1. UNIT 1

2. The Process of Management
Planning
Leading
Resources
Controlling
Organizing
Performance
Human
Financial
Raw Materials
Technological
Information
Attain goals
Products
Services
Efficiency
Effectiveness
Use influence to motivate employees
Select goals and ways to attain them
Assign responsibility for task accomplishment
Monitor activities and make corrections

3. Planning Function Definition
Defines goals for future organizational performance
Decides tasks and use of resources needed

4. Organizing Function Definition Follows planning
Reflects how organization tries to accomplish plan
Involves assignment of
tasks into departments
authority and allocation of resources across organization

5. Controlling Function Definition Monitoring employees’ activities
Determining whether the organization is on target toward its goals
Making corrections as necessary

6. Controlling Function New Trends
Empowerment and trust of employees = training employees to monitor and correct themselves
New information technology provides control without strict top-down constraints
Lack of Control Information can lead to Organizational Failure

7. Organizational Performance
Attainment of organizational goals in an efficient and effective manner
2nd half of definition of management
The Process of Management

8. Organizational Performance
Organization - social entity that is goal directed and deliberately structured
Effectiveness - degree to which organization achieves a stated goal
Efficiency - use of minimal resources (raw materials, money, and people) to produce the desired volume of output
Performance – organization’s ability to attain its goals by using resources in an efficient and effective manner

9. The Evolution of Management Thinking

10. New Approach to Management
Success accrues to those who learn how
To be leaders
To Initiate change
To participate in and create organizations
with fewer managers
With less hierarchy that can change quickly

11. Management and Organization
Management philosophies and organization forms change over time to meet new needs
Some ideas and practices from the past are still relevant and applicable to management today

12. Historical Perspective
Provides a context or environment
Develops an understanding of societal impact
Achieves strategic thinking
Improves conceptual skills
Social, political, and economic forces have influenced organizations and the practice of management

13. Forces Influencing Organizations and Management
Social Forces - values, needs, and standards of behavior
Political Forces - influence of political and legal institutions on people & organizations
Economic Forces - forces that affect the availability, production, & distribution of a society’s resources among competing users

14. Management Perspectives Over Time
Exhibit 2.1, p.44
2000
2010
The Technology-Driven Workplace
1990
2010
The Learning Organization
1980
Total Quality Management
2000
1970
Contingency Views
2000
1950
2000
Systems Theory
1940
Management Science Perspective
1990
1930
Humanistic Perspective
1990
1890
Classical
1940
2010
1870

15. Classical Perspective: 3000 B.C.
Rational, scientific approach to management – make organizations efficient operating machines
Scientific Management
Bureaucratic Organizations
Administrative Principles

16. Scientific Management: Taylor 1856-1915
General Approach
Developed standard method for performing each job.
Selected workers with appropriate abilities for each job.
Trained workers in standard method.
Supported workers by planning work and eliminating interruptions.
Provided wage incentives to workers for increased output.

17. Scientific Management
Contributions
Demonstrated the importance of compensation for performance.
Initiated the careful study of tasks and jobs.
Demonstrated the importance of personnel and their training.
Criticisms
Did not appreciate social context of work and higher needs of workers.
Did not acknowledge variance among individuals.
Tended to regard workers as uninformed and ignored their ideas

18. Bureaucracy Organizations
Max Weber
Prior to Bureaucracy Organizations
European employees were loyal to a single individual rather than to the organization or its mission
Resources used to realize individual desires rather than organizational goals
Systematic approach –looked at organization as a whole
Ethical Dilemma: The Supervisor

19. Bureaucracy Organizations
Division of labor
with Clear definitions of
authority and responsibility
Personnel are selected
and promoted based
on technical
qualifications
Positions organized
in a hierarchy of authority
Managers subject to
Rules and procedures
that will ensure reliable
predictable behavior
Administrative acts
and decisions recorded
in writing
Management separate
from the ownership
of the organization
Exhibit 2.3, p. 49

20. Administrative Principles
Contributors: Henri Fayol, Mary Parker, and Chester I. Barnard
Focus:
Organization rather than the individual
Delineated the management functions of planning, organizing, commanding, coordinating, and controlling

21. Henri Fayol 1841-1925 Division of labor Centralization Authority
14 General Principles of Management
Division of labor
Authority
Discipline
Unity of command
Unity of direction
Subordination of individual interest
Remuneration
Centralization
Scalar chain
Order
Equity
Stability and tenure of staff
Initiative
Esprit de corps

22. Ethics - Power - Empowerment
Mary Parker Follett
Importance of common super-ordinate goals for reducing conflict in organizations
Popular with businesspeople of her day
Overlooked by management scholars
Contrast to scientific management
Reemerging as applicable in dealing with rapid change in global environment
Leadership – importance of people vs. engineering techniques
Ethics - Power - Empowerment

23. Chester Barnard 1886-1961 Informal Organization
Cliques
Naturally occurring social groupings
Acceptance Theory of Authority
Free will
Can choose to follow management orders

24. Humanistic Perspective
Emphasized understanding human behavior, needs, and attitudes in the workplace
Human Relations Movement
Human Resources Perspective
Behavioral Sciences Approach

25. Human Relations Movement
Emphasized satisfaction of employees’ basic needs as the key to increased worker productivity

26. Hawthorne Studies Ten year study
Four experimental & three control groups
Five different tests
Test pointed to factors other than illumination for productivity
1st Relay Assembly Test Room experiment, was controversial, test lasted 6 years
Interpretation, money not cause of increased output
Factor that increased output, Human Relations

27. Human Resource Perspective
Suggests jobs should be designed to meet higher-level needs by allowing workers to use their full potential

28. Based on needs satisfaction
Abraham Maslow’s
Hierarchy of Needs
Self-actualization
Esteem
Belongingness
Chapter 16 – Maslow in more detail
Safety
Physiological
Based on needs satisfaction

29. Douglas McGregor Theory X & Y
Theory X Assumptions
Theory Y Assumptions
Do not dislike work
Self direction and self control
Seek responsibility
Imagination, creativity widely distributed
Intellectual potential only partially utilized
Dislike work –will avoid it
Must be coerced, controlled, directed, or threatened with punishment
Prefer direction, avoid responsibility, little ambition, want security

30. Douglas McGregor Theory X & Y
Few companies today still use Theory X
Many are trying Theory Y techniques
Experiential Exercise: Theory X and Theory Y Scale

31. Behavioral Sciences Approach
Sub-field of the Humanistic Management Perspective
Applies social science in an organizational context
Draws from economics, psychology, sociology, anthropology, and other disciplines
Understand employee behavior and interaction in an organizational setting
OD – Organization Development

32. Management Science Perspective
Emerged after WW II
Applied mathematics, statistics, and other quantitative techniques to managerial problems
Operations Research – mathematical modeling
Operations Management – specializes in physical production of goods or services
Information Technology – reflected in management information systems

33. Recent Historical Trends
Systems Theory
Contingency View
Total Quality Management (TQM)

34. Systems View of Organizations
Exhibit 2.5, p. 58

35. Contingency View of Management
Exhibit 2.6, p. 59
Successful resolution of organizational problems is thought to depend on managers’ identification of key variations in the situation at hand

36. Elements of Organizational Structure
Department-alization
Span of Control
Elements of Organizational
Structure
Formalization
Centralization

37. Span of Control Number of people directly reporting to the next level
Assumes coordination through direct supervision
Wider span of control possible when:
Other coordinating mechanisms present
Routine tasks
Low employee interdependence

38. Tall vs Flat Structures
As companies grow, they:
Build taller hierarchy
Widen span, or both
Problems with tall hierarchies
Overhead costs
Worse upward information
Focus power around managers, so staff less empowered

39. Issues with Tall vs Flatter Structures
Firms moving toward flatter structures (delayering) because taller hierarchies have:
Higher mgt overhead costs
Less information flow
Less staff empowerment
But also problems with flatter hierarchies
Undermines management functions
Increases workload and stress
Restricts management career development

40. Centralization and Decentralization
Formal decision making authority is held by a few people, usually at the top
Centralization
Decision making authority is dispersed throughout the organization
Decentralization

41. Functional Organizational Structure
Organizes employees around specific knowledge or other resources (e.g., marketing, production)
CEO
Finance
Production
Marketing

42. Evaluating Functional Structures
Benefits
Economy of scale
Supports professional identity and career paths
Easier supervision
Limitations
More emphasis on subunit than organizational goals
Higher dysfunctional conflict
Poorer coordination -- requires more controls

43. Divisional Structure
Organizes employees around outputs, clients, or geographic areas
CEO
Healthcare
Lighting
Products
Consumer Lifestyle

44. Divisional Structure Different forms of divisional structure
Geographic structure
Product structure
Client structure
Best form depends on environmental diversity or uncertainty
Movement away from geographic form
Less need for local representation
Reduced geographic variation
More global clients

45. Evaluating Divisional Structures
Benefits
Building block structure -- accommodates growth
Focuses on markets/products/clients
Limitations
Duplication, inefficient use of resources
Specializations are dispersed--silos of knowledge
Politics/conflict when two forms of equal value

46. Team-Based Structure Self-directed work teams
Teams organized around work processes
Typically organic structure
Wide span of control – many employees work without close supervision
Decentralized with moderate/little formalization
Usually found within divisionalized structure

47. Evaluating Team-Based Structures
Benefits
Responsive, flexible
Lower admin costs
Quicker, more informed decisions
Limitations
Interpersonal training costs
Slower during team development
Role ambiguity increases stress
Problems with supervisor role changes
Duplication of resources

48. Bioware’s Matrix Structure
Ray Muzyka (left) and Greg Zeschuk (right) adopted a matrix organizational structure for their electronic games company, Bioware, because it balances the need for teamwork and information sharing.

49. Matrix Structure (Project-based)
Employees ( ) are temporarily assigned to a specific project team and have a permanent functional unit
CEO
Game1
Project Leader
Game2
Project Leader
Game3
Project Leader
Art Dept Leader
Software Dept Leader
Audio Dept
Leader

50. Evaluating Matrix Structures
Benefits
Uses resources and expertise effectively
Improves communication, flexibility, innovation
Focuses specialists on clients and products
Supports knowledge sharing within specialty
Solution when two divisions have equal importance
Limitations
Increases goal conflict and ambiguity
Two bosses dilutes accountability
More conflict, organizational politics, and stress

51. Network Organizational Structure
Product development partner (U.S.A.)
Callcenter partner (Philippines)
Alliance of firms creating a product or service
Supporting firms beehived around a “hub” or “core” firm
Core Firm
Accounting partner
(U.S.A.)
Package design partner (UK)
Assembly partner (Mexico)

52. Evaluating Network Structures
Benefits
Highly flexible
Potentially better use of skills and technology
Not saddled with same resources for all products
Limitations
Exposed to market forces
Less control over subcontractors than in-house