direct others A person who is responsible for making resource allocation decisions and with the formal authority to direct others Operational- lowest level, supervise the affairs of the organization Operational- lowest level, supervise the affairs of the organization Tactical- translate general goals into specific activities Tactical- translate general goals into specific activities Strategic- senior executives responsible for overall development. Strategic- senior executives responsible for overall development.

What is a Team? A set of people performing a task to attain a common goal. Cross-functional teams Composed of individuals from different parts of the organization Composed of individuals from different parts of the organizationCross-disciplinary Composed of team members with diverse background Composed of team members with diverse background Define the problem, set objectives, establish priorities, proposes new ways of doing things, and assigns members to different tasks. Define the problem, set objectives, establish priorities, proposes new ways of doing things, and assigns members to different tasks.

Working in a modern organization Manager Manager A holistic view A holistic view Effective and Efficient Planning Effective and Efficient Planning Integrity, honesty, respect Integrity, honesty, respect Good Communication Good Communication Individual Individual Initiative Initiative Leadership Leadership Learning ability Learning ability Flexibility Flexibility Trustworthiness Trustworthiness Team Team Evaluate overall team performance Evaluate overall team performance Appreciate teams that think out of the box Appreciate teams that think out of the box Appreciate diversity. Appreciate diversity.

Functions of Management Planning: assesses the management environment to set future objectives and map out activities necessary to achieve those objectives. Planning: assesses the management environment to set future objectives and map out activities necessary to achieve those objectives. COORDINATION is required COORDINATION is required Organizing: determines how the firm’s human, financial, physical, informational, and technical resources are arranged and coordinated to perform tasks to achieve desired goals. Organizing: determines how the firm’s human, financial, physical, informational, and technical resources are arranged and coordinated to perform tasks to achieve desired goals. RESOURCE deployment is required RESOURCE deployment is required

Functions of Management (contd.) Leading : energizes people to contribute their best individually and in cooperation with other people Leading : energizes people to contribute their best individually and in cooperation with other people COMMUNICATION, MOTIVATION are required COMMUNICATION, MOTIVATION are required Controlling: measures performance, compares it to objectives, implements necessary changes, and monitors progress. Controlling: measures performance, compares it to objectives, implements necessary changes, and monitors progress. FEEDBACK, PROBLEM SOLVING are required. FEEDBACK, PROBLEM SOLVING are required.

Roles of Managers Interpersonal- involving interaction with superiors, peers and subordinates and people outside the organization. Interpersonal- involving interaction with superiors, peers and subordinates and people outside the organization. Figurehead Figurehead Leader Leader Liaison Liaison Informational- Obtaining, interpreting and giving out a great deal of information. Informational- Obtaining, interpreting and giving out a great deal of information. Monitor Monitor Disseminator Disseminator

Roles of Managers(contd.) Decisional- Choosing among alternatives, balancing interests of various parties. Decisional- Choosing among alternatives, balancing interests of various parties. Entrepreneur Entrepreneur Disturbance handler Disturbance handler Resource allocator Resource allocator Negotiator Negotiator

Early Management Thought Management strategy: Sun Tzu, The Art of War Management strategy: Sun Tzu, The Art of War Leadership: Nicolò Machiavelli, The Prince Leadership: Nicolò Machiavelli, The Prince Design and organization of work: Adam Smith, The Wealth of Nations Design and organization of work: Adam Smith, The Wealth of Nations division of labor division of labor

The Operational Perspective Scientific Management: Frederick W. Taylor Scientific Management: Frederick W. Taylor Quantitative Management: Ford W. Harris Quantitative Management: Ford W. Harris Quality Management: Walter A. Shewhart Quality Management: Walter A. Shewhart Bureaucratic Management: Max Weber Bureaucratic Management: Max Weber Administrative Management: Henri Fayol Administrative Management: Henri Fayol

Taylors Scientific Management Scientifically study each part of a task develop the best method of performing the task. Scientifically study each part of a task develop the best method of performing the task. Carefully select workers and train them to perform the task by using the scientifically developed method. 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. 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. 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.

Weber’s Ideal Bureaucracy Specialization of labor Specialization of labor Formal rules and procedures Formal rules and procedures Impersonality Impersonality Well-defined hierarchy Well-defined hierarchy Career advancement based on merit Career advancement based on merit

Fayol’s Principles of Management  Division of work  Authority  Discipline  Unity of command  Unity of direction  Subordination of individual interest to the general interest  Remuneration Centralization Centralization  Scalar chain  Order  Equity  Stability and tenure  Initiative  Esprit de corps Functional approach to management Unity of command Unity of direction Equity

Behavioral Perspective Based on the fact that psychological and social processes of human behavior can result in improvements in productivity and work satisfaction. Based on the fact 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. 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. Human Relations Approach - the relationship between employees and a supervisor is a vital aspect of management. Employee motivation Employee motivation Leadership style Leadership style

Hawthorne Studies 1924 – 1932 at Western Electric Company’s plant near Chicago – 1932 at Western Electric Company’s plant near Chicago. Paying special attention to employees motivates them to put greater effort into their jobs. Paying special attention to employees motivates them to put greater effort into their jobs. Work groups are important- the chiselers are convinced to speed up and the rate- busters to slow down. Work groups are important- the chiselers are convinced to speed up and the rate- busters to slow down.

Physical Needs Need for Security Need for Social Relations Need for Self Esteem Self- Actualization Maslow’s Hierarchy of Needs

McGregor’s Theory X and Theory Y o Theory X assumes that employees are inherently lazy and lack ambition. o negative perspective on human behavior. o Theory Y assumes that most employees do not dislike work and want to make useful contributions to the organization. o positive perspective on human behavior.

Contemporary Management Approach  Systems Theory  Contingency Theory  The Learning Organization Perspective

Systems Theory The organization is a system of interrelated parts that function in a holistic way to achieve a common purpose. The organization is a system of interrelated parts that function in a holistic way to achieve a common purpose. Input  process  output occurs Input  process  output occurs Environment= external market Environment= external market Feedback is an important component Feedback is an important component Systems theory concepts that affect management thinking: Systems theory concepts that affect management thinking: Open and closed systems- open interact with environment, closed do not. Open and closed systems- open interact with environment, closed do not. Subsystems- interdependent parts of the system Subsystems- interdependent parts of the system Synergy- whole greater than the parts Synergy- whole greater than the parts Equifinality- same goal different routes Equifinality- same goal different routes THE WHOLE IS GREATER THAN THE SUM OF PARTS THE WHOLE IS GREATER THAN THE SUM OF PARTS

Contingency Theory There is no “one best way” to manage an organization. There is no “one best way” to manage an organization. what works for one organization may not work for another what works for one organization may not work for another Situational characteristics (contingencies) differ Situational characteristics (contingencies) differ Managers need to understand the key contingencies that determine the most effective management practices in a given situation Managers need to understand the key contingencies that determine the most effective management practices in a given situation

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. The management approach based on an organization anticipating change faster than its counterparts to have an advantage in the market over its competitors. Rather than reacting to change, which is a normal part of the business landscape, organizations need to anticipate change so they are well positioned to satisfy customer needs. Rather than reacting to change, which is a normal part of the business landscape, organizations need to anticipate change so they are well positioned to satisfy customer needs.

Emerging Perspectives and Issues The Modular Organization Every function not regarded as crucial is outsourced to an independent organization. Every function not regarded as crucial is outsourced to an independent organization. “Disaggregated Corporation” “Disaggregated Corporation” The Intangible Organization Shifts from tangible (plant and equipment) to intangible (know-how and product design) investments Shifts from tangible (plant and equipment) to intangible (know-how and product design) investments Mangers and employees in today’s companies focus on opportunities rather than efficiencies Mangers and employees in today’s companies focus on opportunities rather than efficiencies